|                                                                                                                                                                                                                                                                                                                                                                                                
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                
|UNITED
        STATES
      SECURITIES AND EXCHANGE COMMISSION
      Washington, D.C. 20549
      FORM 20-F                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                
|(Mark
        One)                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                
|[_]                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                
|[X]                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                
|For the
        fiscal year ending **December 31, 2002**                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                
|[_]                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                
|For the
        transition period from _______________ to ______________                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                
|Commission
        file number                              **333-08354**                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                
|**Reuters
          Group PLC**
      (Exact Name of Registrant as Specified in Its Charter)

      (Translation of Registrant’s Name Into English)**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 classes
        of capital or common stock as of the close of the period covered by the
        annual report.                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                
|**Ordinary
          Shares of 25p each ..........1,432,523,249
      Founders Share of £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                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                

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|
|
|
|

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|-----------------
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|

      Page 1 

|FINANCIAL HIGHLIGHTS/FIVE YEAR SUMMARY/THREE YEAR REUTERS CUSTOMER SEGMENTS AND INSTINET REVENUE SUMMARY
|--------------------------------------------------------------------------------------------------------

|**Reuters
            Group**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Normalised
            operating profit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Operating
            (loss)/profit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Normalised
            profit before tax                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(Loss)/profit
            before tax                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(Loss)/profit
            after tax                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Return
            on equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Free
            cash flow                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Net
            (debt)/funds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Basic
            (loss)/earnings per ordinary share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Diluted
            (loss)/earnings per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(Loss)/earnings
            per ADS*‡                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Dividends
            per ordinary share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Dividends
            per ADS*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|*
              Each American Depositary Share (ADS) represents six ordinary shares.
            ‡ A nominal
              exchange rate of US$1.61 = £1 has been used for convenience.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|**Reuters
                   Group reconciliation of operating profit and profit before tax
                  to
            normalised operating profit and normalised profit before tax**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|**Operating
            (loss)/profit**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Add:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|**Normalised
            operating profit**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Share
            of joint ventures and associates (losses)/investment income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Net
            interest payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|**Normalised
            profit before tax**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Amortisation
            of goodwill and other intangible assets of subsidiaries, joint ventures
            and associates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Impairment
            of goodwill of subsidiaries                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Net
            losses on investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|**(Loss)/profit
            before tax**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|**Reuters**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Normalised
            operating profit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Operating
            profit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Normalised
            profit before tax                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(Loss)/profit
            before tax                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Free
            cash flow                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|This
                 report comprises the annual report of Reuters Group PLC in accordance

              with the United Kingdom requirements and its annual report on Form
                 20-F in accordance with the requirements of the United States
                Securities
              and Exchange Commission (SEC) for 2002. In addition, the Form 20-F
                 will contain certificates pursuant to section 302 of the Sarbanes-Oxley

              Act of 2002 signed by the Chief Executive Officer and Finance Director,
                 with respect to Reuters Group PLC. 
              Reference is made to the Form 20-F cross reference guide on pages
              82-83 hereof. Only (i) the information in this document that
              is referenced in the Form 20-F cross reference guide, and (ii)
              the Exhibits, shall be deemed to be filed with the SEC for any
              purpose, including incorporation by reference into any other documents
              filed by Reuters Group PLC pursuant to the Securities Act of 1933,
              as amended, which purport to incorporate by reference  this Form
              20-F. Any information herein which is not referenced in the Form
              20-F cross reference guide, or the Exhibits themselves, shall
              not be deemed to be so incorporated by reference.
            Normalised profits
              and earnings exclude amortisation of goodwill and other intangible
              assets, impairment charges and gains/losses on the disposal of subsidiaries
              and fixed asset investments. Underlying growth is calculated excluding
              acquisitions and disposals and the impact of currency fluctuations.
            As used in this
              report, 'Reuters Group' and 'Group' refer to Reuters Group PLC and
              its consolidated subsidiaries including Instinet Group Incorporated
              (Instinet). The 'company' refers to the parent Reuters Group PLC.
              'Reuters' refers to Reuters Group excluding Instinet.
            The consolidated
                 financial statements of Reuters Group included in this report
                are
              presented in pounds sterling (£). On 31 December 2002, 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 (Noon Buying Rate) was US$1.61 = £1; on
               24  February 2003 the Noon Buying Rate was US$1.59 = £1.
               For additional information on exchange
               rates between the pound
               sterling
               and the
              US dollar, see exchange rates on page 78.
            Reuters Group
                 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
                material
              differences between UK GAAP and US GAAP relevant to Reuters
              Group are explained on pages 65-66.
            This report
              contains forward-looking statements within the meaning of the United
              States Private Securities Litigation Reform Act of 1995 with respect
              to Reuters Group's financial condition, results of operations and
              business and management strategy, plans and objectives for the Group.
              For a discussion of risks associated with these statements see 'Risk
              factors' on pages 34-35
              .
            Reuters, the
              sphere logo and Reuters product names referred to in the report
              are trade marks or registered trade marks of the Reuters Group of
              companies around the world. Other trade marks of third parties are
              used in this report for the purpose of identification only.
| Page 2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

|**Five
                  year summary**                                        
|-------------------------------------------------------------------------------
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|**Three year Reuters customer segments and
          Instinet revenue summary**
|                                                                               
|                                                                               
|                                                                               
|                                                                               

|          
|----------
|          
| Page 3 

|SELECTED FINANCIAL DATA
|-----------------------

|The
              selected financial information set out below is derived, in part,
              from the consolidated financial statements. The selected data should
              be read in conjunction with the financial statements and related
              notes, as well as the operating and financial review.
            The consolidated
              financial statements are prepared in accordance with UK GAAP, which
              differ in certain respects from US GAAP. For a summary of
              the principal
              differences between UK and US GAAP and related information, see
              pages 65-70 of this report.
            **Consolidated
              profit and loss account
              year ended 31 December**
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|**Amounts
            in accordance with UK GAAP:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Operating
            (loss)/profit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(Loss)/profit
            on ordinary activities before taxation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(Loss)/profit
            on ordinary activities after taxation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Basic
            (loss)/earnings per ordinary share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Diluted
            (loss)/earnings per ordinary share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Basic
            (loss)/earnings per ADS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Diluted
            (loss)/earnings per ADS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Dividends
            declared per ordinary share (including UK tax credit)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Dividends
            declared per ADS (including UK tax credit):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Weighted
            average number of ordinary shares (in millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|**Amounts
            in accordance with US GAAP:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(Loss)/Income
            before taxes on income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Net
            (loss)/income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Basic
            (loss)/earnings per ordinary share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Diluted
            (loss)/earnings per ordinary share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Basic
            (loss)/earnings per ADS (after accounting change)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Diluted
            (loss)/earnings per ADS (after accounting change)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Dividends
            declared per ordinary share (including UK tax credit)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Dividends
            declared per ADS (including UK tax credit):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Weighted
            average number of ordinary shares (in millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|**Consolidated
            balance sheet data
            as
            at 31 December**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|**Amounts
            in accordance with UK GAAP:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Total
            assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Long-term
            debt and provisions for charges (excluding deferred tax)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Net
            assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Shareholders'
            equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Share
            capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|**Amounts
            in accordance with US GAAP:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Total
            assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Long-term
            debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Net
            assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Shareholders'
            equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

|          
|----------
|          
| Page 4 

|COMPANY INFORMATION
|-------------------

|BUSINESS OVERVIEW
|-----------------

|The Reuters
                Group includes  the core Reuters information business (Reuters)
                and Instinet Group
              Incorporated, a 63% owned public subsidiary, which operates the
                largest global electronic agency securities brokerage (Instinet).
            Reuters, the
                global information company, provides valuable information and
                related
                   services tailored for professionals in the financial services,
                  media
                and corporate markets. Reuters information is trusted and drives
                  important  decision making across the globe based on Reuters
                  reputation
                  for speed,
                accuracy and independence. Reuters has 15,900 staff in 94 countries,
                   including some 2,400 editorial staff in 197 bureaux, making
                  Reuters
              the world's largest international multimedia news agency.  Instinet
               had  approximately 1,500 employees in 12 countries. In 2002
               the Reuters Group had revenues of £3.6 billion.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|REUTERS STRATEGY
|----------------

|On
              18 February 2003 Reuters announced it was accelerating its transformation
              strategy to become a more competitive, focused and profitable information
              company. The three-year action plan, *Fast
              Forward*,
              is intended to strengthen Reuters core information business. It
              addresses the impact of structural changes in the financial services
              industry including consolidation, reduced headcount, growth in market
              data volumes and increasing regulation.
            The five principal
              components of the *Fast
              Forward*plan are:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**1.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|**2.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|**3.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|**4.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|**5.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|See
            'Operating and financial review' for information concerning the expected
            financial impact of the *Fast
            Forward*
            plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

|REUTERS MARKETS DRIVE ITS ORGANISATIONAL STRUCTURE
|--------------------------------------------------

|Reuters operates
              its business through customer segments, geographic sales and service
              channels and shared resources to build, sell and support the products
              and services its customers need.
            **Customer
                Segments.**Three of Reuters four customer segments serve financial markets:
              Treasury Services, Asset Management and Investment Banking. The
              fourth, Corporates & Media, builds on Reuters
              well established media business and also aims to use Reuters assets
              to serve a broader customer base. Since February 2003, Reuters product
              management activities have been integrated with the customer segments
              to facilitate the move to a single product architecture and segmentation
              of the product line.
      ***Treasury Services.***Reuters
              has a long history of helping customers operate more effectively
              in the foreign exchange and money markets and has built a powerful
              global franchise. The largest segment, Treasury Services provides
              news, prices, analytics and transaction services. It also offers
              solutions that enable customers to service their customers efficiently
              and software applications that enable financial institutions to
              understand and manage their risks, cash flow and order flow. Treasury
              customers are foreign exchange and money market professionals working
              in banks, brokerages and exchanges, and corporate and institutional
              treasuries. This customer segment also provides real-time news and
              data to the commodities and energy markets. At present, Reuters
              has more than 66,400 professional users of its treasury information
              products and a community of 18,000 members who actively trade with
              each other using Reuters dealing services.
      Reuters believes
              that providing banks with the capabilities they need to address
              the foreign exchange and money market requirements of their customers
              will be an important area. For this reason, in December 2002 Reuters
              acquired AVT Technologies Ltd. (AVT), a leading provider of automated
              dealing services and tailored solutions in this sector.
            ***Asset Management.***The asset
              management market is a large and diverse sector in which Reuters
              has a substantial presence. Reuters provides news, prices, analytics
              and transaction services to help asset managers make trading and
              investment decisions and gain access to liquidity. Reuters helps
              them to differentiate their services from those of their competitors
              and to communicate effectively with their customers and with each
              other. Reuters also enables them to streamline their business and
              transact more easily. Customers of this segment, which include the
              top 50 asset management firms around the world, range from institutional
              fund managers and hedge funds to private banks and retail broking
              houses. Reuters offers services for a wide range of roles within
              firms. These include portfolio managers, research analysts, traders
              and private wealth managers. Under the Lipper brand Reuters offers
              world class funds data and analytics for both equities and bonds.
            ***Investment
                Banking.*******Reuters
              is well established in the investment banking sector. It provides
              news, prices, analytics and transaction services for a diverse range
              of organisations and end-users. Key customers are global, regional
              and boutique investment banks, brokerage and venture capital concerns.
              Within these firms, Reuters serves a wide range of professionals
              including equity and fixed income salespeople, traders and brokers,
              research analysts and corporate finance and M&A professionals.
              In addition, Reuters provides content and software solutions to
              serve the enterprise needs of its customers.
            ***Corporates & Media.***Reuters
              Media business is directed towards serving the needs of the world's
              newspapers, television and cable networks, radio stations, websites
              and consumers. Reuters offers its retail customers direct access
              to a segmented offering of news and data products through its branded
              websites (such as www.reuters.com and www.reuters.co.uk), books
              and signage (such as www.thebigpicture@3xsq.com). Reuters has a
              long history of innovation in the media business, including having
              been the first to introduce fully packaged, multimedia news products
              for online publishers and having developed NewsML, the emerging
              internet standard for news delivery.
            The Corporates
              businesses provide research, advisory and business intelligence
              services to customers primarily outside financial services, though
              much of their content is available to financial services clients
              as well. Reuters research business provides proprietary, high-value,
              decision-support information to a wide range of corporate customers
              who can be reached cost-effectively through its financial products
              or directly utilising web technology. Reuters research subsidiaries,
              Tower Group and Yankee Group, service the information needs of information
              technology, communications and financial services corporate customers.
              Factiva, Reuters joint venture with Dow Jones, operates one of the
              world's richest and most diverse news and information retrieval
              services. Reuters relationship with Datamonitor, a European based
              research company (in which it holds a 20% equity interest), allows
              Reuters to report information on an extensive range of companies
              and industries (including healthcare, automotive and energy). Reuters
              subsidiary ORT SA provides its customers with company information
              and summary credit evaluations of a number of French and Belgian
              companies.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| Page 5 ACQUISITION OF MULTEX
|-------------------------------

|On 18 February 2003
            Reuters announced it had entered into a definitive agreement to acquire
            Multex for a total of £121 million in cash. Multex possesses
            significant content assets, access to the research community and market
            experience that Reuters expects to bring substantial benefits to it
            and its customers. Reuters expects that the acquisition will strengthen
            its financial information products with the addition of deeper global
            company information and estimates as well as global research content.
            Reuters intends to combine these assets with its own to offer the
            producers and consumers of investment research innovative, cost-effective
            solutions. Outside of the professional financial markets, Reuters
            expects to use these assets to create segmented online financial news,
            data and research products for retail consumers as well as corporate
            and media customers. Under the acquisition agreement, Reuters commenced
            a tender offer for all outstanding Multex shares on 26 February 2003
            which, subject to satisfaction of its conditions, Reuters expects
            to complete by the end of March 2003. Following the acquisition, Multex
            will become a wholly-owned subsidiary of Reuters.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|GEOGRAPHIC SALES AND SERVICE CHANNELS
|-------------------------------------

|Reuters serves
              its  customers through three geographic sales and service channels:
              the
            Americas; Europe, Middle East and Africa; and Asia Pacific. Members
               of the sales and service team locally work with customers to build

            global and local relationships and to identify the best mix of products
               and solutions for each individual enterprise and to provide after

            sales service to help customers and users get the most out of investments
               made. These sales channels provide feedback to the customer segments

            on how products are working and how they can be enhanced to meet
              future  customer needs. Revenues for the three years to 31 December
              2002 are
            analysed by segment on pages
            27-28 of  the operating
            and financial review and by geography and by segment on
            pages 37-38 in
            note 1 on  the consolidated profit and loss account.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|REUTERS CENTRES OF EXCELLENCE
|-----------------------------

|Reuters future success
              depends on its ability to create and deliver innovative and trusted
              services. Support is provided to the customer segments through shared
              centres of excellence providing specialist services  the Business
              Technology Group, the Chief Information Office, Editorial, Business
              Support Services and Corporate.
            **The
                  Business Technology Group**              includes technical operations, development and data staff. BTG's
              role is to create a coherent and high quality product line that
              delivers considerable value and satisfaction to customers, supporting
              the evolving customer segment strategies with the Fast
              Forward plan overarching these.
            **The
                  Chief Information Office's** role is to establish a strong, consistent IT strategy across the
              Group and to bring innovation into the business through technology
              leadership.
            **Editorial's** role is to cover and edit the news to the highest standards so as
              to meet the needs of customers. Reuters news has been a benchmark
              of excellence for more than 150 years and underpins our reputation
              for speed, accuracy, integrity and freedom from bias.
            **Business
                  Support Services and Corporate**              ensure the business operates as efficiently as possible. These Groups
              include functions such as Finance, Human Resources and Legal.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|PRODUCTS AND SERVICES
|---------------------

|Approximately half
              a million financial professionals across the globe each day receive
              market data, in-depth news, quotes, statistics and analytics on
              financial and commodity markets from Reuters. Known for its expertise
              in journalism, Reuters is also the largest financial information
              provider in the world with annual sales of £3.0 billion (US$4.4
              billion) in 2002.
            Relying on its
              considerable experience in the financial information industry and
              incorporating advanced technologies, Reuters has played an important
              role in redefining this rapidly changing industry and, as a result,
              provides a wide range of products and services that offer content,
              analytics, communities and openness to help customers succeed.
            Reuters products
              and services fall into the broad categories of Information, Transaction
              & Interaction and Solutions; many of these products serve more
              than one customer segment.
            ***Information.***              These
              products help professionals turn raw data into useable information,
              so they can make decisions with confidence.
            Financial information
              is collected from an array of sources including exchanges, over-the-counter
              markets, research services and other contributors such as energy
              and fixed income providers. The data is available through various
              delivery platforms such as workstations, datafeeds and internet
              solutions.
            High-powered
              workstations, such as Reuters 3000 Xtra and Reuters BridgeStation,
              operate on Microsoft Windows software and combine cross-market data
              with superior analytics, charting capabilities and news, so that
              traders, analysts, money managers, economists and others have the
              tools they need to interpret and act in the marketplace. Reuters
              also offers rich data and tools delivered in an internet browser,
              providing both convenient and cost-effective information solutions.
            ***Transaction & Interaction.***Reuters
              Global Routing Service (RGRS) (formerly known as IOE/Reuters Intertrade
              Direct), is a large order routing network that connect buyers and
              sellers by providing customers with electronic access to multiple
              brokers, including Instinet and Bridge Trading Company (BTC). Reuters
              is currently in the process of bringing end-to-end transactional
              capabilities to its equity clients through RGRS as well as its strategic
              alliance with Orc Software AB which will provide direct trading
              access to the world's leading equity and equity derivatives exchanges.
            Treasury customers
              can choose from tiered product offerings, such as Reuters Dealing
              3000 and Reuters Dealing Link, a browser-based version, which provides
              them access to a community with over 18,000 foreign exchange and
              money markets traders. BTC, a New York Stock Exchange (NYSE) member,
              provides agency trading for institutional customers. Instinet also
              provides substantial services in this area, as described below.
            ***Solutions**.*In
              addition to helping customers manage their trading and investments,
              Reuters also helps them better manage risk throughout their organisation.
              These products are particularly suited to foreign exchange and money
              market professionals in the middle and back offices of banks and
              large corporations who are responsible for risk management systems,
              position-keeping, pricing, risk analysis, credit and other exposure.
              Products such as Reuters Kondor+, a real-time position-keeping system,
              Reuters KreditNet, a real-time credit limits management solution,
              and Reuters KvaR+, which coordinates with Reuters Kondor+ and other
              position-keeping systems to provide consolidated enterprise-wide
              risk information and analysis on all financial activities within
              an organisation, help treasury professionals make informed decisions
              in managing the financial exposure of their trading room activities.
              Reuters also offers a back office solution, Reuters Trade Processing,
              that facilitates the daily processing of trades through clearing
              and settlement and into the client's accounting systems.
            Using its strengths
              in data management and technology know-how, Reuters helps customers
              automate and integrate their own internal business processes. Products
              like the Reuters Market Data System help companies address problems
              managing financial content across their trading environment, which
              results in greater performance, reliability and ultimately, profitability.
            ***New capabilities
                for the future.***In
              October 2002 Reuters Messaging was unveiled, an instant messaging
              service built specifically for financial professionals that enables
              them to collaborate in real time with their customers and colleagues.
              In 2003 Reuters expects to launch a number of new products. These
              include Reuters Knowledge, a new information service for research
              and investment banking professionals that combines a number of functions
              they need to do their job into one product; the European Markets
              Suite, aimed at Eurozone professionals; and Reuters Intelligent
              Advisor, a service designed to meet the needs of private wealth
              advisers.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| Page 6 INSTINET
|------------------

|Instinet, the largest
           global electronic agency securities broker, has been providing

              investors with electronic trading solutions for more than 30 years.
           Its services enable buyers and sellers worldwide to trade securities

              directly and anonymously with each other, gain price improvement
           for their trades, manage their orders and lower their overall trading

              costs. Through its electronic platforms, Instinet's customers also
           can access over 40 securities markets throughout the world, including

              Nasdaq, the NYSE and stock exchanges in Frankfurt, Hong Kong, London,
           Paris, Sydney, Tokyo, Toronto and Zurich. Instinet's customers primarily

              consist of institutional investors, such as mutual funds, pension
           funds, insurance companies and hedge funds, as well as market professionals,

              including broker-dealers.
            Instinet completed
              an initial public offering in May 2001 and its common stock is listed
              on the Nasdaq Stock Market (symbol INET.O). In October 2001 Instinet
              acquired ProTrader Group LP, a provider of advanced trading technologies
              and electronic brokerage services, for consideration consisting
              of cash and shares. In September 2002, Instinet completed its acquisition
              of Island Holding Company, Inc., the parent company of The Island
              ECN, Inc. (Island), a leading electronic securities marketplace,
              in an all-stock transaction. As a result of the initial public offering,
              the ProTrader acquisition and the Island acquisition, Reuters Group's
              shareholding of Instinet is now approximately 63%.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|COMMUNICATIONS NETWORKS AND EQUIPMENT
|-------------------------------------

|The Group uses multiple
              communications networks, employing a complex variety of technologies,
              for distribution of its products. Reuters Group completed the first
              year of a major strategic initiative to migrate its principal product
              sets from its prior network infrastructures on to a single global
              IP-based network provided by Radianz Limited (Radianz), the 51%
              owned joint venture with network services provider Equant BV. This
              will deliver greater resilience, speed and capability at lower overall
              cost.
            Reuters has
              four global technical centres, two main technical centres and many
              smaller local data centres. Our data centres are linked by communications
              services provided by Radianz, using dedicated international communications
              circuits that rely on satellite links, optical fibre cables and
              coaxial cables. These circuits are leased by Radianz from various
              governmental and private telecommunications operators including
              Equant. Communications between data centres and subscribers are
              provided by Radianz in 20 countries and by Reuters directly or third
              parties elsewhere; they mainly use 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.
            For further
              information regarding Radianz and the relationship between Reuters
              Group and Radianz, see page 77.
            Two of the global
              technical centres and a number of smaller distribution centres were
              acquired in 2001 as part of Reuters acquisition of the core North
              American equities information and trading businesses of Bridge Information
              Systems, Inc. Some of these smaller distribution centres, located
              in Europe and Asia, are maintained by Moneyline Telerate (which
              acquired certain other businesses of Bridge).
            The network
                services agreements with Radianz and with Savvis Communications
                Corporation (Savvis), Bridge's legacy network service provider,
                are important to the Group's capability to deliver products and
                services to customers. Although reasonable steps are taken to
                ensure
              continuity of service, any failure or interruption of such systems
                could have a significant effect on the Group's business (see Risk
              factors on page
              34). A summary of these network services agreements
              is given on page 77.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|SUBSCRIBERS
|-----------

|                                                                                                                                                                                                                              |                         |      |     
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------- | ---- | ----
|Reuters
            products are generally billed by number of user accesses to datafeeds,
            portable devices and terminals. The number of accesses at the end
            of the last three years are shown below:
|                                                                                                                                                                                                                              | 31
            December
|                                                                                                                                                                                                                             
|000s                                                                                                                                                                                                                          | **2002**                | 2001 | 2000
|                                                                                                                                                                                                                             
|Premium
            products*                                                                                                                                                                                                 | **93**                  | 84   | 31  
|2000/3000
            series                                                                                                                                                                                                  | **98**                  | 134  | 166 
|Mid
            and lower tier                                                                                                                                                                                                | **302**                 | 374  | 330 
|                                                                                                                                                                                                                             
|Total                                                                                                                                                                                                                         | **493**                 | 592  | 527 
|                                                                                                                                                                                                                             
|*Premium
            products include 3000 Xtra, Dealing and BridgeStation.                                                                                                                                                  

|JOINT VENTURES AND ASSOCIATES
|-----------------------------

|Reuters principal
              joint ventures and associates include:
            ***TIBCO Software
                Inc. (TSI).*** TSI
              provides total business integration solutions delivering infrastructure
                software that enables businesses to integrate their business
                systems
              in real-time. In 1999 TSI completed an initial public offering
                of its common stock on the Nasdaq Stock Market (symbol TIBX.O).
                At
              31 December 2002 Reuters held approximately 50% (39% fully diluted)
                of the outstanding shares of TSI. Reuters Group does not consolidate
                TSI for accounting purposes. For information on a license agreement
                between Reuters and TSI with respect to TIBCO technology, see Related
              party transactions on page
              72.
            ***Radianz.***Radianz,
              the joint venture with Equant, was formed in 2000 to develop a secure
              internet protocol network for use by the financial services industry.
              Reuters own 51% of the company but shares voting control and therefore
              does not consolidate Radianz as a subsidiary for accounting purposes.
              Radianz connects all types of market participants: brokers, institutions,
              exchanges, custodians, and clearing and settlement houses. An important
              part of Reuters strategy is to build communities in the securities
              markets as Reuters has done in the foreign exchange and money markets.
            ***Factiva.***Factiva
              is a 50% owned joint venture with Dow Jones formed in 1999. It provides
              a broad range of global news and a deep historical archive of business
              information. Through its products and technology solutions Factiva
              enables enterprises to retrieve information and to integrate content
              into their business applications and intranet portals. Factiva's
              business information includes Reuters and Dow Jones newswires, plus
              nearly 8,000 other newspaper and periodical sources and 8,500 business-oriented
              websites from around the world, delivered in 22 languages. These
              sources provide current news, historical articles, photographs,
              market research and investment analyst reports, and stock quotes.
              Factiva's primary audience consists of information professionals
              and researchers, with around 70% of their revenue derived from sources
              outside the financial services sector. Reuters is a major distributor
              of Factiva content within the financial services sector. Reuters
              Group does not consolidate Factiva for accounting purposes.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|COMPETITORS
|-----------

|The Group faces
              significant competition in all market sectors and geographical areas
              in which it operates.
            Competing information
              products for the financial markets are offered by Bloomberg LP,
              Quick Corporation of Japan, Telekurs AG, Thomson Financial, a division
              of The Thomson Corporation, Sungard, Moneyline Telerate (including
              the Telerate business formerly owned by Bridge) and Factset, plus
              a number of smaller local and regional competitors. In connection
              with the Bridge acquisition, Reuters agreed to provide Moneyline
              Telerate with various network, software development, data management,
              customer support, administrative and other transitional services
              and granted to Moneyline Telerate certain intellectual property
              and software licenses. Moneyline Telerate agreed to provide Reuters
              with various field support, network and administrative services
              and co-location rights, in each case for a term not to exceed four
              years (depending upon the service in question). Page 7 
              The Lipper funds information
              business competes with Morningstar Inc, the Micropal unit of Standard
              & Poor's, a division of the McGraw-Hill Companies Inc., Value
              Line Inc and Thomson Corporation's CDA Weisenberger.
            Reuters foreign
              exchange spot matching services compete with the Electronic Broking
              Service and Bloomberg. Reuters money and foreign exchange transaction
              products also compete with voice brokers in the relevant markets.
            Competitors
              in the supply of market data systems include Misys plc, Sunguard
              Data Systems Inc and CSK Software and a large number of other vendors.
              Competition for the supply of company, financial and industry specific
              information is fragmented widely among traditional information providers
              such as Bloomberg, Thomson Financial and Dow Jones, among online
              exchanges such as ICE and NYMEX and among niche players with specialist
              tools or local market coverage such as CQG and MetalBulletin.
            Reuters main
              competitors in the supply of news to the media are Associated Press,
              Agence France Presse, Dow Jones and Bloomberg News.
            Instinet competes
                with the following, among others: market makers and other traditional
                broker-dealers (including many of its own customers) acting as
                agent
              or principal; traditional and electronic trading methods in use
                on US and international exchanges, including NYSE specialists
                and
              the electronic matching systems of international exchanges; the
                trading platform for the Nasdaq market, known as SuperMontage,
                and
              Nasdaq's primex system which enable NASD members to trade electronically
                in Nasdaq quoted stocks; the NYSE's institutional Xpress, NYSE
                Openbook
              and NYSE Direct products; electronic communications networks (ECNs),
                alternative trading systems (ATSs), electronic brokers and other
                electronic trading systems, including Bloomberg Tradebook and
                Archipelago-Redi;
              automated trade execution services developed by third party vendors
                for commercialisation in a wide range of financial product markets;
              and trading system software companies.
            The financial
              services industry generally, and the securities brokerage business
              in which Instinet engages in particular, is very competitive. Instinet
              has experienced intense price competition in its equity securities
              business in recent years. Also, some of its competitors may have
              more modern technology and a broader range of services and, therefore,
              may be able to offer brokerage services to customers at lower prices
              than Instinet can. As a result, Instinet has aggressively reduced
              pricing for its US broker-dealer customers. These pricing changes
              have caused the transaction fee revenue Instinet receives from this
              customer group to decline significantly and could cause the transaction
              fee revenue it receives from this customer group to continue to
              decline, even if their volumes increase. As a result of Instinet's
              reduced pricing for its US broker-dealer customers, it has experienced
              a decline in revenue and volatility in its market share. As a result
              of these pricing changes, Instinet has taken, and will continue
              to take, actions to reduce costs, which may include reducing staff
              levels, consolidating facilities, and reducing operational and transaction-related
              expenses, among other alternatives. Instinet expects intense competition
              to continue, and if it does so or intensifies, it could lose further
              market share and revenue.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|CAPITAL INVESTMENTS, EXPENDITURE AND DIVESTITURES
|-------------------------------------------------

|                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                             
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Since
            the beginning of 2000, the Group has made a number of acquisitions
            and has invested in several new and existing businesses including
            several joint ventures. The principal acquisitions and investments
            (none of which exceeded a cost of £50 million, save where otherwise
            stated) were:                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                             
|•                                                                                                                                                                                                                                                                                                                                                                                                                                        | *O R Télématique
                SA* (now
            known as ORT SA), acquired in 2000, a leading online provider of company
            information;                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                             
|•                                                                                                                                                                                                                                                                                                                                                                                                                                        | *Yankee Group
            Research Inc.,*
            acquired in 2000, an international technology research and advisory
            firm specialising in sectors essential to e-business;                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                             
|•                                                                                                                                                                                                                                                                                                                                                                                                                                        | *Diagram fip SA,*            acquired
            in March 2001, a major European provider of financial software solutions
            for the capital markets;                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                             
|•                                                                                                                                                                                                                                                                                                                                                                                                                                        | *ProTrader Group
            LP,* acquired
            by Instinet in 2001 for total consideration valued at £105 million;                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                             
|•                                                                                                                                                                                                                                                                                                                                                                                                                                        | certain businesses
            of *Bridge
            Information Systems, Inc.,* acquired
            in September 2001 for total consideration of £256 million, including
            interim funding to Bridge and Savvis;                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                             
|•                                                                                                                                                                                                                                                                                                                                                                                                                                        | *Island Holding
            Company Inc.,* acquired
            by Instinet in September 2002 for stock consideration having a value
            at the closing of £194 million;                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                             
|•                                                                                                                                                                                                                                                                                                                                                                                                                                        | *Capital Access
            International LLC,* which
            provides fixed income holdings information, acquired in November 2002;                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                             
|•                                                                                                                                                                                                                                                                                                                                                                                                                                        | *AVT Technologies
            Ltd,* a specialist
            in foreign exchange transaction technology, acquired in December 2002;
            and                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                             
|•                                                                                                                                                                                                                                                                                                                                                                                                                                        | in February 2002,
            Reuters entered into a definitive agreement to acquire Multex for
            £121 million in cash, which is subject to the satisfaction of
            customary conditions and is expected to complete by the end of March
            2003.
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                             
|In
              October 2001 Reuters sold its interest in VentureOne Corporation,
              a provider of information and research for the venture capital investment
              industry, to Wicks Business Information, LLC for a net consideration
              of £18 million in cash.
            The principal
              disposals or closures in 2002 were:                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                             
|•                                                                                                                                                                                                                                                                                                                                                                                                                                        | in September
            2002, Reuters sold its 20% shareholding in London News Radio;                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                             
|•                                                                                                                                                                                                                                                                                                                                                                                                                                        | in September
            2002 and November 2002, Reuters sold Diagram Asset Management and
            Diagram EDI respectively, two non-core units that were acquired as
            part of the acquisition of Diagram fip SA in 2001;                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                             
|•                                                                                                                                                                                                                                                                                                                                                                                                                                        | in December 2002,
            Reuters sold its 40% shareholding in Sila Communications;                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                             
|•                                                                                                                                                                                                                                                                                                                                                                                                                                        | during 2002,
            Atriax ceased operations and is currently in the process of being
            liquidated by its shareholders; and                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                             
|•                                                                                                                                                                                                                                                                                                                                                                                                                                        | Reuters disposed
            of or closed a total of 56 units in 2002.                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Total
              capital expenditure for acquisitions, investments in joint ventures,
              associates and other investments during 2002 was £317 million
              (2001: £519 million, 2000: £426 million).
            Further information
                 relating to investments, acquisitions, joint ventures and disposals

              in 2002 is provided in note
              16 and note
              31.

|GOVERNMENT REGULATION
|---------------------

|The UK Financial
              Services Authority (FSA) under the Financial Services and Markets
              Acts 2000 regulates Reuters Limited, the principal operating company,
              as a service company.
            Reuters Transaction
              Services Limited (RTSL), through which Dealing 3000 Spot and Forwards
              Matching are operated, is subject to regulation by the FSA equivalent
              to that applied to broking participants in the London foreign exchange
              market. The operations of RTSL's Singapore branch are subject to
              oversight by the Monetary Authority of Singapore and those of the
              Hong Kong branch by The Hong Kong Monetary Authority. The Group's
              other UK authorised firms include Reuters InterTrade Direct SA,
              also regulated as a service company, and Bridge Trading Company
              UK Limited which, under the passporting provisions of the EU Investment
              Services Directive, allows for the introduction of UK and EU clients
              directly to Bridge Trading Company in the US. Page 8 
              As registered
                broker-dealers,  members of self-regulatory organisations in
                the US and other countries
              in which they operate and, in the case of the Instinet ATS and
                the Island ATS as operators of electronic communications networks
                and alternative
              trading systems in the US, Instinet and BTC are subject to regulation
                 under the US securities laws and their equivalents in other
                countries,
              including but not limited to net capital requirements, and to possible
                 increased levels of regulation in the future. The regulatory
                framework
              generally applies directly to Instinet and BTC affiliates that
                are  registered or licensed in various jurisdictions.
            The use of communications
              links is subject to government licensing in several countries.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|CORPORATE STRUCTURE
|-------------------

|The Group conducts
            its business through a portfolio of companies, including wholly and
            partly owned subsidiaries, joint ventures and associated companies.
            Information concerning the most significant companies is contained
            in note 32.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|PROPERTY, PLANT AND EQUIPMENT
|-----------------------------

|The
              Group's tangible fixed assets are primarily in the form of computer
              systems equipment that form the infrastructure for the company's
              business. This equipment is distributed across global sites with
              greater concentration at the major global and regional technical
              centres. A reducing proportion of the equipment is located at customer
              sites around the world.
            The Group's
              principal facilities are:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|The
              London properties and the New York technical centre are situated
              on land owned by Reuters, whereas the buildings in Geneva and Singapore
              were built by us on leased land. The leases, including periods covered
              by options to extend, expire in 2095 and 2050, respectively. The
              Reuters Building at 3 Times Square is owned, and was developed jointly,
              by Reuters and Rudin Times Square Associates LLC. In May 2001 Reuters
              leased 692,000 sq. ft. from the venture of which 360,000 sq. ft.
              was subleased to Instinet. The principal part of Reuters lease will
              expire in 2021. Reuters secured its lease position with a $120 million
              letter of credit. In St. Louis, all four corporate office buildings
              (211,000 sq. ft.) are owned, and the 32,000 sq. ft. warehouse is
              leased (and in turn subleased to Savvis) for a term that expires
              in 2004. One of the global technical centres in St. Louis is located
              in an owned facility and the other is located in a leased facility,
              whose lease expires in 2004. The 5.4 acre parcel of land is currently
              under ground lease to Savvis for a term expiring in 2099.

|HISTORY AND DEVELOPMENT
|-----------------------

|Though its predecessor
               was formed in London in 1851, the ultimate holding company for
              the
            Group, Reuters Group PLC, was incorporated in England and Wales on
               24 December 1996. Reuters registered office and corporate headquarters

            are located at 85 Fleet Street, London EC4P 4AJ, England (telephone:
               +44 (0)20 7250 1122).
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|LEGAL PROCEEDINGS
|-----------------

|Reuters Group is
              a party to certain legal proceedings including the following:
            Island commenced
              an arbitration proceeding before the NASD against Archipelago L.L.C.
              (Archipelago), B-Trade Services LLC (B-Trade), and REDIBook ECN
              L.L.C. (REDIBook). Island alleged that each respondent entered into
              a subscriber agreement with Island which prescribed certain fees
              and, despite Island's demand that each respondent abide by the terms
              of its contract, each respondent has refused to pay such fees. Island
              is seeking approximately US$11 million in total damages, of which
              approximately US$1.9 million is from B-Trade, US$5.1 million from
              Archipelago and US$4 million from REDIBook. Archipelago and REDIBook
              have counterclaimed against Island alleging that Island engaged
              in unfair, discriminatory pricing practices against them and asserting
              claims involving breach of contract, breach of obligation of good
              faith, and attempted monopolisation and conspiracy to restrain trade
              under the US Sherman Act. These counterclaims allege damages of
              no less than US$30 million before trebling, for a total of no less
              then US$90 million trebled damages pursuant to the federal antitrust
              laws. B-Trade also counterclaimed alleging a breach of contract
              counterclaim against Island and seeking at least US$2.75 million
              in damages. Island intends to pursue vigorously its claims and oppose
              respondents' counterclaims.
            Archipelago
              commenced a separate action against Instinet before the NASD in
              which it alleged that Instinet also engaged in unfair, discriminatory
              pricing practices against it and asserted claims involving breach
              of contract, breach of obligation of good faith, and attempted monopolisation
              and conspiracy to restrain trade under the Sherman Act. Archipelago
              in its claim seeks no less than US$41 million before trebling for
              a total of no less than US$123 million trebled damages. Instinet
              intends to defend vigorously this proceeding by asserting certain
              affirmative defences and its own counterclaims against Archipelago.
            NexTrade Holdings,
              Inc. has commenced an action against certain Instinet ProTrader
              subsidiaries alleging that they have infringed certain of NexTrade's
              trade mark rights. The plaintiff seeks to recover all of these subsidiaries'
              profits, gains and advantages resulting from the unauthorised use
              of the trade mark, damages sustained by the plaintiff of no less
              than US$15 million before trebling and that such damages be trebled,
              and exemplary and punitive damages of not less than US$90 million.
              The defendants intend to vigorously contest the plaintiff's claims.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|          
|----------
|          
| Page 9 

|DIRECTORS' REPORT
|-----------------

|The directors submit
            their annual report and audited financial statements for the year
            ended 31 December 2002.
|--------------------------------------------------------------------------------------------------------------------------------------

|ACTIVITIES
|----------

|The Group's
              business  is described on page
              4
              . A detailed review of activities
              during 2002  and likely future developments is given on
              pages 4-8 and 24-33.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|SHARE CAPITAL AND DIVIDENDS
|---------------------------

|Details of the changes
              in the authorised and called-up share capital are set out in notes
              26 and 27 on page 57. Details of major shareholdings are given on
              page 71
              .
            An interim dividend
              of 3.85 pence per ordinary share was paid on 4 September 2002. The
              directors recommend a final dividend of 6.15 pence per ordinary
              share, giving a total of 10.0 pence per ordinary share for the year
              (2001: 10.0 pence). Subject to shareholders' approval at the annual
              general meeting to be held on 17 April 2003, the final dividend
              will be paid on 24 April 2003 to members on the register at the
              close of business on 14 March 2003.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|EMPLOYEES
|---------

|Since the last annual
              report the total number of the Group's employees has been reduced
              by some 3,000 people as a result of the business and structural
              changes which have been implemented. The total number of Reuters
              Group employees at 31 December 2002 was 17,414 (31 December 2001:
              19,429). Details of average numbers of employees by segment are
              given on page 42.
            It is Reuters
              policy that selection of employees, including for recruitment, training,
              development and promotion, should be determined solely on their
              skills, abilities and other requirements which are relevant to the
              job and in accordance with the laws in the country concerned. Reuters
              equal opportunities policy is designed to ensure that disabled people
              are given the same consideration as others and enjoy the same training,
              development and prospects as other employees.
            To provide employees
              with the information they need to understand and achieve the Group's
              business objectives, Reuters makes extensive use of its intranet
              as a communication tool. Meetings are regularly held between management
              and employees' union representatives so that the views of employees
              can be taken into account in making decisions which may affect their
              interests. Reuters European Employee Forum operates as a pan-European
              works council. The Chief Executive or other executive directors
              meet with the Forum regularly. Regular employee surveys are undertaken
              to evaluate morale and to identify any employee issues that need
              to be addressed. The results are communicated to employees.
            The Board values
              the courage and professionalism shown by employees operating in
              zones of conflict. Reuters has reviewed the adequacy of its policies,
              training and procedures for employees generally and for those working
              in dangerous places in particular. Reuters has reaffirmed the standing
              instructions to employees to avoid risks wherever possible and for
              hostile environment training and protective equipment to be provided
              to all employees who may need them.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|CHARITABLE CONTRIBUTIONS
|------------------------

|In 2002 Reuters
              continued to support community initiatives and charitable causes,
              mainly through the work of the Reuters Foundation charitable trust.
              A report on the activities of the Foundation and the Group's wider
              corporate social responsibility programme can be found in the 2002
              annual review or on Reuters website (www.reuters.com/csr). The total
              cash donated by Reuters in the year amounted to £4.7 million.
              In addition to these cash contributions, employees are encouraged
              to give their time and skills to a variety of causes and Reuters
              provides valuable equipment and information services free of charge.
            No political
              contributions were made by Reuters.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|CREDITOR PAYMENT TERMS
|----------------------

|It is the Group's normal
            procedure to agree terms of transactions, including payment terms,
            with suppliers in advance. Payment terms vary, reflecting local practices
            throughout the world. It is Group policy that payment is made on time,
            provided suppliers perform in accordance with the agreed terms. Group
            trade creditors at 31 December 2002 were equivalent to 18 days' purchases
            during the year (2001: 24 days).
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|AUTHORITY FOR COMPANY TO PURCHASE OWN SHARES
|--------------------------------------------

|At the annual general
            meeting held on 23 April 2002, members renewed the company's authority
            under section 166 of the Companies Act 1985 to make purchases of up
            to 143,206,517 ordinary shares at a price of not more than 5% above
            their average middle market quotation in the London Stock Exchange
            Daily Official List for the five business days prior to the date of
            purchase, nor less than 25 pence each.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|DIRECTORS
|---------

|The names and biographical
              details of current directors are given on pages 10-11.
            Geoffrey Weetman
                and Dennis Malamatinas retired from the Board in July and October
                2002 respectively, and Niall FitzGerald was appointed as a non-executive
                director with effect from 1 January 2003. On 17 February 2003
                Devin
              Wenig was appointed as an executive director. Ed Kozel, Roberto
                Mendoza and Dick Olver retire by rotation and are proposed for
                re-election
              as directors at the forthcoming annual general meeting. Niall FitzGerald
                and Devin Wenig having been appointed by the Board since the
                last
              annual general meeting also retire and are proposed for election.
                As non-executive directors, Ed Kozel, Roberto Mendoza, Dick Olver
                and Niall FitzGerald do not have service contracts. Details of
                the
              remuneration of the non-executive directors and information on
                the service contracts and remuneration of the executive directors
                are
              set out
              on pages 13-21, together with details of directors' interests
              in shares of the company and its subsidiaries.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|POST BALANCE SHEET EVENTS
|-------------------------

|Details of post
              balance sheet events are given on page 61.
            By order of
              the Board**Rosemary
              Martin**Company Secretary 
              24 February 2003
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|           
|-----------
|           
| Page 10 

|DIRECTORS AND SENIOR EXECUTIVES
|-------------------------------

|The directors
        and senior executives of Reuters are:
|-----------------------------------------------------------
|Name                                                       
|                                                           
|**Directors**                                              
|Sir Christopher Hogg                                       
|Thomas Glocer                                              
|Philip Green                                               
|David Grigson                                              
|Devin Wenig                                                
|Sir John Craven                                            
|Niall FitzGerald                                           
|Ed Kozel                                                   
|Roberto Mendoza                                            
|Richard Olver                                              
|Charles Sinclair                                           
|Ian Strachan                                               
|                                                           
|**Senior Executives******                                  
|Graham Albutt                                              
|Christopher Hagman                                         
|Alexander Hungate                                          
|Geert Linnebank                                            
|Stephen Mitchell                                           
|Michael Sayers                                             
|David Ure                                                  
|                                                           
|1 Non-executive
        director                           
|                                                           

|In accordance with
          the company's articles of association at each annual general meeting
          the greater of one third of the directors (or, if the number of directors
          is not a multiple of three, the number nearest to but not greater than
          one third) and the number of directors required to retire pursuant
          to the following criteria shall be proposed for re-election: (i) due
          to retire at the meeting by reason of age; (ii) wishes to retire and
          not offer himself for re-election; or (iii) shall not have retired
          from office by rotation in the period of three years ending on the
          date of the meeting.
      If there are no changes
          to the current Board composition the following directors will be eligible
          for re-election at the annual general meeting in 2004: Sir Christopher
          Hogg, Tom Glocer, David Grigson and Ian Strachan, and in 2005: Charles
          Sinclair, Sir John Craven and Philip Green.
      **Directors**        **Sir Christopher Hogg.** Non-executive Chairman of GlaxoSmithKline plc
  since May 2002 (non-executive director since 1993) and a non-executive director
  of Air Liquide SA since May 2000. Non-executive Chairman of the Royal National
  Theatre since 1995. Member of the International Council of JP Morgan since
  1988. Former Chairman of Courtaulds PLC from 1980 to 1996 (Chief Executive
  1979-1991) and of Allied Domecq PLC (1996-2002). Former non-executive director
  of the Bank of England (1992-1996). Member of the Audit and Nominations Committees.
  Age 66.
      **Tom Glocer.** Chief
          Executive. Former Chief Executive Officer of Reuters Information (2000)
          and President & Senior Company Officer, Reuters America (1998-2000).
          Appointed Chief Executive Officer, Reuters Latin America in 1997 after
          serving in Reuters legal department from 1993. Formerly practised law
          in New York, Paris and Tokyo. Non-executive director of Instinet and
          of the New York City Investment Fund. Member of the International Advisory
          Board of the Monetary Authority of Singapore, the Corporate Council
          of the Whitney Museum and of the Leadership Champions Group (Education)
          of Business in the Community. Age 43.
      **Philip
            Green.** Chief Operating Officer. Joined Reuters in September 1999 as Chief
          Executive, Reuters Trading Solutions. Former Chief Operating Officer,
          Europe and Africa, at DHL International, based in Brussels. Joined
          DHL in 1990 as Regional Director, Northern Europe having previously
          worked in both the UK and US. Non-executive director of SKF AB and
          a director of Radianz and TSI. Member of the Advisory Board of the
          London Business School. Trustee of the London Philharmonia Orchestra.
          Age 49.
      **David Grigson.** Finance
          Director. Joined Reuters in August 2000 from Emap plc where he was
          Group Finance Director and Chairman of Emap Digital. He is a qualified
          chartered accountant and a member of the FSA Practitioners Panel. Formerly
          held senior finance roles in the UK and US at Saatchi and Saatchi Plc
          (1984-1989). Held a number of financial positions at Esso UK from 1980
          to 1984. Also a non-executive director of Instinet. Age 48.
      **Devin Wenig.** Executive
          Director and President  Customer Segments since February 2003.
          President  Investment Banking (2001-2003). Joined Reuters in
          1993 as Corporate Counsel, Reuters America and held a number of senior
          management positions before being appointed President, Reuters Information
          in January 2001. Also a director of Instinet, Multex.com Inc. and Nastech
          Pharmaceutical Company. Age 36.
      **Sir John
            Craven.** Non-executive Chairman of Lonmin Plc since 1997.
            Non-executive director of Fleming Family & Partners. Former member
            of the Board of Managing Directors of Deutsche Bank AG and former
            executive Chairman of Morgan Grenfell Group plc (1989-1997). Former
            non-executive director of Gleacher & Co LLC, Rothmans International
            BV, Ducati SpA and Société Générale de
            Surveillance SA. He is a member of the Canadian and Ontario Institute
            of Chartered Accountants. Member of the Audit Committee and Chairman
          of the Nominations Committee. Age 62. Page 11 
          **Niall FitzGerald.**Chairman
          and Chief Executive Officer of Unilever PLC since 1996. He has held
          a number of posts including finance director during 30 years with Unilever.
          He is also President of the Advertising Association, a Member of the
          Foundation Board of the World Economic Forum and a Fellow of the Royal
          Society for the encouragement of Arts, Manufacturing and Commerce and
          the Association of Corporate Treasurers. Former non-executive director
          of Merck, Ericsson, Bank of Ireland and Prudential plc. Member of the
          Nominations Committee. Age 57.
      **Ed Kozel.******Managing
          Director of Open Range Ventures LLC, a private venture capital firm
          active in telecom, networking and internet start-ups. Also a director
          of Yahoo! and Narus Inc. Formerly a non-executive director of Cisco
          Systems Inc. (2000-2001), where he worked from 1989-2000 in a number
          of roles, including Chief Technology Officer and senior vice president
          for business development. A former non-executive director of TSI (2000-2001).
          Prior to 1989 he worked with SRI International in California. Member
          of the Remuneration and Nominations Committees. Age 47.
      **Roberto Mendoza.**Chairman
          of Egg plc and non-executive director of Prudential plc, Vitro SA and
          The BOC Group PLC. Formerly vice-chairman and director of JP Morgan & Co
          Inc. (1990-2000) and managing director of Goldman Sachs & Co (2000).
          Joined JP Morgan in 1967 with successive assignments in London and
          New York. Member of the Remuneration and Nominations Committees. Age
          57.
      **Dick Olver.**Deputy
          Group Chief Executive of BP p.l.c. since January 2003. Chief Executive
          Officer of BP Exploration & Production Division (1998-2002). A
          member of the Institute of Civil Engineers, he has worked for BP since
          1973. A governor of New Hall School. Chairman of the Audit Committee
          and a member of the Nominations Committee. Age 56.
      **Charles Sinclair.******Group
          Chief Executive of Daily Mail and General Trust plc since 1988. Joined
          Associated Newspapers in 1975 and held a number of roles prior to its
          merger into the Daily Mail Group in 1988. Non-executive director of
          Euromoney Institutional Investor PLC and Schroders plc. Fellow of the
          Institute of Chartered Accountants. Chairman of the Remuneration Committee
          and a member of the Nominations Committee. Age 54.
      **Ian Strachan.**Chairman
          of Instinet since 1 January 2003. Non-executive director of Transocean
          Inc., Johnson Matthey plc and Harsco Corporation. Former Deputy Chairman
          of Invensys plc (1999-2000) and Chief Executive Officer of BTR plc
          (1996-1999). Former Deputy Chief Executive Officer (1991-1995) and
          Chief Financial Officer (1987-1991) of Rio Tinto plc. Also a former
          non-executive director of Commercial Union plc (1991-1995). Member
          of the Audit and Nominations Committees. Age 59.
      **Senior
              Executives****Graham
        Albutt.**President  Business Programs. Graham joined Reuters
        in London in 1987. Held various posts in central and operational business
        functions and, in May 2001, was additionally appointed as Business Integration
        Executive, developing the structure and business model for the integration
        of the recently acquired Bridge assets. Non-executive director of Datamonitor
        PLC. Age 49.
      **Christopher
            Hagman.**Managing Director  Europe, Middle East and
            Africa, since April 2001. Joined Reuters in 1987 based in Sweden
            and has held various senior sales and general business management
            positions in Sweden, Netherlands and the UK. Age 44.
      **Alexander
            Hungate.**Chief Marketing Officer, President  Focus
            Group Accounts since September 2001. In 1993, Alex joined Reuters
            in London as a business development executive. From 1996 to 1998
            he was Executive Vice President of Reuters Marketing before being
            appointed Chief Operating Officer, Reuters America in 1999 and Chief
            Executive Officer, Reuters America in 2000. Before joining Reuters
            Alex worked at Booz Allen & Hamilton as a strategy consultant.
            Non-executive director of British America Business Inc. Age 36.
      **Geert Linnebank.******Editor-in-Chief.
          Geert became Editor-in-Chief in 2000 having held various editorial
          roles. Before he joined Reuters in 1983 he was a correspondent, EC
          and Belgium, for AP-Dow Jones  Brussels. Age 46.
      **Stephen Mitchell.**Head
          of Risk Management and General Counsel. Stephen joined Reuters in 1996
          as Deputy General Counsel. Company Secretary 1998 to 1999. He became
          Group General Counsel in 1998 and Head of Risk Management in 2001.
          Former partner in Australian law firm Freehill, Hollingdale & Page.
          Age 43.
      **Michael Sayers.**Chief
          Technology Officer. Michael joined Reuters London development group
          in 1977 and in 1998 was appointed Chief Technology Officer. Age 49.
      **David Ure.**Strategic
          Adviser to the Board and non-executive Chairman of Radianz. Former
          executive director of Reuters (1989-2000) responsible for group technical
          strategy and Reuters Trading Solutions Division. From 1992 to 1998
          he was responsible for Group marketing and technical policy. Prior
          to that he headed Reuters operations in Europe, Middle East and Africa.
          Joined the company in 1968 as a trainee journalist. Age 55.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|           
|-----------
|           
| Page 12 

|CORPORATE GOVERNANCE
|--------------------

|Reuters is committed
        to high standards of corporate governance and has complied throughout
        2002 with the principles of corporate governance set out in Section 1
        of the Combined Code as at the date of this report, save that Tom Glocer's
        service contract is terminable by the company on, in effect, up to two
        years' notice, until 1 July 2005, whereupon it becomes terminable on
        one year's notice.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|THE BOARD AND EXECUTIVE
|-----------------------

|The Board is responsible
          for Reuters system of corporate governance and is ultimately accountable
          for its activities throughout the Group. The articles of association
          require the directors to pay due regard to the Reuters Trust Principles
          which are designed to protect Reuters integrity and independence and
          represent the core values at the heart of Reuters business. These
          Principles are described more fully on page 74. As at 24 February 2003, there
          were four executive directors and eight non-executive directors, including
          the Chairman. Sir John Craven is the senior independent non-executive
          director.
      The Board met eight
          times in 2002. The directors attended all the Board meetings in 2002
          save that Sir John Craven, Ian Strachan, Dick Olver and Geoffrey Weetman
          were each absent from one meeting and Ed Kozel and Dennis Malamatinas
          were absent from two meetings.
      A schedule of matters
          reserved for the Board's decision identifies those matters that the
          Board does not delegate. It includes the approval of annual and interim
          results, corporate objectives, strategy and the budget, significant
          transactions and matters relating to share capital.
      Regular and ad hoc
          reports and presentations to the Board ensure the directors are supplied,
          in a timely fashion, with the information they need. They also have
          access to the Company Secretary and they may take independent professional
          advice at the Group's expense, although no such advice was sought during
          2002.
      Each year the Chairman
          and the non-executive directors review the Chief Executive's performance
          and the Chief Executive reviews the performance of the other executive
          directors. Each year Sir John Craven conducts a chairmanship review
          meeting, attended by the directors other than Sir Christopher Hogg,
          at which the Chairman's remuneration and performance are reviewed.
          During 2002 an informal review of the Board's effectiveness was undertaken
          and the results were considered by the Board as a whole.
      Non-executive directors
          receive a series of briefings about Reuters when they join the Board.
          Training for executive directors is available as appropriate and a
          training programme is run for directors of subsidiaries.
      The Board delegates
          specific responsibilities to certain committees. Each committee has
          its own terms of reference set by the Board. The main committees are:
      ***The
          Audit Committee***reviews
          and, as appropriate, actively engages in the processes for financial
          reporting, internal control, risk assessment, audit and compliance
          assurance, the independence of internal and external auditors and the
          effectiveness of the company's system of accounting, its internal financial
          controls and the internal and external audit functions. The committee
          comprises Dick Olver (Chairman), Sir John Craven, Ian Strachan and
          Sir Christopher Hogg. The Board considers that the members have the
          requisite skills and attributes to serve on the committee. The committee
          meets four times a year with the Chief Executive, the Finance Director,
          the Chief Operating Officer, other officers and the auditors attending
          as required. The auditors have unrestricted access to the Audit Committee.
          During 2002 only one member of the Audit Committee, Ian Strachan, was
          absent from one Audit Committee meeting.
      ***The
          Remuneration Committee***has
          oversight of executive remuneration policy. Information concerning
          the Remuneration Committee is set out in the Remuneration
          report on
          page 13.
      ***The Nominations Committee*** makes
          recommendations to the Board about future appointments of non-executive
          directors, the Chairman and the Chief Executive, and considers recommendations
          from the Chief Executive to the Board about the future appointment
          of executive directors. This committee meets when required and comprises
          the eight non-executive directors, chaired by Sir John Craven. A director
          may not attend or be involved in any decision concerning him or his
          successor.
      In addition, the
          Group Management Committee, which is chaired by the Chief Executive,
          implements strategy and manages the Group. It reviews business risk
          and monitors operating and financial performance. It comprises the
          four executive directors and seven other senior managers. The Group
          Operations Committee (comprising 13 senior executives and chaired by
          Philip Green) manages the business's operations.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|RELATIONS WITH SHAREHOLDERS
|---------------------------

|The executive directors
        meet regularly with institutional shareholders and analysts. Investor
        relations departments in London and New York are dedicated to facilitating
        communications between the company and its shareholders. Non-executive
        directors receive a regular report on investor relations as part of the
        routine board report materials. From time to time they also receive reports
        from the company's brokers and investor relations advisers on investors'
        perceptions. The company's annual general meeting is used as an opportunity
        to communicate with private investors. At the annual general meeting
        the level of proxies lodged on each resolution and the balance for and
        against the resolution are announced after the resolution has been voted
        on by a show of hands. The results of voting at the annual general meeting
        in 2003 will be available on Reuters website: www.reuters.com.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|DIRECTORS' RESPONSIBILITIES, INTERNAL CONTROLS AND FINANCIAL REPORTING
|----------------------------------------------------------------------

|The directors' responsibilities
        and information on internal controls and financial reporting can be found
        on page 22.
|-------------------------------------------------------------------------------------------------------------------------------------

|           
|-----------
|           
| Page 13 

|REMUNERATION REPORT
|-------------------

|This report sets out
        Reuters executive remuneration policy and structure and details of the
        remuneration received by the directors in respect of the year ended 31
        December 2002. Shareholders will be invited to approve this report at
        the annual general meeting on
17 April 2003.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|1. CONSIDERATION
    OF REMUNERATION MATTERS
|--------------------------------------------

|The Board has overall
          responsibility for determining the framework of executive remuneration
          and its cost, and is required to take account of any recommendations
          made by the Remuneration Committee. The Board has delegated to the
          committee, through formal terms of reference, oversight of the specific
          remuneration packages for the executive directors and consideration
          of executive remuneration issues generally, including the use of equity
          incentive plans in particular.
      The Remuneration
          Committee consists solely of non-executive directors. Its current members
          are Charles Sinclair (Chairman), Ed Kozel and Roberto Mendoza. Dennis
          Malamatinas was a member of the committee until his retirement from
          the Board on 9 October 2002 and Sir Christopher Hogg stepped down from
          the committee on 17 February 2003. The committee met four times in
          2002. All members were present at each committee meeting save that
          Dennis Malamatinas and Ed Kozel were absent from one meeting.
      The Chief Executive
          normally attends meetings of the Remuneration Committee, but is not
          present at any discussion concerning his own remuneration. For the
          year under review the committee was also advised internally by Geoffrey
          Weetman and Stephen Clements, whilst they were Group Human Resources
          Director and Director of Remuneration respectively, John Reid-Dodick,
          Acting Human Resources Director, and Jim McInally, who was appointed
          Director of Remuneration in November 2002. The terms of reference permit
          the Remuneration Committee to obtain its own external advice on any
          matter, at the company's expense, although it did not do so in 2002.
          The company itself takes external advice and information from many
          sources in preparing proposals for the Remuneration Committee, but
          no material external assistance from a single source was received in
          relation to remuneration decisions made for 2002.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. REMUNERATION
    POLICY
|--------------------------

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Executive directors**The committee aims
          to ensure that remuneration and incentive arrangements are market-competitive,
          consistent with best practice and support the interests of shareholders.
      In practical terms,
          this means that the reward structure for directors should attract,
          motivate and retain high-calibre individuals capable of leading the
          Group successfully. To achieve this in a global business environment,
          Reuters executive remuneration must reflect the competitive practices
          of its principal competitors and the other multinational businesses
          with which it competes for talent. The committee believes that market-led
          executive pay, with a heavy emphasis on the variable remuneration elements,
          is the best way to ensure Reuters Group has the high-performing executives
          necessary to achieve its immediate and longer-term strategic objectives.
          It is not the company's intention to pay more than is necessary for
          this.
      Consistent with this
          view, total executive remuneration is calibrated to deliver mid-market
          rewards at target levels of personal and corporate performance. Variable
          reward components will provide an opportunity for much higher levels
          of remuneration where this is supported by exceptional performance
          whether on an individual level or in relation to the Group's short-term
          and longer-term business priorities.
      Reuters has made
          a number of changes to executive remuneration over the past few years
          and an increased proportion of executive reward is variable and dependent
          upon the Group's performance. As such, the structure of the individual
          packages currently in place includes a significant proportion of reward
          that is performance related, with basic pay representing well under
          half of the target earnings potential. Excluding pension entitlements,
          the targeted composition of the expected value for each executive director's
          remuneration is:

|                                                 
|-------------------------------------------------
|**Proportion of fixed and variable remuneration**
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|Tom
              Glocer                         
|Philip
              Green                       
|David
              Grigson                      
|Devin
              Wenig                        
|                                                 

|Variable rewards
          will continue to be provided through a balanced mix of performance-related
          elements. The annual cash bonus plan supports operational objectives
          over the financial year, while the company's long-term incentive plan
          will reward superior performance relative to Reuters competitors over
          a longer period and share options will support the company's growth
          objectives and reward share price improvement.
      The committee also
          believes that, in addition to participating in equity based incentive
          plans, the executive directors should build and maintain a personal
          equity stake in the company. To this end a share retention policy is
          operated requiring each executive director to accumulate a personal
          holding worth twice his salary within five years.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Non-executive directors**Non-executive directors
          are appointed for an initial period of six years, subject to review
          after three years. Reappointment may be made after one six-year term.
          Non-executive directors do not have service contracts and are not eligible
          to participate in executive share plans.
      The Chairman's remuneration
          is determined by the Board, who in reaching future decisions on appropriate
          levels of pay will continue to have regard to the packages awarded
          to chairmen of other UK listed companies of a similar size and complexity.
      The company's shareholders
          determine the remuneration paid to the other non-executive directors.
          Historically, this has comprised a fixed annual fee, which has been
          unchanged at £35,000 per annum for three years. During this time
          the workload of non-executive directors has increased considerably
          and will continue to do so following the Higgs Review, the Smith Report
          and Sarbanes-Oxley legislation. However, it has been decided to defer
          putting to shareholders until next year's annual general meeting any
          proposal to change the fixed annual fee. Meanwhile fees paid to non-executive
          directors for specific roles, for example, chairing a Board committee
          have been realigned to reflect the time commitment associated with
          each role. The fees for these additional roles with effect from 1 January
          2003 are: senior independent director: £5,000 per annum; chairman
          of the Audit Committee: £15,000 per annum; chairman of the Remuneration
          Committee: £10,000 per annum; and chairman of the Nominations
          Committee: £5,000 per annum.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Remuneration structure**It is Reuters general
        policy to construct executive remuneration packages as described below.
        However, in order to ensure the company is able to recruit and retain
        the best senior executives, the committee believes it needs to maintain
        the freedom to negotiate terms of employment on an individual basis,
        taking account of the circumstances of each case. Where it is necessary,
        special arrangements will also be made to accommodate the needs of, for
        example, international executives who are required to relocate. As Devin
        Wenig was appointed an executive director on 17 February 2003, the figures
        for 2002 reported below do not include his remuneration. The terms of
        his appointment are under discussion and are expected to be consistent
        with the following policy disclosures.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Basic salary and
          benefitsIn formulating and
          reviewing pay packages for the executive directors, the committee will
          normally receive comparator group information and assistance from independent
          remuneration consultants. Reuters policy is to maintain a salary structure
          based upon the mid-market of its comparator group of companies. The committee
          is also guided by salary levels among other executives and across the
          organisation as a whole. However, as part of the Group's ongoing programme
          of cost reductions, the executive directors elected that their base salaries
          should not be increased for 2002. They have reaffirmed that position
          for 2003. Page 14 
      Non-cash benefits are
      provided to executive directors and the Chairman in line with normal market
      practice. All executive directors and the Chairman receive company car
      and private healthcare benefits. Life and disability insurance is provided
      as part of the pension arrangements for each executive director and the
      Chairman. Under the terms of Tom Glocer's relocation agreement, the company
      provides accommodation in the UK and pays home leave expenses for him and
      his family. His accommodation costs have been renegotiated from April 2003
      and are expected to be lower in future years. Reuters also met the costs
      of his relocation.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|PensionsSince April 1999 it
        has been Reuters policy that all new employees, including directors,
        are offered participation in a defined contribution pension plan. In
        the case of UK executive directors, entitlement above the statutory earnings
        cap (where applicable) is met by an additional taxable 'retirement allowance'
        permitting each director to make his own supplementary pension arrangements.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Annual performance-related
          bonusBonus arrangements
          are normally negotiated individually and included in each director's
          service contract. The Remuneration Committee determines performance
          targets annually. Bonus payments are non-pensionable.
      In 2002, the executive
          directors were eligible for an annual cash bonus, with a maximum level
          of 100% of base salary for Philip Green, David Grigson and Geoffrey
          Weetman. The maximum level for Tom Glocer was 125% of salary. The committee
          has agreed that bonus potential for all executive directors other than
          Tom Glocer will be 100% for 2003. Tom Glocer's bonus potential will
          remain at 125% for 2003 before reverting to 150% for 2004 as specified
          in his service contract.
      For 2002, bonus targets
          were set on a sliding scale and included a mix of financial and strategic
          measures:

|  |                                                                                                                                                                                                            
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|• | 15% on Group
          normalised profit before tax;                                                                                                                                                       
|  |                                                                                                                                                                                                            
|• | 15% on Reuters
          revenue;                                                                                                                                                                          
|  |                                                                                                                                                                                                            
|• | 20% on Reuters
          margin;                                                                                                                                                                           
|  |                                                                                                                                                                                                            
|• | 30% split
                  equally between three key strategic measures relating to Reuters
                  Messaging, migration to the Radianz network and customer satisfaction;
                  and
|  |                                                                                                                                                                                                            
|• | 20% on a maximum
          of two personal targets.                                                                                                                                                        

|                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|In February
                2003 the committee considered 2002 performance relative to the
                specified targets and awarded bonuses in the amounts disclosed
                in the remuneration
               table on page 16 reflecting the achievement
                of margin and progress on the strategic and personal targets.
                No payment was made in respect of the profit and revenue measures.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Equity incentive
          plansThe executive directors
          also participate in a long-term incentive plan (LTIP) and discretionary
          share option plan (DSOP) designed to reward longer-term performance.
          Details of all share incentive awards outstanding for each director
          serving during 2002 are set out on pages 18-20. All directors' future
          entitlements are subject to the performance conditions applicable to
          the relevant plan as disclosed below. Other than as described below,
          the company has no present intention of making any significant change
          to the directors' entitlements under these plans.
      ***LTIP:*** Since
          1993, Reuters has operated a long-term incentive plan which seeks to
          encourage and reward long-term growth in shareholder value. It is Reuters
          practice to make an annual award of share rights to executive directors
          and those senior managers most able to influence corporate performance.
          Awards to the executive directors (excluding the Chief Executive) have
          normally been based on a face value of 100% of annual salary, using
          the average daily share price for the previous year. From 2003 all
          awards made under the LTIP will be based on fair value using option
          pricing methodology. Under the terms of his service contract, awards
          to Tom Glocer will be based on a fair value of not less than US$2.325
          million (£1.56 million) per annum up to and including 2003. The
          actual value that may be realised is contingent on the Group performing
          as described below. The other executive directors will receive awards
          with a fair value of up to 100% of base salary.
      ***LTIP
                performance condition***  to
          be consistent with the objectives of the plan and to ensure the Group's
          growth is measured relative to other major companies in which the company's
          shareholders invest, performance is measured over a three-year period
          by comparing the Group's total shareholder return (TSR) with that of
          other companies comprising the FTSE 100 at the beginning of the period.
          The companies are ranked according to their TSR for the measurement
          period with the company having the highest TSR ranked first. The company's
          position on the list determines the extent to which awards will vest.
          In line with best practice, the minimum position for vesting was raised
          to the median level in 2001. Full vesting only occurs for top quartile
          performance. Between those positions, awards vest on a straight-line
          scale. If the awards do not vest or only partially vest after three
          years, the plan permits the measurement period to be extended by up
          to two years. The pre-set vesting criteria for awards not yet vested,
          or which vested during 2002, are shown in the table below, together
          with the actual ranking at 31 December 2002 (or on vesting if earlier).
          Awards vesting under the plan are not released until at least five
          years from the date of grant.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

|                                            | Pre-set
              vesting criteria            |                                                   | 
|------------------------------------------- | ------------------------------------------------- | ------------------------------------------------- | 
|                                            |                                                   |                                                   | 
|Date measurement
          period commenced | Rankings
              for
          100% vesting | Rankings
              for
          zero vesting | 
|                                           
|1 January 1999                              | 1
              to 26                             | 66
              to 100                           | 
|1 January 2000                              | 1
              to 26                             | 66
              to 100                           | 
|1 January 2001                              | 1
              to 26                             | 50
              to 100                           | 
|1 January 2002                              | 1
              to 26                             | 50
              to 100                           | 
|                                           

|In order
                to smooth the opening and closing points of measurement the averages
                of the daily closing prices for the immediately preceding 12
                months are used as the initial and final share prices when calculating
                the TSR.
              As a matter
                  of good practice, the measurements are verified by an independent
                  consultant before being presented to the Remuneration Committee
                  for approval. Shares awarded under the plan will continue to
                  be met from existing shares held by Reuters employee share
                  ownership trusts (ESOTs). The cost of the shares is charged
                  to the profit and loss account over the vesting periods.
              ***DSOP:*** A
                  global discretionary share option plan was adopted by the Remuneration
                  Committee in October 2000 and approved by shareholders in April
                  2001. It aims to incentivise growth in earnings and in the
                  share price, and the performance condition for directors has
                  been chosen to reflect this.
              ***DSOP
                        performance condition*** options
                  granted to executive directors can only vest if the percentage
                  growth in the Group's normalised earnings per share (EPS) exceeds
                  the percentage growth in the retail price index by more than
                  9% over the three-year performance period. If the target is
                  not met, the performance period may be extended by up to two
                  years with an increase of 3% in the hurdle rate of EPS growth
                  for each year added to the performance period. If the target
                  rate is not met by the end of the fifth year the options will
                  lapse. There is no performance condition for options granted
                  to participants other than executive directors, and both Geoffrey
                  Weetman and Devin Wenig hold DSOP options granted without performance
                  conditions prior to their appointments as directors.
              The performance
                  condition has not yet been measured since the first awards
                  to directors were granted in June 2001. It is intended, however,
                  to obtain independent verification of the measurement process
                  as is done for the LTIP.
              The executive
                  directors are entitled to participate in the DSOP. Under the
                  terms of his service contract, option allocations to Tom Glocer
                  will be based on a fair value of at least US$2.062 million
                  (£1.384 million) per annum up to and including 2003. There
                  is no assurance that this value will be realised as this is
                  contingent on the performance of Reuters. Awards to the other
                  executive directors are not set out in their service contracts,
                  but will also be based on levels commensurate with competitor
                  company practices. It is the committee's practice to award
                  participants' annual entitlements in two equal tranches in
                  February and August to reduce issues associated with block
                  grants losing their incentivising effect during periods of
                  high volatility in share price. Page 15 
                  **SAYE Plan:** An
                  all-employee international savings related share option plan
                  is offered in which the Chairman and the executive directors
                  are eligible to participate. Participants save a fixed monthly
                  amount of up to £250 for three or five years and are then
                  able to use their savings to buy shares in the company at a
                  price set at a 20% discount to the market value at the start
                  of the savings period. In line with market practice, no performance
                  conditions attach
to options granted under this plan.
      ***Legacy plans:***There
                  are several legacy plans, summarised below, under which Messrs
                  Glocer, Green, Weetman and Wenig received awards prior to becoming
                  directors of the company. It is not intended that directors
                  should receive any further awards under these plans:
              ***Performance
                  related share plan (PRSP)*** this
                  plan operated from 1995 to 2001 and targeted senior executives
                  not participating in the LTIP. Tom Glocer, Philip Green, Geoffrey
                  Weetman and Devin Wenig hold awards granted before they became
                  directors of the company. The performance condition is the
                  same as for the LTIP, although vested shares can be released
                  three years after grant.
              ***Deferred
                  bonus share plan (DBSP)*** restricted
                  share awards were made in 2000 as a special retention bonus
                  to a total of around 100 senior executives. As a retention
                  tool, and in line with market practice at the time, they were
                  made conditional only on continued employment for two and three
                  years and excluded the directors in office at the time. These
                  awards vested in February 2002 and February 2003. Tom Glocer
                  has deferred the vesting of his shares under the plan, which
                  are currently due to vest in April 2004 subject to any further
                  deferral that he may elect to make. The shares awarded under
                  the plan are satisfied by existing shares from the ESOTs.
              ***Executive
                  stock option plan (ESO)******* Tom
                  Glocer participated in an executive stock option plan operated
                  in 1993 and 1994. In line with market practice in the US, where
                  he was based at that time, his options under the plan carry
                  no performance conditions and vested automatically on the third
                  anniversary of grant.
              ***Plan 2000*** a
                  one-off all-employee option grant was made in 1998 in order
                  to support the retention of employees over the millennium period.
                  In common with such all-employee plans, there is no performance
                  condition to be satisfied. All employees, including the executive
                  directors, were given the opportunity to apply for an option
                  to acquire 2,000 shares at an exercise price of £5.50
                  per share. These options became exercisable in September 2001
                  and will normally expire in September 2005. A small supplementary
                  grant was made to new employees in March 1999, at an option
                  price of £8.14 and these will normally expire in March
                  2006. The company may issue new shares to satisfy options granted
                  under this plan.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. PERFORMANCE
    GRAPH
|------------------------

|Shown below is
          the company's TSR, for the five years to 31 December 2002 compared
          with the return achieved by the FTSE 100 index of companies. This index
          is used as the comparator group for the performance conditions attached
          to the LTIP and PRSP referred to above. The calculations assume the
          reinvestment of dividends.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. SERVICE
    CONTRACTS
|------------------------

|It is not Reuters
          policy to appoint executive directors for a fixed term, but it is the
          general policy that new directors be offered notice periods of not
          more than one year. Reuters recognises, however, that, in the case
          of appointments from outside the Group, a longer initial notice period
          may be necessary, reducing to one year subsequently. Given this, the
          committee expects to retain its policy of including provisions for
          termination payments in its contracts with directors.
      Tom Glocer has a
          service contract, dated 23 July 2001, normally terminable by him on
          90 days' notice or, with good reason, on 30 days' notice. The company
          may terminate without cause on 30 days' notice. In the event of termination
          by Tom Glocer with good reason or by the company without cause on or
          before 1 July 2003, Tom Glocer is entitled to a compensation payment
          equal to twice the sum of his basic annual salary and an estimated
          annual bonus calculated by reference to the highest bonus percentage
          received in the previous three years. If his contract is terminated
          after 1 July 2003 the compensation payment is reduced in equal tranches
          for each year down to a minimum of his annual salary and bonus in the
          case of termination after 1 July 2005. In the event of termination
          at any time by the company without cause, or by Tom Glocer with good
          reason, Tom Glocer retains the benefit of any outstanding share plan
          awards as if his employment had not ceased. In addition, Tom Glocer
          and his family retain the life assurance, medical and dental benefits
          provided by the company for one year following termination.
      Philip Green and
          David Grigson's contracts are dated 20 June 2001 and 21 June 2001 respectively,
          and can be terminated on one year's notice. Any termination payment
          will not exceed an amount equal to the sum of the director's annual
          salary, bonus and 12 months' pension contributions paid by the company.
      Geoffrey Weetman's
          contract was dated 31 December 2001 and was terminable on one year's
          notice. Details of the termination
          payment made on his retirement on
          31 July 2002 are on page 16.
      On a change of control
          of the company, Messrs Glocer, Green and Grigson are entitled to terminate
          their contracts on one month's notice unless the acquiring party has,
          within three months of the change of control, agreed to adopt and uphold
          the Reuters Trust Principles (see page
          74). Termination payments are
          payable to the directors in such circumstances.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. POLICY
    ON EXTERNAL APPOINTMENTS
|--------------------------------------

|Reuters recognises
        that its directors may be invited to become non-executive directors of
        other companies or to become involved in charitable or public service
        organisations. As the Board believes that this can broaden the knowledge
        and experience of the company's directors to the benefit of Reuters Group,
        it is the company's policy to approve such appointments provided there
        is no conflict of interest and the commitment required is not excessive.
        Board approval is required and directors are permitted to retain cash
        fees paid for such appointments. In 2002 Philip Green received approximately £25,000
        as a director of SKF AB. None of the other executive directors retained
        any fees for external directorships.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| Page 16 6. DIRECTORS' REMUNERATION FOR 2002
|----------------------------------------------

|                                                                                                      |                 |          
|----------------------------------------------------------------------------------------------------- | --------------- | ---------
|**Directors'
                emoluments**                                                             | **2002**        | 2001     
|                                                                                                     
|                                                                                                      | **Salary/fees** | **Bonus**
|                                                                                                      | **£000**        | **£000** 
|                                                                                                     
|**Chairman:**                                                                                         | ****            | ****     
|Sir
                Christopher Hogg                                                                  | **263**         | ****    
|                                                                                                     
|**Non-executive
                directors:**                                                          | ****            | ****     
|Sir
              John Craven                                                                         | **45**          | ****    
|Ed
              Kozel                                                                                | **35**          | ****    
|Dennis
              Malamatinas (retired 9 October 2002)                                             | **27**          | ****    
|Roberto
              Mendoza                                                                         | **35**          | ****    
|Dick
              Olver                                                                              | **45**          | ****    
|Charles
              Sinclair                                                                        | **45**          | ****    
|Ian
              Strachan1                                                                           | **110**         | ****    
|                                                                                                     
|**Executive
                directors:**                                                              | ****            | ****     
|Tom
              Glocer2                                                                             | **816**         | **612**  
|Philip
              Green3                                                                           | **450**         | **259**  
|David
              Grigson4                                                                          | **400**         | **220**  
|Geoffrey
              Weetman5 (retired 31 July 2002)                                                | **219**         | ****    
|                                                                                                     
|**Total
              emoluments of directors**                                                       | **2,490**       | **1,091**
|                                                                                                     
|**Other
              senior executives as a group (8 persons)**7**(2001:
              17 persons)** | **2,283**       | **1,233**
|                                                                                                     

|Notes:
|------
|1.    
|      
|2.    
|      
|3.    
|      
|4.    
|      
|5.    
|      
|6.    
|      
|7.    

| Page 17                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Directors'
                  pensions**Messrs Glocer, Green and Grigson all participate in defined
              contribution pension arrangements.
              Philip Green
                  and David Grigson are members of the Reuters Retirement Plan
                  in the UK and receive a company contribution in respect of
                  pension benefits equal to 20% of the statutory earnings cap.
                  In addition, they each receive an allowance in lieu of any
                  pension contribution by the company on salary above the cap
                  (see 
                  page 16). Tom Glocer participates in the company's US
                  pension arrangements and is entitled to a pension allowance
                  of 20% of his base salary. All three directors are entitled
                  to a lump sum death benefit whilst in service of four times
                  basic salary.
              Company contributions
                  and allocations (including the cost of life cover and any other
                  risk benefits provided through the pension plans) in respect
                  of these directors in 2002 were:
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

|                            | Age | Company
      contribution
      during period
£000
|--------------------------- | --- | ---------------------------------------------------
|                           
|Tom
              Glocer    | 43  | 167                                                
|Philip
              Green  | 49  | 23                                                 
|David
              Grigson | 48  | 22                                                 
|                           

|In 2001,
                the company made contributions of £201,000 in respect
                of the above directors' defined contribution pension arrangements.
              The Chairman
                  has been admitted as a member of the Reuters Pension Fund for
                  the sole purpose of providing a fixed lump sum benefit of £300,000
                  for his dependants in the event of his death in service. Under
                  a separate unfunded pension arrangement the Chairman is entitled
                  to a pension of 2.5% of his final annual fee for each year
                  of service, from the date of his appointment as Chairman in
                  May 1985 to the date his office terminates.
              On his retirement
                  from Reuters service with effect from 31 July 2002, Geoffrey
                  Weetman was entitled under the terms of his service contract
                  to an early retirement pension of two-thirds of basic salary,
                  without reduction.
              Pension benefits
                  earned during 2002 by the Chairman and Geoffrey Weetman are
                  as set out in the following table:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

|                                                      | Age | Director's
 contributions
      during
      the year
£000 | Accrued
      pension at
  31 December
      2002
      or date of
      retirement
£000 | Increase
              in
  accrued pension
      during the year
£000 | Increase
              in
  accrued pension
      during the year
      (net of inflation)
£000 | Transfer value
      of accrued
      pension at 
      31 December
      2001
£000 | Transfer value
      of accrued
      pension at 
      31 December
      2002
£000 | Increase
              in
      transfer value
  (net of director's
      contributions)
£000
|----------------------------------------------------- | --- | ---------------------------------------------------------- | ---------------------------------------------------------------------------------------- | ---------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------
|                                                     
|Sir
              Christopher Hogg                    | 66  | 0                                                          | 116                                                                                      | 7                                                                      | 5                                                                                               | 1,703                                                                               | 1,802                                                                               | 99                                                                                           
|Geoffrey
              Weetman (retired 31 July 2002) | 56  | 13                                                         | 250                                                                                      | 32                                                                     | 30                                                                                              | 3,260                                                                               | 5,220                                                                               | 1,947                                                                                        
|                                                     

|In 2001,
                the Chairman and four executive directors were members of the
                Reuters Pension Fund.
              The information
                  shown above complies with requirements under both the Listing
                  Rules of the UK Listing Authority and the Directors' Remuneration
                  Report Regulations 2002. The transfer values have been calculated
                  in accordance with the guidance note 'GN11' published by the
                  Institute of Actuaries and Faculty of Actuaries.
              The total
                  amount of contributions or accruals made by the company in
                  2002 to provide pension and similar benefits for the directors
                  was £1.76 million (2001: £3.1 million) and for the
                  directors and other senior managers as a group was £2.15
                  million (2001: £3.7 million).
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| Page 18                                                                           
|-------------------------------------------------------------------------------------
|**Directors'
                interests in long-term incentive plans**                
|                                                                                     
|                                                                                     
|                                                                                     
|Tom
              Glocer                                                             
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|**Total**                                                                            
|                                                                                     
|Philip
              Green                                                           
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|**Total**                                                                            
|                                                                                     
|David Grigson                                                                        
|                                                                                     
|                                                                                     
|                                                                                     
|**Total**                                                                            
|                                                                                     
|Geoffrey                                                                             
|Weetman4                                                                             
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|**Total**                                                                            
|                                                                                     
|**Other
                senior executives as a group (8 persons) (2001: 16 persons)**
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|LTIP                                                                                 
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|DBSP                                                                                 
|                                                                                     
|**Total**                                                                            
|                                                                                     

| Page 19 Notes:
|-----------------
|1.               
|                 
|2.               
|                 

|                               | Plan | Date
              of
      grant | Date
              of
      vesting | Number
              of
      vested
      shares | Market
      value per
      share on
      grant
      pence | Market
      value per
      share on
      vesting
      pence | Market
      value per
      share at
      exercise or
      release
      pence
|------------------------------ | ---- | --------------------------------- | ----------------------------------- | ------------------------------------------------- | ------------------------------------------------------------- | --------------------------------------------------------------- | ---------------------------------------------------------------------------------
|                              
|Tom
              Glocer       | PRSP | 1 Apr 99                          | 1 Jan 02                            | 9,855                                             | 905                                                           | 680                                                             | n/a                                                                              
|                               | PRSP | 1 Apr 99                          | 1 Jan 02                            | 42,596                                            | 905                                                           | 680                                                             | n/a                                                                              
|                              
|Philip
              Green     | PRSP | 1 Apr 99                          | 1 Jan 02                            | 100,000                                           | 905                                                           | 680                                                             | n/a                                                                              
|                               | DBSP | 24 Mar 00                         | 13 Feb 02                           | 15,000                                            | 1,440                                                         | 538                                                             | 538                                                                              
|                              
|Geoffrey
              Weetman | PRSP | 1 Apr 99                          | 1 Jan 02                            | 31,763                                            | 905                                                           | 680                                                             | n/a                                                                              
|                               | PRSP | 1 Apr 99                          | 1 Jan 02                            | 34,561                                            | 905                                                           | 680                                                             | n/a                                                                              
|                              

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. | PRSP awards
              are available for exercise immediately on vesting. The qualifying
              period may be extended by up to two years where vesting does not
              occur or is only partial after the initial three year period. LTIP
              awards are subject to a retention period of two years from vesting,
              save that this is reduced to one year where the performance period
              has been extended to five years.                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|4. | In recognition
                of Geoffrey Weetman's service to Reuters over many years, the
                committee decided that his existing LTIP participation rights
                will continue until they vest or lapse, as if he had remained
                an employee. The awards will remain subject to the normal retention
                period. His unvested PRSP rights will also continue unaffected,
                save that on vesting they are required to be exercised within
                six months. No other awards had their terms varied during the
                year.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|5. | The indicated
              awards were made prior to the appointment of the relevant individual
              as a director of the company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

| Page 20                                                                                       
|-------------------------------------------------------------------------------------------------
|**Directors'
                share options**                                                     
|                                                                                                 
|                                                                                                 
|                                                                                                 
|Sir Christopher Hogg                                                                             
|                                                                                                 
|                                                                                                 
|**Total**                                                                                        
|                                                                                                 
|Tom
              Glocer                                                                         
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|**Total**                                                                                        
|                                                                                                 
|Philip
              Green                                                                       
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|**Total**                                                                                        
|                                                                                                 
|David
              Grigson                                                                      
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|**Total**                                                                                        
|                                                                                                 
|Geoffrey Weetman3                                                                                
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|**Total**                                                                                        
|                                                                                                 
|**Other
                senior
  executives as 
  a group 
  (8 persons)
  (2001:
  16 persons)**
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|DSOP                                                                                             
|                                                                                                 
|                                                                                                 
|                                                                                                 
|Plan 2000                                                                                        
|                                                                                                 
|**Total**                                                                                        
|                                                                                                 

|Notes:
|------
|1.    
|      
|2.    
|      
|3.    
|      
|4.    
|      
|5.    
|      
|6.    

|7.
        DIRECTORS' INTERESTS IN ORDINARY SHARES
|--------------------------------------------------

|The
              total interests of the current directors and other senior executives
              in the issued share capital of the company and in shares underlying
              options and incentive plans are shown below as at 24 February 2003.
              No director or senior manager is beneficially interested in 1%
              or more of the company's issued share capital. Interests in ordinary
              shares (excluding options and interests in long term incentive
              plans disclosed above) held at 1 January 2002 and 31 December 2002
              are also shown for directors in office at 31 December 2002. Directors
              were the beneficial owners of all shares listed save for 814 shares
              held by a family member of Sir Christopher Hogg and for 11,466
              shares held by a trust of which Tom Glocer is a beneficiary.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                   |                                                                    |                                                                      |                                             |           |          
|------------------------------------------------------------------ | ------------------------------------------------------------------ | -------------------------------------------------------------------- | ------------------------------------------- | --------- | ---------
|                                                                   | Interests
              at
      1 January
      2002
      shares | Interests
              at
      31 December
      2002
      shares | Interests
              at 24 February 2003
|                                                                  
|Shares                                                             | Options                                                            | Long-term
      incentives                                          
|                                                                  
|**Directors:******                                                 |                                                                    |                                                                      |                                             |           |          
|Sir
              Christopher Hogg                                 | 33,321                                                             | 53,321                                                               | 63,321                                      | 1,012     |         
|Tom
              Glocer                                           | 11,576                                                             | 24,576                                                               | 24,576                                      | 3,269,020 | 2,361,671
|Philip
              Green                                         | 2,000                                                              | 17,000                                                               | 76,839                                      | 836,245   | 373,157  
|David
              Grigson                                        | 2,280                                                              | 10,045                                                               | 10,045                                      | 521,853   | 306,078  
|Devin
              Wenig                                          | n/a                                                                | n/a                                                                  | 78,354                                      | 444,569   | 263,212  
|Sir
              John Craven                                      | 6,846                                                              | 6,846                                                                | 6,846                                       |          |         
|Niall
              FitzGerald                                     | n/a                                                                | n/a                                                                  | 12,500                                      |          |         
|Ed
              Kozel                                             |                                                                   | 120,000                                                              | 120,000                                     |          |         
|Roberto
              Mendoza                                      | 8,000                                                              | 28,000                                                               | 53,000                                      |          |         
|Dick
              Olver                                           | 3,000                                                              | 10,000                                                               | 10,000                                      |          |         
|Charles
              Sinclair                                     | 14,062                                                             | 32,100                                                               | 32,100                                      |          |         
|Ian
              Strachan                                         | 1,500                                                              | 1,500                                                                | 1,500                                       |          |         
|                                                                  
|**Other
                senior executives as a group (7 persons)** | n/a                                                                | n/a                                                                  | 317,386                                     | 2,033,424 | 1,433,135
|                                                                  

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|As
                at the date of this report Tom Glocer, David Grigson, Ed Kozel
                and Devin Wenig each held 1,000 shares in Instinet and Ian Strachan
                held 7,785 shares. The other senior executives as a group held
                interests in 3,000 shares of Instinet.
              None of the
                  directors has notified the company of an interest in any other
                  shares, or other transactions or arrangements which require
                  disclosure. There have been no movements in the interests of
                  the directors in the share capital of the company or its subsidiaries
                  since 31 December 2002 save as otherwise disclosed in this
                  report.

|8. RENUMERATION
    AND PENSION ARRANGEMENTS FOR PAST DIRECTORS
|---------------------------------------------------------------

|Mark Wood served
          as a director of the company between September 1990 and December 1996.
          He left Reuters employment on 31 August 2002 and received early retirement
          benefits in accordance with the rules of the Reuters Supplementary
          Pension Scheme. However, as part of his termination terms, he waived
          a severance payment of £1.067 million in exchange for an additional
          annual pension of £59,000. He also received an ex-gratia gift
          of his company car valued at £22,000.
      André Villeneuve
          served as a director between June 1989 and February 2000. When he transferred
          employment to Instinet in the US, he was given guarantees concerning
          the benefits that he would receive from the Reuters UK pension arrangements
          in the event of subsequent retirement. He left Reuters Group employment
          on 31 December 2002 and his early retirement pension was increased
          by £29,000 per annum. The company has made a special contribution
          of £465,000 to the UK pension plans in respect of this pension.
      The severance agreement
          between Instinet and André Villeneuve also provides for him
          to continue to receive his base salary of US$600,000 (£402,685)
          per annum from 1 January 2003 until 30 November 2004. He also received,
          in February 2003, a payment of US$861,120 (£577,933) in lieu of
          bonus entitlements for that same period and an annual bonus of US$396,000
          (£265,772) in respect of the year ended 31 December 2002.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9. SUBSIDIARY
    COMPANY SHARE PLANS
|-------------------------------------

|A number
                of subsidiaries operate share plans over new or existing shares
                for their directors and employees. Of these, only the stock option
                plans operated by Instinet are significant.
            The Instinet
                stock option plan permits the grant of options up to a maximum
                of 14% of the common stock outstanding immediately after Instinet's
                initial public offering (IPO) in May 2001. Options may be granted
                to directors and employees of Instinet at an exercise price of
                not less than fair market value at the date of grant. Options
                normally vest in instalments over a four-year period and may
                not exceed a term of 10 years. Approximately 1,300 employees
                and directors of Instinet participate in the plan. At 31 December
                2002, options were outstanding over almost 24 million Instinet
                shares, equivalent to 9.8% of Instinet's common stock immediately
                after the IPO. These options have exercise prices ranging from
                US$3.29 to US$18.70 per share with a term of seven years.
            As a result
                of the acquisition of Island by Instinet in 2002, a further 1.13
                million shares under option were outstanding under the Island
                stock option plan as at 31 December 2002. Exercise prices range
                from US$0.91 to US$9.23 and these options are exercisable for
                10 years from grant.
            On behalf of
                the Board**Sir Christopher
                Hogg**
              Chairman
            24 February 2003
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|           
|-----------
|           
| Page 22 

|STATEMENT OF DIRECTORS' RESPONSIBILITIES
|----------------------------------------

|FINANCIAL REPORTING
|-------------------

|The directors are
              required by UK company law to prepare financial statements for each
              financial year, which give a true and fair view of the state of
              the affairs of the company and the Group as at the end of the financial
              year and of the loss and cash flows of the Group for the period.
              Reuters Group is also required to prepare financial statements and
              provide additional disclosures in accordance with the requirements
              of the SEC.
            The Group has
              complied with both UK and US disclosure requirements in this report
              in order to present a consistent picture to all shareholders. In
              preparing the financial statements, applicable accounting standards
              have been followed, suitable accounting policies have been used
              and applied consistently and reasonable and prudent judgments and
              estimates have been made.
            The directors
              have reviewed the Group's budget and cash flow forecast for the
              Group and the company for the year to 31 December 2003 and outline
              projections for the subsequent year in the light of the Group's
              financial position and borrowing facilities at 31 December 2002.
              On the basis of this review the directors are satisfied that the
              Reuters Group is a going concern and have continued to adopt the
              going concern basis in preparing the financial statements.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|RISK MANAGEMENT AND INTERNAL CONTROLS
|-------------------------------------

|The directors acknowledge
              their responsibility for the Group's system of internal control
              and confirm they have reviewed its effectiveness. In doing so, the
              Board has taken note of the Turnbull guidance for directors on internal
              control, *Internal
              Control: Guidance for Directors on the Combined Code,*              which is applicable to all UK listed companies.
            The Board confirms
              that it has adopted a process for identifying, evaluating and managing
              significant risks the Group faces. This process, which accords with
              the Turnbull guidance, has been in place for the full financial
              year and is ongoing. The overall internal control system includes
              written policies and control procedures, clearly drawn lines of
              accountability and delegation of authority, and comprehensive reporting
              and analysis against approved budgets. There are supporting policies
              and procedures for reporting and management of control breakdowns.
              The Board considers that the control system is appropriately designed
              to manage, rather than eliminate, the risk of failure to achieve
              business objectives and can only provide reasonable and not absolute
              assurance against material misstatement or loss. The concept of
              reasonable assurance recognises that the cost of a control procedure
              should not exceed the expected benefits.
            Using a common
              risk management framework throughout the organisation, each of the
              principal business and functional units identifies the significant
              risks that could impede the achievement of their objectives and
              records them in a 'Risk Register'. For each significant risk, line
              managers document an overview of the risk, consider the effectiveness
              of the current controls in place and identify any improvement actions
              required. In addition to the continuous monitoring processes embedded
              within the business, the Group Operating Committee monitors all
              significant operating risks. There is also a regular schedule of
              Group Risk Registers (covering significant operational, financial
              and strategic risks) submitted twice a year for review to the Group
              Management Committee and the Audit Committee. A common risk assessment
              process has also been adopted as an integral part of major programmes
              such as the restructuring programme.
            In connection
              with the preparation of the statement on internal control in this
              report, the Group Management Committee formally considers the operation
              and effectiveness of Reuters risk management and internal control
              systems. This review includes consideration of self-assessment reports
              from line management and covers each of the most significant risks
              faced and how well these are controlled and managed. The Chief Executive
              and Chief Operating Officer report on the results of this review
              to the Audit Committee. Since October 2002 a Disclosure Committee,
              chaired by the Chief Executive, has also supported the process by
              reviewing disclosure controls and procedures.
            Instinet and
              TSI, which are both listed on Nasdaq, have their own systems of
              risk management and internal controls on which they each report
              publicly to their shareholders. The boards of Radianz and Factiva,
              which include Reuters representatives, have responsibility for adopting
              processes for identifying, evaluating and managing significant risks
              in their respective businesses. Reuters assessment of the main risks
              relating to its affiliate companies are considered by the members
              of the Group Management Committee and included where required in
              the Chief Executive's report to the Audit Committee.
      In addition
              to the self-assessment and management review procedures, the company
              monitors its internal financial control system through a programme
              of internal audits. Internal auditors independently review the controls
              in place to manage significant risks and report to the Audit Committee
              twice a year. The Audit Committee reviews the assurance procedures,
              including compliance controls, on a biannual basis and reports their
              findings to the Board.
            The Group's
              external auditors, PricewaterhouseCoopers, have audited the financial
              statements and have reviewed the work of internal auditors and the
              internal control systems to the extent they consider necessary to
              support their audit report. The Audit Committee has met internal
              auditors and PricewaterhouseCoopers to discuss the results of their
              work.
            During 2002,
              the directors were not aware of any control failures that resulted
              in a material loss to the Group.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|DISCLOSURE CONTROLS AND PROCEDURES
|----------------------------------

|Within the 90-day
              period prior to the filing of this report, an evaluation was carried
              out under the supervision and with the participation of Reuters
              management, including the Chief Executive and Finance Director,
              of the effectiveness of the design and operation of the Group's
              disclosure controls and procedures which are defined as those controls
              and procedures designed to ensure that information required to be
              disclosed in reports filed under the Securities Exchange Act of
              1934 is recorded, summarised and reported within specific time periods.
              As of the date of the evaluation, the Chief Executive and Finance
              Director concluded that the design and operation of these disclosure
              controls and procedures were effective. No significant changes were
              made in the Group's internal controls or in other factors that could
              significantly affect these controls subsequent to their evaluation.
            By order of
              the Board**Rosemary
              Martin**Company Secretary 
              24 February 2003
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|           
|-----------
|           
| Page 23 

|INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF REUTERS GROUP PLC
|----------------------------------------------------------------

|We have audited the financial
    statements which comprise the consolidated profit and loss account, the consolidated
    balance sheet, the consolidated cash flow statement, the related notes and
    the balance sheet of Reuters Group PLC which have been prepared under the
    historical cost convention and the accounting policies set out in the statement
    of accounting policies, and the summary of differences between UK and US
    generally accepted accounting principles. We have also audited the disclosures
    required by Part 3 of Schedule 7A to the Companies Act 1985 contained in
Section 6 of the remuneration report, 'the auditable part'.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
|-----------------------------------------------------

|The directors' responsibilities
              for preparing the annual report, the remuneration report and the
              financial statements in accordance with applicable United Kingdom
              law and accounting standards and the Form 20-F are set out in the
              statement of directors' responsibilities.
            Our responsibility
              is to audit the financial statements and the auditable part of the
              remuneration report in accordance with relevant legal and regulatory
              requirements and United Kingdom Auditing Standards issued by the
              Auditing Practices Board and Auditing Standards generally accepted
              in the United States.
            We report to
              you our opinion as to whether the financial statements give a true
              and fair view and whether the financial statements and the auditable
              part of the remuneration report have been properly prepared in accordance
              with the Companies Act 1985. We also report to you if, in our opinion,
              the directors' report is not consistent with the financial statements,
              if the company has not kept proper accounting records, if we have
              not received all the information and explanations we require for
              our audit, or if information specified by law regarding directors'
              remuneration and transactions is not disclosed.
            We read the
              other information contained in the annual report and Form 20-F and
              consider the implications for our report if we become aware of any
              apparent misstatements or material inconsistencies with the financial
              statements. The other information comprises only those sections
              set out in the table of contents, including the directors' report,
              the unaudited part of the remuneration report, the report on corporate
              governance, the statement of directors' responsibilities and the
              operating and financial review.
            We review whether
              the corporate governance statement reflects the company's compliance
              with the seven provisions of the Combined Code specified for our
              review by the Listing Rules of the Financial Services Authority
              and we report if it does not. We are not required to consider whether
              the Board's statements on internal control cover all risks and controls,
              or to form an opinion on the effectiveness of the Group's corporate
              governance procedures or its risk and control procedures.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|BASIS OF AUDIT OPINION
|----------------------

|We conducted our
              audit in accordance with United Kingdom Auditing Standards issued
              by the Auditing Practices Board and with Auditing Standards generally
              accepted in the United States. An audit includes examination, on
              a test basis, of evidence relevant to the amounts and disclosures
              in the financial statements and the auditable part of the remuneration
              report. It also includes an assessment of the significant estimates
              and judgements made by the directors in the preparation of the financial
              statements and of whether the accounting policies are appropriate
              to the company's circumstances, consistently applied and adequately
              disclosed.
            We planned and
              performed our audit so as to obtain all the information and explanations
              which we considered necessary in order to provide us with sufficient
              evidence to give reasonable assurance that the financial statements
              and the auditable part of the remuneration report are free from
              material misstatement, whether caused by fraud or other irregularity
              or error. In forming our opinion we also evaluated the overall adequacy
              of the presentation of information in the financial statements.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|UNITED KINGDOM OPINION
|----------------------

|In our opinion the
              financial statements give a true and fair view of the state of affairs
              of the company and the Group at 31 December 2002 and of the loss and
              cash flows of the Group for the year then ended and have been properly
              prepared in accordance with the Companies Act 1985. Those parts of
              the remuneration report required by Part 3 of Schedule 7A to the Companies
              Act 1985 have been properly prepared in accordance with the Companies
            Act 1985.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|UNITED STATES OPINION
|---------------------

|In our opinion the
              financial statements present fairly, in all material respects, the
              financial position of the Group at 31 December 2002, 2001 and 2000
              and the results of its operations and cash flows for each of the
              three years in the period ended 31 December 2002, all expressed
              in pounds sterling in conformity with accounting principles generally
              accepted in the United Kingdom.
            Accounting principles
              generally accepted in the United Kingdom vary in certain significant
              respects from accounting principles generally accepted in the United
              States. The application of the latter would have affected the determination
              of consolidated net result for each of the three years in the period
              ended 31 December 2002 and consolidated shareholders' equity at
              31 December 2002, 2001 and 2000, all expressed in pounds sterling,
              as shown in the summary of differences between UK and US generally
              accepted accounting principles.
            PricewaterhouseCoopers
                LLP 
              Chartered Accountants and Registered Auditors 
              London 
              24 February 2003
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|           
|-----------
|           
| Page 24 

|OPERATING AND FINANCIAL REVIEW
|------------------------------

|REVIEW OF YEAR END RESULTS
|--------------------------

|Under US law, all
              statements other than statements of historical fact included in
              this review are, or may be deemed to be, forward-looking statements
              within the meaning of Section 27A of the Securities Act of 1933
              and Section 21E 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 'Risk factors' on pages 34-35
               as well as elsewhere in this
              review. All written and oral forward-looking statements made on
              or after the date of this report and attributable to Reuters are
              expressly qualified in their entirety by such factors.
            As of 1 January
              2002, Reuters established a new organisation structure, moving from
              the previous product based divisions to the current customer-focused
              segments supported by specialist service centres. Reuters financial
              results for 2001 and 2000 have been restated accordingly and this
              review is based upon the restated figures. A review of the 2001
              and 2000 results under the previous management structure can be
              found in the Annual Report and Form 20-F 2001.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|1. FINANCIAL
    OVERVIEW AND KEY PERFORMANCE MEASURES
|------------------------------------------------------

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|The Group measures
              its performance by reference to revenue and profit, operating margin,
              earnings per share, cash conversion and free cash flow.
            Underlying change
              and normalised profits and earnings are measures used by the Group
              to enable period-to-period comparison on a like-for-like basis so
              that organic operational growth can be easily identified. This reflects
              the manner in which the Group is managed.
            Change is measured
              both in overall terms and in underlying terms. Underlying growth
              is calculated excluding acquisitions and disposals and the impact
              of currency fluctuations.
            Operating profit,
              profit before tax and earnings per share are shown on a normalised
              basis, before the impact of amortisation of goodwill and other intangible
              assets, impairment charges and gains/losses on the disposal of subsidiaries
              and fixed asset investments.
            A reconciliation
              of 2002 normalised operating profit and normalised profit before
              tax to operating profit and profit before tax under UK GAAP is shown
              below.

|                                                                                    |                                                              |                                 |                   |                  
|----------------------------------------------------------------------------------- | ------------------------------------------------------------ | ------------------------------- | ----------------- | -----------------
|£m                                                                                  | Reuters                                                      | Instinet                        | Group            
|                                                                                   
|**Normalised
            operating profit/(loss)
            before restructuring** | **393**                                                      | **(14)**                        | **379**          
|Restructuring
            costs                                                     | (112)                                                        | (96)                            | (208)            
|                                                                                   
|**Normalised
            operating profit/(loss)**                                  | **281**                                                      | **(110)**                       | **171**          
|Amortisation
            of goodwill and other intangible assets  subsidiaries     | (86)                                                         | (21)                            | (107)            
|Impairment
            of goodwill                                                  |                                                             | (208)                           | (208)            
|                                                                                   
|**Operating
            profit/(loss)**                                             | **195**                                                      | **(339)**                       | **(144)**        
|                                                                                   
|**Normalised
            profit/(loss) before taxation**                            | **194**                                                      | **(105)**                       | **89**           
|Amortisation
            of goodwill and other intangible assets:                   |                                                              |                                 |                  
|                                                                                    | subsidiaries                                                 | (86)                            | (21)              | (107)            
|                                                                                    | affiliates                                                   | (11)                            |                  | (11)             
|Impairments:                                                                        |                                                              |                                 |                  
|                                                                                    | goodwill                                                     |                                | (208)             | (208)            
|                                                                                    | investments/affiliates                                       | (190)                           | (38)              | (228)            
|Net
            (losses)/gains on disposal of subsidiaries/investments              | (30)                                                         | 2                               | (28)             
|                                                                                   
|**Loss
            on ordinary activities before taxation**                         | **(123)**                                                    | **(370)**                       | **(493)**        
|                                                                                   
| Page 25 **Summary
            of results**                                       |                                                              |                                 |                  
|                                                                                    |                                                              | Year
            to 31 December
|                                                                                   
|                                                                                    |                                                              | **2002
          £m**           | 2001
          £m | 2000
          £m
|                                                                                   
|                                                                                    | Revenue                                                      | **3,575**                       | 3,885             | 3,592            
|                                                                                   
|                                                                                    | Normalised
            operating profit before restructuring | **379**                         | 482               | 470              
|                                                                                    | Restructuring
            costs                              | **(208)**                       | (99)              |                 
|                                                                                   
|                                                                                    | Normalised
            operating profit                      | **171**                         | 383               | 470              
|                                                                                    | Affiliates/investment
            income                     | **(62)**                        | (70)              | (16)             
|                                                                                    | Net
            interest (payable)/receivable                | **(20)**                        | (9)               | 3                
|                                                                                   
|                                                                                    | Normalised
            profit before tax                     | **89**                          | 304               | 457              
|                                                                                    | Amortisation                                                 | **(118)**                       | (93)              | (71)             
|                                                                                    | Impairments
            and disposals                        | **(464)**                       | (53)              | 271              
|                                                                                   
|                                                                                    | (Loss)/profit
            before tax                         | **(493)**                       | 158               | 657              
|                                                                                   

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**2002 results compared
          with 2001**Group
          revenue declined by 8% to £3,575 million. Underlying revenue fell 12%,
              driven by a 34% decline in revenue at Instinet. The decline at Instinet
              was primarily driven by the reduction in transaction fees per share
              traded and a fall in overall Nasdaq volumes. Reuters revenue was
              down 2% to £2,992 million reflecting weak trading conditions
              in global markets.
            As a consequence
              of the declining revenues, actions have been taken at both Reuters
              and Instinet to reduce the operating cost base. The result has been
              a reduction in Group operating costs of 6% at actual rates and 11%
              at underlying rates. This also reflects the £114 million reduction
              in business transformation costs in 2002.
            Group normalised
              operating profit before restructuring costs fell 22% to £379
              million, with Instinet incurring a loss of £14 million.
            The pre-restructuring
              normalised operating profit margin for the Group was 10.6% compared
              to 12.4% in 2001. Reuters margin improved to 13.1%, ahead of its
              publicly stated target of 12%. This improvement was more than offset
              by the loss in Instinet.
            The restructuring
              costs in 2002 totalled £208 million across the Group, split
              £112 million in Reuters and £96 million in Instinet. This
              compares to a total of £99 million in 2001, split £82
              million in Reuters and £17 million in Instinet. In both years,
              the restructuring costs related primarily to the reduction in headcount
              and rationalisation of the Group's property portfolio.
            After restructuring
              costs, Group normalised operating profit fell 56% to £171 million.
              Normalised operating profit in Reuters was up 26% to £281 million
              in 2002, while Instinet incurred losses of £110 million.
            The Group's
              share of affiliates' losses declined from £70 million in 2001
              to £62 million in 2002. Of the three key affiliates, the profit
              from Factiva remained steady at £5 million, Radianz contributed
              a slightly lower loss at £26 million and TSI was significantly
              worse, moving from a loss of £17 million in 2001 to a loss
              of £40 million in 2002, mainly due to significant non-cash
              restructuring and amortisation charges. All other affiliates contributed
              a net £1 million loss compared to a £31 million loss in
              2001. This reflected the Group's portfolio rationalisation programme,
              increased operating efficiencies and reduced start-up losses.
            The Group's
              interest charge increased from £9 million in 2001 to £20
              million in 2002. This is primarily due to a £10 million reduction
              in the interest receivable in Instinet due to reduced operating
              cash balances, reflecting trading performance, and lower deposit
              rates in the US.
            The Group reported
              a normalised profit before tax of £89 million in 2002, compared
              to £304 million in 2001. The movement between the two years
              is explained as follows:

|                                                                                     |        
|------------------------------------------------------------------------------------ | -------
|                                                                                     | £m     
|                                                                                    
|**Normalised
            profit before taxation  2001**                             | **304**
|29% increase
            in Reuters normalised operating profit before restructuring | 89     
|Reduction in
            Instinet normalised operating profit before restructuring   | (192)  
|Additional restructuring
            in Reuters                                      | (30)   
|Additional restructuring
            in Instinet                                     | (79)   
|Decrease in losses
            from affiliates/investment income                     | 8      
|Increase in net
            interest payable                                         | (11)   
|                                                                                    
|**Normalised
            profit before taxation  2002**                             | **89** 
|                                                                                    

|Amortisation
                of goodwill and other intangible assets has increased by 26%
                to £118 million in 2002. The increase is attributable to
                the full-year impact of Bridge, which was acquired effective
                1 October 2001. This
                was partly offset by reductions in the goodwill charge for the
                Instinet subsidiaries, as the goodwill was written down at the
                end of the
                third quarter of 2002.
            Total impairments
              and disposals have increased from £53 million in 2001 to £464
              million in 2002. In 2002, non-cash impairment charges reflected
              the fall in the share prices of both Reuters and Instinet over the
              course of the year, and included a £208 million impairment
              of Instinet goodwill and £147 million in respect of the write-down
              in the value of Reuters shares held in the Reuters Employee Share
              Ownership Trusts (ESOTs). In addition there were also some £81
              million of charges taken to reflect a reduction in the carrying
              value of various investments held by the Group and net losses on
              disposal of £28 million, including a £19 million loss
              on the deemed disposal of a portion of the Group's investment in
              Instinet, following the Island acquisition. Although a significant
              impairment charge was taken in 2001, this was partially offset by
              the £200 million gain attributable to a deemed disposal of
              a 15.1% interest in connection with the initial public offering
              (IPO) of Instinet.
            The Group reported
              a loss before taxation of £493 million in 2002 compared to
              a profit of £158 million in 2001. The 2002 loss is made up
              of a £370 million loss in Instinet and a £123 million
              loss in Reuters. These losses reflect the £464 million non-cash
              impairment charge discussed above.
            The tax charge
                 for 2002 was £23 million on reported losses before taxation
                  of £493 million, compared with a charge for 2001 of £107
                   million on reported profits before taxation of £158 million.
                    The tax charge for 2002 has arisen principally due to the
                   non-deductible
              nature of write-downs in investments and amortisation charges.
                   It  also includes a £10 million charge arising on the
                   dividend  paid by Instinet. On a normalised basis the actual
                   tax rate for
              the Group was 15% in 2002, compared to a rate of 35% in 2001. A
                    reconciliation of the tax charge to the charge expected by
                   applying
              the 30% UK rate of corporation tax to the reported profits before
                    taxation is provided in note 4 to the consolidated profit
                   and loss
              account.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Earnings/(loss)
                per share (EPS)**Normalised
                EPS for Reuters Group fell to 6.8 pence from 13.6 pence, reflecting
                the increase in restructuring costs and the operating loss in
                Instinet.
              On a reported basis the Group recorded a 29.0 pence loss per share,
                as compared to a 3.3 pence EPS in 2001, reflecting the £464
                million non-cash impairment charge in 2002. Reuters normalised
                EPS
              grew 58% to 10.8 pence, reflecting the improvement in operating
                margins.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Cash flow**Cash
            conversion is used to measure the conversion of operating profit
            into cash
                and is calculated by taking the normalised operating cash flow
                (pre-restructuring)
              as a percentage of normalised operating profit (pre-restructuring).
                Reuters continues to be strongly cash generative, generating £423
                million of operating cash before restructuring, representing
                cash
              conversion of 108% (109% on a post-restructuring basis). Page 26 
              
            Cash conversion
                 is a less valuable measure for Instinet due to the relative
                size
              and volatility of counterparty debtors and creditors.
            Reuters generated
              free cash flow of £214 million, providing cover of 1.5 times
              the dividend of £139 million. Further support for the dividend
              was provided by £134 million of dividend received from Instinet.
              Net debt for the Group was £66 million, comprised of net funds
              in Instinet of £518 million and net debt in Reuters of £584
              million. Net debt for Reuters reduced by £118 million during
              the year.

|                                                                                                                                                                                                                                                                                      
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Dividend per share**A final dividend
              of 6.15 pence has been proposed which, when added to the interim
             dividend of 3.85 pence amounts to 10.0 pence per share, consistent

              with 2001. This compares to Reuters normalised EPS of 10.8 pence.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**2001
              results compared with 2000**Group revenue increased
          8% to £3,885 million and underlying revenues, driven primarily
          by Reuters core business, increased 2%. The difference between actual
          and underlying
    growth largely reflected the impact of currency movements and the Bridge
    acquisition.
    Normalised operating profit
    before restructuring increased 3% to £482 million. Underlying growth
    was underpinned by a combination of revenue growth in Reuters and tighter
    cost control across Reuters and Instinet. This was partly offset by an increase
    in business transformation programme costs in Reuters of £25 million.
The normalised operating margin
    (before restructuring) for the Group was 12.4% compared to 13.1% in 2000.
    Expenditure relating to restructuring was £99 million in 2001 with no
    such charges incurred in 2000. After restructuring costs, Group normalised
    operating profit fell 19%.
The Group's share of net operating
    losses (before amortisation) in associates, joint ventures and investment
    income rose from £16 million in 2000 to £70 million in 2001, reflecting
    the inclusion of a full year's loss from Radianz and other start-ups, as
    well as losses arising from significant costs in TSI as a result of restructuring
    activity.
The £9 million net interest
    payable reflected £45 million of interest receivable, primarily relating
    to Instinet and also included £16 million from associates and joint
    ventures. This was more than offset by £54 million of interest payable,
    primarily related to Reuters, including £15 million of interest relating
    to the payment of corporate taxes. This compared to a £3 million net
    interest receivable in 2000.
Normalised profit before taxation
    fell by 34% to £304 million. The decline reflected costs associated
    with business transformation programmes which were higher in 2001, the restructuring
    costs incurred for the first time in 2001, increased losses in associates
    and joint ventures and increased interest payable, partly offset by higher
    operating profit in Reuters and Instinet.
Total amortisation was £93
    million (2000: £71 million), of which £12 million (2000: £12
    million) related to associates and joint ventures. The significant increase
    related principally to the acquisitions of Bridge, Diagram and ProTrader.
Net losses on investments
    were £53 million, compared to net gains of £271 million in 2000
    (which included a £160 million book profit relating to a TSI follow-on
    public offering).
            The most significant
              gain in 2001 was the deemed disposal of a 15.1% interest in Instinet
              following the IPO, which resulted in a £200 million book profit
              taken in the first half of the year. Reuters 'Greenhouse' portfolio
              of investments saw a net loss of £145 million with impairments
              offsetting the gains on disposal. These impairments reflected the
              substantial reduction in the value of technology stocks. Page 27 
              There were £108
              million of net losses (of which £13 million related to write-downs
              by Instinet) with respect to the Group's other investments. This
              included full provisions against investments in Sila Communications
              and Pedestal and also £10 million in respect of assets lost
              in the World Trade Center. Also included in the net write-downs
              was a gain of £16 million on the disposal of VentureOne.
            As a result,
              reported profit before taxation was £158 million, compared
              to £657 million in 2000.
            The tax charge
              for 2001 resulted in an actual tax rate of 67% on profit before
              taxation, compared with a rate of 21% in 2000 and the prevailing
              UK corporate tax rate of 30%. The higher actual tax rate was due
              principally to the fact that the write-down in investments and the
              amortisation charges were non-deductible. On a normalised basis,
              the actual tax rate for 2001 and 2000 was 35%.
            Profit after
              taxation was £51 million compared to £521 million in 2000.
            Normalised EPS
              for Reuters Group fell to 13.6 pence from 21.0 pence, reflecting
              the lower normalised profit before tax. On a reported basis the
              Group recorded EPS of 3.3 pence compared to 37.1 pence in 2000,
              reflecting the impairments and net losses on disposal of £53
              million, as compared to the net gain in 2000 of £271 million.
            Cash conversion,
              pre-restructuring, was 86% in 2001 and 120% in 2000. This reflects
              the business transformation expenditure accrued in 2000, but paid
              in 2001.
            The full year
              dividend fell from 16.0 pence in 2000 to 10.0 pence in 2001, following
              a review of dividend policy.

|2. PROSPECTS
|------------

|Underlying recurring
              revenues in Reuters in the last quarter of 2002 were down 6.5%,
              slightly better than expectations. Over the year-end market conditions
              have deteriorated such that Reuters now expects the decline in recurring
              revenue to be at or slightly above 9% in the first quarter of 2003
              and for the decline to be somewhat higher in the second quarter.
            Reuters remains
                committed to the long-term target of rebuilding operating margins
                and is confident that the *Fast
              Forward* plan announced on 18 February 2003 will deliver this
              outcome. In the short-term the business will not be managed exclusively
              for
              operating margin, as the priority is to execute rapidly and effectively
              on *Fast
              Forward*.
              Nevertheless, plans currently in place for 2003 are expected to
              deliver a normalised operating margin before restructuring of around
              12%.
            By executing
              aggressively on the separate initiatives that make up *Fast
              Forward*,
              Reuters expects to incur restructuring costs of approximately £160
              million in 2003. *Fast
              Forward*
              will generate savings of £45 million in 2003, in addition to
              the £445 million of savings from initiatives to date.
            Reuters has
              a strong track record of high cash conversion, reflecting the quality
              of its earnings, and remains committed to ensuring this continues.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. FAST FORWARD
|---------------

|As a result of the
              *Fast Forward* plan, the number of Reuters employees is
              expected to fall from 15,900 to around 13,000 by the end of 2006.
              Reuters expects to incur restructuring
            charges of £340 million between 2003 and 2005, with £160
            million incurred in 2003. Reuters is targeting annualised savings
            from *Fast
            Forward* of approximately £440 million by 2006. The investment
            associated with *Fast
            Forward*
            measures such as building out the existing Bridge distribution system
            and building up Reuters content and analytics offerings is expected
            to come from the redirection of internal resources, rather than any
            incremental spend. Reuters estimates the amount of this internal investment
            at £120 million in each of 2003 and 2004.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. OPERATING
    REVIEW
|-----------------------

|                                                                                                                                                                                                               
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|The operating review
        reflects the manner in which the Group is managed: Reuters under its
        new organisation structure and, separately, Instinet which operates independently
        of Reuters.

|                                                                      |                                   |                             |         |        
|--------------------------------------------------------------------- | --------------------------------- | --------------------------- | ------- | -------
|**Reuters**                                                           |                                   |                             |        
|                                                                      |                                   | Year
        to 31 December
|                                                                     
|                                                                      |                                   | **2002
£m**                 | 2001
£m | 2000
£m
|                                                                     
|Revenue                                                               |                                   |                             |        
|                                                                      | Treasury
        Services         | **1,134**                   | 1,189   | 1,101  
|                                                                      | Investment
        Banking        | **834**                     | 815     | 701    
|                                                                      | Asset
        Management          | **709**                     | 690     | 649    
|                                                                      | Corporates & Media                | **315**                     | 348     | 343    
|                                                                     
|**Total
          Reuters**                                           | **2,992**                         | 3,042                       | 2,794  
|Normalised
        operating costs                                    |                                   |                             |        
|                                                                      | Segments                          | **(274)**                   | (293)   | (251)  
|                                                                      | Channels                          | **(1,151)**                 | (1,147) | (1,068)
|                                                                      | Business
        Technology Group | **(779)**                   | (775)   | (685)  
|                                                                      | Chief
        Information Office  | **(98)**                    | (105)   | (111)  
|                                                                      | Editorial                         | **(216)**                   | (241)   | (233)  
|                                                                      | Business
        Support Services | **(49)**                    | (99)    | (37)   
|                                                                      | Corporate                         | **(32)**                    | (78)    | (96)   
|                                                                     
|**Normalised
          operating profit 
      before restructuring** | **393**                           | 304                         | 313    
|                                                                     
|Restructuring
        Costs                                           | **(112)**                         | (82)                        |       
|                                                                     
|**Normalised
          operating profit**                             | **281**                           | 222                         | 313    
|                                                                     

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Revenue
            by type**Reuters
      classifies revenue into three distinct types  recurring, outright
      and usage. Recurring revenue, which continues to make up approximately
      91% of total revenues (£2.7 billion), refers to the sale of our subscription
      products and includes maintenance fees on solutions. Recurring revenue
      declined by 1% in 2002 compared to growth of 8% in the previous year, reflecting
      the challenging market environment. The underlying fall in the second half
      of the year was 6.1%.
      Revenue from premium
          products (which comprises 3000 Xtra, Dealing and BridgeStation) grew
          26% on an underlying basis to £654 million with the average number
          of accesses up 45%. Revenue from 3000 Xtra was £323 million, up
          83% on 2001. The installed base of 3000 Xtra grew steadily through
          2002 reaching 51,100 at the end of the year, a 45% increase. Installations
          represented 87% of firm sales of 3000 Xtra as at the end of the year.
          Dealing revenues were down 7% on an underlying basis with the average
          number of accesses down 6%.
      Recurring revenue
          from legacy 2000/3000 series products totalled £552 million and
          was down 25% on an underlying basis with the average number of accesses
          down 22%. This decline was due to the migration to 3000 Xtra, especially
          from higher priced products such as Markets 3000, as well as cancellations.
      Revenue from mid
          and low tier products was £308 million, down 5% in underlying
          terms with average accesses down 11%. The first of Reuters next generation
          products, aimed specifically to grow market share in the mid tier,
          are expected to go on sale during 2003.
      Reuters saw good
          growth from client infrastructure products, enterprise information
          products such as DataScope and Bridge EJV, and risk management applications
          such as Kondor+. This growth was offset by revenue declines in exchange
          fees and other recoveries, software rentals, online media services
          and research and advisory services.
      Outright revenue,
          comprising 5% (£163 million) of total revenue, is principally
          derived from the sales of solutions including software, hardware and
          consultancy. Outright revenue declined by 24% compared to an increase
          of 13% in 2001. The decline in 2002 is due to continuing constraints
          in IT spend by clients. Page 28 
          Usage revenue (4%
          or £122 million of total revenue) is principally derived from
          BTC and Dealing products where revenue is generated based on trading
          volumes. Usage revenue increased by 32% in 2002 compared to a 56% increase
          in 2001, attributable to the full
year impact of BTC.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Revenue
            by customer segment**Treasury ServicesThe Treasury
      Services segment performed well against a challenging backdrop of market
      consolidation and cost cutting. Revenue was £1,134 million, down 5%
      compared to 8% growth in the previous year. On an underlying basis the
      decline was 3%  an underlying 7% decline in Dealing revenues was
      partially offset by strong demand for 3000 Xtra and other information products
      and by a pick-up in forwards matching volumes, particularly in the fourth
      quarter.
      Recurring revenues
          within this segment experienced a modest decline, in tough market conditions,
          of 4% to £1,000 million, compared to growth of 7% in the prior
          year. Information product revenue has grown, principally through 100%
          growth in 3000 Xtra reflecting a mix of new sales and upgrades from
          the 2000/3000 product series.
      Offsetting this growth
          was a 9% decline in revenue from Dealing products to £278 million
          (2001: 8% decline) from both Dealing 3000 and Dealing 2000-1. The largest
          declines were in the UK and the US, the former due to various mergers
          (for example, Halifax and Bank of Scotland) and the latter due partly
          to merger activity but also as a result of the full year impact of
          the events of 11 September 2001.
      Outright revenue
          declined by 18% to £80 million compared to 20% growth in 2001
          reflecting the constraints on major IT projects by clients. The consulting
          practices saw a decline as a result, although this was somewhat offset
          by an increase of almost a third in Commodities & Energy outright
          revenue, driven principally by two major deals in Japan.
      Usage revenue grew
          by 4% to £54 million (2001: 4% growth), driven by increased activity
          on the Dealing Matching systems.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Investment
            Banking (IB)Revenue
      increased 2% to £834 million due to the acquisition of Bridge, compared
      to 16% growth in 2001, but fell 11% on an underlying basis, as customers
      continued to cut costs by eliminating duplicate services, replacing existing
      products with lower cost alternatives and reducing headcount.
      Recurring revenue
          grew by 1% to £726 million (2001: 12%) reflecting the inclusion
          of Bridge information revenue (principally BridgeStation, a premium
          product). On an underlying basis, recurring revenue was down 9% as
          cancellations of legacy products, particularly in Europe, were only
          partly offset by increased revenues from 3000 Xtra. IB's business has
          suffered from client headcount reductions (some 10,500 staff cut in
          the second half of 2002 at the six largest investment banks) and the
          intensive competitive actions (price-cutting and launch of products).
      Partly offsetting
          the decline has been growth in Enterprise Information Products and
          the newly launched North American Capital Markets product (NACAP).
      Outright revenues
          fell 32%, compared to 29% growth in 2001, as banks remain reluctant
          to commit to new IT projects.
      Usage revenue grew
          140% to £59 million aided by a full year of strong trading performance
          from BTC. Excluding BTC, there was growth of 11% driven by the Reuters
          InterTrade Direct product.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Asset Management
            (AM)Although
      the AM segment has not seen the same level of cost-cutting as other parts
      of the financial services sector, there has been some level of retrenchment
      and consolidation in the industry. Revenue for the year grew 3% to £709
      million (2001: 6%) benefiting from the Bridge acquisition, but was down
      4% on an underlying basis. Recurring revenues grew by 4% overall (2001:
      8%) and fell just 2% to £674 million on an underlying basis as demand
      for private client services, end-of-day pricing services and funds information
      partially offset the impact of cancellations due to headcount reductions.
      Outright revenues
          declined by 24% to £32 million (2001: 20% decline) as asset managers
          cancelled or deferred IT expenditure plans or made greater use of their
          internal departments for development. AM's consulting practices have
          also suffered from aggressive price competition.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Corporates & Media
            (C&M)Revenues
      from C&M declined 7% (2001: 1% growth) on an underlying basis to £315
      million. This was due to the impact on our traditional media customers
      of the downturn in advertising, the fall-out among our new media customers
      of the decline in online advertising and the reduced demand for research
      and advisory products within the financial services and IT sectors. Corporates
      were affected by the general downturn in the economy particularly subsequent
      to the events of 11 September 2001 as well as current political uncertainty.
      Recurring revenue
          declined by 7% to £307 million (2001: 2% decline) as corporate
          customers sought to trim costs and, as a result, held back or reduced
          installations of Reuters products. Clients also cut back quite severely
          on their research requirements, thus impacting our research-focused
          subsidiaries Yankee and Tower.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Operating
            costsOperating
      costs for Reuters as a whole were reduced by 5% in 2002, compared to an
      increase of 11% in 2001. The underlying cost reduction in 2002 was 10%,
      compared to a 6% decline in underlying revenues. The principal drivers
      of this reduction were the business transformation programme initiated
      in 2000 and follow on savings initiatives. Annual savings from these totalled £235
      million in 2002, £30 million more than originally planned. Reuters
      manages costs by geographic sales and service channels and centres of excellence.

| Page 29                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ChannelsApproximately 44%
      of Reuters costs arise in the Channels, principally the three main regions
      of the Americas, Europe Middle East & Africa (EMEA) and the Asia Time
      Zone (ATZ). Channel costs in total remained flat in 2002 compared to a
      8% growth in 2001. On an underlying basis channel costs declined by 4%.
      
      In the Americas,
          total costs grew by 22% to £392 million compared to 3% growth
          in 2001, reflecting the full year impact of Bridge. On an underlying
          basis growth was 6% reflecting the inclusion of the Research & Analytics
          business brought in from Instinet as well as charges related to further
          property rationalisation. Excluding these, costs were restrained through
          headcount reductions and rationalisation of the property portfolio,
          primarily by centralising staff in New York in the new 3 Times Square
          building, which was completed part way through 2001.
      In EMEA costs were
          reduced by 8% to £573 million, the principal drivers of which
          were headcount cuts as part of the restructuring programme. In addition,
          data costs reduced significantly mainly as a result of the fall in
          end users. This compares to an 11% increase in overall costs in 2001
          partly through transformation programmes.
      In ATZ costs were
          flat year-on-year at £186 million (2001: 4% growth) with small
          increases in staff costs (to support the significant solutions deals)
          being offset by reductions in services (renegotiation of subscriber
          lease costs) and bad debt expenses.

|                                                                                                                                                                                                                                                                                                                                                                                                               
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|SegmentsApproximately
      11% of Reuters costs are derived from the four customer segments and primarily
      consist of staff costs, professional fees and contractor staff. In 2002,
      segment costs were reduced by 6% to £274 million principally through
      a sizeable saving in marketing costs. Further savings were made in Lipper,
      Tower, Yankee and ORT through headcount reductions.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Business
            Technology Group (BTG)BTG costs represent
      approximately 30% of Reuters cost base. Total BTG costs grew by 1%, compared
      with 13% in 2001. This marginal growth in 2002 reflects the inclusion of
      a full year of costs following the acquisition of Bridge offset by net
      cost savings across BTG.
      
      On an underlying
          basis, costs declined by 7% compared with 3% growth in 2001. Major
          areas of cost reduction in 2002 were in the development function, where
          savings have been achieved through a combination of site rationalisations,
          severance programmes and a transfer of activity from higher cost to
          lower cost locations, and lower investment in business transformation
          programmes.
      These cost reductions
          have been offset in part by growth in the cost of communications. This
          growth is a reflection of increases in data volumes and update rates,
          and the migration of clients to the next generation of Internet protocol
          networks.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EditorialEditorial costs,
      accounting for about 8% of total Reuters operating costs, were 11% lower
      at £216 million than in 2001, compared to an increase of 4% in the
      previous year.
      
      The principal factors
          underpinning the reduction were the closure of Financial TV, deferral
          of further capital expenditure and the headcount reduction programme.
          The reduction was partly offset by further investment in our News2Web
          programme and coverage of the football World Cup.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Chief Information
            Office (CIO)CIO
      costs, which represent 4% of total Reuters costs, declined by 7% to £98
      million compared to a decline of 5% in 2001.
      
      CIO's costs were
          reduced as a result of the completion in 2001 of a number of initiatives
          under the business transformation programme. These included the establishment
          of a Global Sourcing function which involved replacing local logistics
          and materials management staff with sourcing professionals and the
          outsourcing of logistics and installation staff in the UK. The new
          Global Sourcing function has seen significant reductions in the Reuters
      cost base as Reuters moves to a more Page 30 
      structured sourcing
        strategy. The outsourcing project has reduced costs and introduced a
          more flexible
  cost model linked to activity levels.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Business Support
            Services (BSS)BSS
            makes up about 2% of Reuters cost base and declined by 51% to £49
            million in 2002 compared to a growth of 168% in 2001. The cost decline
            reflects a significant reduction
      in headcount as shared service operations were rolled out and the investment
      in 2001 in implementing the shared service programme and a new global finance
      system as part of the business transformation programme.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|CorporateThe
      Corporate centre accounts for 1% of Reuters costs and declined by 59% in
      2002 to £32 million compared to a decline of 21% in 2001. Cost reductions
      have been primarily driven by the headcount reduction programme, with further
      savings coming from a renegotiation of the management contract with RVC,
      an independent fund manager established by former Reuters employees to
      manage the Greenhouse venture capital fund. Reductions in professional
      fees relating
      to tax and legal work have also helped to reduce the overall costs, as
      well as beneficial impacts from currency
  movements.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|RestructuringReuters
      commenced a series of restructuring initiatives in the second half of 2001.
      Reuters aim is to achieve further cost savings in response to the continuing
      weak market conditions by reducing headcount beyond that resulting from
      the business transformation and other programmes. The combined target from
      restructuring and business transformation was a total of 2,250 staff. The
      restructuring programme actions resulted in a charge of £82 million
      in 2001, augmented by a further £112 million in 2002.
      Business transformation
          and these other restructuring programmes are estimated to have realised
          benefits in 2001 of £65 million, £235 million in 2002 and
          are expected to yield total savings of £445 million in 2003.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Research
            and development (R&D)R&D expenditure
      totalled £200 million in 2002 compared with £294 million in 2001
      and £323 million in 2000. Of the total expenditure in 2002, £154
      million related to Reuters (2001: £227 million) and £46 million
      to Instinet (2001: £67 million).
      The decline in Reuters
          R&D costs partly reflects the impact of cost reduction measures
          across the development organisation. This decline has been offset in
          part by the full year impact of costs arising from the acquisition
          of Bridge. Notable areas of spend in 2002 included investment in next
          generation products and capabilities such as Reuters Knowledge, Reuters
          Messaging and News2Web, our new editorial multimedia production system.
          Part of the decline relates to the completion of projects related to
          the business transformation programme.

|                                                                      |                             |             |            
|--------------------------------------------------------------------- | --------------------------- | ----------- | -----------
|Instinet                                                              |                             |             |            
|                                                                      | Year
        to 31 December
|                                                                     
|                                                                      | **2002
£m**                 | 2001
    £m | 2000
    £m
|                                                                     
|Revenue                                                               | **592**                     | 854         | 804        
|                                                                     
|Normalised
        operating (loss)/profit
      before restructuring | **(14)**                    | 178         | 157        
|Restructuring
        costs                                           | **(96)**                    | (17)        |           
|                                                                     
|Normalised
        operating (loss)/profit                            | **(110)**                   | 161         | 157        
|                                                                     

| Page 31                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Instinet has been
          operating in a very challenging market environment. Instinet's business
          is dependent on trading volumes in global equity markets and particularly
          the Nasdaq over-the-counter market in the USA. Trading volumes have
          been under continuous pressure throughout 2002. This, coupled with
          a substantial reduction in price, partly offset by improved Nasdaq
          market share, has resulted in a 31% decline in revenue to £592
          million (2001: 6% increase). Operating losses, excluding restructuring,
          were £14 million as compared to a profit of £178 million
          in 2001 and a profit of £157 million in 2000. Following the acquisition
          of Island in September 2002, a goodwill impairment charge totalling £208
          million was recorded. As part of that transaction Instinet paid a dividend
          of US$249 million, of which Reuters received US$207 million.
      Nasdaq market volume
          per day in the fourth quarter of 2002 was 12% down from the fourth
          quarter of 2001 and 8% down for the full year 2002 versus 2001. Instinet's
          share of the Nasdaq traded volume in the last quarter of 2002 was 29.7%
          against 11.8% at the end of 2001 (2000: 13.9%) due to the addition
          of Island, market share gains from new products and price reductions
          earlier in the year. Instinet does not believe that the introduction
          of Nasdaq's SuperMontage system has had a material effect on its trading
          performance.
      During 2002 a series
          of measures were implemented to increase the competitiveness of Instinet,
          including the acquisition of Island, a new management team under the
          leadership of Ed Nicoll, significant reductions in the fixed cost base
          and the rollout of new products including Instinet Trading Portal,
          a front-end trading application, and Newport, a global portfolio-trading
          and execution management solution. In addition, Reuters and Instinet
          began to work together on a series of initiatives including the ability
          to reach Instinet's liquidity pool from Reuters screens.
      A £21 million
          decline in Instinet's R&D costs in 2002 principally reflects a
          reduction in Research and Analytics investment and the termination
          of expenditure in the Fixed Income business, which ceased trading early
          in 2002.

|5. FINANCING
    NEEDS AND CAPITAL STRUCTURE
|--------------------------------------------

|**Cash
                flow movement in 2002**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                      |                       |                   
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------- | --------------------- | ------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Reuters
          £m | Instinet
          £m | Total
          £m
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Normalised
              operating profit/(loss)
          (pre-restructuring)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 393                  | (14)                  | 379               
|Depreciation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 179                  | 42                    | 221               
|Capex                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (140)                | (28)                  | (168)             
|Working
              capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | (9)                  | (90)                  | (99)              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|**Operating
                cash flow (pre-restructuring)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | **423**              | **(90)**              | **333**           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Restructuring                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | (117)                | (34)                  | (151)             
|Taxation,
              interest, other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | (92)                 | (50)                  | (142)             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|**Free
                cash flow**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | **214**              | **(174)**             | **40**            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Reuters
              dividend                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (139)                |                      | (139)             
|Instinet
              dividend                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 134                  | (161)                 | (27)              
|Net
              acquisitions (including ESOTs)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (91)                 | 13                    | (78)              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|**Movements**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | **118**              | **(322)**             | **(204)**         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Net
              (debt)/funds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (584)                | 518                   | (66)              
|***Cash
          conversion* (pre-restructuring)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | ***108%***           | ***n/a***             | ***n/a***         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Spending
                on tangible fixed assets was £168 million in 2002 compared
                to £276 million in 2001 and £274 million in 2000. The
                reduction in expenditure reflects lower property-related expense
                and reduced spend on subscriber and administration equipment.
              Reuters continues
                  to be strongly cash generative, generating £423 million
                  of operating cash flow before restructuring costs, representing
                  cash conversion of 108% (109% on a post-restructuring basis).
                  Instinet had a net operating cash outflow of £90 million,
                  due principally to the movement in net counterparty debtors
                  and creditors. Free cash flow was £40 million (2001: £443
                  million) for the Group, with Reuters generating £214 million,
                  largely offset by an outflow at Instinet of £174 million.
              Reuters paid
                  dividends of £139 million in 2002 compared to £227
                  million in 2001 and £205 million in 2000. Instinet paid
                  a dividend of £161 million during 2002, of which £27
                  million was paid to shareholders outside the Reuters Group.
      Reuters Group
                  spent £78 million in 2002 on acquisitions net of disposals
                  (including ESOTs), compared to £43 million in 2001 and £318
                  million in 2000. In 2002, £65 million was spent on Reuters
                  shares acquired by the ESOTs compared with £48 million
                  in 2001 and £40 million in 2000. Proceeds from the sale
                  of fixed asset investments, principally relating to Greenhouse
                  portfolio disposals, were £22 million compared to £68
                  million in 2001 and £80 million in 2000.
              On 18 February
                  2003 Reuters announced it had entered into a definitive agreement
                  to acquire Multex for total consideration of £121 million.
                  Reuters currently anticipates that the acquisition will be
                  completed by the end of March 2003. Multex reported 2002 revenue
                  of US$92 million (£57 million), EBITDA of US$11 million
                  (£7 million) and a net loss of US$7 million (£4 million),
                  in accordance with US GAAP. The acquisition covers net assets
                  with a book value at 31 December 2002 of US$109 million (£68
                  million), including US$50 million (£31 million) of cash.
                  Reuters expects the acquisition to reduce normalised profit
                  before tax by approximately £10 million (US$16 million)
                  in 2003 as a result of integration and financing costs. The
                  acquisition is expected to have a positive impact thereafter.
              Net debt
                  for the Group at 31 December 2002 amounted to £66 million,
                  compared with net funds of £138 million at 31 December
                  2001 and net debt of £34 million at 31 December 2000.
                  Net debt increased by £204 million, reflecting a £322
                  million decrease in Instinet offset by £118 million of
                  debt repayment in Reuters. Net debt at 31 December 2002 comprised
                  gross debt of £794 million offset by cash and short-term
                  investments of £728 million.
              Reuters finances
                  its operations by a mixture of cash flows from operations,
                  short-term borrowings from banks and commercial paper markets,
                  backed up as required by committed bank facilities and finance
                  from capital markets. Reuters manages its net debt position
                  and interest costs to support its continued access to the full
                  range of debt capital markets. Reuters expects to be able to
                  finance its current business plans from ongoing operations
                  and its external facilities.
              At 31 December
                  2002 Reuters had available a committed syndicated loan facility
                  of £500 million which expires in December 2006, all undrawn
                  at 31 December 2002. The facility contains one financial covenant
                  that consolidated profits before interest, tax and amortisation
                  (subject to certain adjustments) should be greater than 2.75
                  times consolidated net finance charges. As at 31 December 2002
                  Reuters complied with the covenant.
              In February
                  2003 Reuters began the process of replacing its £500 million
                  bank facility with a new facility of £1.25 billion. The
                  facility is being syndicated to a group of international banks.
                  The facility is structured with £800 million of the facility
                  available for drawing and redrawing until 2008. The remaining £450
                  million will be available until 2004, with the ability to extend
                  the maturity in whole or part in certain circumstances.
              A £1.5
                  billion Euro Commercial Paper Programme was established in
                  1998. At 31 December 2002, Reuters had outstanding obligations
                  of £176 million under this programme, repayable at various
                  dates up to March 2003. The minimum outstanding during 2002
                  was £127 million and the maximum was £549 million.
              In 1998 Reuters
                  also established a £1 billion Euro Medium Term Note Programme.
                  At 31 December 2002, Reuters had outstanding £588 million
                  under this programme, repayable at various dates up to January
                  2006. The minimum outstanding during 2002 was £405 million
                  and the maximum was £614 million.

| Page 32                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                      |                              |                 |                 |                                  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | ---------------------------- | --------------- | --------------- | ---------------------------------
|In addition,
                Reuters has short-term uncommitted bank borrowing facilities
                denominated in various currencies, the sterling equivalent of
                which was
          approximately £185 million. Drawings under these lines was £10
          million at 31 December 2002. Instinet has access to the equivalent of
          US$717 million short-term uncommitted bank facilities of which US$31
          million was drawn at 31 December 2002.
      The following
                  table summarises the Group's principal contractual financial
                  obligations at 31 December 2002, certain of which are described
                  in the consolidated financial statements and notes. The Group
                  expects to be able to fund such obligations from ongoing operations
                  and its external facilities.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                      |                              |                 |                 |                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Payments
              due by period
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|**Contractual
                obligations**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Total                                | Less
      than
      1 year | 1-3
      years | 4-5
      years | After
              5
      years
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Short-term
              debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 440                                  | 440                          |                |                |                                 
|Long-term
              debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 352                                  |                             | 352             |                |                                 
|Operating
              leases                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 735                                  | 91                           | 149             | 119             | 376                              
|Unconditional
              purchase obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 152                                  | 63                           | 89              |                |                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Total
              contractual obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 1,679                                | 594                          | 590             | 119             | 376                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

|6. TREASURY MANAGEMENT
|----------------------

|The
                key objectives of Reuters Group treasury management are to ensure
                sufficient liquidity exists to meet funding needs and to manage
                the interest rate and currency risks arising from the Group's
                operations and its sources of finance.
              Reuters borrows
                  in many currencies, at both fixed and floating rates and uses
                  derivative contracts to create the desired currency and interest
                  rate basis. Historically, most funding was converted into sterling.
                  However some debt may be left in, or converted to, other currencies
                  to match asset exposures that arise from time to time. Derivatives
                  used are principally interest rate swaps, forward rate agreements,
                  interest rate caps and collars, currency swaps, forward foreign
                  exchange contracts and currency options.
              The main
                  risks managed by the Group Treasurer, under policies approved
                  by the Board are foreign currency risk, interest rate risk,
                  liquidity and refinancing risk and counterparty credit risk.
                  A Treasury Committee of the Board periodically reviews Reuters
                  treasury activities, policies and procedures. All treasury
                  activity takes place within a formal control framework. A separate
                  treasury department exists within Instinet.
              Almost 90%
                  of Group revenue is denominated in non-sterling currencies.
                  The Group also has significant costs denominated in foreign
                  currencies with a different mix from revenue. Group profits
                  are, therefore, exposed to currency fluctuations. The approximate
                  proportions of operating profit excluding goodwill amortisation
                  and currency gains attributable to each key currency group
                  was as follows:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                 |                                          |              |             
|------------------------------------------------ | ---------------------------------------- | ------------ | ------------
|                                                 | Year
              to 31 December       
|                                                
|**Operating
                profit by currency** | **2002
      %**                         | 2001
      % | 2000
      %
|                                                
|Continental
              Europe                 |                                          |              |             
|                                                 | Euro
              and legacy currencies | **296**      | 133         
|                                                 | Other                                    | **54**       | 25          
|US
              dollar                          | **(71)**                                 | 66           | 57          
|Japanese
              yen                       | **53**                                   | 26           | 22          
|Sterling                                         |                                          |              |             
|                                                 | Depreciation                             | **(140)**    | (63)        
|                                                 | Other                                    | **(143)**    | (97)        
|Other                                            | **51**                                   | 10           | 20          
|                                                
|Total                                            | **100**                                  | 100          | 100         
|                                                

| Page 33 
            Sterling
                costs exceeded sterling revenue due to the level of restructuring
                costs, UK-based marketing, development, operational and central
                management costs and depreciation which was largely accounted
                for in sterling once an asset has been acquired.
              In broad
                  terms, using the 2002 mix of profits, the impact of an additional
                  unilateral 1% strengthening of sterling would have been a reduction
                  of approximately £7 million in operating profits before
                  hedging (2001: £10 million, 2000: £10 million).
              Exchange
                  rate movements in 2002 had an adverse impact before hedging
                  on reported revenue offset by a favourable impact on costs,
                  mainly due to the weaker US dollar in 2002 compared with 2001.
                  The net impact on operating profit was not significant.
              The Group
                  holds cash and short-term investment balances of £728
                  million, of which £537 million is held by the Instinet
                  group of companies. Reuters currency exposure with respect
                  to Instinet is not currently hedged.
              The priority
                  in Reuters currency management policy is to reduce the risk
                  of volatility in the Group's profit and loss account to acceptable
                  levels while allowing a degree of flexibility to take advantage
                  of market movements.
              The main
                  principles underlying currency hedging policies are as follows:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|The
              results of currency and interest rate hedging activities for the
              three years to December 2002 are summarised below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                          |                       |                 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------- | --------------------- | ----------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Year
              to 31 December                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|**Recognised
                gains/(losses)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | **2002
£m**                                              | 2001
£m               | 2000
£m         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Currency
              hedging                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | **10**                                                   | (4)                   | 5               
|Interest
              rate hedging                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | **(2)**                                                  | (1)                   | (3)             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Recognised
                currency hedging gains in 2002 were favourable compared with
                2001 due mainly to the lower level of US dollar hedging which
                gave rise to losses in 2001 when the currency weakened after
                hedges were placed.
              Gains and
                  losses on instruments used for hedging are not recognised until
                  the exposure that is being hedged is itself recognised. Unrecognised
                  gains and losses on instruments used for hedging, and the movements,
                  are set out below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                          |                       |                 
|**Hedging**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Gains
          £m                                       | (Losses)
          £m | Net
          £m
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Unrecognised
              at 1 January 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 18                                                       | (9)                   | 9               
|Arising
              in previous years:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                          |                       |                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | recognised
              in 2002                         | (12)                  | 5               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | not
              recognised in 2002                     | 6                     | (4)             
|Arising
              in 2002:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                          |                       |                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | not
              recognised in 2002                     | 7                     | (9)             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Unrecognised
                at 31 December 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 13                                                       | (13)                  |                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Of
              which:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                          |                       |                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | expected
              to be recognised in 2003          | 11                    | (8)             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | expected
              to be recognised in 2004 or later | 2                     | (5)             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Net
                unrecognised gains on derivatives used for hedging were nil at
                31 December 2002 compared with unrecognised gains of £9
                million at 31 December 2001 and unrecognised losses of £3
                million in 2000. The decrease is mainly due to profitable Japanese
                yen hedges at 31 December 2001 which matured during 2002.
              Net cash
                  flows are mainly converted into sterling and either applied
                  to reduce debt or invested in money market instruments with
                  financial institutions holding strong credit ratings with pre-agreed
                  limits set by the Board. Interest rates are managed using a
                  mix of financial instruments, which commence and mature at
                  various dates through to January 2006. Interest rate hedging
                  relates to the use of derivative contracts to alter the currency
                  and interest rate profile on medium-term fixed rate notes issued
                  and to hedge timing mismatches. In broad terms, using the average
                  net funds position, a 1% increase in global interest rates
                  would have reduced profit before tax in the year by approximately £1
                  million (2001 and 2000: £1 million) excluding the impact
                  of hedging.

|7. ACCOUNTING
    POLICIES AND US GAAP
|--------------------------------------

|Group
                accounting policies, which are set out on pages
                63-64, conform
                with UK GAAP. In accordance with the requirements of Financial
                Reporting Standard 18 (FRS 18), these policies and any applicable
                estimation techniques have been reviewed by the directors who
                have confirmed them to be the most appropriate for the preparation
                of the 2002 financial statements.
              **Critical
                    accounting policies**In
                preparing these financial statements, management has made its
                best estimates and judgements of certain amounts included in
                the financial statements. The most significant judgemental areas
            in 2002 related to:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| Page 34 **US
                GAAP**A reconciliation of net income under UK and US GAAP
          is set out on page 67. A discussion
          of the relevant US accounting policies which differ materially from
          UK GAAP is given on pages
          65-66. Details
          of recent US GAAP accounting pronouncements are given on pages
69-70.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

|8. RISK
    FACTORS
|-------------------

|**Forward-looking
            statements**This document contains certain forward-looking statements within
      the meaning of the United States Private Securities Litigation Reform Act
      of 1995 with respect to the Group's financial condition, results of operations
      and business and management's strategy, plans and objectives. In particular,
      all statements that express forecasts, expectations and projections with
      respect to certain matters, including trends in results of operations,
      margins, growth rates, overall financial market trends, the impact of interest
      rates or exchange rates, anticipated cost savings and synergies and the
      completion of strategic transactions or restructuring programmes are all
      forward-looking statements. These statements involve risk and uncertainty
      because they relate to events and depend on circumstances that may occur
      in the future. There are a number of factors that could cause actual results
      and developments to differ materially from those expressed or implied by
      these forward-looking statements. These factors include, but are not limited
      to, the risk factors discussed below. Any forward-looking statements made
      by the Group or on its behalf speak only as of the date they are made.
      Reuters Group does not undertake to update any forward-looking statements.
      **Reuters may
            not be able to realise the anticipated benefits of its *Fast Forward*            transformation plan**On
        18 February 2003 Reuters announced it was accelerating its strategy to
        become a more focused information company. The *Fast
        Forward* plan
        includes investing in new information, streamlining the way information
        is delivered, offering a more simple and segmented product line, rationalising
        the non-core elements of the business and reshaping the cost base. While
        it is expected that these measures will produce significant competitive
        advantages, cost savings and eventual revenue growth, there can be no
        assurance of the extent to which these benefits will be realised.
      **Continued
            or worsened unfavourable conditions in financial markets may have
            a significant adverse effect on the Group's business**The
        Group's business is dependent upon the health of the financial markets
        and the participants in those markets. The Group's dealing products are
        dependent on the level of activity in the foreign exchange market. Similarly,
        the businesses of BTC and Instinet are dependent upon the
        level of activity in the equity markets. Reuters results were negatively
        impacted by the continuing economic downturn in 2002. If these conditions
        continue or get worse or in the event of significant trading market disruptions
        or suspensions there could be further adverse effects on the Group's
        business. In addition, the Group's business could be adversely affected
        by further consolidations among clients and competitors.
      **Currency
            fluctuations and interest rate fluctuations may have a negative impact
            on the Group's reported revenue and earnings**Reuters
        Group reports results in UK pounds sterling but receives revenue and
        incurs expenses in more than 60 currencies and is thereby exposed to
        the impact of fluctuations in currency rates. Currency movements had
        a broadly neutral impact on operating profit in 2002. A strengthening
        of sterling from current levels, especially in relation to other currencies
        in which Reuters Group derives significant revenues or holds significant
        assets such as the euro or the US dollar, could adversely affect
        results
        in future
        periods. To the extent that these currency exposures are not hedged,
        exchange rate movements may cause fluctuations in the Group's consolidated
        financial statements. In addition, an increase in interest rates from
        current levels
        could adversely affect the Group's results in future periods.
      **Reuters is
            exposed to a decline in the valuation of companies in which it has
            invested and does not have management control over all of them**Reuters
        has entered into joint ventures with, and made strategic investments
        in, a number of companies and also has significant interests in companies
        and joint ventures such as Instinet, TSI, Radianz and Factiva. The value
        of a number of these companies fluctuated widely and generally
        decreased significantly from 2001 through 2002, in part as a result of
        external market factors. The value of Reuters interests in these companies
        is dependent on, among other things, the performance of these companies
        generally, whether such performance meets investors' expectations, and
        external market and economic conditions.
      **The Group
            may experience difficulties or delays in developing or responding
            to new customer demands or launching new products**The
        Group's business environment is characterised by rapid technological
        change, changing and increasingly sophisticated customer demands and
        evolving industry standards. If the Group is unable to anticipate and
        respond to the demand for new services, products and technologies on
        a timely and cost-effective basis and to respond and adapt to technological
        advancements and changing standards, its business may be adversely affected.
        In addition, Reuters Group may fail to launch new products and its existing
        products and services may cease to be attractive to customers and new
        products and services that the Group may develop and introduce may not
        achieve market acceptance.
      **Reuters Group
            is dependent on third parties for the provision of certain network
            and other services**The
        Group has outsourced the day-to-day operation of most of its networks
        to Radianz, the joint venture with Equant. Radianz will source the majority
        of its requirements from Equant and will seek to provide network services
        to companies in addition to Reuters Group. Reuters and Equant are equally
        represented on the Radianz Board with neither party having control. Accordingly,
        Reuters ability to affect the performance of Radianz may be limited and
        our business could be adversely affected as a result.
      In connection with
          the Bridge acquisition, Reuters entered into a network services agreement
          with Savvis which was the primary provider of network services to Bridge.
          Reuters currently holds Savvis preferred stock that votes as, and is
          convertible into, an approximately 15% common stock interest in Savvis
          share capital, and has an observer on Savvis' board. Reuters has very
          limited, if any, ability to affect the performance of Savvis. Should
          Savvis fail, or be unable to provide network services necessary to
          the continued conduct of the Bridge businesses Reuters acquired before
          Reuters is able to migrate these services to Radianz or make other
          alternative arrangements, the Group's business would be adversely affected.
      **The Group's
            business may be adversely affected if our networks or systems experience
            any significant failures or interruptions or cannot accommodate increased
            traffic**Reuters
        Group's business is dependent on the ability to handle speedily substantial
        quantities of data and transactions on its computer-based networks and
        systems and those of Radianz, Savvis and others. Any significant failure
        or interruption of such systems due to factors beyond the Group's control,
        including terrorist activities, could have a material adverse effect
        on its business and results of operations. The continuing increase in
        the update rates of market data may impact product and network performance
        from time to time. Factors that have significantly increased the market
        data update rates include: the emergence of Nasdaq's SuperMontage and
        proprietary data feeds from other markets; high market volatility; decimalisation;
        and the multiple listing of options. While the Group has implemented
        a number of capacity management initiatives, there can be no assurance
        that the Group and its network providers will be able to successfully
        accommodate accelerated growth of peak traffic volumes.
      **Changes in
            the regulatory or competitive environment could have an adverse effect
            on Instinet's business**Neither
        the Instinet alternative trading system (ATS) nor the Island ATS is currently
        required to register as a US national securities exchange. However, as
        the Island and Instinet ATSs are integrated over time, the SEC could
        determine that exchange registration is necessary resulting in substantial
        additional regulation of Instinet, which could reduce its operational
        flexibility in ways that could have a material adverse effect on its
        business. The Instinet ATS and the Island ATS are also subject to Regulation
        ATS, which requires ATSs meeting certain trading volume criteria to provide
        quotation data to an SRO and to provide other broker-dealers execution
        access to such quotes. Compliance with Regulation ATS could have a significant
        negative impact on Instinet's trading volumes. In July 2002, the SEC
        also took action that resulted Page 35 
        in the suspension
            of market data revenue sharing programmes, in which Island participated,
          and led to Island's suspension of its own programme. Instinet has been
          from time to time, and is currently, involved in discussions
          and
          proceedings
          with
          the SEC
          and some of its customers
            regarding the application of these and other SEC rules, which may
          have a material adverse effect on Instinet's pricing policies and business
            operations. Future SEC rule-makings or interpretations relating to
            equities securities markets could adversely affect Instinet's business,
            financial condition and operating results.
      The financial services
          industry generally, and the securities brokerage business in which
          Instinet engages in particular, is very competitive, and competition
          is expected to continue to intensify in the future. Instinet has experienced
          intense price competition in recent years, which has led it to aggressively
          reduce pricing for its US broker-dealer customers. These pricing changes
          have resulted in volatility in Instinet's market share and a decline
          in revenue and could cause the transaction fee revenue Instinet receives
          from this customer group to continue to decline, even if their volumes
          increase.
      Nasdaq began to roll-out
          its new trading platform, generally referred to as SuperMontage, on
          14 October 2002 and fully implemented it on 2 December 2002. The implementation
          of SuperMontage could cause Instinet to receive fewer orders in Nasdaq-quoted
          stocks and also could cause fewer of the orders Instinet receives to
          be executed in its liquidity pool. Instinet competes with Nasdaq, through
          its operation of SuperMontage, as a trading venue for Nasdaq-quoted
          stocks, and Nasdaq has also applied for status as a for-profit exchange.
      The NASD regulates
          the activities of Instinet's US broker-dealer subsidiaries and its
          Nasdaq subsidiary competes with Instinet. The NASD, either directly
          or through subsidiaries, is able to propose, and often obtain SEC approval
          of rule changes that the Group believes can be to Nasdaq's competitive
          benefit as a securities marketplace and to Instinet's competitive disadvantage.
          Reuters Group is unable to predict at this time the impact of any proposed
          or potential changes to the regulatory environment in which Instinet
          and its affiliates operate, which may include additional changes to
          the Nasdaq marketplace considered by the NASD or the adoption by authorities
          in other jurisdictions of new methods for regulating electronic over-the-counter
          trading. Any such regulatory changes may cause Instinet and its affiliates
          to incur substantial compliance costs, or impair their ability to conduct
          their businesses, or to compete effectively.
      **The Group
            may be exposed to adverse governmental action in countries where
            we conduct reporting activities**As
        the world's largest news and information company, Reuters Group may suffer
        discriminatory tariffs or other forms of adverse government intervention
        due to the nature of its editorial and other reporting activities.
      **The Group
            may not be able to realise the anticipated benefits of acquisitions
            such as the proposed Multex acquisition**To
        achieve its strategic objectives, Reuters Group has acquired or invested
        in, and in the future may seek to acquire or invest in, other companies
        and businesses such as the Multex acquisition Reuters announced on 18
        February 2003. Reuters currently anticipates that this acquisition will
        be completed by the end of March 2003. No assurance can be given that
        Reuters Group will realise, when anticipated or at all, the benefits
        it expects as a result of any acquisition including that of Multex. Achieving
        these benefits will depend on many factors, including the successful
        and timely integration and, in some cases, the consolidation of products,
        technology, operations and administrative functions, of two companies
        that have previously operated separately. Considering the highly technical
        and complex nature of Reuters Group's products and services, these integration
        efforts may be difficult and time consuming.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|           
|-----------
|           
| Page 36 

|FINANCIAL STATEMENTS
|--------------------

|CONSOLIDATED PROFIT AND LOSS ACCOUNT
|------------------------------------

|                                                                                                                                                                                                                                                    
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Consolidated
            profit and loss account**for the year ended 31 December                                                                                                                                                                  
|                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                    
|Revenue:                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                    
|**Group
            revenue**                                                                                                                                                                                                                       
|Operating
            costs                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                    
|**Operating
            (loss)/profit**                                                                                                                                                                                                             
|Share
            of operating losses of joint ventures                                                                                                                                                                                             
|Impairment
            of investments in joint ventures                                                                                                                                                                                             
|Share
            of operating losses of associates                                                                                                                                                                                                 
|Impairment
            of investment in associate                                                                                                                                                                                                   
|(Loss)/profit
            on disposals of subsidiary undertakings                                                                                                                                                                                   
|Profit
            on disposals of fixed assets/investments                                                                                                                                                                                         
|Income
            from fixed asset investments                                                                                                                                                                                                     
|Amounts
            written off fixed asset investments                                                                                                                                                                                             
|Net
            interest (payable)/receivable                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                    
|**(Loss)/profit
            on ordinary activities before taxation**                                                                                                                                                                                
|Taxation
            on (loss)/profit on ordinary activities                                                                                                                                                                                        
|                                                                                                                                                                                                                                                    
|**(Loss)/profit
            on ordinary activities after taxation**                                                                                                                                                                                 
|Equity
            minority interests                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                    
|**(Loss)/profit
            attributable to ordinary shareholders**                                                                                                                                                                                 
|Dividends                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                    
|**(Loss)/retained
            profit**                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                    
|Basic
            (loss)/earnings per ordinary share                                                                                                                                                                                                
|Diluted
            (loss)/earnings per ordinary share                                                                                                                                                                                              
|                                                                                                                                                                                                                                                    
|Consolidated
              revenue and operating (loss)/profit derive from continuing operations
              in all material respects.
            The result for
              the year has been computed on an unmodified historical cost basis.

|                                                                                                                        
|------------------------------------------------------------------------------------------------------------------------
|**Consolidated
                statement of total recognised gains and losses**for the year ended 31 December           
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|(Loss)/profit
              attributable to ordinary shareholders                                                       
|Unrealised
              gain on deemed partial disposal of subsidiary                                                  
|Unrealised
              gains on formation of joint ventures and associates                                            
|Unrealised
              gain on deemed partial disposal of associate                                                   
|Unrealised
              gains on disposals of fixed asset investments                                                  
|Translation
              differences taken directly to reserves                                                        
|                                                                                                                        
|**Total
                recognised gains and losses relating to the year**                                              
|                                                                                                                        
|A
                detailed statement showing the movement in capital and reserves
                is set out in note 26.

| Page 37 **Notes
                on the consolidated profit and loss account**
|--------------------------------------------------------------------------------

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**1.
            Segmental analysis**The
        tables below show a segmental analysis of revenue, costs and results
        which reflects the way Reuters was managed during 2002. Revenue is allocated
        to customer segments by reference to the activities at particular customer
        sites. Activities at certain customer sites fall into more than one segment.
        In such cases revenue is allocated based on estimated activity by segment.
        Prior periods have been restated on a comparable basis.
        Segmental revenue
            less direct customer segment costs does not purport to represent
            segmental profitability. Direct segment costs include the costs of
            core management, marketing, non-integrated businesses and specific
            revenue related activities. The majority of revenue related costs
            are included within the channels and centres of excellence.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|**Revenue**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Treasury
        Services                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Investment
        Banking                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Asset
        Management                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Corporates & Media                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Reuters                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Instinet                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Share
        of joint ventures revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Intra-group
        revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Gross
        revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Less share
        of joint ventures revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|**Group
          revenue**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|**Costs**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Treasury
        Services                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Investment
        Banking                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Asset
        Management                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Corporates & Media                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Direct
        customer segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Channels                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Business
        Technology Group                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Chief
        Information Office                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Editorial                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Business
        Support Services                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Corporate/other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Reuters                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Instinet                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Restructuring
        costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Intra-group
        costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|**Amortisation
          and impairment of goodwill and other intangibles**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Treasury
        Services                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Investment
        Banking                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Asset
        Management                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Corporates & Media                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Direct
        customer segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Business
        Technology Group                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Reuters                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Instinet                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|**Operating
        costs**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| Page 38 **Results**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Treasury
        Services                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Investment
        Banking                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Asset
        Management                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Corporates & Media                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Segmental
        revenue less direct customer segment costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Channels                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Business
        Technology Group                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Chief
        Information Office                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Editorial                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Business
        Support Services                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Corporate/other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Reuters                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Instinet                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Restructuring
        costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|**Operating
          profit before amortisation and impairment of goodwill and other intangibles**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Amortisation
        of goodwill and other intangibles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Impairment
        of goodwill                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|**Operating
          (loss)/profit**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Revenue is normally
          invoiced in the same geographical area in which the customer is located.
          Revenue earned, therefore, generally represents revenue both by origin
          and by destination.
      The geographical
          analysis of performance reflects the revenues earned and operating
          costs incurred in each area excluding amortisation of goodwill and
          intangibles, goodwill impairment, restructuring costs and net currency
          gain/(loss).                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|**By
          geography**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|**Revenue**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Europe,
        Middle East and Africa                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|The
        Americas                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Asia/Pacific                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|**Operating
          costs where incurred**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Europe,
        Middle East and Africa                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|The
        Americas                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Asia/Pacific                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|**Contribution**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Europe,
        Middle East and Africa                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|The
        Americas                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Asia/Pacific                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|**Other
          costs**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Amortisation
        of goodwill and other intangible assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Goodwill
        impairment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Restructuring
        costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Net
        currency gain/(loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|United
          Kingdom and Ireland revenue was £485 million (2001: £521
          million, 2000: £522 million). With the exception of Instinet,
          Reuters products are delivered and sold primarily through a common
          geographical infrastructure and delivered over a number of communications
          networks.
        The impact of the
            Island acquisition in 2002 and the Bridge acquisition in 2001 are
            reflected principally in the Americas (see note
            31).                                                                                                                                                                                                                                                                                                                                                                                                                                     
|**Revenue
          by type**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Recurring                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Usage                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Outright                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Recurring
        revenue is derived from the sale of subscription services, including
        maintenance contracts. Usage revenue is principally derived from Instinet,
        Dealing 2000-2, Dealing 3000 Spot Matching and BTC. Outright revenue
        comprises once-off sales including information and risk management solutions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                     |                    |                    |                |                |        
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------- | ------------------ | ------------------ | -------------- | -------------- | -------
| Page 39 **2.
          Operating costs**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                     |                    |                    |                |               
|**Costs
          by type**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | **2002
£m**                         | **%
      change** | 2001
£m            | %
      change | 2000
£m       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Salaries,
        commission and allowances                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | **1,180**                           | **(9%)**           | 1,299              | 20%            | 1,081         
|Social
        security costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | **79**                              | **(5%)**           | 83                 | 2%             | 81            
|Other,
        pension costs (see note 23)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | **65**                              | **4%**             | 63                 | 12%            | 56            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Staff
        costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | **1,324**                           | **(8%)**           | 1,445              | 19%            | 1,218         
|Services                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | **811**                             | **(8%)**           | 883                | (1%)           | 895           
|Depreciation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | **227**                             | **(8%)**           | 246                | (11%)          | 276           
|Data                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | **343**                             | **1%**             | 340                | 15%            | 296           
|Communications                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | **420**                             | **25%**            | 335                | 37%            | 245           
|Space                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | **312**                             | **29%**            | 242                | 20%            | 202           
|Cost
        of sales and other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | **31**                              | **(31%)**          | 45                 | 45%            | 31            
|Amortisation
        of goodwill and other intangibles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | **107**                             | **31%**            | 81                 | 37%            | 59            
|Goodwill
        impairment (see note 14)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | **208**                             | ****              |                   |               |              
|Other
        operating income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | **(56)**                            | **21%**            | (47)               | 21%            | (39)          
|Currency
        hedging activities  net (gain)/loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | **(10)**                            | ****               | 2                  |                | (5)           
|Foreign
        currency translation  net loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | **2**                               | ****               | 11                 |                | 3             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                     | **3,719**          | **4%**             | 3,583          | 13%            | 3,181  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|The directors
        believe that the nature of the Group's business is such that the format
        of the analysis of operating costs required by the Companies Act 1985
        is not appropriate. The format has been adapted in a manner consistent
        with the Group's activities. Services include equipment hire and bought-in
        services, including consultancy and contractors, advertising and publicity,
        professional fees and staff-related expenses. Other operating income
        comprises amounts received from joint ventures and others in respect
        of costs incurred by Reuters on their behalf.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                     |                    |                    |                |               
|**Costs
          by function**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | **2002
£m**                         | **%
      change** | 2001
£m            | %
      change | 2000
£m       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Production
        and communications                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | **1,947**                           | **1%**             | 1,933              | 6%             | 1,822         
|Selling
        and marketing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | **574**                             | **(19%)**          | 706                | 14%            | 621           
|Support
        services and administration                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | **683**                             | **(9%)**           | 751                | 10%            | 681           
|Amortisation
        of goodwill and other intangibles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | **107**                             | **31%**            | 81                 | 37%            | 59            
|Restructuring
        costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | **208**                             | **110%**           | 99                 |               |              
|Goodwill
        impairment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | **208**                             | ****              |                   |               |              
|Net
        currency (gain)/loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | **(8)**                             | ****               | 13                 |                | (2)           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                     | **3,719**          | **4%**             | 3,583          | 13%            | 3,181  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|**Costs
          include:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                     |                    |                    |                |               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Development
        expenditure                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | **200**                             | **(32%)**          | 294                | (9%)           | 323           
|Operating
        lease expenditure:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                     |                    |                    |                |               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Hire
        of equipment           | **9**              | **(37%)**          | 13             | 30%            | 10     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Other,
        principally property | **112**            | **4%**             | 108            | 30%            | 83     
|Loss
        on disposal of tangible fixed assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | **1**                               | ****               | 11                 | 10%            | 10            
|Advertising                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | **32**                              | **(6%)**           | 34                 | (33%)          | 50            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| Page 40 Fees
        payable to PricewaterhouseCoopers were as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Audit
        fees:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                     |                    |                    |                |               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | United
        Kingdom              | **0.9**            | ****              | 0.9            |               | 0.9    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Overseas                            | **1.4**            | **8%**             | 1.3            | 44%            | 0.9    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                     | **2.3**            | **5%**             | 2.2            | 22%            | 1.8    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Audit-related
        services:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                     |                    |                    |                |               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | United
        Kingdom              | **0.6**            | ****               | 0.2            | (82%)          | 1.1    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Overseas                            | **0.9**            | **(68%)**          | 2.8            | 133%           | 1.2    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                     | **1.5**            | **(50%)**          | 3.0            | 30%            | 2.3    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Non-audit
        services:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                     |                    |                    |                |               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | United
        Kingdom              | **4.3**            | **(47%)**          | 8.1            | 56%            | 5.2    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Overseas                            | **1.0**            | **(44%)**          | 1.8            | (68%)          | 5.6    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                     | **5.3**            | **(46%)**          | 9.9            | (8%)           | 10.8   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                     | **9.1**            | **(40%)**          | 15.1           | 1%             | 14.9   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|The United Kingdom
          audit fee of £0.9 million includes £10,000 in respect of
          the parent company audit.
      Non-audit services
          were as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                     | **2002
£m**        | **%
      change** | 2001
£m        | %
      change | 2000
£m
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Management
        consultancy                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | **3.4**                             | **(52%)**          | 7.1                | 45%            | 4.9           
|Taxation
        advice                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | **1.7**                             | **(19%)**          | 2.1                | (43%)          | 3.7           
|Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | **0.2**                             | **(71%)**          | 0.7                | (68%)          | 2.2           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                     | **5.3**            | **(46%)**          | 9.9            | (8%)           | 10.8   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Management consultancy
          fees represent fees earned by PwC Consulting, which ceased to be part
          of PricewaterhouseCoopers on 1 October 2002.
      The directors consider
          it important that the company has access to a broad range of external
          advice, including from PricewaterhouseCoopers. Where appropriate, work
          is put out to competitive tender. The Audit Committee monitors the
          relationship with PricewaterhouseCoopers, including the level of non-audit
          fees.                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

|                                                   |                                                                               |             |         |        
|-------------------------------------------------- | ----------------------------------------------------------------------------- | ----------- | ------- | -------
|**3.
          Net interest receivable/(payable)** |                                                                               |             |        
|                                                   |                                                                               | **2002
£m** | 2001
£m | 2000
£m
|                                                  
|Interest
        receivable:                       |                                                                               |             |        
|                                                   | Listed
        investments                                                    | 1           | 1       | 5      
|                                                   | Unlisted
        investments                                                  | 19          | 28      | 19     
|                                                   | Share
        of joint ventures and associates interest (see note
        16) | 9           | 16      | 13     
|                                                  
|                                                   |                                                                               | 29          | 45      | 37     
|                                                  
|Interest
        payable:                          |                                                                               |             |        
|                                                   | Bank
        loans and overdraft                                              | (4)         | (3)     | (3)    
|                                                   | Other
        borrowings                                                      | (45)        | (51)    | (31)   
|                                                  
|                                                   |                                                                               | (49)        | (54)    | (34)   
|                                                  
|                                                   |                                                                               | (20)        | (9)     | 3      
|                                                  

|                                                                                                                                                                                                                                                                                                                                                                                                                                |             |         |        
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------- | ------- | -------
| Page 41 **4.
          Taxation on profit on ordinary activities**                                                                                                                                                                                                                                                                                                                                                           | **2002
£m** | 2001
£m | 2000
£m
|                                                                                                                                                                                                                                                                                                                                                                                                                               
|**UK corporation
        tax**                                                                                                                                                                                                                                                                                                                                                                                                  |             |         |        
|Current
        tax on income for the period                                                                                                                                                                                                                                                                                                                                                                                    | **43**      | 37      | 292    
|Adjustments
        in respect of prior periods                                                                                                                                                                                                                                                                                                                                                                                 | **(13)**    | (19)    | (40)   
|                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                | **30**      | 18      | 252    
|Double
        taxation relief                                                                                                                                                                                                                                                                                                                                                                                                  | **(7)**     | (23)    | (264)  
|                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                | **23**      | (5)     | (12)   
|                                                                                                                                                                                                                                                                                                                                                                                                                               
|**Foreign
          tax**                                                                                                                                                                                                                                                                                                                                                                                                       |             |         |        
|Current
        tax on income for the period                                                                                                                                                                                                                                                                                                                                                                                    | **82**      | 150     | 133    
|Share
        of tax of joint ventures and associates (see note
        16)                                                                                                                                                                                                                                                                                                                                                     | **6**       | (4)     | 1      
|Adjustments
        in respect of prior periods                                                                                                                                                                                                                                                                                                                                                                                 | **(9)**     | 16      | 15     
|                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                | **79**      | 162     | 149    
|                                                                                                                                                                                                                                                                                                                                                                                                                               
|**Total
        current tax**                                                                                                                                                                                                                                                                                                                                                                                                   | **102**     | 157     | 137    
|**Deferred
        taxation**(see
        note 24)                                                                                                                                                                                                                                                                                                                                                                              |             |         |        
|Deferred
        tax in respect of the current period                                                                                                                                                                                                                                                                                                                                                                           | **(61)**    | (50)    | (1)    
|Deferred
        tax in respect of prior periods                                                                                                                                                                                                                                                                                                                                                                                | **(18)**    |        |       
|                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                | **(79)**    | (50)    | (1)    
|                                                                                                                                                                                                                                                                                                                                                                                                                               
|**Tax
          on (loss)/profit**                                                                                                                                                                                                                                                                                                                                                                                              | **23**      | 107     | 136    
|                                                                                                                                                                                                                                                                                                                                                                                                                               
|In accordance
        with the requirements of the FRS No 19 'Deferred
        Tax', a reconciliation of the current tax charge on ordinary activities
        for the period reported in the profit and loss account is set out below.                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                |             |         |        
|                                                                                                                                                                                                                                                                                                                                                                                                                                | **2002
£m** | 2001
£m | 2000
£m
|                                                                                                                                                                                                                                                                                                                                                                                                                               
|Corporation
        tax on pre-tax (loss)/profit at UK nominal rate of 30%                                                                                                                                                                                                                                                                                                                                                      | **(148)**   | 48      | 197    
|Non tax
        deductible amortisation of goodwill and other intangibles                                                                                                                                                                                                                                                                                                                                                       | **88**      | 28      | 21     
|Adjustments
        in respect of prior years                                                                                                                                                                                                                                                                                                                                                                                   | **(22)**    | (3)     | (25)   
|Permanent
        differences                                                                                                                                                                                                                                                                                                                                                                                                   | **13**      | 2       | 26     
|Book
        profit on TSI public share issues not taxable                                                                                                                                                                                                                                                                                                                                                                      | ****       |        | (47)   
|Tax deduction
        arising from exercise of employee options                                                                                                                                                                                                                                                                                                                                                                 | ****       |        | (60)   
|Book
        profit on Instinet IPO not taxable                                                                                                                                                                                                                                                                                                                                                                                 | ****       | (60)    |       
|Non tax
        deductible investment impairments                                                                                                                                                                                                                                                                                                                                                                               | **77**      | 86      |       
|Fixed
        asset related timing differences                                                                                                                                                                                                                                                                                                                                                                                  | **1**       | 5       | (4)    
|Non fixed
        asset related timing differences                                                                                                                                                                                                                                                                                                                                                                              | **39**      | 11      | 5      
|Tax losses
        not currently utilised                                                                                                                                                                                                                                                                                                                                                                                       | **35**      | 35      | 10     
|Tax on
        dividend received on acquisition of Island                                                                                                                                                                                                                                                                                                                                                                       | **10**      |        |       
|Other
        differences                                                                                                                                                                                                                                                                                                                                                                                                       | **9**       | 5       | 14     
|                                                                                                                                                                                                                                                                                                                                                                                                                               
|**Total
          current tax**                                                                                                                                                                                                                                                                                                                                                                                                 | **102**     | 157     | 137    
|                                                                                                                                                                                                                                                                                                                                                                                                                               
|The other differences
          are primarily due to overseas profits taxed at rates differing from
          those in the UK and the geographical mix of profits.
      No tax is expected
          to fall due in respect of the disposal of fixed asset investments,
          subsidiaries and associates in 2002 (2001: nil).
      There is no tax impact
          on the unrealised gains arising in 2002 (2001: nil).
|                                                                                                                                                                                                                                                                                                                                                                                                                               

|                              |             |         |        
|----------------------------- | ----------- | ------- | -------
|**5.
          Dividends**    | **2002
£m** | 2001
£m | 2000
£m
|                             
|Interim
        paid          | **53**      | 54      | 51     
|Final
        (2002 proposed) | **86**      | 86      | 173    
|                             
|                              | **139**     | 140     | 224    
|                             
|Per ordinary
        share    | **Pence**   | Pence   | Pence  
|                             
|Interim
        paid          | **3.85**    | 3.85    | 3.65   
|Final
        (2002 proposed) | **6.15**    | 6.15    | 12.35  
|                             
|                              | **10.00**   | 10.00   | 16.00  
|                             

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |           |       |      
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------- | ----- | -----
| Page 42 **6.
          Earnings per ordinary share** Basic and
                  diluted earnings per ordinary share are based on the results
                  attributable to ordinary shareholders and on the weighted average
                  number of those shares in issue during the year. The weighted
                  average number of shares in issue may be reconciled to the
                  number used in the basic and diluted earnings per ordinary
    share calculations as follows:
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |           |       |      
|**Weighted
          average number in millions**                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | **2002**  | 2001  | 2000 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Ordinary
        shares in issue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | **1,432** | 1,431 | 1,426
|Non-vested
        shares held by employee share ownership trusts                                                                                                                                                                                                                                                                                                                                                                                                                                                 | **(37)**  | (27)  | (22) 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Basic
        earnings per share denominator                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | **1,395** | 1,404 | 1,404
|Issuable
        on conversion of options                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | ****     | 28    | 24   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Diluted
        earnings per share denominator                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | **1,395** | 1,432 | 1,428
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

|                                                                                                                                                                                                                                                                                            
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**7. Remuneration
            of directors**The remuneration
        report on pages
        16-21 includes details of directors' emoluments, pension
        arrangements, long-term incentive plans and stock option plans; those
        details form part of these financial statements.
|                                                                                                                                                                                                                                                                                            

|                                                                                                               |                   |           |        |      
|-------------------------------------------------------------------------------------------------------------- | ----------------- | --------- | ------ | -----
|**8.
            Employee information**The average
        number of employees during the year was as follows:
|                                                                                                               |                   |           |       
|**Customer
          segment**                                                                                 | **2002**          | 2001      | 2000  
|                                                                                                              
|Treasury
        Services                                                                                      | **256**           | 235       | 207   
|Investment
        Banking                                                                                     | **176**           | 162       | 135   
|Asset
        Management                                                                                       | **712**           | 345       | 292   
|Corporates & Media                                                                                             | **868**           | 1,245     | 904   
|                                                                                                              
|Direct
        customer segment                                                                                | **2,012**         | 1,987     | 1,538 
|Channels                                                                                                       | **6,515**         | 6,907     | 6,351 
|Business
        Technology Group                                                                              | **4,243**         | 3,792     | 3,707 
|Chief
        Information Office                                                                               | **652**           | 806       | 762   
|Editorial                                                                                                      | **2,448**         | 2,586     | 2,375 
|Business
        Support Services                                                                              | **343**           | 203       | 143   
|Corporate/other                                                                                                | **389**           | 456       | 368   
|                                                                                                              
|Reuters                                                                                                        | **16,602**        | 16,737    | 15,244
|Instinet                                                                                                       | **1,731**         | 2,251     | 2,021 
|                                                                                                              
|**Total**                                                                                                      | **18,333**        | 18,988    | 17,265
|                                                                                                              
|**By
          location**                                                                                      | ****              |           |       
|Europe,
        Middle East and Africa                                                                         | **8,920**         | 9,283     | 8,790 
|The
        Americas                                                                                           | **6,874**         | 6,998     | 6,064 
|Asia/Pacific                                                                                                   | **2,539**         | 2,707     | 2,411 
|                                                                                                              
|                                                                                                               | **18,333**        | 18,988    | 17,265
|                                                                                                              
|**By
          function******                                                                                  | ****              |           |       
|Production
        and communications                                                                          | **9,658**         | 9,809     | 9,274 
|Selling
        and marketing                                                                                  | **5,146**         | 5,282     | 4,844 
|Support
        services and administration                                                                    | **3,529**         | 3,897     | 3,147 
|                                                                                                              
|                                                                                                               | **18,333**        | 18,988    | 17,265
|                                                                                                              
|The above
        include:                                                                                     | ****              |           |       
|                                                                                                               | Development staff | **2,109** | 2,440  | 2,460
|                                                                                                              
|The average
        number of employees during 2002 included 281 temporary staff (2001: 341).                 

| Page 43 CONSOLIDATED CASH FLOW STATEMENT
|-------------------------------------------

|                                                                                            |       |             |         |        
|------------------------------------------------------------------------------------------- | ----- | ----------- | ------- | -------
|**Consolidated
                      cash flow statement**for the year ended 31 December    |       |             |         |        
|                                                                                            |       |             |         |        
|                                                                                            | Notes | **2002
£m** | 2001
£m | 2000
£m
|                                                                                           
|**Net
              cash inflow from operating activities**                                 | 9     | **355**     | 887     | 852    
|**Dividends
              received from associates**                                        |       | **2**       | 2       | 2      
|**Returns
              on investments and servicing of finance**                           |       | ****        |         |        
|Interest
              received                                                             |       | **20**      | 30      | 25     
|Interest
              paid                                                                 |       | **(58)**    | (40)    | (35)   
|Income
              from fixed asset investments                                           |       | **1**       | 3       | 3      
|Dividends
              paid to equity minority interests                                   |       | **(27)**    |        |       
|                                                                                           
|**Net
              cash outflow from returns on investments and servicing of finance**     |       | **(64)**    | (7)     | (7)    
|**Taxation
              paid**                                                             |       | **(73)**    | (173)   | (159)  
|**Capital
              expenditure and financial investment**                              |       | ****        |         |        
|Purchase
              of tangible fixed assets                                             |       | **(168)**   | (276)   | (274)  
|Sale
              of tangible fixed assets                                                 |       | **15**      | 6       | 20     
|Purchase
              of fixed asset investments                                           |       | **(80)**    | (73)    | (304)  
|Sale
              of fixed asset investments                                               |       | **22**      | 68      | 80     
|                                                                                           
|**Net
              cash outflow on capital expenditure and financial investment**          |       | **(211)**   | (275)   | (478)  
|**Acquisitions
              and disposals (including joint ventures and associates)**      | 10    | **(6)**     | (89)    | (146)  
|**Equity
              dividends paid**                                                     |       | **(139)**   | (227)   | (205)  
|                                                                                           
|**Cash
              (outflow)/inflow before management of liquid resources and financing** |       | **(136)**   | 118     | (141)  
|**Management
              of liquid resources**                                            |       | ****        |         |        
|Net
              decrease/(increase) in short-term investments                             | 10    | **378**     | (448)   | (2)    
|**Financing**                                                                               |       | ****        |         |        
|Proceeds
              from the issue of shares                                             | 26    | **2**       | 16      | 28     
|Net
              (decrease)/increase in borrowings                                         | 10    | **(158)**   | 350     | 126    
|                                                                                           
|**Net
                cash (outflow)/inflow from financing**                                |       | **(156)**   | 366     | 154    
|                                                                                           
|**Increase
                in cash**                                                        | 11    | **86**      | 36      | 11     
|                                                                                           
|                                                                                            |       |             |         |        
|                                                                                            | Notes | **2002
£m** | 2001
£m | 2000
£m
|                                                                                           
|**Reconciliation
                of net cash flow to movement in net debt**                 |       |             |         |        
|Increase
              in cash                                                              |       | **86**      | 36      | 11     
|Cash
              outflow/(inflow) from movement in borrowings                             | 10    | **158**     | (350)   | (126)  
|Cash
              (inflow)/outflow from movement in liquid resources                       | 10    | **(378)**   | 448     | 2      
|                                                                                           
|Change
              in net (debt)/funds resulting from cash flows                          |       | **(134)**   | 134     | (113)  
|Net
              funds arising on acquisitions                                             |       | **1**       | 15      | 12     
|Translation
              differences                                                       |       | **(71)**    | 23      | 26     
|                                                                                           
|Movement
              in net (debt)/funds                                                  |       | **(204)**   | 172     | (75)   
|Opening
              net funds/(debt)                                                      | 11    | **138**     | (34)    | 41     
|                                                                                           
|**Closing
                net (debt)/funds**                                                | 11    | **(66)**    | 138     | (34)   
|                                                                                           

| Page 44 **Notes
                      on the consolidated cash flow statement**
|----------------------------------------------------------------------------------

|                                                                                                                                                                           
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                           
|                                                                                                                                                                           
|                                                                                                                                                                           
|                                                                                                                                                                           
|                                                                                                                                                                           
|                                                                                                                                                                           
|                                                                                                                                                                           
|                                                                                                                                                                           
|                                                                                                                                                                           
|                                                                                                                                                                           
|                                                                                                                                                                           
|**9.
            Net cash inflow from operating activities**Operating
            profit is reconciled to net cash inflow from operating activities
            as follows:
|                                                                                                                                                                           
|                                                                                                                                                                           
|Operating
            (loss)/profit                                                                                                                                        
|Depreciation                                                                                                                                                               
|Amortisation
            and impairment of goodwill and other intangible assets                                                                                            
|Decrease/(increase)
            in stocks                                                                                                                                  
|Decrease/(increase)
            in debtors                                                                                                                                 
|(Decrease)/increase
            in creditors                                                                                                                               
|Loss
            on disposal of tangible fixed assets                                                                                                                      
|Amounts
            written off interests in own shares                                                                                                                    
|Other,
            principally translation differences                                                                                                                     
|                                                                                                                                                                           
|**Net
            cash inflow from operating activities**                                                                                                                  
|                                                                                                                                                                           
|                                                                                                                                                                           

|                                                                                          |                                                               |                     |                     |      
|----------------------------------------------------------------------------------------- | ------------------------------------------------------------- | ------------------- | ------------------- | -----
|**10.
            Analysis of cash flows for headings netted in the cash flow statement**
|                                                                                          | **2002
£m**                                                   | 2001
            £m | 2000
            £m
|                                                                                         
|**Acquisitions
            and disposals (including joint ventures and associates)**      | ****                                                          |                     |                    
|Cash
            consideration:                                                           | ****                                                          |                     |                    
|                                                                                          | Subsidiary
            undertakings (see note 31)             | **(41)**            | (373)               | (130)
|                                                                                          | Joint
            ventures (see note 31)                      | **(2)**             | (44)                | (47) 
|                                                                                          | Associated
            undertakings (see note 31)             | ****               | (22)                | (31) 
|                                                                                          | Loans
            from/(to) joint ventures and associates     | **6**               | (9)                 |     
|                                                                                          | Deferred
            payments for acquisitions in prior years | **(5)**             | (3)                 | (8)  
|                                                                                         
|                                                                                          |                                                               | **(42)**            | (451)               | (216)
|Less
            cash acquired                                                            | **29**                                                        | 5                   | 8                  
|                                                                                         
|                                                                                          |                                                               | **(13)**            | (446)               | (208)
|Cash
            received from disposals (including deemed disposals):                    | ****                                                          |                     |                    
|                                                                                          | Subsidiary
            undertakings                           | **4**               | 357                 | 21   
|                                                                                          | Associated
            undertakings                           | **3**               |                    | 41   
|                                                                                         
|                                                                                          |                                                               | **(6)**             | (89)                | (146)
|                                                                                         
|**Management
            of liquid resources**                                            | ****                                                          |                     |                    
|Increase
            in term deposits                                                     | **(2,511)**                                                   | (1,242)             | (3,719)            
|Decrease
            in term deposits                                                     | **2,595**                                                     | 1,176               | 3,842              
|Purchase
            of certificates of deposit                                           | ****                                                         | (31)                | (108)              
|Sale
            of certificates of deposit                                               | **1**                                                         | 30                  | 113                
|Purchase
            of listed/unlisted securities                                        | **(4,587)**                                                   | (1,566)             | (989)              
|Sale
            of listed/unlisted securities                                            | **4,880**                                                     | 1,185               | 859                
|                                                                                         
|                                                                                          |                                                               | **378**             | (448)               | (2)  
|                                                                                         
|**Financing**                                                                             | ****                                                          |                     |                    
|(Decrease)/increase
            in short-term borrowings                                  | **(173)**                                                     | 300                 | 99                 
|Increase
            in long-term borrowings                                              | **15**                                                        | 50                  | 27                 
|                                                                                         
|                                                                                          |                                                               | **(158)**           | 350                 | 126  
|                                                                                         

|                                                     |                                                                             |                           |                                                                  |                                                   |                                                                    |                                                                                         |                     
|---------------------------------------------------- | --------------------------------------------------------------------------- | ------------------------- | ---------------------------------------------------------------- | ------------------------------------------------- | ------------------------------------------------------------------ | --------------------------------------------------------------------------------------- | --------------------
| Page 45 **11.
            Analysis of net funds**
|                                                     |                                                                             |                           |                                                                  |                                                   | Bank/other
            borrowings                                  |                                                                                        
|                                                    
|                                                     | Cash
            at
            bank and
            in hand
            £m | Overdrafts
            £m | Total
            cash and
            overdrafts
            £m | Short-term
            investments
            £m | Falling
            due within
            one year
            £m | Falling
            due after
            more than
            one year
            £m | Total
            £m
|                                                    
|31
            December 2000                         | 117                                                                         | (99)                      | 18                                                               | 530                                               | (294)                                                              | (288)                                                                                   | (34)                
|Cash
            flow                                | 20                                                                          | 16                        | 36                                                               | 448                                               | (300)                                                              | (50)                                                                                    | 134                 
|Exchange
            movements                       | 1                                                                           | (3)                       | (2)                                                              | 26                                                | (1)                                                                |                                                                                        | 23                  
|Arising
            on acquisition                   |                                                                            |                          |                                                                 | 15                                                |                                                                   |                                                                                        | 15                  
|                                                    
|31
            December 2001                         | 138                                                                         | (86)                      | 52                                                               | 1,019                                             | (595)                                                              | (338)                                                                                   | 138                 
|Cash
            flow                                | 23                                                                          | 63                        | 86                                                               | (378)                                             | 173                                                                | (15)                                                                                    | (134)               
|Exchange
            movements                       | (3)                                                                         | 4                         | 1                                                                | (71)                                              | (1)                                                                |                                                                                        | (71)                
|Arising
            on acquisition                   |                                                                            |                          |                                                                 |                                                  | 1                                                                  |                                                                                        | 1                   
|                                                    
|**31
            December 2002**                     | **158**                                                                     | **(19)**                  | **139**                                                          | **570**                                           | **(422)**                                                          | **(353)**                                                                               | **(66)**            
|                                                    
|                                                    

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                   |                                                                   |                                               |                                           |                                                               |                                           |                                           |                                                               |                                           |                                      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------- | ----------------------------------------------------------------- | --------------------------------------------- | ----------------------------------------- | ------------------------------------------------------------- | ----------------------------------------- | ----------------------------------------- | ------------------------------------------------------------- | ----------------------------------------- | -------------------------------------
|**12.
              Derivatives and other financial instruments**A
             substantial portion of Reuters revenue is receivable in foreign

              currencies with terms of payment up to six months in advance. As
             such, Reuters is subject to currency exposure from committed revenue

              and additionally, to interest rate risk from borrowing and the
            investment  of cash balances. Reuters seeks to limit these risks
            by entering
              into a mix of derivative financial instruments, which include forward
             contracts, options (including cylinders) and swaps.
            
            A
            
 more detailed
              discussion on Reuters Group treasury management
 can be found on pages 32-33.
            If the derivative
              financial instruments were considered separately from the underlying
              future revenue and interest, Reuters would be subject to market
              risk on these financial instruments from fluctuations in currency
              and interest rates. Reuters only enters into such derivative financial
              instruments to hedge (or reduce) the underlying exposure described
              above. There is, therefore, no net market risk on such derivative
              financial instruments and only a credit risk from the potential
              non-performance by counterparties. The amount of this credit risk
              is generally restricted to any hedging gain and not the principal
              amount hedged.
            Derivative instruments
              held at 31 December were:
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                   |                                                                   |                                               |                                           |                                                               |                                           |                                           |                                                               |                                           |                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                   | ****                                                              | ****                                          | **2002**                                  |                                                               |                                           | 2001                                      |                                                               |                                           | 2000                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                   | **Gross
            contract
            amounts
            £m** | **Carrying
            value
            £m** | **Fair
            value
            £m** | Gross
            contract
            amounts
            £m | Carrying
            value
            £m | Fair
            value
            £m     | Gross
            contract
            amounts
            £m | Carrying
            value
            £m | Fair
            value
            £m
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|**Currency
            management**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                   |                                                                   |                                               |                                           |                                                               |                                           |                                           |                                                               |                                          
|Foreign
            exchange forward contracts:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                   |                                                                   |                                               |                                           |                                                               |                                           |                                           |                                                               |                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Contracts
            in profit                   | **96**                                                            | ****                                         | **7**                                     | 110                                                           |                                          | 13                                        | 187                                                           | 1                                         | 11                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Contracts
            in loss                     | **154**                                                           | ****                                         | **(6)**                                   | 143                                                           |                                          | (3)                                       | 116                                                           |                                          | (5)                                  
|Foreign
            currency options:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                   |                                                                   |                                               |                                           |                                                               |                                           |                                           |                                                               |                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Contracts
            in profit                   | **194**                                                           | **2**                                         | **1**                                     | 163                                                           |                                          | 1                                         | 337                                                           | 2                                         | 4                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Contracts
            in loss                     | **60**                                                            | ****                                         | **(1)**                                   | 148                                                           |                                          | (2)                                       | 267                                                           |                                          | (11)                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                   | **504**                                                           | **2**                                         | **1**                                     | 564                                                           |                                          | 9                                         | 907                                                           | 3                                         | (1)                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|**Interest
            rate management**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                   |                                                                   |                                               |                                           |                                                               |                                           |                                           |                                                               |                                          
|Interest
            rate and currency swaps                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | **487**                                           | **(5)**                                                           | **(4)**                                       | 337                                       |                                                              |                                          | 254                                       |                                                              | (2)                                      
|Foreign
            exchange swaps                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | **77**                                            | **3**                                                             | **3**                                         |                                          |                                                              |                                          |                                          |                                                              |                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                   | **564**                                                           | **(2)**                                       | **(1)**                                   | 337                                                           |                                          |                                          | 254                                                           |                                          | (2)                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|The
            following table provides an analysis by currency of foreign exchange
            forward contracts and options held for currency hedging purposes as
            at 31 December.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                   |                                                                   |                                               |                                           |                                                               |                                           |                                           |                                                               |                                           |                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                   |                                                                   |                                               |                                           | ****                                                          | **2002**                                  |                                           | 2001                                                          |                                           | 2000                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                   |                                                                   |                                               |                                           | **Forwards
            %**                                    | **Options
            %**                 | Forwards
            %                    | Options
            %                                         | Forwards
            %                    | Options
            %                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Euro                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                   |                                                                   |                                               | **54**                                    | **100**                                                       | 22                                        | 90                                        | 16                                                            | 53                                       
|Japanese
            yen                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                   |                                                                   |                                               | **33**                                    | ****                                                         | 31                                        |                                          | 24                                                            |                                         
|US
            dollar                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                   |                                                                   |                                               | ****                                     | ****                                                         | 23                                        | 10                                        | 42                                                            | 47                                       
|Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                   |                                                                   |                                               | **13**                                    | ****                                                         | 24                                        |                                          | 18                                                            |                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                   |                                                                   |                                               | **100**                                   | **100**                                                       | 100                                       | 100                                       | 100                                                           | 100                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Foreign
              exchange forward contracts and options mature at dates up to two
              years from the balance sheet date. Interest rate swaps commence
              and mature at various dates through to January 2006.
            The fair values
              of foreign currency and interest rate management instruments are
              estimated on the basis of market quotes, discounted to current value
              using market-quoted interest rates.
            The weighted
              average variable rate payable on the interest rate swaps used to
              alter the currency and interest rate profile of debt issued at 31
              December 2002 was 4% (2001: 4%, 2000: 6%). The weighted average
              variable rate is based on the rate implied in the yield curve at
              the balance sheet date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
            Page 46 All
              derivative instruments are unsecured. However, Reuters does not
              anticipate non-performance by the counterparties who are all banks
              with recognised long-term credit ratings of 'A3/A' or higher.
    Tables containing
              information on hedging gains and losses
are set out on page 33
.
            Carrying and
              fair values of group financial assets and liabilities at 31 December
          were:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                   |                                                                   |                                               |                                           |                                                               |                                           |                                           |                                                               |                                           |                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                   |                                                                   |                                               |                                           |                                                               | **2002**                                  |                                           | 2001                                                          |                                           | 2000                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                   |                                                                   |                                               |                                           | **Carrying
            value
            £m**                 | **Fair
            value
            £m** | Carrying
            value
            £m | Fair
            value
            £m                         | Carrying
            value
            £m | Fair
            value
            £m
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Derivative
            instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                   |                                                                   |                                               | ****                                     | ****                                                         |                                          | 9                                         | 3                                                             | (3)                                      
|Other
            financial assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                   |                                                                   |                                               |                                           |                                                               |                                           |                                           |                                                               |                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Fixed
            asset investments               |                                                                   |                                               |                                           | **66**                                                        | **66**                                    | 140                                       | 160                                                           | 371                                       | 529                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Long-term
            debtors                     |                                                                   |                                               |                                           | **12**                                                        | **12**                                    | 15                                        | 15                                                            | 19                                        | 19                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Short-term
            investments and cash       |                                                                   |                                               | **728**                                   | **728**                                                       | 1,157                                     | 1,160                                     | 647                                                           | 647                                      
|Other
            financial liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                   |                                                                   |                                               |                                           |                                                               |                                           |                                           |                                                               |                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Short-term
            borrowings                 |                                                                   |                                               |                                           | **(440)**                                                     | **(440)**                                 | (681)                                     | (681)                                                         | (393)                                     | (393)                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Long-term
            borrowings                  |                                                                   |                                               |                                           | **(352)**                                                     | **(353)**                                 | (338)                                     | (338)                                                         | (288)                                     | (286)                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Other
            long-term financial liabilities |                                                                   |                                               | **(88)**                                  | **(88)**                                                      | (29)                                      | (29)                                      | (13)                                                          | (13)                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|The
              fair value of fixed asset investments is the carrying value unless
              the investment has a readily determinable market value which is
              higher.
            The fair value
              of listed short-term investments are based on quoted market prices
              for those investments. The carrying amount of the other short-term
              deposits and investments approximated to their fair values due to
              the short maturity of the instruments held.
            The fair value
              of short-term borrowings approximated to the carrying value due
              to the short maturity of the investments.
            The fair value
              of long-term liabilities takes into account the effect of interest
              rate swaps.
            Short-term debtors
              and creditors have been excluded from the above analysis and all
              other disclosures in this note, other than the currency risk disclosures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                          
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Financial
              instrument sensitivity analysis**The analysis
              below summarises the sensitivity of the fair value of the Group's
              financial instruments to hypothetical changes in market rates. Fair
              values are the present value of future cash flows based on market
              rates at the valuation date.
            The estimated
              adverse changes in the fair value of financial instruments are based
              on an instantaneous:
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                          
|i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 1% increase in
            the specific rate of interest from the levels effective at 31 December
            2002 with all other variables remaining constant; and                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                          
|ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 10% weakening
              in the value of sterling against all other currencies from the levels
              applicable at 31 December 2002 with all other variables remaining
              constant.

|                                             |                               |                                             |                                                                                            |                                                                                                                               
|-------------------------------------------- | ----------------------------- | ------------------------------------------- | ------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------
|                                             |                               | Fair
            value changes arising from
|                                            
|                                             |                               | Fair
            value
            £m       | 1%
            increase in
            interest rates
            (adverse)
            £m | 10%
              weakening
              in £ against
              other currencies
              (adverse)
              £m
|                                            
|Currency
            swaps and interest rate |                              | (4)                                         | (25)                                                                                      
|Foreign
            exchange:                |                               |                                             |                                                                                           
|                                             | Forward
            contracts | 1                                           |                                                                                           | (25)                                                                                                                          
|                                             | Currency
            options  |                                            |                                                                                           | (5)                                                                                                                           
|                                            
|                                             |                               | 1                                           | (4)                                                                                        | (55)                                                                                                                          
|                                            

|                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                       |                                                                |                                      |                     |                                        |                                         |                                                             |                      |                     
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------- | -------------------------------------------------------------- | ------------------------------------ | ------------------- | -------------------------------------- | --------------------------------------- | ----------------------------------------------------------- | -------------------- | --------------------
|Monetary
            assets and liabilities by currency, after cross currency swaps, excluding
           the functional currency of each operation at 31 December 2002, were:                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                       | Net
            foreign currency monetary assets/(liabilities)
|                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                       | Sterling
            £m                                        | US
            dollar
            £m | Euro
            £m | Swiss
            franc
            £m | Japanese
            yen
            £m | Hong
              Kong
              dollar
            £m | Other
            £m | Total
            £m
|                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Functional
            currency of operation:                                                                                                                                                                                                                                                                                                                                                                                                                |                       |                                                                |                                      |                     |                                        |                                         |                                                             |                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Sterling              |                                                               | (44)                                 | (16)                | (79)                                   | 6                                       | (5)                                                         | (10)                 | (148)               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                             | US
            dollar | 4                                                              |                                     | 9                   | (1)                                    | 9                                       | 3                                                           | 4                    | 28                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                       | 4                                                              | (44)                                 | (7)                 | (80)                                   | 15                                      | (2)                                                         | (6)                  | (120)               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Net
            currency gains and losses arising from monetary assets and liabilities
            not in the functional currency of an operation are recognised in its
            profit and loss account. Those arising from the translation of US
            dollar functional currency financial statements into sterling (principally
            Instinet) are recognised in the statement of total recognised gains
            and losses (STRGL).

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |         |                                                          |                                                                        |                                                                  |                                                                    |                                                                                                             |                                                                                                                
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------- | -------------------------------------------------------- | ---------------------------------------------------------------------- | ---------------------------------------------------------------- | ------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------
| Page 47 
          The currency
              and interest rate profile of the Group's financial assets at 31
              December 2002 was:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |         |                                                          |                                                                        |                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |         | Cash
            and short-term 
            investments |                                                                        | Fixed
              rate investments                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |         | Total
            £m                                     | Non-interest
            bearing
            £m                        | Floating
            rate
            investments
            £m | Fixed
            rate
            investments
            £m      | Weighted
            average
            interest
            rate at
            31 December
            % | Weighted
            average
            time for
            which rate
            is fixed
            years
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Sterling                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 153     | 2                                                        | 151                                                                    |                                                                 |                                                                   |                                                                                                           
|US
            dollar                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 586     | 65                                                       | 515                                                                    | 6                                                                | 2%                                                                 | 1                                                                                                          
|Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 67      | 11                                                       | 51                                                                     | 5                                                                |                                                                   |                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|**31
            December 2002**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | **806** | **78**                                                   | **717**                                                                | **11**                                                           | **2%**                                                             | **1**                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|31
            December 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 1,312   | 155                                                      | 1,022                                                                  | 135                                                              | 3%                                                                 | 2                                                                                                          
|31
            December 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 1,037   | 390                                                      | 563                                                                    | 84                                                               | 6%                                                                 | 2                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Sterling
              and US dollar short-term floating rate investments include £135
              million (2001: £301 million, 2000: £73 million) of money
              market deposits which mature within three months of the balance
              sheet date. Interest on floating rate investments is earned at rates
              based on local money market rates.
            Fixed rate investments
              are those investments which have an interest rate fixed for a period
              of greater than one year.
            The currency
              and interest rate profile of the Group's financial liabilities,
              after allowing for interest rate and cross currency swaps, at 31
              December 2002 was:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |         |                                                          |                                                                        |                                                                  | Borrowings                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |         |                                                          |                                                                        | Total
            £m                                             | Other
            financial
            liabilities
            £m | Floating
            rate
            borrowings
            £m                                             | Fixed
            rate
            borrowings
            £m                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Sterling                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |         |                                                          | 783                                                                    | 36                                                               | 781                                                                |                                                                                                           
|US
            dollar                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |         |                                                          | 20                                                                     | 39                                                               | 11                                                                 |                                                                                                           
|Euro                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |         |                                                          |                                                                       | 7                                                                |                                                                   |                                                                                                           
|Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |         |                                                          | 3                                                                      | 6                                                                | 2                                                                  |                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|**31
            December 2002**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |         |                                                          | **806**                                                                | **88**                                                           | **794**                                                            | ****                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|31
            December 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |         |                                                          | 1,029                                                                  | 29                                                               | 1,019                                                              |                                                                                                           
|31
           December 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |         |                                                          | 692                                                                    | 13                                                               | 681                                                                |                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|The
              floating rate borrowings comprise bank loans and overdrafts bearing
              interest at rates based on local money market rates, commercial
              paper
            and medium-term notes. The weighted average interest rate on bank
            borrowings at 31 December 2002 was 4% (2001: 4%, 2000: 6%).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Total
            financial liabilities are repayable as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |         | ****                                                     | **2002**                                                               |                                                                  | 2001                                                               |                                                                                                             | 2000                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |         | **Borrowings
            £m**                            | **Other
            financial
            liabilities
            £m** | Borrowings
            £m                                        | Other
            financial
            liabilities
            £m | Borrowings
            £m                                                                                   | Other
            financial
            liabilities
            £m                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Within
            one year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | **441** | **35**                                                   | 681                                                                    | 16                                                               | 393                                                                | 1                                                                                                          
|Between
            one and two years                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | **282** | **23**                                                   | 137                                                                    | 3                                                                | 88                                                                 | 8                                                                                                          
|Between
            two and five years                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | **71**  | **30**                                                   | 201                                                                    | 10                                                               | 200                                                                | 4                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |         | **794**                                                  | **88**                                                                 | 1,019                                                            | 29                                                                 | 681                                                                                                         | 13                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|In
              December 2001, Reuters Group PLC entered into syndicated credit
              facilities for £500 million to support borrowings from commercial
              paper markets. The facility is at variable interest rates based
              on LIBOR, the London Interbank Offer Rate, is committed and may
              be drawn and redrawn up to one month prior to its maturity in December
              2006. At 31 December 2002, the facility was undrawn.
            In March 1998,
              Reuters established a Euro Commercial Paper Programme. This provides
              access to £1.5 billion of uncommitted short-term finance of
              which £1 billion was unused at 31 December 2002. In December
              1998, Reuters established a £1 billion Euro Medium Term Note
              Programme of which £412 million was unused at 31 December 2002.
            In addition,
              at 31 December 2002 the Group had unused, short-term, uncommitted
              bank borrowing facilities denominated in various currencies, the
              sterling equivalent of which was approximately £600 million,
              at money market rates varying principally between 0% and 5%, depending
              on the currency.
            Reuters is in
              the process of replacing its £500 million bank facility with
              a new facility of £1.25 billion. The facility is being syndicated
              to a group of international banks. The facility is structured with
              £800 million of the facility available for drawing and redrawing
              until 2008. The remaining £450 million will be available until
              2004, with the ability to extend the maturity in whole or part in
              certain circumstances.

| Page 48 CONSOLIDATED BALANCE SHEET
|-------------------------------------

|                                                                                                                                                                                                                                                                                                                                                                                                |                                                            |                                          |             |           |           |       |         |       |      
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------- | ---------------------------------------- | ----------- | --------- | --------- | ----- | ------- | ----- | -----
|**Consolidated
                    balance sheet**at
              31 December                                                                                                                                                                                                                                                                                                                  |                                                            |                                          |             |           |           |       |        
|                                                                                                                                                                                                                                                                                                                                                                                                | Notes                                                      |                                          | **2002
£m** |           | 2001
£m   |       | 2000
£m
|                                                                                                                                                                                                                                                                                                                                                                                               
|**Fixed
                assets**                                                                                                                                                                                                                                                                                                                                                                |                                                            |                                          |             |           |           |       |        
|Intangible
              assets                                                                                                                                                                                                                                                                                                                                                                 | 14                                                         |                                          | **418**     |           | 498       |       | 237    
|Tangible
              assets                                                                                                                                                                                                                                                                                                                                                                   | 15                                                         |                                          | **601**     |           | 691       |       | 632    
|Investments                                                                                                                                                                                                                                                                                                                                                                                     | 16                                                         |                                          |             |           |           |       |        
|                                                                                                                                                                                                                                                                                                                                                                                                | Investments
              in joint ventures:               |                                          |             |           |           |       |         |      
|                                                                                                                                                                                                                                                                                                                                                                                                |                                                            | Share
              of gross assets      |             |           | **207**   |       | 270     |       | 237  
|                                                                                                                                                                                                                                                                                                                                                                                                |                                                            | Share
              of gross liabilities |             |           | **(110)** |       | (118)   |       | (79) 
|                                                                                                                                                                                                                                                                                                                                                                                                |                                                            |                                          |             |           | **97**    |       | 152     |       | 158  
|                                                                                                                                                                                                                                                                                                                                                                                                | Share
              of net assets of associates            |                                          |             | **266**   |           | 329   |         | 353  
|                                                                                                                                                                                                                                                                                                                                                                                                | Other
              investments                            |                                          |             | **134**   |           | 293   |         | 488  
|                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                |                                                            |                                          |             |           | **1,516** |       | 1,963   |       | 1,868
|                                                                                                                                                                                                                                                                                                                                                                                               
|**Current
                assets**                                                                                                                                                                                                                                                                                                                                                              |                                                            |                                          |             |           |           |       |        
|Stocks                                                                                                                                                                                                                                                                                                                                                                                          | 17                                                         |                                          | **1**       |           | 3         |       | 7      
|Debtors:                                                                                                                                                                                                                                                                                                                                                                                        |                                                            |                                          |             |           |           |       |        
|                                                                                                                                                                                                                                                                                                                                                                                                | Amounts
              falling due within one year          | 18                                       |             | **1,120** |           | 1,302 |         | 1,289
|                                                                                                                                                                                                                                                                                                                                                                                                | Amounts
              falling due after more than one year | 18                                       |             | **159**   |           | 113   |         | 59   
|Short-term
              investments                                                                                                                                                                                                                                                                                                                                                            | 19                                                         |                                          | **570**     |           | 1,019     |       | 530    
|Cash
              at bank and in hand                                                                                                                                                                                                                                                                                                                                                          |                                                            |                                          | **158**     |           | 138       |       | 117    
|                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                |                                                            |                                          |             |           | **2,008** |       | 2,575   |       | 2,002
|**Creditors:** Amounts
              falling due within one year                                                                                                                                                                                                                                                                                                                                | 20                                                         |                                          | **(2,198)** |           | (2,709)   |       | (2,295)
|                                                                                                                                                                                                                                                                                                                                                                                               
|**Net
                current liabilities**                                                                                                                                                                                                                                                                                                                                                     |                                                            |                                          | **(190)**   |           | (134)     |       | (293)  
|                                                                                                                                                                                                                                                                                                                                                                                               
|**Total
                assets less current liabilities**                                                                                                                                                                                                                                                                                                                                       |                                                            |                                          | **1,326**   |           | 1,829     |       | 1,575  
|**Creditors:** Amounts
              falling due after more than one year                                                                                                                                                                                                                                                                                                                       | 21                                                         |                                          | **(354)**   |           | (344)     |       | (310)  
|Provisions
              for liabilities and charges:                                                                                                                                                                                                                                                                                                                                           |                                                            |                                          |             |           |           |       |        
|                                                                                                                                                                                                                                                                                                                                                                                                | Pensions
              and similar obligations             | 23                                       |             | **(59)**  |           | (58)  |         | (50) 
|                                                                                                                                                                                                                                                                                                                                                                                                | Deferred
              taxation                            | 24                                       |             | **(27)**  |           | (30)  |         | (28) 
|                                                                                                                                                                                                                                                                                                                                                                                                | Other
              provisions                             | 25                                       |             | **(159)** |           | (124) |         | (34) 
|                                                                                                                                                                                                                                                                                                                                                                                               
|**Net
                assets**                                                                                                                                                                                                                                                                                                                                                                  |                                                            |                                          | **727**     |           | 1,273     |       | 1,153  
|                                                                                                                                                                                                                                                                                                                                                                                               
|**Capital
                and reserves**                                                                                                                                                                                                                                                                                                                                                        | 26                                                         |                                          |             |           |           |       |        
|Called-up
              share capital                                                                                                                                                                                                                                                                                                                                                           |                                                            |                                          | **358**     |           | 358       |       | 357    
|Share
              premium account                                                                                                                                                                                                                                                                                                                                                             |                                                            |                                          | **91**      |           | 89        |       | 71     
|Other
              reserve                                                                                                                                                                                                                                                                                                                                                                     |                                                            |                                          | **(1,717)** |           | (1,717)   |       | (1,717)
|Capital
              redemption reserve                                                                                                                                                                                                                                                                                                                                                        |                                                            |                                          | **1**       |           | 1         |       | 1      
|Profit
              and loss account reserve                                                                                                                                                                                                                                                                                                                                                   |                                                            |                                          | **1,763**   |           | 2,378     |       | 2,441  
|                                                                                                                                                                                                                                                                                                                                                                                               
|Shareholders'
              equity                                                                                                                                                                                                                                                                                                                                                              |                                                            |                                          | **496**     |           | 1,109     |       | 1,153  
|Equity
              minority interests                                                                                                                                                                                                                                                                                                                                                         |                                                            |                                          | **231**     |           | 164       |       |       
|                                                                                                                                                                                                                                                                                                                                                                                               
|**Capital
                employed**                                                                                                                                                                                                                                                                                                                                                            |                                                            |                                          | **727**     |           | 1,273     |       | 1,153  
|                                                                                                                                                                                                                                                                                                                                                                                               
|The
              
              balance
                sheet of Reuters Group PLC
              is shown on page 62.
            The financial statements on pages
              36-64 and
              the summary of differences between UK and US generally accepted
              accounting principles on pages 65-70 were
              approved by the directors on 24 February 2003.

|                                            |                                                   
|------------------------------------------- | --------------------------------------------------
|                                            |                                                   
|**Tom Glocer,**
            Chief Executive | **David
            Grigson,**Finance Director****

|                                                                                                                                           |             |         |        
|------------------------------------------------------------------------------------------------------------------------------------------ | ----------- | ------- | -------
| Page 49 
          **Reconciliation
                  of movements in shareholders' funds**for the
              year ended 31 December |             |         |        
|                                                                                                                                           | **2002
£m** | 2001
£m | 2000
£m
|                                                                                                                                          
|(Loss)/retained
              profit                                                                                                       | **(543)**   | (94)    | 297    
|Unrealised
              gain on deemed partial disposal of subsidiary                                                                     | **1**       | 11      |       
|Unrealised
              gains on formation of joint ventures and associates                                                               | ****       |        | 73     
|Unrealised
              gain on deemed partial disposal of associate                                                                      | **12**      |        | 39     
|Unrealised
              gains on disposals of fixed asset investments                                                                     | **10**      |        | 13     
|Translation
              differences taken directly to reserves                                                                           | **(95)**    | 23      | 40     
|Shares
              issued during the year                                                                                                | **2**       | 16      | 28     
|                                                                                                                                          
|Net
              movement in shareholders' equity                                                                                         | **(613)**   | (44)    | 490    
|Opening
              shareholders' equity                                                                                                 | **1,109**   | 1,153   | 663    
|                                                                                                                                          
|**Closing
                shareholders' equity**                                                                                           | **496**     | 1,109   | 1,153  
|                                                                                                                                          

| Page 50 **Notes
                      on the consolidated balance sheet**
|----------------------------------------------------------------------------

|                                                                                                                                                                                                                                                                                                                                                                                                           |                        |                                           |         |             |         |        
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------- | ----------------------------------------- | ------- | ----------- | ------- | -------
|**13.
                Segmental analysis**The
          tables below show total assets and non-interest bearing net assets
          by customer segment and by location on a basis consistent with the
          segmental analysis of profit in note 1. For the reasons discussed in
          that note, the assets in any location are not matched with the revenue
          earned in that location.
|                                                                                                                                                                                                                                                                                                                                                                                                           |                        |                                          
|                                                                                                                                                                                                                                                                                                                                                                                                           | Total
          assets | Non-interest
          bearing net assets
|                                                                                                                                                                                                                                                                                                                                                                                                          
|**By
            customer segment**                                                                                                                                                                                                                                                                                                                                                                        | **2002
£m**            | 2001
£m                                   | 2000
£m | **2002
£m** | 2001
£m | 2000
£m
|                                                                                                                                                                                                                                                                                                                                                                                                          
|Treasury
          Services                                                                                                                                                                                                                                                                                                                                                                                | **227**                | 224                                       | 233     | **141**     | 171     | 74     
|Investment
          Banking                                                                                                                                                                                                                                                                                                                                                                               | **131**                | 162                                       | 164     | **49**      | 67      | 58     
|Asset
          Management                                                                                                                                                                                                                                                                                                                                                                                 | **160**                | 175                                       | 204     | **55**      | 74      | 88     
|Corporates & Media                                                                                                                                                                                                                                                                                                                                                                                         | **170**                | 224                                       | 259     | **75**      | 109     | 123    
|                                                                                                                                                                                                                                                                                                                                                                                                          
|Total
          customer segment                                                                                                                                                                                                                                                                                                                                                                           | **688**                | 785                                       | 860     | **320**     | 421     | 343    
|Channels                                                                                                                                                                                                                                                                                                                                                                                                   | **439**                | 517                                       | 473     | **249**     | 299     | 275    
|Business
          Technology Group                                                                                                                                                                                                                                                                                                                                                                        | **417**                | 506                                       | 406     | **210**     | 298     | 232    
|Editorial                                                                                                                                                                                                                                                                                                                                                                                                  | **25**                 | 32                                        | 20      | **(45)**    | (40)    | (55)   
|Chief
          Information Office                                                                                                                                                                                                                                                                                                                                                                         | **16**                 | 19                                        | 15      | **(3)**     | (5)     | (9)    
|Business
          Support Service                                                                                                                                                                                                                                                                                                                                                                         | **1**                  | 1                                         |        | **(9)**     | (7)     | (4)    
|Central                                                                                                                                                                                                                                                                                                                                                                                                    | **594**                | 714                                       | 576     | **(8)**     | 48      | 171    
|Instinet                                                                                                                                                                                                                                                                                                                                                                                                   | **1,344**              | 1,964                                     | 1,520   | **79**      | 121     | 234    
|                                                                                                                                                                                                                                                                                                                                                                                                          
|Total
          assets/non-interest bearing net assets                                                                                                                                                                                                                                                                                                                                                     | **3,524**              | 4,538                                     | 3,870   | **793**     | 1,135   | 1,187  
|Interest
          bearing net assets                                                                                                                                                                                                                                                                                                                                                                      | ****                   |                                           |         | **(66)**    | 138     | (34)   
|                                                                                                                                                                                                                                                                                                                                                                                                          
|Total
          net assets                                                                                                                                                                                                                                                                                                                                                                                 | ****                   |                                           |         | **727**     | 1,273   | 1,153  
|                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                           | Total
          assets | Non-interest
          bearing net assets
|                                                                                                                                                                                                                                                                                                                                                                                                          
|**By location**                                                                                                                                                                                                                                                                                                                                                                                            | **2002
£m**            | 2001
£m                                   | 2000
£m | **2002
£m** | 2001
£m | 2000
£m
|                                                                                                                                                                                                                                                                                                                                                                                                          
|Europe,
          Middle East and Africa                                                                                                                                                                                                                                                                                                                                                                   | **1,381**              | 1,803                                     | 1,502   | **633**     | 652     | 651    
|The
          Americas                                                                                                                                                                                                                                                                                                                                                                                     | **1,660**              | 2,093                                     | 1,644   | **253**     | 523     | 671    
|Asia/Pacific                                                                                                                                                                                                                                                                                                                                                                                               | **192**                | 241                                       | 258     | **40**      | 64      | 74     
|Central                                                                                                                                                                                                                                                                                                                                                                                                    | **291**                | 401                                       | 466     | **(133)**   | (104)   | (209)  
|                                                                                                                                                                                                                                                                                                                                                                                                          
|Total
          assets/non-interest bearing net assets                                                                                                                                                                                                                                                                                                                                                     | **3,524**              | 4,538                                     | 3,870   | **793**     | 1,135   | 1,187  
|                                                                                                                                                                                                                                                                                                                                                                                                          
|Fixed
          assets                                                                                                                                                                                                                                                                                                                                                                                     | **1,516**              | 1,963                                     | 1,868   |             |         |        
|Current
          assets                                                                                                                                                                                                                                                                                                                                                                                   | **2,008**              | 2,575                                     | 2,002   |             |         |        
|                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                           | **3,524**              | 4,538                                     | 3,870   |             |         |        
|                                                                                                                                                                                                                                                                                                                                                                                                          
|Central
          total assets by customer segment consist principally of Reuters cash
          and short-term investments plus interests in own shares and other fixed
          asset investments. Central total assets by location consist principally
          of those assets held by head office operations together with unamortised
          goodwill and other intangibles.                   
|                                                                                                                                                                                                                                                                                                                                                                                                          

|                                                                                                                                                                                                                                                                                                                                                              |                |             |                |                               |         
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------- | ----------- | -------------- | ----------------------------- | --------
|**14.
                  Intangible assets**                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                              |                | Goodwill
£m | Trade names
£m | Technology 
      know-how
£m | Total
£m
|                                                                                                                                                                                                                                                                                                                                                             
|**Cost**                                                                                                                                                                                                                                                                                                                                                      |                |             |                |                              
|31
              December 2001                                                                                                                                                                                                                                                                                                                                | 846            | 33          | 92             | 971                          
|Additions                                                                                                                                                                                                                                                                                                                                                     | 208            | 3           | 37             | 248                          
|Disposals                                                                                                                                                                                                                                                                                                                                                     | (17)           |            | (2)            | (19)                         
|                                                                                                                                                                                                                                                                                                                                                             
|**31
                December 2002**                                                                                                                                                                                                                                                                                                                          | **1,037**      | **36**      | **127**        | **1,200**                    
|                                                                                                                                                                                                                                                                                                                                                             
|**Amortisation
                and impairment**                                                                                                                                                                                                                                                                                                               |                |             |                |                              
|31
              December 2001                                                                                                                                                                                                                                                                                                                                | (467)          | (1)         | (5)            | (473)                        
|Disposals                                                                                                                                                                                                                                                                                                                                                     | 5              |            | 1              | 6                            
|Charged
              in the year:                                                                                                                                                                                                                                                                                                                            |                |             |                |                              
|                                                                                                                                                                                                                                                                                                                                                              |  amortisation | (88)        | (4)            | (15)                          | (107)   
|                                                                                                                                                                                                                                                                                                                                                              |  impairment   | (208)       |               |                              | (208)   
|                                                                                                                                                                                                                                                                                                                                                             
|**31
                December 2002**                                                                                                                                                                                                                                                                                                                          | **(758)**      | **(5)**     | **(19)**       | **(782)**                    
|                                                                                                                                                                                                                                                                                                                                                             
|**Net
                book amount**                                                                                                                                                                                                                                                                                                                           |                |             |                |                              
|**31
                December 2002**                                                                                                                                                                                                                                                                                                                          | **279**        | **31**      | **108**        | **418**                      
|                                                                                                                                                                                                                                                                                                                                                             
|31
              December 2001                                                                                                                                                                                                                                                                                                                                | 379            | 32          | 87             | 498                          
|                                                                                                                                                                                                                                                                                                                                                             
|A
              decrease in the Instinet share price in the third quarter of 2002
              triggered the need to perform an impairment test on the carrying
              value of goodwill associated with Instinet. As a consequence total
              unamortised goodwill of £208 million relating to Instinet
              has been written off.

|                                                        |                            |                             |                                           |                                                          |                 
|------------------------------------------------------- | -------------------------- | --------------------------- | ----------------------------------------- | -------------------------------------------------------- | ----------------
| Page 51 **15.
        Tangible assets**              |                            |                             |                                           |                                                          |                 
|                                                        | Freehold
      property
£m | Leasehold
      property
£m | Computer
      systems
      equipment
£m | Office
      equipment
      and motor
      vehicles
£m | Total
        £m
|                                                       
|**Cost**                                                |                            |                             |                                           |                                                          |                 
|31
            December 2001                            | 223                        | 241                         | 1,581                                     | 320                                                      | 2,365           
|Translation
            differences                     |                           | (9)                         | (25)                                      | (5)                                                      | (39)            
|Additions                                               | 5                          | 40                          | 82                                        | 27                                                       | 154             
|Acquisitions                                            |                           | 5                           | 1                                         | 4                                                        | 10              
|Disposals                                               |                           | (26)                        | (189)                                     | (30)                                                     | (245)           
|                                                       
|**31
              December 2002**                      | **228**                    | **251**                     | **1,450**                                 | **316**                                                  | **2,245**       
|                                                       
|**Depreciation**                                        |                            |                             |                                           |                                                          |                 
|31
            December 2001                            | (71)                       | (111)                       | (1,263)                                   | (229)                                                    | (1,674)         
|Translation
            differences                     |                           | 4                           | 19                                        | 4                                                        | 27              
|Charged
            in the year                         | (4)                        | (28)                        | (149)                                     | (46)                                                     | (227)           
|Disposals                                               |                           | 22                          | 183                                       | 25                                                       | 230             
|                                                       
|**31
              December 2002**                      | **(75)**                   | **(113)**                   | **(1,210)**                               | **(246)**                                                | **(1,644)**     
|                                                       
|**Net
              book amount**                       |                            |                             |                                           |                                                          |                 
|**31
              December 2002**                      | **153**                    | **138**                     | **240**                                   | **70**                                                   | **601**         
|                                                       
|31
            December 2001                            | 152                        | 130                         | 318                                       | 91                                                       | 691             
|                                                       
|                                                        |                            |                             |                                           |                                                          |                 
|**Net
              book amount of leasehold property** |                            |                             | **2002
£m**                               | 2001
        £m                                          | 2000
        £m 
|                                                       
|Long-term
            leaseholds                        |                            |                             | **38**                                    | 38                                                       | 19              
|Short-term
            leaseholds                       |                            |                             | **100**                                   | 92                                                       | 71              
|                                                       
|                                                        |                            |                             | **138**                                   | 130                                                      | 90              
|                                                       
|Contracted
            capital commitments              |                            |                             | **11**                                    | 9                                                        | 18              
|                                                       
|                                                       

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                 |                                              |                                                  |                                              |                            |                 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------- | -------------------------------------------- | ------------------------------------------------ | -------------------------------------------- | -------------------------- | ----------------
|**16.
         Investments**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                 |                                              |                                                  |                                              |                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                 | Interests
            in
      own shares
£m | Interests
            in
      joint ventures
£m | Interests
            in
      associates
£m | Other
      investments
£m | Total
        £m
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|**Net
              assets/cost**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                 |                                              |                                                  |                                              |                           
|31
            December 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 153                             | 146                                          | 313                                              | 140                                          | 752                       
|Translation
            differences                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                | (11)                                         | (33)                                             | (1)                                          | (45)                      
|Additions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 65                              | 2                                            | 12                                               | 29                                           | 108                       
|Arising
            in year  share of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                 |                                              |                                                  |                                              |                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Operating
            losses    |                                             | (32)                                             | (31)                                         |                           | (63)            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Interest
            receivable |                                             | 2                                                | 7                                            |                           | 9               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Taxation                        |                                             | (1)                                              | (5)                                          |                           | (6)             
|Dividends
            received                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                |                                             | (2)                                              |                                             | (2)                       
|Loans
            from joint ventures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                | (6)                                          |                                                 |                                             | (6)                       
|Impairments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (147)                           | (6)                                          |                                                 | (75)                                         | (228)                     
|Amounts
            written off                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (3)                             |                                             |                                                 |                                             | (3)                       
|Disposals                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                |                                             | (3)                                              | (27)                                         | (30)                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|**31
              December 2002**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | **68**                          | **94**                                       | **258**                                          | **66**                                       | **486**                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|**Goodwill**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                 |                                              |                                                  |                                              |                           
|31
            December 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                | 6                                            | 16                                               |                                             | 22                        
|Charged
            in the year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                | (3)                                          | (8)                                              |                                             | (11)                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|**31
              December 2002**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | ****                           | **3**                                        | **8**                                            | ****                                        | **11**                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|**Net
              book amount**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                 |                                              |                                                  |                                              |                           
|31
            December 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                 |                                              |                                                  |                                              |                           
|Net
            assets/cost                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 68                              | 94                                           | 258                                              | 66                                           | 486                       
|Goodwill                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                | 3                                            | 8                                                |                                             | 11                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                 | **68**                                       | **97**                                           | **266**                                      | **66**                     | **497**         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|31
            December 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                 |                                              |                                                  |                                              |                           
|Net
            assets/cost                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 153                             | 146                                          | 313                                              | 140                                          | 752                       
|Goodwill                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                | 6                                            | 16                                               |                                             | 22                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                 | 153                                          | 152                                              | 329                                          | 140                        | 774             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|**Listed
              investments at 31 December 2002**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                 |                                              |                                                  |                                              |                           
|Carrying
            value                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 68                              |                                             | 234                                              | 7                                            | 309                       
|Market
            value                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 70                              |                                             | 459                                              | 8                                            | 537                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| Page 52 
        The
              net book amount of interests in own shares represents the cost
              less amounts
              written off and impairments in respect of 39 million Reuters ordinary
              shares held by employee share ownership trusts (ESOTs). These were
              acquired on the open market using funds provided by Reuters. The
              write-off reflects employee interests under incentive
              plans which
              are charged against profit over the vesting period of the awards
        (see              page
              14). The impairment charge reflects a write-down in
              the carrying value to market value of 32 million shares not allocated
              to incentive plans to their market value at 31 December 2002. The
              ESOTs have waived dividend and voting rights on all shares they
              hold. The aggregate dividend waived on these shares in 2002 was £4
              million (2001: £3 million, 2000: £4 million).
          Impairments have
              been recognised in respect of certain joint ventures, where carrying
              values have been restated to expected net realisable values.
          Included within
              Reuters share of operating losses of associates is £16 million
              representing Reuters share of restructuring charges incurred by
              TSI during 2002.
          Other investments
              consist principally of small equity investments and stock exchange
              seats.
          Impairment write-downs
              have also been made in respect of certain other fixed asset investments;
              carrying values have been revised to directors' valuations where
              the diminution in value is expected to be either permanent or reflects
              expected resale values.
          Had all listed
              investments been disposed of on 31 December 2002, tax of approximately £3
              million would have been payable on the assumption that none of
              the earnings would be repatriated. The market value excludes 5.7
              million TSI shares held by Reuters, which are subject to options
              held by Reuters employees who worked at TIBCO Finance Technology
              Inc., a former Reuters subsidiary which was incorporated into other
          Reuters businesses in 2001.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

|                                      |             |                 |                
|------------------------------------- | ----------- | --------------- | ---------------
|**17. Stocks**                        |             |                 |                
|                                      | **2002
£m** | 2001
        £m | 2000
        £m
|                                     
|Contract
            work in progress | **2**       | 5               | 7              
|Less
            progress payments    | **(2)**     | (3)             | (2)            
|                                     
|                                      | ****       | 2               | 5              
|Equipment
            stocks          | **1**       | 1               | 2              
|                                     
|                                      | **1**       | 3               | 7              
|                                     
|                                     

|                                                               |             |         |        
|-------------------------------------------------------------- | ----------- | ------- | -------
|**18.
              Debtors**                                  |             |         |        
|**Amounts
              falling due within one year**          | **2002
£m** | 2001
£m | 2000
£m
|                                                              
|Trade
            debtors                                      | **249**     | 299     | 288    
|Less
            allowance for doubtful accounts               | **(52)**    | (47)    | (31)   
|                                                              
|                                                               | **197**     | 252     | 257    
|Instinet
            counterparty debtors                      | **514**     | 621     | 662    
|Amounts
            owed by joint ventures and associates      | **81**      | 104     | 62     
|Other
            debtors                                      | **149**     | 160     | 134    
|Prepayments
            and accrued income                     | **66**      | 79      | 83     
|Deferred
            taxation (see note 24)                    | **113**     | 86      | 91     
|                                                              
|                                                               | **1,120**   | 1,302   | 1,289  
|                                                              
|**Amounts
              falling due after more than one year** |             |         |        
|Other
            debtors                                      | **12**      | 15      | 19     
|Deferred
            taxation (see note 24)                    | **147**     | 98      | 40     
|                                                              
|                                                               | **159**     | 113     | 59     
|                                                              
|                                                              

|                                             |          |             |         |        
|-------------------------------------------- | -------- | ----------- | ------- | -------
|**19.
              Short-term investments**
|                                             |          | **2002
£m** | 2001
£m | 2000
£m
|                                            
|**Listed**                                   |          | ****        |         |        
|Government
            securities:           | UK       | **23**      |        |       
|                                             | Overseas | **29**      | 55      | 127    
|Other
            deposits                   | Overseas | **329**     | 342     | 48     
|                                            
|                                             |          | **381**     | 397     | 175    
|                                            
|**Unlisted**                                 |          | ****        |         |        
|Certificates
            of deposit          | UK       | **2**       | 1       | 2      
|Term
            deposits:                   | UK       | **47**      | 70      | 67     
|                                             | Overseas | **29**      | 74      | 8      
|Other
            deposits:                  | UK       | **4**       | 61      | 9      
|                                             | Overseas | **107**     | 416     | 269    
|                                            
|                                             |          | **189**     | 622     | 355    
|                                            
|                                             |          | **570**     | 1,019   | 530    
|                                            

|                                                                          |             |         |        
|------------------------------------------------------------------------- | ----------- | ------- | -------
| Page 53 **20. Creditors:
        Amounts falling due within one year** |             |         |        
|                                                                          | **2002
£m** | 2001
£m | 2000
£m
|                                                                         
|Trade
            creditors                                               | **103**     | 142     | 143    
|Accruals                                                                  | **519**     | 556     | 505    
|Instinet
            counterparty creditors                               | **545**     | 709     | 570    
|Deferred
            income                                               | **57**      | 68      | 78     
|Amounts
            owed to joint ventures and associates                 | **86**      | 118     | 76     
|Other
            creditors                                               | **37**      | 66      | 58     
|Other
            taxation and social security                            | **65**      | 49      | 54     
|                                                                         
|                                                                          | **1,412**   | 1,708   | 1,484  
|Bank
            overdrafts                                               | **19**      | 86      | 99     
|Bank
            loans                                                    | **11**      | 7       | 25     
|Other
            borrowings                                              | **411**     | 588     | 269    
|Current
            UK corporation and overseas taxation                  | **259**     | 234     | 245    
|Proposed
            dividend                                             | **86**      | 86      | 173    
|                                                                         
|                                                                          | **2,198**   | 2,709   | 2,295  
|                                                                         
|Current
            UK corporation and overseas taxation comprises:       |             |         |        
|UK
            corporation tax                                            | **125**     | 102     | 72     
|Overseas
            taxes                                                | **134**     | 132     | 173    
|                                                                         
|                                                                          | **259**     | 234     | 245    
|                                                                         
|                                                                         

|                                                                                                                          |             |         |        
|------------------------------------------------------------------------------------------------------------------------- | ----------- | ------- | -------
|**21. Creditors:
              Amounts falling due after more than one year**                                             |             |         |        
|                                                                                                                          | **2002
£m** | 2001
£m | 2000
£m
|                                                                                                                         
|Term
            notes and commercial paper                                                                               | **353**     | 337     | 287    
|Bank
            borrowings                                                                                               | ****       | 1       | 1      
|Accruals                                                                                                                  | ****       | 2       | 15     
|Amounts
            owed to joint ventures                                                                                | **1**       | 4       | 7      
|                                                                                                                         
|                                                                                                                          | **354**     | 344     | 310    
|                                                                                                                         
|The
            maturity profile of all bank overdrafts, bank loans and other borrowings
            is given in note 12.
|                                                                                                                         

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**22.
                Concentration of credit risk**Reuters Group is exposed to concentrations of credit risk. Reuters Group
        invests in UK and US government securities and with high credit quality
        financial institutions. Reuters Group limits the amount of credit exposure
        to any one financial institution. The Group is also exposed to credit
        risk from its trade debtors, which are concentrated in the financial
        community. Reuters Group estimates that approximately 68% of its subscribers
        are financial institutions, 19% are corporations in other sectors of
        the business community, 6% are from the news media and 7% are government
        institutions and individuals worldwide (2001: 63%, 23%, 6% and 8% respectively).
            Instinet is
                exposed to the possibility of trades between its counterparties
                failing to settle. Due to the settlement mechanisms employed,
                the maximum exposure is generally limited to the market movement
                between the trade date and the settlement date. There are no
                material unprovided off-balance sheet exposures or positions
                in respect of trades undertaken on or prior to 31 December 2002.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                   |                      |                            |                                                     |                            |                                                     |                               |                                                        |             
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | -------------------- | -------------------------- | --------------------------------------------------- | -------------------------- | --------------------------------------------------- | ----------------------------- | ------------------------------------------------------ | ------------
|**23.
                Pensions and similar obligations**Reuters
            Group has established various pension arrangements covering the majority
            of its employees. In all plans, except those which are internally
            funded, the assets are held separately from those of the Group and
            are independently administered.
            **Defined
                  contribution plans**Reuters
              Group operates 31 defined contribution plans covering approximately
              67% of its employees, of which the largest plan, the Reuters Pension
              Fund, covers approximately 13% of employees. Members of this plan
              contribute 6% of basic salaries and Reuters is required to make
              an annual contribution of 9.525% of members' basic salaries regardless
              of the funding status of the plan. Reuters does not have the ability
              to recover assets held by the plan, nor can it be required to make
              additional payments to the plan over and above the annual contributions
              referred to above. Custodial responsibility for the assets of the
              plan rests with two substantial and independent UK investment managers.
            **Defined
                  benefit plans**The Group
              also operates 33 defined benefit plans covering approximately 15%
              of employees. Individually, these plans are of a relatively minor
              nature. They are subject to regular valuations based on the accepted
              actuarial practice and standards within the country in which the
              plan is established. The largest plans are directly invested and
              others are invested in insurance contracts. The remainder are internally
              funded in accordance with local practice with provisions in the
              subsidiary undertakings to recognise the pension obligations.
            Where necessary,
                additional provisions have been established for the Group's plans
                in accordance with UK Statement of Standard Accounting Practice
                24 based on independent actuarial advice.
             Page 54 **Post-retirement medical benefits**In the
              US, the Group provides unfunded post-retirement medical benefits
              to certain US employees. The principal assumptions used in the
              most recent actuarial valuation undertaken during 2002 were that
              the growth in healthcare costs would decrease from 11% per annum
          per head in 2002 to 6% by 2007 and remain at 5% thereafter.
            The movement
                on pension provisions and similar obligations was as follows:
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                   |                      |                            |                                                     |                            |                                                     | **2002
£m**                   | 2001
£m                                                | 2000
£m     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Opening
            balance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                   |                      |                            |                                                     |                            | **58**                                              | 50                            | 39                                                    
|Profit
            and loss account (see note 2):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | ****                                                                              |                      |                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Defined
            contribution plans                                            | **47**               | 40                         | 38                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Defined
            benefit plans                                                 |                      |                            |                                                     |                            |                                                     | **18**                        | 18                                                     | 15          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Post-retirement
            medical benefits                                      |                      | ****                      | 5                                                   | 3                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                   |                      |                            |                                                     |                            |                                                     | **65**                        | 63                                                     | 56          
|Utilised
            in the year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                   |                      |                            |                                                     |                            | **(64)**                                            | (55)                          | (45)                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|**Closing
              balance**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                   |                      |                            |                                                     |                            | **59**                                              | 58                            | 50                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|**FRS
                17: 2nd year transitional disclosures
        Composition of the schemes**Full
                  actuarial valuations were carried out as at various dates between
                  31 December 1999 and 31 December 2002 and where necessary updated
                  to 31 December 2002 by independent qualified actuaries in accordance
                  with FRS 17. The major assumptions used by the actuary at 31
                  December 2002 were:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                   |                      |                            | UK
            plans                                | Overseas
            plans | Post-
      retirement
      medical
      benefits
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                   |                      |                            | **2002
      %**                                    | 2001
      %               | **2002
      %**                                    | 2001
      %                  | **2002
      %**                                       | 2001
      %
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Discount
            rate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                   |                      | **5.50%**                  | 5.75%                                               | **4.10%**                  | 4.99%                                               | **6.75%**                     | 7.25%                                                 
|Inflation
            assumption                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                   |                      | **2.25%**                  | 2.50%                                               | **1.52%**                  | 1.79%                                               | **2.00%**                     | 2.00%                                                 
|Rate
            of increase in salaries                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                   |                      | **4.00%**                  | 4.25%                                               | **3.06%**                  | 3.42%                                               | ****                         |                                                      
|Rate
            of increase in pensions in payment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | **2.25%**                                                                         | 2.50%                | **1.69%**                  | 1.72%                                               | ****                      |                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                   |                      |                            |                                                    
|**The
              assets in the scheme and expected return on assets were:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | ****                                                                              |                      |                            |                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|**Expected
              rate of return on assets**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | ****                                                                              | ****                 |                            |                                                     |                           
|Equities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                   |                      | **8.25%**                  | 8.25%                                               | **7.60%**                  | 7.53%                                               |                               |                                                       
|Bonds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                   |                      | **5.00%**                  | 5.75%                                               | **3.86%**                  | 4.16%                                               |                               |                                                       
|Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                   |                      | **6.60%**                  | 7.00%                                               |                            |                                                     |                               |                                                       
|Cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                   |                      | **3.50%**                  | 3.50%                                               | **2.65%**                  | 2.65%                                               |                               |                                                       
|Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                   |                      | ****                      |                                                    | **5.25%**                  | 6.00%                                               |                               |                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|**Market
              value**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                   |                      |                            |                                                     |                            |                                                     |                               |                                                       
|Equities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                   |                      | **19**                     | 21                                                  | **50**                     | 59                                                  | ****                         |                                                      
|Bonds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                   |                      | **7**                      | 6                                                   | **40**                     | 41                                                  | ****                         |                                                      
|Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                   |                      | **1**                      |                                                    | ****                      |                                                    | ****                         |                                                      
|Cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                   |                      | **6**                      | 9                                                   | **3**                      | 4                                                   | ****                         |                                                      
|Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                   |                      | ****                      |                                                    | **4**                      | 4                                                   | ****                         |                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|The
            following amounts at 31 December were measured in accordance with
            the requirements of FRS 17.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                   | UK
            plans | Overseas
            plans | Post-
      retirement
      medical
      benefits | Total                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                   | **2002
£m**          | 2001
£m                    | **2002
£m**                                         | 2001
£m                    | **2002
£m**                                         | 2001
£m                       | **2002
£m**                                            | 2001
£m     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Total
            market value of assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | **33**                                                                            | 36                   | **97**                     | 108                                                 | ****                      |                                                    | **130**                       | 144                                                   
|Present
            value of scheme liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | **(63)**                                                                          | (56)                 | **(132)**                  | (100)                                               | **(6)**                    | (31)                                                | **(201)**                     | (187)                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(Deficit)/surplus
            in the scheme                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | **(30)**                                                                          | (20)                 | **(35)**                   | 8                                                   | **(6)**                    | (31)                                                | **(71)**                      | (43)                                                  
|Related
            deferred tax asset                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | **9**                                                                             | 6                    | **10**                     |                                                    | **2**                      | 12                                                  | **21**                        | 18                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Net
            pension (liability)/asset                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | **(21)**                                                                          | (14)                 | **(25)**                   | 8                                                   | **(4)**                    | (19)                                                | **(50)**                      | (25)                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Made
            up of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                   |                      |                            |                                                     |                            |                                                     |                               |                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Net
            pension asset                                                     | ****                |                           | ****                                               | 13                         | ****                                               |                              | ****                                                  | 13          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Net
            pension liability                                                 | **(21)**             | (14)                       | **(25)**                                            | (5)                        | **(4)**                                             | (19)                          | **(50)**                                               | (38)        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|The
            assets and liabilities reported under UK plans cover a small UK scheme
            with 178 members together with unfunded early retirement and retirement
            benefit schemes, the liabilities of which are covered through book
            reserves. The figures do not include Reuters principal UK plan, Reuters
            Pension Fund, as this is a defined contribution plan and its assets
            and liabilities are not required to be disclosed under FRS 17.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| Page 55 
        If
            the above amounts had been recognised in the financial statements,
            the Group's net assets and profit and loss reserve at 31 December
            would be as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                   |                      |                            |                                                     |                            |                                                     |                               | **2002
£m**                                            | 2001
£m     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Net
            assets per consolidated balance sheet                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | **727**                                                                           | 1,273               
|Add:
            Net pension liability already recognised in net assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | **24**                                                                            | 24                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Net
            assets before impact of FRS 17                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | **751**                                                                           | 1,297               
|Net
            pension liability under FRS 17                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | **(50)**                                                                          | (25)                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Net
            assets after impact of FRS 17                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                   | **701**              | 1,272                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Consolidated
            profit and loss account reserve                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                   | **1,773**            | 2,378                     
|Add:
            Net pension liability already recognised in profit and loss account
            reserve                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                   | **24**               | 24                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Profit
            and loss account reserve before impact of FRS 17                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                   | **1,797**            | 2,402                     
|Net
            pension liability under FRS 17                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                   | **(50)**             | (25)                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Profit
            and loss account reserve after impact of FRS 17                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                   | **1,747**            | 2,377                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|**The
              following amounts would have been recognised in the performance
              statements in the year to 31 December 2002 under the requirements
              of FRS 17:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                   |                      |                            |                                                     |                            | UK
            plans
£m                             | Overseas
            plans
£m | Post-
      retirement
      medical
      benefits
£m | Total
£m    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|**Analysis
              of amount charged to operating profit**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                   |                      |                            |                                                    
|Current
            service cost                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 2                                                                                 | 9                    | 2                          | 13                                                 
|Past
            service cost                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                   |                      |                            |                                                     |                           |                                                    | (29)                          | (29)                                                  
|Curtailments/settlements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                   |                      |                            |                                                     | 5                          | (1)                                                 |                              | 4                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Total
            operating charge                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                   |                      |                            |                                                     | 7                          | 8                                                   | (27)                          | (12)                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|**Analysis
              of amount credited to other finance income**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                   |                      |                            |                                                    
|Expected
            return on pension scheme assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 2                                                                                 | 7                    |                           | 9                                                  
|Interest
            on pension scheme liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (3)                                                                               | (5)                  | (1)                        | (9)                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Net
            return                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | (1)                                                                               | 2                    | (1)                        |                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|**Analysis
              of amount recognised in STRGL**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                   |                      |                            |                                                    
|Actual
            return less expected return on pension scheme assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (9)                                                                               | (17)                 |                           | (26)                                               
|Experience
            gains and losses arising on the scheme liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                  | (9)                  | (3)                        | (12)                                               
|Changes
            in assumptions underlying the present value of the scheme liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                  | (20)                 |                           | (20)                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Actuarial
            loss recognised in the STRGL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (9)                                                                               | (46)                 | (3)                        | (58)                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|**Movement
              in (deficit)/surplus during the year**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                   |                      |                            |                                                    
|(Deficit)/surplus
            in the scheme at beginning of the year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | (20)                                                                              | 8                    | (31)                       | (43)                                               
|Movement
            in year:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                   |                      |                            |                                                     |                            |                                                     |                               |                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Current
            service cost                                                  |                      |                            |                                                     |                            | (2)                                                 | (9)                           | (2)                                                    | (13)        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Employer
            contributions                                                |                      |                            |                                                     |                            | 7                                                   | 10                            |                                                       | 17          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Curtailments/settlements                                                          |                      |                            |                                                     |                            | (5)                                                 | 1                             |                                                       | (4)         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Past
            service costs                                                    |                      |                            |                                                     |                            |                                                    |                              | 29                                                     | 29          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Other
            finance income                                                  | (1)                  | 2                          | (1)                                                 |                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Actuarial
            loss recognised in STRGL                                    | (9)                  | (46)                       | (3)                                                 | (58)                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Effect
            of currency translation                                        |                     | (1)                        | 2                                                   | 1                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Deficit
            in scheme at end of year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (30)                                                                              | (35)                 | (6)                        | (71)                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|**History
              of experience gains and losses**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                   |                      |                            |                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Difference
            between the expected and actual return on scheme assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                   |                      |                            |                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Amount
            (£m)                                                           |                      |                            |                                                     |                            | (9)                                                 | (17)                          |                                                       | (26)        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Percentage
            of scheme assets at year-end                               | (27.8%)              | (17.9%)                    |                                                    | (20.4%)                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Experience
            gains and losses of scheme liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                   |                      |                            |                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Amount
            (£m)                                                           |                     | (9)                        | (3)                                                 | (12)                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Percentage
            of the present value of the scheme liabilities at year-end |                     | (5.4%)                     | (46.3%)                                             | (5.7%)                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Total
            amount recognised in STRGL:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                   |                      |                            |                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Amount
            (£m)                                                           | (9)                  | (47)                       | (1)                                                 | (57)                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Percentage
            of the present value of the scheme liabilities at year-end | (14.8%)              | (35.1%)                    | (27.9%)                                             | (28.3%)                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Contributions
              to funded plans in 2003 are expected to remain at similar levels
              to 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                    |                              |                        |                |     
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------- | ---------------------------- | ---------------------- | -------------- | ----
|
        Page
            56 **24.
              Deferred taxation liabilities/(assets)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                    |                              |                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                    | **2002
£m**                  | 2001
£m                | 2000
£m       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Opening
            balance:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                    |                              |                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | As
            previously reported | **(154)**                    | (103)                  | (51)          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Prior
            year adjustment  | ****                        |                       | (51)          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Restated                           | **(154)**                    | (103)                  | (102)         
|Balance
            sheet reclassification                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | ****                              | (1)                          |                      
|Profit
            and loss account                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | **(79)**                           | (50)                         | (1)                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|**Closing
              balance**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | **(233)**                          | (154)                        | (103)                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|The
            closing balance is analysed below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                    |                              |                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Timing
            differences:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                    |                              |                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Fixed
        asset related        |                              | **(39)**               | (40)           | (35)
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Tax
        losses                 |                              | **(55)**               | (32)           |    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Other                              |                              | **(139)**              | (82)           | (68)
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | **(233)**                          | (154)                        | (103)                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Reuters
              has provided for all potential deferred tax liabilities in respect
              of timing differences and has provided for deferred UK income and
              foreign withholding taxes that will be triggered by the expected
              future remittance of dividends by overseas subsidiary undertakings.
              Reuters has not provided for deferred UK income and foreign withholding
              taxes relating to unremitted earnings where remittance of these
              earnings has not been accrued or where no binding agreement to
              distribute exists. Reuters estimates that these unrecognised taxes
              would total approximately £684 million at 31 December 2002
              assuming repatriation at that date.
            The prior year
                adjustment related to the adoption of FRS 19 in 2001.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                    |                              |                        |                |     
|Total
            timing differences at 31 December 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Assets
        £m                  | Valuation
      allowance
£m | Liabilities
        £m | Net
        £m
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Fixed
            asset related                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | (57)                               |                             | 18                     | (39)          
|Tax
            losses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | (99)                               | 44                           |                       | (55)          
|Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (139)                              |                             |                       | (139)         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (295)                              | 44                           | 18                     | (233)         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|The
              valuation allowance of £44 million is in respect of losses
              not recognised where it is uncertain that taxable income will arise.
              It has increased by £12 million during 2002.
            Other timing
                differences include reorganisation costs, accrued employee costs
                (including pension costs) and other provisions.
            Where appropriate
                deferred tax assets and liabilities are shown net for balance
                sheet presentation purposes. The net deferred tax balance has
                been analysed as:                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | **2002
£m**                        | 2001
£m                      | 2000
£m               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Deferred
            tax asset (included in debtors  see note
            18)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | **(260)**                          | (184)                        | (131)                 
|Deferred
            tax liability (included in provisions for liabilities and charges)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | **27**                             | 30                           | 28                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                            |                            |                         |                  |                 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | -------------------------- | ----------------------- | ---------------- | ----------------
|**25.
                Other provisions**The
            movement in other provisions during 2002 was as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Rationalisation
        £m | Legal/
      compliance
£m | Other
      property
£m | Other
        £m | Total
        £m
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|31
            December 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 115                        | 2                          | 3                       | 4                | 124             
|Charged
            against profit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 215                        | 1                          | 13                      | 4                | 233             
|Utilised
            in the year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | (184)                      |                           | (7)                     | (2)              | (193)           
|Released                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | (2)                        | (2)                        | (1)                     |                 | (5)             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|**31
              December 2002**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | **144**                    | **1**                      | **8**                   | **6**            | **159**         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|At
              the end of 2001 the rationalisation provision included costs relating
              to the incomplete business transformation programme. During 2002
              further restructuring programmes were announced which included
              headcount reduction and property rationalisation. The obligations
              associated with these programmes are included in the rationalisation
              provision at the end of 2002, which will be utilised during 2003.
              The legal/compliance provision represents the expected cost of
              settling disputes arising from contractual arrangements with third-party
              suppliers.
            Other property
                provisions reflect Reuters contractual liability at the balance
                sheet date to make good dilapidations under ongoing rental agreements
                outside the rationalisation programmes.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                        |                                           |                                      |                        |                                                      |                                      
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | ----------------------------------------- | ------------------------------------ | ---------------------- | ---------------------------------------------------- | -------------------------------------
| Page 57 **26. Capital
              and reserves**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                        |                                           |                                      |                        |                                                      |                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Called-up
      share
      capital
£m | Capital
      redemption
      reserve
£m | Share
      premium
      account
£m | Other
      reserve
£m | Profit
      and loss
      account
      reserve
£m | Share-
      holders'
      equity
£m
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|31
            December 1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 355                                    | 1                                         | 42                                   | (1,717)                | 1,982                                                | 663                                  
|Shares
            issued during the year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 2                                      |                                          | 29                                   |                       | (3)                                                  | 28                                   
|Unrealised
            gain on formation of joint ventures and associates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                       |                                          |                                     |                       | 73                                                   | 73                                   
|Unrealised
            gain on deemed disposal of associate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                       |                                          |                                     |                       | 39                                                   | 39                                   
|Unrealised
            gain on disposal of fixed asset investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                       |                                          |                                     |                       | 13                                                   | 13                                   
|Translation
            differences                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                       |                                          |                                     |                       | 40                                                   | 40                                   
|Retained
            earnings for the year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                       |                                          |                                     |                       | 297                                                  | 297                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|31
            December 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 357                                    | 1                                         | 71                                   | (1,717)                | 2,441                                                | 1,153                                
|Shares
            issued during the year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 1                                      |                                          | 18                                   |                       | (3)                                                  | 16                                   
|Unrealised
            gain on deemed partial disposal of subsidiary                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                       |                                          |                                     |                       | 11                                                   | 11                                   
|Translation
            differences                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                       |                                          |                                     |                       | 23                                                   | 23                                   
|Loss
            for the year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                       |                                          |                                     |                       | (94)                                                 | (94)                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|31
            December 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 358                                    | 1                                         | 89                                   | (1,717)                | 2,378                                                | 1,109                                
|Shares
            issued during the year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                       |                                          | 2                                    |                       |                                                     | 2                                    
|Unrealised
            gain on disposal of fixed asset investment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                       |                                          |                                     |                       | 10                                                   | 10                                   
|Unrealised
            gain on deemed partial disposal of subsidiary                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                       |                                          |                                     |                       | 1                                                    | 1                                    
|Unrealised
            gain on deemed partial disposal of associate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                       |                                          |                                     |                       | 12                                                   | 12                                   
|Translation
            differences                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                       |                                          |                                     |                       | (95)                                                 | (95)                                 
|Loss
            for the year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                       |                                          |                                     |                       | (543)                                                | (543)                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|**31
              December 2002**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | **358**                                | **1**                                     | **91**                               | **(1,717)**            | **1,763**                                            | **496**                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|During
              2002, £2 million was received by Reuters Group PLC on the
              issue of shares in respect of the exercise of options awarded under
              various share option plans.
            Cumulative
                translation losses at 31 December 2002 totalled £50 million
                (2001: cumulative gains £45 million, 2000: cumulative gains £22
                million).
            Share capital
                and reserves in the 1997 consolidated balance sheet were restated
                on a pro forma basis. The pro forma share capital as at 31 December
                1997 represented the pro forma nominal value of shares in issue
                of Reuters Group PLC immediately prior to a capital reorganisation.
                Differences between this amount and the previously reported capital
                and reserves, excluding the profit and loss account reserve,
                represent the merger difference and have been reflected in other
                reserve.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

|                                                                                                                                                         |             |         |        
|-------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------- | ------- | -------
|**27.
              Share capital**                                                                                                                      |             |         |        
|                                                                                                                                                         | **2002
£m** | 2001
£m | 2000
£m
|                                                                                                                                                        
|**Authorised******                                                                                                                                       |             |         |        
|One
            Founders Share of £1                                                                                                                     | ****       |        |       
|2,100
            million ordinary shares of 25 pence each                                                                                               | **525**     | 525     | 525    
|                                                                                                                                                        
|                                                                                                                                                         | **525**     | 525     | 525    
|                                                                                                                                                        
|**Allotted,
              called-up and fully paid******                                                                                                 |             |         |        
|One
            Founders Share of £1                                                                                                                     | ****       |        |       
|Ordinary
            shares of 25 pence each                                                                                                             | **358**     | 358     | 357    
|                                                                                                                                                        
|                                                                                                                                                         | **358**     | 358     | 357    
|                                                                                                                                                        
|Number
            of ordinary shares of 25 pence each (millions)                                                                                        | **1,432.5** | 1,432.1 | 1,429.1
|                                                                                                                                                         |             |         |        
|**Shares
              allotted during the year in millions**                                                                                            | **2002**    | 2001    | 2000   
|                                                                                                                                                        
|Shares
            in Reuters Group PLC issued for cash under employee share schemes
            at prices ranging from 478 pence to 992 pence per share | **0.4**     | 3.0     | 6.4    
|                                                                                                                                                        
|The
            rights attaching to the Founders Share are set out on pages 75-76
            .                                                          |             |         |        

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                              |                                                                                          |                                                   |                                                                           |                                                                    
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------ | ---------------------------------------------------------------------------------------- | ------------------------------------------------- | ------------------------------------------------------------------------- | -------------------------------------------------------------------
| Page 58 
        **28.
                Employee share option plans**Reuters Group
                PLC operates share plans for the benefit of employees as explained
                in the remuneration report. Since the flotation of Reuters Holdings
                PLC in 1984, 104 million shares have been issued under these
                plans.
      Activity relating
                to share options to subscribe for new shares for the two years
        ended 31 December 2002 was as follows:                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                              |                                                                                          |                                                   |                                                                           |                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Save-as-
      you-earn
      plans                          | Discretionary
      employee and
      executive
      plans                             | Plan
      2000                                   | Total                                                                     | Weighted
      average
      exercise
      price
£                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Ordinary
        shares under option in millions (including ADSs):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|31
            December 1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 14.6                                                         | 0.8                                                                                      | 22.2                                              | 37.6                                                                      | 5.51                                                               
|Granted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 2.6                                                          |                                                                                         |                                                  | 2.6                                                                       | 10.19                                                              
|Exercised                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | (5.0)                                                        | (0.4)                                                                                    | (1.0)                                             | (6.4)                                                                     | 4.43                                                               
|Expired,
            cancelled or lapsed                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (1.0)                                                        |                                                                                         | (0.3)                                             | (1.3)                                                                     | 5.77                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|31
            December 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 11.2                                                         | 0.4                                                                                      | 20.9                                              | 32.5                                                                      | 5.99                                                               
|Granted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 2.3                                                          | 7.4                                                                                      |                                                  | 9.7                                                                       | 8.56                                                               
|Exercised                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | (2.0)                                                        | (0.1)                                                                                    | (0.9)                                             | (3.0)                                                                     | 5.10                                                               
|Expired,
            cancelled or lapsed                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (1.1)                                                        |                                                                                         |                                                  | (1.1)                                                                     | 7.98                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|31
            December 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 10.4                                                         | 7.7                                                                                      | 20.0                                              | 38.1                                                                      | 6.55                                                               
|Granted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 7.2                                                          | 31.8                                                                                     |                                                  | 39.0                                                                      | 4.04                                                               
|Exercised                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | (0.2)                                                        |                                                                                         | (0.2)                                             | (0.4)                                                                     | 5.39                                                               
|Expired,
            cancelled or lapsed                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (6.7)                                                        | (0.9)                                                                                    | (3.1)                                             | (10.7)                                                                    | 6.76                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|**31
              December 2002**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | **10.7**                                                     | **38.6**                                                                                 | **16.7**                                          | **66.0**                                                                  | **5.10**                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Number
            of participants at 31 December 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 7,007                                                        | 6,575                                                                                    | 8,343                                             |                                                                           |                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|The
            following table summarises information relating to the number of
            shares under option and those which were exercisable at 31 December
            2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|**Range
              of exercise prices**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Total 
      shares
      under
      option
      (million) | Weighted
      average
      period
      remaining to
      full vesting
      (months) | Weighted
      average
      exercise
      price | Options
      exercisable at
      31 December
      2002
      (million) | Exercisable
      weighted
      average
      exercise
      price
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Ordinary
            shares (£)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                              |                                                                                          |                                                   |                                                                           |                                                                    
|2.01  5.00                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 25.8                                                         | 27                                                                                       | £3.15                                             | 0.2                                                                       | £4.55                                                              
|5.01  7.00                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 28.4                                                         | 8                                                                                        | £5.59                                             | 17.2                                                                      | £5.58                                                              
|7.01  9.00                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 9.1                                                          | 12                                                                                       | £8.55                                             | 3.2                                                                       | £8.49                                                              
|9.01  11.00                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 1.2                                                          | 13                                                                                       | £9.82                                             | 0.1                                                                       | £9.69                                                              
|ADSs
            (US$)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                              |                                                                                          |                                                   |                                                                           |                                                                    
|10.01  40.00                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 0.7                                                          | 37                                                                                       | $38.17                                            |                                                                          |                                                                   
|40.01  70.00                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 0.4                                                          | 4                                                                                        | $56.53                                            |                                                                          |                                                                   
|70.01  100.00                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 0.3                                                          | 10                                                                                       | $84.47                                            |                                                                          |                                                                   
|100.01  130.00                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 0.1                                                          | 14                                                                                       | $119.50                                           |                                                                          |                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 66.0                                                         |                                                                                          |                                                   | 20.7                                                                      |                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|In
            August 1990 and January 1994, Reuters established employee share
            ownership trusts with the power to acquire shares in the open market.
            The trustee of both trusts is an offshore independent professional
            trustee. Shares purchased by the trusts, which are included within
            fixed asset investments on the consolidated balance sheet, will be
            used either to meet obligations under the company's restricted share
            plans described in the remuneration report
             on pages 14-15
             or to satisfy
            the exercise of options granted, or to be granted, under other employee
            share option plans. Alternatively, new shares may be issued to satisfy
            these option obligations.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                       |                           |                                          |                                            
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------- | ------------------------- | ---------------------------------------- | -------------------------------------------
| Page 59 
        **29.
                Related party transactions**During the
                year, Reuters Group carried out a number of transactions with
                related parties in the normal course of business and on an arm's
                length basis. Details of these transactions are shown below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 31
            December
      2001
£m | Amounts
      invoiced
£m | Amounts
      (collected)/
      paid
£m | **31
              December
      2002
£m**
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|**Amounts
              receivable******                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                       |                           |                                          |                                            
|Radianz                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 77                                    | 126                       | (133)                                    | **70**                                     
|Factiva                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 25                                    | 61                        | (77)                                     | **9**                                      
|Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 2                                     | 38                        | (38)                                     | **2**                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 104                                   | 225                       | (248)                                    | **81**                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|**Amounts
              payable******                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                       |                           |                                          |                                            
|Radianz                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | (79)                                  | (284)                     | 290                                      | **(73)**                                   
|Factiva                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | (21)                                  | (19)                      | 32                                       | **(8)**                                    
|Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (6)                                   | (11)                      | 12                                       | **(5)**                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (106)                                 | (314)                     | 334                                      | **(86)**                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|The
              above amounts relate to the rendering or receiving of services
              between both parties, including agency arrangements and licence
              agreements. The other amounts principally comprise transactions
              with TSI.
            In addition
                to the above amounts Reuters has a promissory note payable to
                Factiva with a balance of £4 million outstanding at the
                year-end (2001: £7 million) and £3 million (2001: £9
                million) of cash held on deposit for the Capco joint venture
                which is repayable on demand.
            Reuters also
                holds a convertible loan note due from ICor of £4 million
                (2001: nil) and an interest bearing loan repayable to Factiva
                of £7 million (2001: £4 million loan from Factiva).
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

|                                                                                                                                                                                                                                                                                                                                                |                                          |                                |         |         |             |         |        
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------- | ------------------------------ | ------- | ------- | ----------- | ------- | -------
|**30. Operating leases and other financial commitments**Minimum payments
                for non-cancellable operating leases for terms in excess of one
                year from 31 December are as follows:                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                | **2002
£m**                              | 2001
£m                        | 2000
£m
|                                                                                                                                                                                                                                                                                                                                               
|Year
            ended 31 December                                                                                                                                                                                                                                                                                                              |                                          |                                |        
|2001                                                                                                                                                                                                                                                                                                                                            | ****                                    |                               | 97     
|2002                                                                                                                                                                                                                                                                                                                                            | ****                                    | 102                            | 82     
|2003                                                                                                                                                                                                                                                                                                                                            | **91**                                   | 90                             | 70     
|2004                                                                                                                                                                                                                                                                                                                                            | **81**                                   | 77                             | 59     
|2005                                                                                                                                                                                                                                                                                                                                            | **68**                                   | 64                             | 47     
|2006                                                                                                                                                                                                                                                                                                                                            | **62**                                   | 57                             | 40     
|2007                                                                                                                                                                                                                                                                                                                                            | **57**                                   | 50                             | 36     
|Thereafter                                                                                                                                                                                                                                                                                                                                      | **376**                                  | 335                            | 249    
|                                                                                                                                                                                                                                                                                                                                               
|Total
            minimum lease payments                                                                                                                                                                                                                                                                                                        | **735**                                  | 775                            | 680    
|                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                               
|At
            31 December the Group had commitments to make payments during the
            following year under non-cancellable operating leases as follows:                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                |                                          | Land
            and buildings | Other  
|                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                |                                          | **2002
£m**                    | 2001
£m | 2000
£m | **2002
£m** | 2001
£m | 2000
£m
|                                                                                                                                                                                                                                                                                                                                               
|Operating
        leases which expire:                                                                                                                                                                                                                                                                                                          |                                          |                                |         |         |             |        
|                                                                                                                                                                                                                                                                                                                                                | Within
            one year              | **11**                         | 11      | 13      | **2**       | 4       | 1      
|                                                                                                                                                                                                                                                                                                                                                | In
            the second to fifth years | **37**                         | 48      | 52      | **4**       | 5       | 8      
|                                                                                                                                                                                                                                                                                                                                                | Over
            five years              | **50**                         | 49      | 37      | ****       |        |       
|                                                                                                                                                                                                                                                                                                                                               
|Other
                financial commitmentsAt
                31 December 2002, Reuters had a minimum commitment of £152 million (2001: £252
                million) under a service level agreement with Savvis for the
                provision of a network delivery mechanism for the Bridge assets
                acquired during 2001.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                       |                                                               |                                         |                                       |                                                               |                                         |                                               |                                                                                                    |                      |     
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------- | ------------------------------------------------------------- | --------------------------------------- | ------------------------------------- | ------------------------------------------------------------- | --------------------------------------- | --------------------------------------------- | -------------------------------------------------------------------------------------------------- | -------------------- | ----
| Page 60 **31.
              Acquisitions and disposals** ******Acquisitions**In
              September 2002, Instinet acquired 100% of Island Holdings Company,
              Inc. During 2002, Reuters made a number of smaller acquisitions,
              including 100% of AVT Technologies Limited, Easetech Financial Systems
              L.L.C., and Capital Access International LLC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                       |                                                               |                                         |                                       |                                                               |                                         |                                               |                                                                                                    |                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                       |                                                               | Island                                  |                                       |                                                               | Others                                  |                                               |                                                                                                    |                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                       |                                                               |                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Book
            value
            £m | Fair
            value
            adjustments
            £m | Total
            Island
            £m | Book
            value
            £m | Fair
            value
            adjustments
            £m | Total
            others
            £m | Total
            subsidiaries
            £m | Total
            joint
            ventures
            and
            associates
            £m | Total
            £m
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Fixed
            assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                       |                                                               |                                         |                                       |                                                               |                                         |                                               |                                                                                                    |                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Intangible                            |                                                              | 37                                      | 37                                    |                                                              | 3                                       | 3                                             | 40                                                                                                 |                     | 40  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Tangible                              | 9                                                             |                                        | 9                                     | 1                                                             |                                        | 1                                             | 10                                                                                                 |                     | 10  
|Fixed
            asset investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                      |                                                              |                                        |                                      |                                                              |                                        |                                              | 2                                                                                                  | 2                   
|Current
            assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                       |                                                               |                                         |                                       |                                                               |                                         |                                               |                                                                                                    |                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Cash                                  | 23                                                            |                                        | 23                                    | 6                                                             |                                        | 6                                             | 29                                                                                                 |                     | 29  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Other                                 | 25                                                            |                                        | 25                                    | 2                                                             | 2                                       | 4                                             | 29                                                                                                 |                     | 29  
|Current
            liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | (18)                                  |                                                              | (18)                                    | (6)                                   | (6)                                                           | (12)                                    | (30)                                          |                                                                                                   | (30)                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                       | 39                                                            | 37                                      | 76                                    | 3                                                             | (1)                                     | 2                                             | 78                                                                                                 | 2                    | 80  
|Cash
            consideration:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                       |                                                               |                                         |                                       |                                                               |                                         |                                               |                                                                                                    |                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Paid                                  |                                                               |                                         | (5)                                   |                                                               |                                         | (36)                                          | (41)                                                                                               | (2)                  | (43)
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Deferred                              |                                                               |                                         | (2)                                   |                                                               |                                         | (13)                                          | (15)                                                                                               |                     | (15)
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Contingent                            |                                                               |                                         |                                      |                                                               |                                         | (21)                                          | (21)                                                                                               |                     | (21)
|Equity
            consideration                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | (207)                                 |                                                               |                                         | (2)                                   | (209)                                                         |                                        | (209)                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Total
            consideration                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | (214)                                 |                                                               |                                         | (72)                                  | (286)                                                         | (2)                                     | (288)                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Goodwill                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 138                                   |                                                               |                                         | 70                                    | 208                                                           |                                        | 208                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|The
              fair value adjustments in respect of intangible fixed assets are
              due to the recognition of £40 million relating to trade names
              and technology know-how, which have been independently valued. The
              fair value adjustments in respect of current assets and liabilities
              relate to valuation adjustments and are provisional, based on management's
              best estimates. The fair value adjustments relating to 2002 acquisitions
              will be finalised in the 2003 financial statements. Of the fair
              value adjustments above £7 million relates to finalisation
              of the Bridge fair value exercise following the acquisition in 2001.
              There were no fair value adjustments in respect of joint ventures
              and associates.
            The total deferred
              consideration will be paid during 2003 in cash. This amount has
              been deferred under the terms of the acquisition agreements. The
              contingent consideration is dependent on a number of performance
              criteria which are required to be met in the years subsequent to
              acquisition. The above figures are provisional and reflect management's
              best estimate of the final amount payable.
            Included within
              the Group profit and loss account are revenues of £33 million
              and operating losses including amortisation of £5 million in
              respect of the Island post-acquisition results. The other acquisitions
              did not have a material impact on the Group's results.
            **Deemed disposals******The acquisition
              of Island gave rise to a deemed partial disposal of Reuters interest
          in Instinet.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                       |                                                               |                                         |                                       |                                                               |                                         |                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                       |                                                               |                                         |                                       | Instinet
            £m                                       | TSI
            £m                      | Total
            £m                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Decrease
            in net assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                       |                                                               |                                         |                                       | (165)                                                         | (5)                                     | (170)                                        
|Consideration                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                       |                                                               |                                         |                                       | 147                                                           | 17                                      | 164                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(Loss)/gain                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                       |                                                               |                                         |                                       | (18)                                                          | 12                                      | (6)                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|The
              loss arising on the deemed partial disposal of Instinet of £18
              million is due to the £19 million loss recorded on the acquisition
              of Island, offset by a £1 million unrealised gain on the acquisition
              of ProTrader. The unrealised gain on the deemed partial disposal
              of TSI was due to TSI's acquisition of the Talarian Corporation.
            Reuters disposed
              of a part of 100% owned subsidiary, Diagram. Reuters also sold its
              20% stake in associate London News Radio. These disposals resulted
              in a net loss of £6 million.
            In March 2002
              Reuters Group disposed of its fixed asset investment in Archipelago
              in exchange for an investment in REDIBook. This resulted in an unrealised
              gain of £10 million.
            **Reconciliation
              of gains/(losses)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                       |                                                               |                                         |                                       |                                                               | Realised£m                              | Unrealised
            £m                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|On
            deemed disposals                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                       |                                                               |                                         |                                       |                                                               | (19)                                    | 13                                           
|On
            disposal of subsidiary undertaking                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                       |                                                               |                                         | (10)                                  |                                                             
|On
            disposal of associates and joint ventures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                       |                                                               |                                         | 3                                     |                                                             
|On
            disposal of fixed asset investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                       |                                                               |                                         | (2)                                   | 10                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Recorded
            in the profit and loss account                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                       | (28)                                                          |                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Recorded
            in the STRGL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                       |                                                               |                                         |                                       |                                                               |                                         | 23                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Of
            the £28 million realised loss, £2 million is attributable
            to equity minority interests.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                  |                                                     |                                                         
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------ | --------------------------------------------------- | --------------------------------------------------------
| Page 61 **32.
              Subsidiary and associated undertakings and joint ventures**The principal
              subsidiary and associated undertakings and joint ventures at 31
              December 2002, all of which are included in the consolidated financial
              statements, are shown below. The shares in Reuters Investments Limited
              and Reuters Investments (2002) Limited are held by Reuters Group
              PLC. The shares in the other companies are held by Reuters Investments
              Limited, Reuters Investments (2002) Limited or their wholly-owned
              subsidiaries.
            **Subsidiary
              undertakings** ****
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Country
            of
            incorporation | Principal
            area of
            operation | Percentage
            of equity
            shares held
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Bridge
            Trading Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | USA                                              | USA                                                 | 100                                                     
|Instinet
            Group Incorporated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | USA                                              | USA                                                 | 63                                                      
|Reuters
            AG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Germany                                          | Germany                                             | 100                                                     
|Reuters
            America Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | USA                                              | USA                                                 | 100                                                     
|Reuters
            Australia Pty Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Australia                                        | Australia                                           | 100                                                     
|Reuters
            Eastern Europe Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | UK                                               | Russia                                              | 100                                                     
|Reuters
            España SA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Spain                                            | Spain                                               | 100                                                     
|Reuters
            Hong Kong Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Cook
            Islands                         | Hong
            Kong                               | 100                                                     
|Reuters
            Investments Limited*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | UK                                               | UK                                                  | 100                                                     
|Reuters
            Investments (2002) Limited*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | UK                                               | UK                                                  | 100                                                     
|Reuters
            Italia SpA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Italy                                            | Italy                                               | 100                                                     
|Reuters
            Japan Kabushiki Kaisha                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Japan                                            | Japan                                               | 100                                                     
|Reuters
            Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | UK                                               | Worldwide                                           | 100                                                     
|Reuters
            Middle East Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Cook
            Islands                         | Middle
            East                             | 100                                                     
|Reuters
            Nederland BV*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Netherlands                                      | Netherlands                                         | 100                                                     
|Reuters
            SA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Switzerland                                      | Continental
            Europe                      | 100                                                     
|Reuters
            Services SARL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | France                                           | France                                              | 100                                                     
|Reuters
            Singapore Pte Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Singapore                                        | Singapore                                           | 100                                                     
|Reuters
            Transaction Services Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | UK                                               | Worldwide                                           | 100                                                     
|Reuters
            Information Systems (Canada) Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Canada                                           | Canada                                              | 100                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|The
              financial years for the above subsidiary undertakings end on 31
              December.
            *Investment
                 companies.
            **Associated
              undertakings and joint ventures**                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Country
            of
            incorporation | Principal
            area of
            operation | Percentage
            of equity
            shares held
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|TIBCO
            Software Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | USA                                              | Worldwide                                           | 50                                                      
|Factiva
            LLC (joint venture)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | USA                                              | Worldwide                                           | 50                                                      
|Radianz
            Ltd. (joint venture)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | UK                                               | Worldwide                                           | 51                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|On
            a diluted basis, after deducting shares under option, Reuters interest
            in the equity of TIBCO Software Inc., was reduced to 39%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**33.
                  Post balance sheet events**On 18 February
              2003, Reuters announced it was accelerating its transformation strategy
              to become a more competitive and focused information company. The
              three-year action plan,Fast
              Forward,
              costing an estimated £340 million, is intended to strengthen
              Reuters core information business. It is intended to address the
              impact of structural changes in the financial services industry
              including reduced headcount, massive growth in market data volumes,
              consolidation and increasing regulation.
            On 18 February
              2003, Reuters announced that it had entered into a definitive agreement
              to acquire financial information provider Multex.com Inc. for US$7.35
              (£4.56) per share in cash. The total cost of the acquisition
              is expected to be approximately US$195 million (£121 million).

| Page 62 BALANCE SHEET OF REUTERS GROUP PLC
|---------------------------------------------

|                                                                                                                                                                                                    |                                              |                         |                     |                    
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | ----------------------- | ------------------- | -------------------
|**Balance
            sheet of Reuters Group PLC**at 31 December                                                                                                                                    |                                              |                         |                     |                    
|                                                                                                                                                                                                    | Notes                                        | **2002
            £m** | 2001
            £m | 2000
            £m
|                                                                                                                                                                                                   
|Fixed
               asset investments                                                                                                                                                              | 34                                           | **2,672**               | 8,681               | 8,679              
|Amounts
            owed by group undertakings                                                                                                                                                      |                                              | **634**                 | 1,002               | 795                
|Other
            borrowings                                                                                                                                                                        |                                              | **(763)**               | (941)               | (558)              
|Proposed
            dividends                                                                                                                                                                      |                                              | **(86)**                | (86)                | (173)              
|                                                                                                                                                                                                   
|**Net
            assets**                                                                                                                                                                          |                                              | **2,457**               | 8,656               | 8,743              
|                                                                                                                                                                                                   
|Capital
            and reserves                                                                                                                                                                    | 35                                           |                         |                     |                    
|Called-up
            share capital                                                                                                                                                                 |                                              | **358**                 | 358                 | 357                
|Capital
            redemption reserve                                                                                                                                                              |                                              | **1**                   | 1                   | 1                  
|Share
            premium account                                                                                                                                                                   |                                              | **91**                  | 89                  | 71                 
|Merger
            reserve                                                                                                                                                                          |                                              | ****                   | 6,788               | 6,788              
|Other
            reserves                                                                                                                                                                          |                                              | **699**                 |                    |                   
|Profit
            and loss account reserve                                                                                                                                                         |                                              | **1,308**               | 1,420               | 1,526              
|                                                                                                                                                                                                   
|**Capital
            employed**                                                                                                                                                                    |                                              | **2,457**               | 8,656               | 8,743              
|                                                                                                                                                                                                   
|Profit
          attributable to ordinary shareholders                                                                                                                                              |                                              | **27**                  | 34                  | 294                
|This balance
              sheet was approved by the directors on 24 February 2003.                                                                                                                
|                                                                                                                                                                                                    |                                              |                         |                     |                    
|                                                                                                                                                                                                    |                                              |                         |                     |                    
|**Tom Glocer**
          Chief Executive                                                                                                                                                            | **David Grigson**
          Finance Director |                         |                     |                    
|                                                                                                                                                                                                    |                                              |                         |                     |                    
|Advantage
            has been taken of the provisions of Section 230(3) of the Companies
            Act 1985 not to present a separate profit and loss account for Reuters
            Group PLC.

|**Notes
                on the balance sheet of Reuters Group PLC**
|-------------------------------------------------------------------

|                                                                                                                                                                                                                      
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**34.
                     Fixed asset investments**Fixed
          asset investments comprise the shareholdings of Reuters Group PLC in
          Reuters Investments Limited and Reuters Investments (2002) Limited.
|                                                                                                                                                                                                                      

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                          |                                                                 |                                                            |                                         |                                         |                                                                                              |                   
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ | --------------------------------------------------------------- | ---------------------------------------------------------- | --------------------------------------- | --------------------------------------- | -------------------------------------------------------------------------------------------- | ------------------
|**35. Capital
            and reserves**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                          |                                                                 |                                                            |                                         |                                         |                                                                                              |                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                          |                                                                 |                                                            |                                         |                                         |                                                                                              |                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Called
            up
            share
            capital
          £m | Capital
            redemption
            reserve
          £m | Share
            premium
            account
          £m | Merger
            reserve
          £m | Other
            reserves
          £m | Profit
            and
            loss
            account
            reserve
          £m | Total
          £m
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|31
            December 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 358                                                                      | 1                                                               | 89                                                         | 6,788                                   |                                        | 1,420                                                                                        | 8,656             
|Intra-group
            reorganisation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                         |                                                                |                                                           | (3,000)                                 | 3,000                                   |                                                                                             |                  
|Impairment
            of investment in subsidiary undertakings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                         |                                                                |                                                           | (3,788)                                 | (2,301)                                 |                                                                                             | (6,089)           
|Shares
            issued during the year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                         |                                                                | 2                                                          |                                        |                                        |                                                                                             | 2                 
|Loss
            for the year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                         |                                                                |                                                           |                                        |                                        | (112)                                                                                        | (112)             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|**31
            December 2002**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | **358**                                                                  | **1**                                                           | **91**                                                     | ****                                   | **699**                                 | **1,308**                                                                                    | **2,457**         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Following
            the approval of a High Court Scheme of Arrangement, the majority of
            the issued share capital of Reuters Holdings PLC was acquired by Reuters
            Group PLC in February 1998. The merger reserve and profit and loss
            account reserve arose as a result of this transaction. During 2002,
            a transfer has been made from the merger reserve to other non-distributable
            reserves as a result of an intra-group reorganisation. In addition,
            a reduction has been made in both the merger reserve and other non-distributable
            reserves to recognise the impairment of the investment in underlying
            subsidiaries.

| Page 63 ACCOUNTING POLICIES
|------------------------------

|                                                                                                                                                                                          
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Accounting
            basis**The financial
            statements are prepared under the historical cost convention and in
            accordance with applicable accounting standards.

|                                                                                                
|------------------------------------------------------------------------------------------------
|**Basis
            of consolidation**The
            consolidated financial statements include:
|                                                                                                
|a.                                                                                              
|                                                                                                
|b.                                                                                              

|                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Foreign
            currency translation**Where
            it is considered that the functional currency of an operation is sterling
            the financial statements are expressed in sterling on the following
            basis:                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|a.                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|b.                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|c.                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|d.                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|For
            other operations, associated undertakings and joint ventures, assets
            and liabilities are translated into sterling at the rates ruling at
            the balance sheet date. Revenue and expenses in foreign currencies
            are recorded in sterling at the rates ruling for the month of the
            transactions and gains or losses arising on translation are dealt
            with through reserves.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Treasury**Reuters
              Group receives revenue and incurs expenses in more than 60 currencies
              and uses financial instruments to hedge a portion of its net cash
              flow and operating profit. Profits and losses from hedging activities
              are matched with the underlying cash flows and profits being hedged.
              Those relating to trading cash flows are reported as part of profit
              and those relating to Reuters capital expenditure programme are
              adjusted against the cost of the assets to which they relate.
            Reuters uses
              financial instruments to hedge a portion of its interest exposure.
              Profits and losses on financial instruments are reported as part
              of profit for the period to which they relate.
            Financial instruments
              hedging the risk on foreign currency assets are revalued at the
              balance sheet date and the resulting gain or loss offset against
              that arising from the translation of the underlying asset into sterling.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Revenue**
              Revenue represents
              the turnover, net of discounts, derived from services provided to
              subscribers and sales of products applicable to the year.
      Revenue from
              sales of subscription based real-time and historical information
              services are recognised ratably over the term of the subscription.
              Revenue from contracts for the outright sale of systems based product
              solutions, which include the sale of fully developed software licences,
              is recognised at the time of client acceptance. Short-term contracts
              are accounted for on a completed contract basis. Long-term contracts
              are accounted for in accordance with the contractual terms either
              on a percentage of completion basis or on a time and materials as
              incurred basis.
            Revenue from
              associated maintenance and support services are recognised ratably
              over the term of the maintenance contract. Where contracts allow
              Reuters to recharge costs from communications suppliers and exchanges
              onwards to subscribers, this income is recognised as revenue.
            Transaction
              products usage revenue is accounted for on a trade date basis.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Securities
            transactions**Securities
            transactions between Instinet counterparties which pass through Instinet
            and in its role as agency brokers, are recorded on a settlement date
            basis and, therefore, are only reflected in the balance sheet if there
            is a failure to settle. Revenues and related expenses arising from
            such securities transactions are accrued from the date of the transaction.

|                                                                                                                 
|-----------------------------------------------------------------------------------------------------------------
|**Development**Development
            expenditure is charged against profit in the year in which it is incurred.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Pensions
              and similar obligations**The
              expected costs of defined benefit pensions and post-retirement medical
              benefits are charged against profit so as to spread the cost over
              the service lives of the employees affected.
            For defined
              contribution schemes the charge to the profit and loss account represents
              contributions made by Reuters Group during the period.

|                                                                                                                                                                                                                                
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Restricted
            share and Instinet long-term incentive plans**Costs
            of the restricted share and Instinet long-term incentive plans are
            charged to profit over the vesting period of the awards.

|                                                                                                                                                                                                          
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Tangible
            fixed assets**Depreciation
            is calculated on a straight line basis so as to write down the assets
            to their residual values over their expected useful lives:
|                                                                                                                                                                                                          
|Freehold land                                                                                                                                                                                             
|Freehold buildings                                                                                                                                                                                        
|Leasehold property                                                                                                                                                                                        
|Computer systems
            equipment, office equipment and motor vehicles                                                                                                                               

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Stocks
              and contract work in progress**Stocks
              and contract work in progress are valued at the lower of cost and
              net realisable value less progress payments received and receivable
              from clients. Progress payments in excess of the value of work carried
              out are included within creditors. Page 64 
            Cost is calculated
              on a first-in, first-out basis by reference to the invoiced value
              of supplies and attributable costs of bringing stocks to their present
              location and condition.
            Net realisable
              value is the estimated market value less selling costs.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Short-term
              investments**Government
              securities are stated in the balance sheet at the lower of cost
              plus accrued capital appreciation and market value. Income from
              these securities and any adjustment for changes in their market
              value during the year is reported as part of profit.
            Movements in
                 short-term investments are reported under the heading of 'management

              of liquid resources' in the cash flow statement.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Debt
              issuance**Medium-term
              notes and commercial paper are stated at the amount of the net
              proceeds plus accrued interest or any discount or premium.
              Discounts
              or premia to the nominal value are amortised over the term of the
              issue. Costs associated with debt issuance are charged against
              profit
              over the life of the instrument.
            Foreign currency
              swap agreements and forward contracts are used to convert non-sterling
              debt into sterling. Interest rate swaps, swaptions and forward rate
              agreements are used to manage interest rate exposures. Amounts payable
              or receivable in respect of these derivatives are recognised as
              adjustments to interest expense over the period of the contract.

|                                                                                                                                                
|------------------------------------------------------------------------------------------------------------------------------------------------
|**Leasing**Operating
              lease rentals are charged against profit on a straight line basis
              over the period of the lease.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Deferred
              taxation**Tax
              deferred or accelerated by the effect of timing differences is accounted
              for to the extent that a transaction or an event that has occurred
              at the balance sheet date gives rise to an obligation to pay more
              tax in the future or a right to pay less tax in the future.
            However, deferred
                 tax assets are only recognised to the extent that, based on
                all
              available evidence, it is more likely than not that suitable taxable
                 profits will arise from which the reversal of the timing differences

              can be deducted. Deferred tax assets and liabilities which are
                recognised  are not discounted.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Goodwill
              and other intangible assets**Goodwill
              is calculated as the difference between the fair value of the consideration
              paid and the fair value of the Group's share of the net assets at
              the date of acquisition. No value is attributed to internally generated
              intangible assets.
            Purchased goodwill
                 and other intangible assets are capitalised and amortised through
                the
              profit and loss account on a straight line basis over their estimated
                 useful economic lives, which are up to 20 years depending on
                the
              nature of the business acquired. Impairment reviews are carried
                 out at the end of the first financial year after acquisition
                and
              where there is any indication of impairment.
            Impairment is
              measured by comparing the carrying value of the asset with the higher
              of the net realisable value and the value in use. Any impairment
              charges are recognised in the profit and loss account for the period
              in which they arise.

|                                                                                                                                                                                                                                                                                                     
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Interest
              in shares of Reuters Group PLC**Shares
               held by the employee share ownership trusts are recorded in the

              balance sheet within fixed asset investments at cost including
              expenses  less amounts written off and impairment charges.

|                                                                                                                                                                                 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Fixed
              asset investments**Fixed
              asset investments are held at cost net of permanent diminution in
              values as assessed by the directors.

| Page 65 SUMMARY OF DIFFERENCES BETWEEN UK AND US GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)
|---------------------------------------------------------------------------------------------------

|                                                                                                                                                                                                                                                                                                                                            
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Accounting
              principles**These
              consolidated financial statements have been prepared in accordance
              with UK GAAP, which differ in certain significant respects from
              US GAAP. A description of the relevant accounting principles which
              differ materially is given below:

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**a.
              Revenue recognition**Under
              UK GAAP, revenue from contracts for the outright sale of systems
              based product solutions, which include the sale of fully developed
              software licences, is recognised at the time of client acceptance.
              Under US GAAP, specific rules establish the criteria that must be
              met for software revenue recognition. Under these rules, certain
              contracts with multiple elements require an amount of revenue to
              be deferred until all criteria for revenue recognition are met.
            Under UK GAAP,
              soft dollar revenues are netted against operating costs in the profit
              and loss account. Under US GAAP, soft dollar revenues would be presented
              gross in the revenues and operating costs. There is no difference
              in net income as a result of the classification.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**b.
              Software and website development costs**Under
              UK GAAP, costs of developing computer software products are usually
              expensed in the year in which they are incurred. Under US GAAP,
              the costs of developing computer software products subsequent to
              establishing technical feasibility are capitalised.
            Under UK GAAP,
                 prior to July 2001, costs of developing websites were expensed
                in
              the year in which they were incurred. Since July 2001, under both
                 UK GAAP and US GAAP, certain costs relating to website development

              incurred subsequent to the planning stage are capitalised subject
                 to certain criteria.
            The amortisation
              of the capitalised costs is based on the estimated future revenues
              or remaining estimated useful economic lives of the products involved.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**c.
              Joint ventures and associated undertakings**Under
              UK GAAP, the difference between the book value and fair value of
              the assets contributed to joint ventures and associates are recognised
              in the STRGL. Under US GAAP, the difference is released to the income
              statement over the anticipated life of the assets contributed to
              the venture.
            Under UK and
              US GAAP, a review of the carrying value of associates for impairment
              is undertaken and where necessary an impairment charge is recorded.
              The UK GAAP impairment charge is adjusted to reflect the different
              carrying value of the associate under US GAAP.
            Under UK GAAP,
                 stock compensation expenses are not required to be recorded
                in respect
              of certain joint ventures' and associates' stock option plans.
                Under US GAAP, the Group's share of the results of joint ventures
                and
              associates has been adjusted to reflect stock compensation charges
                 where appropriate.
            Under UK GAAP,
                 the transfer of employees that held unvested stock option awards

              to a joint venture does not give rise to a charge against profit.
                 Under US GAAP, the stock awards are considered to be held by
                non-employees
              and accordingly a stock option expense relating to the fair value
                 of the unvested awards is included in the 'share of operating
                loss
              of joint ventures and associated undertakings' over the remaining
                 vesting period.
            Under US GAAP,
              the Group's share of the results of joint ventures and associates
              is adjusted to reflect the non-amortisation of goodwill since 1
              January 2002.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**d.
                    Gains on deemed disposal of subsidiary and associated undertakings**Under UK GAAP, gains on the deemed partial disposal of
              subsidiary and associated undertakings involving non-qualifying
              consideration are recorded in the STRGL. Under US GAAP the gains
              are recorded in the income statement and are calculated using asset
              and consideration values as determined under US GAAP.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**e.
              Gains on fixed asset investments**Under
              UK GAAP, gains on the sale of fixed asset investments for non-cash
              consideration are recorded in the STRGL. Under US GAAP, these gains
              are recorded in the income statement.
            Under UK GAAP,
              fixed asset investments are held in the balance sheet at cost net
              of permanent diminution in values as assessed by the directors.
              Under US GAAP, fixed asset investments which are available for sale
              are stated at fair value with unrealised gains or losses included
              in the statement of comprehensive income. Under US GAAP, broker-dealer
              fixed asset investments are stated at fair value with unrealised
              gains or loss included in the income statement.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**f.
              Goodwill adjustments**Under
               UK GAAP, goodwill and other intangible assets are amortised. Under

              US GAAP, prior to 1 July 2001, all goodwill was amortised, consistent
               with UK GAAP. In 2002, Reuters adopted the provisions of Financial
              Accounting Standards No. 142 (FAS 142),
              'Goodwill and Other Intangible Assets', and as a result goodwill
               is no longer subject to amortisation under US GAAP. In addition,

              the non-amortisation of goodwill provisions of FAS 142 were effective
               immediately for goodwill arising on all acquisitions completed
              after
              30 June 2001.
            Under UK GAAP,
              goodwill impairment reviews are carried out at the end of the first
              financial year after acquisition and where there is an indication
              of impairment. Impairment is measured by comparing the carrying
              value of the goodwill with the higher of the net realisable value
              and the value in use.
            Under US GAAP,
              the Group performed a transitional impairment test effective 1 January
              2002, as required by FAS 142. Goodwill impairment reviews are also
              conducted whenever the Group considers there to be indication of
              impairment. Beginning in 2002, Reuters also completes an annual
              goodwill impairment test, as required by FAS 142.
            Under US GAAP,
              where the carrying value of a reporting unit exceeds its fair value
              then a goodwill impairment is recorded based on the excess of the
              carrying value of goodwill in a reporting unit over the implied
              fair value of that goodwill.
            Under UK GAAP,
              the fair value of quoted securities issued to effect a business
              combination is measured at the market price at the date of closing
              the acquisition. Under US GAAP, the fair value of the securities
              issued is determined using the market price for a reasonable period
              before and after the date that the terms of acquisition are agreed
              to and announced.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**g.
              Employee costs**Reuters
              grants options under save-as-you-earn plans at a 20% discount. Under
              UK GAAP, the share issues are recorded at their discounted price
              when the options are exercised. Under US GAAP, the discount is regarded
              as employee compensation and is accrued over the vesting period
              of the grants.
            Under UK GAAP,
              no compensation charge is recorded when the vesting terms of an
              option award are accelerated, or when an option plan is amended
              with substantially similar terms as the old plan. Under US GAAP,
              additional compensation cost is recognised when the vesting of an
              option has been accelerated and those options would otherwise have
              been forfeited unvested. Additional compensation cost is also recognised
              where a new measurement date is established following the amendment
              of a stock option plan where the exercise price is less than the
              market value of the underlying shares on the new measurement date.
            Under UK GAAP,
              the liability for national insurance on stock options is accrued
              for based on the intrinsic value of the options on the date of grant
              and adjusted for subsequent changes in the market value of the underlying
              shares. Under US GAAP, this expense is recorded upon exercise of
              the stock options. Page 66 
            Under UK GAAP,
                 the compensation charge relating to certain stock based long-term

              incentive plans is based on the original cost of shares held in
                 the ESOTs, less impairments. Under US GAAP, the compensation
                charge
              is based on the market value of the awards at each balance sheet
                 date.
            Under both UK
              GAAP and US GAAP, the total compensation charge is adjusted to take
              account of the expected outcome of the performance conditions and
              the compensation charge is spread over the service period.
            Under UK GAAP,
                 the expected costs under defined benefit pension and post-retirement

              arrangements are spread over the service lives of employees entitled
                 to those benefits. Variations from regular cost are spread on
                a
              straight line basis over the expected average remaining service
                 lives of relevant current employees. Under US GAAP, the annual
                pension
              cost comprises the estimated cost of benefits accruing in the period
                 adjusted for the amortisation of the surplus arising when FAS
                87
              'Employers' Accounting for Pensions', was adopted.
            The reduction
                in shareholders' equity at 31 December 2002 includes the effect
                of the US GAAP requirement to make immediate provision for pension
                fund deficits through other comprehensive income. The provision
              in part reflects the recent reduction in equity values.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**h.
              Derivatives**Under
              US GAAP, the Group adopted FAS 133, 'Accounting for Derivate Instruments
              and Hedging Activities' as amended by FAS 138, on 1 January 2001.
              FAS 133 introduced new rules in respect of hedge accounting and
              the recognition of movements in fair value through the income statement.
              As a result of the adoption, all derivatives and embedded derivative
              instruments, whether designated in hedging relationships or not,
              are carried on the balance sheet at fair value.
            The company
              has not designated any of its derivative instruments as qualifying
              hedge instruments under FAS 133. Accordingly, changes in the fair
              value of derivative and embedded derivative instruments have been
              included within net income under US GAAP.
            Under current
              UK GAAP, the company has continued to apply hedge accounting and
              is not required to record all of its derivative instruments or any
              of its embedded derivative instruments on the balance sheet at fair
              value.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**i.
                    Shares held by ESOTs**Under
              UK GAAP, shares held by the ESOTs are recorded as fixed asset investments
              at cost less amounts written off and impairments. Under US GAAP,
              those shares that have not been exercised are regarded as treasury
              stock and recorded at cost as a deduction from shareholders' equity.
            The effects
              of these differing accounting principles are shown in notes 36-39.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**j.
              Taxes on income** Under UK GAAP,
              FRS 19, 'Deferred Tax', requires deferred taxes to be accounted
              for on all timing differences. Deferred tax assets are to be recognised
              to the extent that, on the basis of all available evidence, it can
              be regarded as more likely than not that there will be suitable
              taxable profits from which the future reversal of the underlying
              timing differences can be deducted. Assets not recognised are shown
              by way of a valuation allowance in the balance sheet. Under US GAAP,
              deferred taxes are accounted for in accordance with FAS 109, 'Accounting
              for Income Taxes', on all timing differences and a valuation allowance
              is established in respect of those deferred tax assets where it
              is more likely than not that some portion will remain unrealised.
            Deferred tax
              also arises in relation to the timing differences of other US GAAP
              adjustments.

|                                                                                                                                                                                                                                                                                                                                
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**k.
              Dividends**Under
              UK GAAP, dividends are provided for in the year in respect of which
              they are declared or proposed. Under US GAAP, dividends and any
              related tax credit are given effect only in the period in which
              dividends are formally declared.

|                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                     |                     |                     | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------- | ------------------- | 
|**Cash
              flow statement**The
              cash flow statement
               set out on pages 43-47
               has been prepared in
              conformity with UK FRS 1, (Revised) 'Cash Flow Statements'. The
              principal differences between this statement and cash flow statements
              presented in accordance with FAS 95 'Statement of cash flows' are
              as follows:
|                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                    
|1.                                                                                                                                                                                                                                                                                                                                                                                                                               | Under
            UK GAAP, net cash flow from operating activities is determined before
            considering cash flows from (a) returns on investments and servicing
            of finance and (b) taxes paid. Under US GAAP, net cash flow from operating
            activities is determined after these items.                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                    
|2.                                                                                                                                                                                                                                                                                                                                                                                                                               | Under
            UK GAAP, capital expenditure, financial investments and acquisitions
            are classified separately while under US GAAP they are classified
            as investing activities.                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                    
|3.                                                                                                                                                                                                                                                                                                                                                                                                                               | Under
            UK GAAP, dividends paid are classified separately while under US GAAP,
            dividends paid are classified as financing activities. Under UK GAAP,
            the purchase of Reuters shares by the ESOTs is classified as investing
            activities whereas under US GAAP, this is classified as financing
            activities.
|                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                    
|4.                                                                                                                                                                                                                                                                                                                                                                                                                               | Under
            UK GAAP, movements in short-term investments are not included in cash
            but classified as management of liquid resources. Under US GAAP, short-term
            investments with maturity of three months or less at the date of acquisition
            are included in cash and cash equivalents.                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                    
|5.                                                                                                                                                                                                                                                                                                                                                                                                                               | Under
            UK GAAP, movements in bank overdrafts are classified as movements
            in cash while under US GAAP, they are classified as a financing activity.                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                
|Set
            out below is a summary consolidated cash flow statement under US GAAP:                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                 | **2002
            £m**                                                                                                                                                                                                                                                                                                                                             | 2001
            £m | 2000
            £m
|                                                                                                                                                                                                                                                                                                                                                                                                                                
|Net
            cash inflow from operating activities                                                                                                                                                                                                                                                                                                                                                                            | **247**                                                                                                                                                                                                                                                                                                                                                             | 709                 | 688                
|Net
            cash outflow from investing activities                                                                                                                                                                                                                                                                                                                                                                           | **(152)**                                                                                                                                                                                                                                                                                                                                                           | (316)               | (584)              
|Net
            cash (outflow)/inflow from financing activities                                                                                                                                                                                                                                                                                                                                                                  | **(306)**                                                                                                                                                                                                                                                                                                                                                           | 37                  | (94)               
|                                                                                                                                                                                                                                                                                                                                                                                                                                
|Net
            (decrease)/increase in cash and cash equivalents under US GAAP                                                                                                                                                                                                                                                                                                                                                   | **(211)**                                                                                                                                                                                                                                                                                                                                                           | 430                 | 10                 
|Net
            increase in cash under UK GAAP (see notes 4-5 above)                                                                                                                                                                                                                                                                                                                                                             | **86**                                                                                                                                                                                                                                                                                                                                                              | 36                  | 11                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                

| Page 67 **Notes
                  on summary of differences between UK and US Generally Accepted
                Accounting Principles (GAAP)**
|--------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                                               |                                                      |                                                                                     |                                               |                            |                        |                       
|-------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------- | ----------------------------------------------------------------------------------- | --------------------------------------------- | -------------------------- | ---------------------- | ----------------------
|**36. Adjustments to net (loss)/income**                                                                       |                                                      |                                                                                     |                                              
|                                                                                                               | **2002
            £m**                              | 2001
            £m                                                                 | 2000
            £m                          
|                                                                                                              
|(Loss)/profit
            attributable to ordinary shareholders in accordance with UK GAAP                     | **(404)**                                            | 46                                                                                  | 521                                          
|US
            GAAP adjustments:                                                                               |                                                      |                                                                                     |                                              
|                                                                                                               | a.                                                   | Revenue
            recognition                                                     | **3**                                         | (8)                        | (6)                   
|                                                                                                               | b.                                                   | Capitalised
            website development costs                                   | ****                                         |                           | 3                     
|                                                                                                               | b.                                                   | Amortisation
            of software and website development costs                  | **(1)**                                       | (5)                        | (2)                   
|                                                                                                               | c.                                                   | Joint
            ventures and associated undertakings                              | **18**                                        | 22                         | (16)                  
|                                                                                                               | d.                                                   | Gains
               on deemed disposal of subsidiaries and associated undertakings | **104**                                       | 11                         | 25                    
|                                                                                                               | e.                                                   | Gains
            on fixed asset investments                                        | ****                                         | 29                         | 16                    
|                                                                                                               | f.                                                   | Goodwill
            adjustments                                                    | **(34)**                                      | 2                          | (3)                   
|                                                                                                               | g.                                                   | Employee
            costs                                                          | **(1)**                                       | (11)                       | (22)                  
|                                                                                                               | h.                                                   | Derivative
            instruments                                                  | **(28)**                                      | 4                          |                      
|                                                                                                               | i.                                                   | Impairment
            of shares held by ESOTs                                      | **147**                                       |                           |                      
|                                                                                                               | j.                                                   | Income
            taxes                                                            |                                               |                            |                       
|                                                                                                               |                                                      |                                                                                     | application
            of FAS 109            | ****                      | 4                      | 10                    
|                                                                                                               |                                                      |                                                                                     | tax
            effect of US GAAP adjustments | **42**                     | (5)                    | 8                     
|                                                                                                               | Minority
            interest in US GAAP adjustments | **38**                                                                              | (2)                                           |                          
|                                                                                                              
|(Loss)/income
            before cumulative effect of change in accounting principle                           | **(116)**                                            | 87                                                                                  | 534                                          
|Cumulative
            effect of change in accounting principle for FAS 142                                    | **(13)**                                             |                                                                                    |                                             
|Cumulative
            effect of change in accounting principle for FAS 133                                    | ****                                                | 7                                                                                   |                                             
|Tax
            effect of change in accounting principle                                                       | ****                                                | (2)                                                                                 |                                             
|Minority
            interest effect of change in accounting principle                                         | **2**                                                |                                                                                    |                                             
|                                                                                                              
|**Net
            (loss)/income attributable to ordinary shareholders in accordance
            with US GAAP** | **(127)**                                            | 92                                                                                  | 534                                          
|                                                                                                              
|                                                                                                               |                                                      |                                                                                     |                                               |                            |                        |                       
|                                                                                                               |                                                      |                                                                                     |                                               | **2002
            pence** | 2001
            pence | 2000
            pence
|                                                                                                              
|**Earnings
              and dividends****Before
              accounting change**                             |                                                      |                                                                                     |                                              
|Basic
            (loss)/earnings per ADS in accordance with US GAAP                                           | **(49.5)**                                           | 37.5                                                                                | 228.1                                        
|Diluted
            (loss)/earnings per ADS in accordance with US GAAP                                         | **(49.5)**                                           | 36.8                                                                                | 224.3                                        
|**After
            accounting change**                                                                        |                                                      |                                                                                     |                                              
|Basic
            (loss)/earnings per ADS in accordance with US GAAP                                           | **(54.3)**                                           | 39.5                                                                                | 228.1                                        
|Diluted
            (loss)/earnings per ADS in accordance with US GAAP                                         | **(54.3)**                                           | 38.7                                                                                | 224.3                                        
|                                                                                                              
|Dividend
            paid per ADS (including UK tax credit)                                                    | **66.7**                                             | 108.0                                                                               | 97.7                                         
|                                                                                                              
|Weighted
            average number of shares used in basic EPS calculation (millions)                         | **1,395**                                            | 1,404                                                                               | 1,404                                        
|Dilutive
            shares                                                                                    | ****                                                | 28                                                                                  | 24                                           
|                                                                                                              
|Used
            in diluted EPS calculation                                                                    | **1,395**                                            | 1,432                                                                               | 1,428                                        
|                                                                                                              
|                                                                                                              

|                                                                |                                                      |                                                                                        |                     |       |       | 
|--------------------------------------------------------------- | ---------------------------------------------------- | -------------------------------------------------------------------------------------- | ------------------- | ----- | ----- | 
|**37. Adjustments to shareholders' equity**                     |                                                      |                                                                                        |                    
|                                                                | **2002
            £m**                              | 2001
            £m                                                                    | 2000
            £m
|                                                               
|Shareholders'
            equity in accordance with UK GAAP     | **496**                                              | 1,109                                                                                  | 1,153              
|US
            GAAP adjustments:                                |                                                      |                                                                                        |                    
|                                                                | a.                                                   | Revenue
            recognition                                                        | **(11)**            | (14)  | (6)  
|                                                                | b.                                                   | Capitalised
               software and website development costs, net of amortisation | ****               | 1     | 6    
|                                                                | c.                                                   | Investments
            in joint ventures and associated undertakings                  | **(37)**            | (64)  | (81) 
|                                                                | e.                                                   | Fixed
            asset investments                                                    | **19**              | 50    | 159  
|                                                                | f.                                                   | Goodwill
            adjustments                                                       | **71**              | 2     | 4    
|                                                                | g.                                                   | Liabilities                                                                            | **(10)**            | (52)  | (73) 
|                                                                | h.                                                   | Derivative
            instruments                                                     | **(14)**            | 14    |     
|                                                                | i.                                                   | Shares
              held by employee share ownership trusts                           | **(68)**            | (153) | (117)
|                                                                | j.                                                   | Deferred
            taxes                                                             | **6**               | (18)  | (33) 
|                                                                | k.                                                   | Dividends
            not formally declared or paid during the year                    | **86**              | 86    | 174  
|                                                                | Minority
            interest in US GAAP adjustments | **(10)**                                                                               | (2)                 |     
|                                                               
|**Shareholders'
            equity in accordance with US GAAP** | **528**                                              | 959                                                                                    | 1,186              
|                                                               
|                                                               

|                                                                       |                                                                           |                                                                             |                         |                     |                    
|---------------------------------------------------------------------- | ------------------------------------------------------------------------- | --------------------------------------------------------------------------- | ----------------------- | ------------------- | -------------------
|**38. Statement of comprehensive (loss)/income**                       |                                                                           |                                                                             |                        
|                                                                       |                                                                           |                                                                             | **2002
            £m** | 2001
            £m | 2000
            £m
|                                                                      
|Net
            (loss)/income in accordance with US GAAP               | **(127)**                                                                 | 92                                                                          | 534                    
|Other
            comprehensive (loss)/income, net of tax:             |                                                                           |                                                                             |                        
|                                                                       | Unrealised
            (losses)/gains on certain fixed asset investments: |                                                                             |                         |                    
|                                                                       | arising during
            year                                           | **(21)**                                                                    | (109)                   | (270)              
|                                                                       | less amounts
            taken to net income, net of losses               | **3**                                                                       |                        | (43)               
|                                                                       | Foreign
          currency translation differences                        | **(95)**                                                                    | 26                      | 40                 
|                                                                       | Derivative
            instruments                                        |                                                                             |                         |                    
|                                                                       |                                                                           | cumulative
            effect of change in accounting principle for FAS 133 | ****                   | (2)                 |                   
|                                                                       | less
            amounts taken to net income                              | ****                                                                       | 2                       |                   
|Adjustment
            to reflect minimum pension liability            | **(4)**                                                                   |                                                                            |                       
|                                                                      
|**Comprehensive
            (loss)/income in accordance with US GAAP** | **(244)**                                                                 | 9                                                                           | 261                    
|                                                                      

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                         |                     |                    
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------- | ------------------- | -------------------
| Page 68 **39.
            Summarised balance sheet (US GAAP basis)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                         |                     |                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | **2002
            £m** | 2001
            £m | 2000
            £m
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|**Assets**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                         |                     |                    
|Fixed
            tangible assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | **1,012**               | 1,299               | 1,584              
|Current
            assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | **1,850**               | 2,462               | 1,892              
|Other
            assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | **159**                 | 113                 | 60                 
|Goodwill
            and other intangibles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | **489**                 | 499                 | 247                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|**Total
            assets**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | **3,510**               | 4,373               | 3,783              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|**Liabilities
            and shareholders' equity**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                         |                     |                    
|Current
            liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | **2,167**               | 2,628               | 2,130              
|Long-term
            liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | **552**                 | 572                 | 458                
|Deferred
            taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | **21**                  | 48                  | 9                  
|Minority
            interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | **242**                 | 166                 |                   
|Shareholders'
            equity before deductions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | **781**                 | 1,163               | 1,349              
|Shares
            held by employee share ownership trusts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | **(253)**               | (204)               | (163)              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|**Total
            shareholders' equity**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | **528**                 | 959                 | 1,186              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|**Total
            liabilities and shareholders' equity**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | **3,510**               | 4,373               | 3,783              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Goodwill
              and other intangibles are net of accumulated amortisation of £569
              million (2001: £551 million, 2000: £477 million). Software
              development costs are net of accumulated amortisation of £19
              million (2001: £18 million, 2000: £16 million).
            The goodwill
              adjustment in the 2002 net income reconciliation comprises £99
              million in respect of UK GAAP amortisation written back under FAS
              142, £146 million impairment charge in respect of goodwill
              not recognised under UK GAAP and a £13 million impairment charge
              arising as a result of the adoption of FAS 142.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Additional
                  disclosures required by US GAAP**Employee costsThe
              Group has complied with FAS 123, 'Accounting for Stock-Based Compensation'.
              Reuters has continued to apply the methodologies set out in APB
              Opinion 25, 'Accounting for Stock Issued to Employees' and other
              US GAAP literature in calculating its US GAAP adjustments for share
              option plans and awards of share rights.
              The following
                  table illustrates the effect on net (loss)/income and (loss)/earnings
                  per share if Reuters had applied the fair value recognition
                  provisions of FAS 123 to stock based employee compensation.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Net
              (loss)/income, as reported                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Add:
              Stock-based compensation expense included in reported net (loss)/income,
              net of related tax effects                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Deduct:
              Total stock-based employee compensation expense determined under
              fair value based method for all awards, net of related tax effects                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Pro
              forma (loss)/net income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(Loss)/earnings
              per share (after accounting change):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Basic  as
              reported                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Basic  pro
              forma                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Diluted  as
              reported                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Diluted  pro
              forma                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

|                                                                                                                                                                                                                                                       
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|****Fair
              values****Fair
                      value of options granted are estimated using a European
                      binomial option pricing model. The range of assumptions
                      applied to options granted are:
|                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                       
|Dividend
              yield                                                                                                                                                                                                                           
|Volatility                                                                                                                                                                                                                                             
|Risk
              free investments rates                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                       

| Page 69 Derivative
          instrumentsThe current
    year loss on derivative instruments is £28 million (2001: £11 million
    gain, 2000: nil). At 31 December 2002, the balance sheet includes derivative
    assets of £8 million and derivative liabilities of £26 million.
    The current year loss includes a loss of £19 million (2001: £2
    million; 2000: nil) relating to currency forward contracts embedded within
    long-term customer contracts.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Goodwill****During
                2002 Reuters identified indicators of possible impairment of
                its recorded goodwill relating to its investment in Instinet.
                During the year, Instinet experienced a decline in its market
                capitalisation. Due to this significant decrease, the book value
                of Instinet exceeded its fair market value. Instinet management
                believes that the significant decline in market value reflects
                the ongoing challenging business environment, declining business
                fundamentals, the commoditisation of its services, the launch
                of significant competitive products and a difficult regulatory
                environment. These events prompted Instinet to perform a goodwill
                impairment test.
              In accordance
                  with FAS 142, based on the results of a valuation analysis
                  prepared by an independent specialist, Instinet determined
                  that its remaining goodwill had been completely impaired and
                  as a result recorded a US GAAP pre-tax goodwill impairment
                  charge of £377 million.
              Intangible
                  assets have been recognised in connection with a number of
                  the Group's acquisitions. The intangible assets are amortised
                  on
                  a straight
                  line basis over their respective estimated useful lives. The
                  weighted average amortisation period for other intangible assets
                  acquired during 2002 is seven years. Amortisation expense for
                  the 12 months ended 31 December 2002 was £18 million.
                  Estimated amortisation expense for each of the next five years
                  is:
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Bridge acquisitionIn September
    2001, Reuters completed the acquisition of the core North American equities
    information business and certain other businesses of Bridge Information Systems
    Inc., and its subsidiaries, which had been in bankruptcy proceedings since
    the beginning of 2001. The total purchase consideration, which included interim
    funding to Bridge and its network provider, Savvis, was £256 million.
    The acquired Bridge businesses include content, analytics and trading applications
    primarily for financial institutions and their customers, as well as Bridge
    Trading, a licensed broker-dealer.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Island
                    acquisitionOn
                20 September 2002 Instinet acquired 100% of the outstanding common
                stock of Island. Island's results of operations since that date
                have been included in the Group's consolidated financial statements.
                Island is a leading electronic securities marketplace, with a
                large liquidity pool of orders to buy and sell securities that
                are published in its marketplace. Island's proprietary technology
                enables it to offer low cost, rapid and reliable order display
                and matching services to its customers. Instinet believes this
                acquisition will result in better execution opportunities for
                its customers, a stronger technology and trading platform, an
                alternative to other offerings, cost savings, and a stronger
                management team.
              The aggregate
                  purchase price under US GAAP was £360 million, comprised
                  of £318 million representing 80,658,886 shares of Instinet's
                  common stock, £13 million representing additional common
                  shares for the conversion of options, warrants and stock appreciation
                  rights, deferred tax liability of £21 million related
                  to intangible assets and £8 million representing direct
                  costs of the acquisition. The value of the common shares issued
                  was determined based on the average closing market price of
                  Instinet's common shares over the two-day period before and
                  after 19 June 2002, the date the terms of the acquisition were
                  agreed to and announced.
      The following
                  unaudited pro forma information gives the impact of Island
                  on the results of the Group as if the acquisition had taken
                  place on 1 January 2002 and 1 January 2001 respectively. The
                  unaudited pro forma information does not purport to represent
                  the results of operations that would have been obtained if
                  the Island acquisition had taken place at the beginning of
                  each of the years presented, or that may be attained in the
                  future.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Group
              revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Net
              (loss)/profit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Basic
              (loss)/earnings per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Diluted
              (loss)/earnings per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Joint
                ventures and associated undertakingsThe carrying
              value of Reuters Group's investment in joint ventures and associated
              undertakings of £363 million  at 31 December 2002, is represented
              by 17 investments. The most significant of which are TSI, 3 Times
              Square Associates LLC, GL Trade, Radianz and Dow Jones Reuters
              Business Interactive (Factiva).
              Selected
                  aggregate financial information for associates and joint ventures
                  is as follows. This represents their total aggregate profit
                  and loss account and balance sheet information and not Reuters
                  Group's share.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Revenues                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Operating
              profit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Net
              loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Current
              assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Non-current
              assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Current
              liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Long-term
              liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ContingenciesIncorporated
      within the purchase agreements for a number of recent acquisitions are
      contingency/earn out arrangements, under which the Group may be liable
      to pay up to £31 million as additional purchase consideration. The
      payments are contingent on the financial and operational performance of
      the acquired entities against targets established at the date of acquisition.
      Under UK GAAP, liabilities
          have been recorded in respect of the contingencies. No liabilities
          have been recorded under US GAAP. If payable, all contingencies will
          fall due between 2003 and 2005.

| Page 70 Use of estimatesThe preparation
    of financial statements in conformity with US GAAP requires management to
    make estimates and assumptions that affect the reported amounts of assets
    and liabilities, disclosure of contingent assets and liabilities at the date
    of the financial statements and the reported amounts of revenue and expenses
    during the reporting period. Actual results could differ from those estimates.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Recent
            US GAAP accounting pronouncements**FAS
      145**In April
      2002, the Financial Accounting Standards Board (FASB) issued FAS 145,
      'Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement
      No. 13, and Technical
      Corrections'. The adoption of this accounting pronouncement has had no
      impact on the Group's financial position or results of operations.
      **FAS 146**In June 2002,
        the FASB issued FAS 146, 'Accounting for Costs Associated with Exit or
        Disposal Activities'. This standard addresses financial accounting and
        reporting for costs associated with exit or disposal activities and nullifies
        EITF 94-3, 'Liability Recognition for Certain Employee Termination Benefits
        and Other Costs to Exit an Activity (including Certain Costs Incurred
        in a Restructuring)'. FAS 146 requires that a liability for a cost associated
        with an exit or disposal activity be recognised when the liability is
        incurred rather than at the date of an entity's commitment to an exit
        plan. Costs covered by the standard include lease termination costs and
        certain employee severance costs that are associated with a restructuring,
        discontinued operation, or other exit or disposal activity. FAS 146 is
        to be applied prospectively to exit or disposal activities initiated
        after 31 December 2002. The Group is in the process of assessing the
        impact of adopting FAS 146.
      **FAS 148**In December
        2002, the FASB issued FAS 148, 'Accounting for Stock-Based Compensation  Transition
        and Disclosure'. This standard amends FAS 123, 'Accounting for Stock-Based
        Compensation', to provide alternative methods of transition for an entity
        that voluntarily changes to the fair value based method of accounting
        for stock-based employee compensation. It also amends the disclosure
        provisions of FAS 123 to require prominent disclosure about the effects
        on reported net income of an entity's accounting policy decisions with
        respect to stock-based employee compensation. Finally, FAS 148 amends
        APB Opinion No. 28, 'Interim Financial Reporting', to require disclosure
        about those effects in interim financial information. FAS 148 is effective
        for fiscal years beginning after 15 December 2002. This accounting pronouncement
        is not expected to have a significant impact on the Group's financial
        position or results of operations.
      **EITF 00-21**In January
        2003, the Emerging Issues Task Force (EITF) issued EITF 00-21, 'Accounting
        for Revenue Arrangements with Multiple Deliverables'. EITF 00-21 addresses
        the issues of how to determine whether an arrangement involving multiple
        deliverables contains more than one unit of accounting and how arrangement
        consideration should be measured and allocated to the separate units
        of accounting in the arrangement. EITF 00-21 does not change otherwise
        applicable revenue recognition criteria. EITF 00-21 is effective for
        revenue arrangements entered into in fiscal periods beginning after 15
        June 2003. The Group is in the process of assessing the impact of EITF
        00-21.
      **FIN 45**In November
        2002, the FASB issued FASB Interpretation No. 45 (FIN 45), 'Guarantor's
        Accounting and Disclosure Requirements for Guarantees, Including Indirect
        Guarantees of Indebtedness of Others'. FIN 45 requires a liability to
        be recognised at the time a company issues a guarantee for the fair value
        of the obligations assumed under certain guarantee agreements. The provisions
        for initial recognition and measurement of guarantee agreements are effective
        on a prospective basis for guarantees that are issued or modified after
        31 December 2002. The Group is in the process of assessing the impact
        of adopting FIN 45.
      **FIN 46******In January 2003,
          the FASB issued FIN 46,
          'Consolidation of Variable Interest Entities, an interpretation of
          Accounting Research Bulletin (ARB) 51'. FIN 46 addresses the consolidation
          of entities for which control is achieved through means other than
          through voting rights ('variable interest entities' or 'VIE') by clarifying
          the application of ARB No. 51, 'Consolidated Financial Statements'
          to certain entities in which equity investors do not have the characteristics
          of a controlling financial interest or do not have sufficient equity
          at risk for the entity to finance its activities without additional
          subordinated financial support from other parties. FIN 46 provides
          guidance on how to determine when and which business enterprise (the
          'primary beneficiary') should consolidate the VIE. In addition, FIN
          46 requires that both the primary beneficiary and all other enterprises
          with a significant variable interest in a VIE make additional disclosures.
      The disclosure provisions
          of FIN 46 are effective in all financial statements initially issued
          after 31 January 2003. FIN 46 is required to be immediately applied
          by all entities with a variable interest in a VIE created after 31
          January 2003. A public entity with a variable interest in a VIE created
          before 1 February 2003 is required to apply FIN 46 to that entity no
          later than the beginning of the first interim or annual reporting period
          beginning after 15 June 2003. This accounting pronouncement is not
          expected to have a significant impact on the Group's financial position
          or results of operations.

|           
|-----------
|           
| Page 71 

|INFORMATION FOR SHAREHOLDERS
|----------------------------

|MAJOR SHAREHOLDERS
|------------------

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                        |                                                
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------- | -----------------------------------------------
|**Ordinary
              shares**As
              of 24 February 2003, there were 1,393,466,707 ordinary shares outstanding,
              excluding 39,056,542 ordinary shares owned by two ESOTs (see note
              16).
              As at 24
                  February 2003, the company has received notice under section
                  198 of the Companies Act 1985, that the following parties hold
                  notifiable interests in its shares:                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Number
      of shares | Percentage 
      of issued
      share capital
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Brandes
              Investment Partners                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 175,536,601            | 12.25                                          
|Capital
              Group Companies, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 149,697,872            | 10.45                                          
|Franklin
              Templeton Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 89,109,769             | 6.22                                           
|Merrill
              Lynch Investment Managers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 48,978,642             | 3.42                                           
|Fidelity
              Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 43,716,730             | 3.05                                           
|Legal & General
              Investment Management                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 43,205,188             | 3.02                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|The
              company's major shareholders do not have any different voting rights
              from the other ordinary shareholders. The interest of Brandes Investment
              Partners has increased from 3.1% to 12.25% in the last 10 months
              and the interest of Capital Group Companies, Inc. has increased
              from 3.63% to 10.45% in the last three years. Franklin Templeton
              Investments first notified the company of a 3.1% holding on 28
              January 2003 and have since increased their holding to 6.22%.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                    
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------
|**The
                  Founders Share**Independence,
              integrity and freedom from bias in the gathering and dissemination
              of news and information is fundamental to the entire Reuters Group.
              Reuters Founders Share Company Limited (the Founders Share Company)
              was established to safeguard those qualities and holds a single
              Founders Share. This share may be used to outvote all ordinary
              shares if other safeguards fail and there is an attempt to effect
              a change in control of the company. 'Control', for this purpose,
              means 30% of the ordinary shares. The directors of the Founders
              Share Company have a duty to ensure, as far as they are able by
              the proper exercise of the powers vested in them, that the Reuters
              Trust Principles are observed (see page
              74). Similarly, Reuters
              directors are required by Reuters Articles to have due regard for
              the Trust Principles in so far as by the proper exercise of their
              powers as directors and in accordance with their other duties as
              directors those principles are capable of being observed by them.
              The Founders
                  Share Company's directors are nominated by a Nomination Committee
                  which includes certain serving directors of the Founders Share
                  Company, one person nominated by each of four news associations,
                  two people appointed by the Chairman of Reuters Group PLC and
                  two people appointed after consultation with the European Commission
                  on Human Rights. A director of the Founders Share Company may
                  not be a director or employee of Reuters Group.
              The current
                  directors of the Founders Share Company are as follows:
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Trustee
      since
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Leonard
                Berkowitz                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 1998               
|Mrs
              Anson GBM, CBE, JP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 2002               
|Sir
              Michael Checkland                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 1994               
|Dr
              Claude Cole CBE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 1984               
|Uffe
              Ellemann-Jensen                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 2001               
|Robert
              Erburu                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 1999               
|Pehr
              Gyllenhammar (Chairman)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 1997               
|Toyoo
              Gyohten                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 2000               
|Jacques
              de Champfeu KBE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 1999               
|John
              McArthur                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 2001               
|Sir
              Christopher Mallaby GC, MG, GCVO                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 1998               
|Mammen
              Matthew                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 2002               
|The
              Right Hon The Baroness Noakes DBE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 1998               
|Sir
              William Purves CBE, DSO                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 1998               
|Jaakko
              Rauramo                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 1999               
|Ernest
              Turnbull AO                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 1993               
|Dr
              Mark Wössner                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 2001               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| Page 72 Each
              Founders Share Company director is normally required to retire
              at the annual general meeting of the Founders Share Company following
              the fifth anniversary of his or her nomination or last renomination
              and will be eligible for renomination (unless he or she has reached
              the age of 75).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Related
            party transactions****General.** Related
      party transactions are principally with Radianz, Factiva, TSI and Instinet.
      During 2002 and in accordance with inter-company agreements, Radianz provided
      the Group with network services, totalling £284 million (see 'Material
      contracts' on page 77). Also during the year, Factiva provided picture
      archiving facilities and the internal use of its information product, Factiva.com,
      for a total cost of £19 million. Reuters Group provided both companies
      with technical and administrative support services of £126 million
      and £61 million respectively. In addition, Reuters Group purchased £5
      million of development services from TSI.
      Reuters has entered
          into arrangements with many of its subsidiaries and associates in the
          normal course of business on commercial terms.
      Reuters Group provided
          financial information services to many of the companies with which
          it shares a common director. These services totalled £11 million
          during 2002. It also purchased services totalling £36 million.
      Reuters owns the
          underlying TIB intellectual property and technology that was in existence
          at 31 December 1996 and that is incorporated into many of TSI's products.
          Reuters licenses this technology to TSI pursuant to a licence agreement.
          TSI owns all technology and related intellectual property rights independently
          developed by TSI since 1 January 1997, including enhancements and improvements
          to the licensed technology, which TSI itself licenses to Reuters pursuant
          to the licence agreement.
      All the above services
          were in the normal course of business and charged at commercial rates.
          Only in the case of the transactions with TSI, Radianz and Factiva,
          described above, were any of the amounts involved material to either
          party. These services are ongoing and continued at historical levels
          to the date of this report.
      Under the terms of
          the agreement with Dow Jones & Co. relating to the formation of
          the Factiva joint venture, Reuters agreed to invest US$20 million in
          cash in the venture over a period of five years. This element of the
          agreement is evidenced by an interest-free promissory note. At 31 December
          2002 the balance outstanding under the note was US$6 million.
      **Arrangements with
          Instinet.**The
          goals of the initiatives between Instinet and Reuters described below
          are to improve customers' investment and trading performance, increase
          transactional capabilities for Reuters customers and develop further
          operational efficiencies between the two companies.
      ***RGRS*****.** Under
          an agreement between Instinet and BTC, Instinet's customers gain the
          ability to submit orders to Instinet through the RGRS network. Instinet
          pays standard commercial rates for orders it receives through RGRS.
          The agreement subsists until 25 November 2003, subject to annual renewal
          thereafter. In addition, Reuters and Instinet have agreed to develop
          enhancements to the RGRS interface so that customers can better access
          Instinet's proprietary trading functionality. This agreement's initial
          term runs until 19 September 2004, subject to annual renewal thereafter,
          and is terminable by either party on a change of control of Instinet
          or if Reuters otherwise ceases to own a majority of Instinet's voting
          stock.
      ***Newport(sm)*****.**          Under
          an agreement with Instinet, Reuters exclusively provides
          the real-time market data for Instinet's (patent pending) NEWPORT(SM)
          programme trading application. The agreement term
          expires on
          19 September 2004, subject to annual renewal thereafter, and is terminable
          by either party on a change of control of Instinet or if Reuters otherwise
          ceases to own a majority of Instinet's voting stock.
      ***Market data*****.**          Under a data distribution agreement, Reuters has the limited right
          to be the exclusive data vendor distributing some of Instinet's proprietary
          equity securities data. Some of Instinet's information is already made
          available through various Reuters products and services.
      ***Preferred soft-dollar
            arrangement*****.** Under an agreement with Reuters, Instinet offers
            preferred commercial and soft-dollar arrangements to those of its
            customers that purchase Reuters products and services. Reuters compensates
            Instinet's sales personnel for new sales of Reuters products and
            services, and Instinet will pay Reuters an annual fee for various
            administrative and marketing services related to training of Instinet's
            personnel. The agreement subsists until 19 September 2004, subject
            to annual renewal thereafter, and is terminable by either party on
            a change of control of Instinet or if Reuters otherwise ceases to
            own a majority of Instinet's voting stock.
      ***Patent licensing
            agreement*****.** Reuters has granted Instinet a patent licence permitting
            Instinet to make, use and sell products that include a system with
            functionality that identifies counterparties to a transaction and
            enables communication between the counterparties to negotiate the
            terms of the transaction. This licence is for the life of the patent,
            although it may be terminated under customary conditions. In addition,
            Reuters has the right to terminate in the event that Instinet uses
            the patent to create products that compete with any of Reuters products.
            Reuters also has the right to terminate the licence generally if
            it ceases to own a majority of Instinet's voting stock, subject to
            Instinet retaining some rights to the patent for products existing
            on or before the date of such termination. Instinet has also agreed
            that if it obtains a patent for a system with substantially similar
            functionality, it would grant Reuters a licence to that patent on
            terms no worse than the terms of this licence.
      ***Bridge Trading
            commission sharing agreement*****.** Instinet has agreed to open accounts
            for some institutional clients that BTC introduces to Instinet, and
            to rebate BTC portions of the commissions these customers pay at
            a commercially reasonable rate. This agreement is terminable at will
            by either party.
      ***Triad*****.** Under
          an agreement with BTC, Instinet has the ability to deliver indications
          of interest and advertised trades to its customers and potential customers
          through the Triad network. Instinet pays standard commercial rates
          for indications of interest and advertised trades it delivers through
          Triad. The agreement has a one year term commencing on the date Triad
          is installed at Instinet, and is subject to annual renewal thereafter.
      ***Radianz*****.**          An officer and former director of Reuters, David Ure, participates
          in an all employee stock option plan operated by Radianz. Under the
          terms of the plan, options may be granted, at not less than fair market
          value, to directors and employees of Radianz. During 2001 the Board
          of Radianz approved a resolution to permit option holders to release
          options granted to them at US$6.81 per share in exchange for the granting
          of new options in 2002. During 2002 David Ure received a total of 2,350,571
          replacement options with a weighted average exercise price of US$2.03
          per share. None of these options are currently exercisable.
      For further information
          on related party transactions see note 29 in the financial statements.

|
|

|                                                                                                                                                        |  | 1Investment
                  trusts, unit trusts, mutual funds 30%2Pension
              funds 26%3ADSs
              12%4Foreign
              banks 7%5Insurance
              companies 5%6Private
              investors 3%7Non-profit
              organisations 2%8Corporate
              holdings 2%9Foreign
              governments 1%10Other/below
              analysis threshold (note 1) 12%
|------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note
              1: Includes all holdings below 100,000 shares, except for private
          investors, whose holdings are analysed below this level.

|                                                          |                                               |                                 
|--------------------------------------------------------- | --------------------------------------------- | --------------------------------
|                                                          | The
              London
      Stock Exchange | Nasdaq                          
|                                                         
|                                                          | Pounds
              per share                | US
              dollars per ADS
|                                                         
|                                                          | High                                          | Low                             
|                                                         
|**Annual
                market prices:**                 |                                               |                                 
|1998                                                      | 7.66                                          | 4.19                            
|1999                                                      | 10.10                                         | 5.17                            
|2000                                                      | 16.20                                         | 7.59                            
|2001                                                      | 11.58                                         | 5.26                            
|2002                                                      | 7.47                                          | 1.61                            
|                                                          |                                               |                                 
|**Quarterly
                market prices:
      2001**   |                                               |                                 
|First
              quarter                               | 11.58                                         | 7.70                            
|Second
              quarter                              | 10.94                                         | 7.70                            
|Third
              quarter                               | 9.25                                          | 5.26                            
|Fourth
              quarter                              | 8.15                                          | 5.68                            
|                                                          |                                               |                                 
|**2002**                                                  |                                               |                                 
|First
              quarter                               | 7.47                                          | 5.05                            
|Second
              quarter                              | 5.62                                          | 3.44                            
|Third
              quarter                               | 3.55                                          | 2.16                            
|Fourth
              quarter                              | 2.36                                          | 1.61                            
|                                                          |                                               |                                 
|**Monthly
                  market prices:
        2002** |                                               |                                 
|August                                                    | 3.03                                          | 2.33                            
|September                                                 | 2.84                                          | 2.16                            
|October                                                   | 2.88                                          | 1.61                            
|November                                                  | 2.35                                          | 1.85                            
|December                                                  | 2.36                                          | 1.77                            
|                                                          |                                               |                                 
|**2003**                                                  |                                               |                                 
|January                                                   | 2.04                                          | 1.69                            
|February
              (to 24 February)                   | 1.81                                          | 1.32                            
|                                                         

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Analysis
                  of shareholders**As
              of 24 February 2003 there were 1,393,466,707 Reuters ordinary shares
              in issue, excluding ordinary shares held by employee
              share ownership trusts. There were 33,245 shareholders on the ordinary
              share register, analysed as in the
              chart to the left.
              As of the
                  same date 843,479 ordinary shares and ADRs evidencing 28,340,603
                  ADSs (representing 170,043,618 ordinary shares) were held on
                  record in the US. These ordinary shares and ADRs were held
                  by 262 record holders and 2,145 record holders, respectively
                  and represented 0.06% or evidenced ADSs representing 12.2%,
                  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.

| Page 74 **Dividends**The table below sets forth the amounts of interim, final
            and total dividends (excluding any associated UK
            tax credit discussed
            on page 78) 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 actual rates of
            exchange used for each of the respective payments of interim and
            final dividends. The first section of the table shows the dividends
            paid as reported under UK GAAP. The second section of the table gives
            the amounts restated for the 1998 capital reorganisation and as reported
            under US GAAP.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Year
              ended 31 December                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|**Dividends
                in accordance with UK GAAP**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|1998                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|20021                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|**Dividends
                retroactively restated in accordance with US GAAP**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|19982                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|20021                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

|1                                                                                                                      | The final dividend
              in respect of 2002 is payable on 24 April 2003 to holders of ordinary
              shares on the register at 14 March 2003 and on 1 May 2003 to holders
              of ADSs on the register at 14 March 2003 and will be converted
              into US dollars from sterling at the rate prevailing on 1 May 2003.                                                       
|---------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                
|2                                                                                                                      | The 1998 interim
              dividend amount in accordance with US GAAP consists of the interim
              dividend of 3.40 pence per share (33.69 cents per ADS) paid in
              September 1998 and the amount recorded as a dividend under the
              terms of the capital reorganisation consummated on 18 February
              1998 of 104.62 pence per share (1,024.41 cents per ADS).
|                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                
|Future
              dividends will be aligned to the normalised earnings of Reuters
              excluding Instinet.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Memorandum
                  and Articles of Association**The following
              description summarises certain material rights of holders of the
              company's ordinary shares of 25 pence each and material provisions
              of the company's Memorandum and Articles of Association (the Articles),
              the Memorandum and Articles of Association of the Founders Share
              Company and English law. The following description is a summary
              only and is qualified in its entirety by reference to the Articles
              (which have been filed with the SEC and Companies House) and the
              Companies Act.
      All of the
                  outstanding ordinary shares are fully paid. Accordingly, no
                  further contribution of capital may be required by the company
                  from the holders of such shares.
              In this description,
                  the term 'holder' refers to the person registered in the register
                  of members as the holder of the relevant share and the term
                  'beneficial owner' refers to a person other than the holder
                  who has a beneficial interest in the relevant share. JPMorgan
                  Chase Bank, which acts as Depositary under the Deposit Agreement
                  relating to the ADSs is the holder of the ordinary shares represented
                  by the outstanding ADSs.

|                                                                                                                                                                                                                                                                                                                                
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**General**Reuters
            Group PLC is incorporated under that name and is registered in England
            and Wales with registered number 3296375. Its objects are set out
            in the fourth clause of its Memorandum of Association and cover a
            wide range of activities, including the following:
|                                                                                                                                                                                                                                                                                                                                
|•                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                
|•                                                                                                                                                                                                                                                                                                                               
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|•                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                
|•                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                
|The
              Memorandum of Association provides a broad range of corporate powers
              to effect these objectives.                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**The
                Reuters Trust Principles and the Founders Share Company**The Articles
            contain two sets of restrictions relating to the ownership of Reuters
            shares. These restrictions are intended to ensure continued compliance
            with the following principles (the Reuters Trust Principles) set
            out in the Articles:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|•                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|For
                the purposes of the Reuters Trust Principles, the Articles define
                the term Reuters to mean Reuters Group PLC and every subsidiary
                of it from time to time supplying news services.
              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
                  which require persons to disclose to public companies interests
                  in voting shares in excess of a prescribed percentage. Subject
                  to certain exceptions, all shares held by a person who reaches
                  the 15% limit will be disenfranchised and the shares exceeding
                  the 15% limit must be disposed of. This set of restrictions
                  is more fully described below under 'Rights and restrictions
                  attaching to the company's shares  Restrictions on ownership  Disenfranchisement
                  and disposal of excess interests'.
              Secondly,
                  the company's share capital includes the Founders Share, which
                  is held by the Founders Share Company, a company limited by
                  guarantee consisting of individuals, referred to as the Reuters
                  Trustees, Page 75 
                  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 Group. The rights
                    attaching to the Founders Share are described in more detail
                    below under 'Rights and restrictions attaching to the company's
                    shares  Voting rights  Rights conferred by Founders
                    Share'.
              The restrictions
                  on interests in ordinary shares and the extraordinary voting
                  rights of the Founders Share may be characterised as anti-takeover
                  provisions to the extent they may have the effect of preventing
                  a bid for control of Reuters Group. 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 restrictions
                  and extraordinary voting rights summarised in this section
                  may preclude such offers.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Directors**The company's Articles provide for a Board of Directors consisting
      of not fewer than five nor more than 15 directors. The Articles require
      that, in performing their duties, the directors have due regard for the
      Reuters 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.
      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.
      Under the Articles,
          a director may not vote in respect of any contract, arrangement or
          proposal in which the director, or any person connected with the director,
          has any material interest other than by virtue of the director's interests
          in securities of, or otherwise in or through, the company. This is
          subject to certain exceptions relating to proposals (a) giving the
          director any guarantee, security or indemnity in respect of obligations
          incurred at the request of or for the benefit of Reuters Group, (b)
          giving any guarantee, security or indemnity to a third party in respect
          of obligations of Reuters Group for which the director has assumed
          responsibility under an indemnity or guarantee, (c) relating to an
          offer of securities of Reuters Group in which the director may be entitled
          to participate or will be interested as an underwriter, (d) concerning
          any other company in which the director is beneficially interested
          in less than 1% of the issued shares of any class of the
          company or the voting rights available to its shareholders, (e) relating
          to the adoption, modification or operation of any employee benefits
          plan which will provide the director with the same benefits as other
          employees and (f) relating to any liability insurance that Reuters
          is empowered to purchase for its directors or employees in respect
          of actions undertaken as directors or officers of Reuters Group.
      The directors are
          empowered to exercise all the powers of the company to borrow money,
          subject to the limitation that the aggregate principal amount outstanding
          in respect of monies borrowed by the Reuters Group shall not exceed
          a sum equal to two and a half times the Group's share capital and aggregate
          reserves, calculated in the manner described in the Articles and £5,000
          million, unless sanctioned by an ordinary resolution of the company's
          shareholders.
      At each annual general
          meeting of the company's shareholders at least 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.
          The directors to retire by rotation at the annual general meeting include
          any director who is due to retire at the meeting by reason of age.
          A retiring director shall be eligible for re-election. For additional
          information seepage 10.
      A non-executive director
          is not required to hold shares in the company in order to qualify as
          a director. A director not holding any shares may attend and speak
          at general meetings of the company.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Rights
                    and restrictions attaching to the company's shares**Dividends****Holders of ordinary shares are entitled to participate
              in the payment of dividends pro rata to their holdings. The Founders
              Share is not entitled to participate in the payment of dividends.
              The Board may propose and pay interim dividends and recommend a
              final dividend, in respect of any accounting period out of the
              profits available for distribution under English law. A final dividend
              may be declared by the shareholders in general meeting by ordinary
              resolution, but no dividend may be declared in excess of the amount
              recommended by the Board.
            The company
                may allot ordinary shares in lieu of cash dividends, subject
                to shareholder approval at the time the relevant dividend is
                declared. In addition, the company may declare and pay equivalent
                dividends to shareholders outside the United Kingdom in local
                currencies and pay such dividends to the Depositary for value
                on the payment date.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Voting
            rights**Rights
      conferred by ordinary shares.**Voting at a general meeting
      of shareholders is by show of hands unless, before or on making known the
      result, a poll is demanded in accordance with the Articles. If voting is
      by show of hands, each holder of ordinary shares who is present in person
      has one vote. On a poll, every holder of ordinary shares who is present
      in person or by proxy has one vote for every ordinary share held.
      Holders of a substantial
          number of ordinary shares may be disenfranchised under the circumstances
          described under 'Restrictions on ownership' below.
      **Rights conferred
          by Founders Share.** The
          Founders Share confers upon the Founders Share Company the right to
          cast such number of votes as is necessary to defeat any resolution
          which would vary or abrogate the rights of the Founders Share. The
          Articles provide that the alteration of specified articles relating
          to the Founders Share and the Reuters Trust Principles are deemed to
          constitute a variation of the rights of the Founders Share. In addition,
          any resolution proposing the winding up of the company voluntarily,
          by the Court, or any reconstruction of the company, or any resolution
          which would attach to any share voting rights not identical in all
          respects with those of the ordinary shares, is deemed to be a variation
          of the rights of the Founders Share.
      Additionally, if
          there are, in the opinion of the Founders Share Company, reasonable
          grounds for believing that any person and his associates have obtained
          or are attempting to obtain, directly or indirectly, control of the
          company, the Founders Share Company is entitled in its absolute discretion
          to serve Reuters with a written notice (a Founders Share Control Notice)
          to that effect. Control is defined for these purposes as the ability
          to control the exercise of 30% or more of the votes which may be cast
          on a poll at a general meeting. At all times after the service of a
          Founders Share Control Notice and pending its rescission, the Founders
          Share confers upon the Founders Share Company the right to cast on
          a poll such number of votes as are necessary to ensure the effective
          passing of any resolution in favour of which it votes and to ensure
          the defeat of any resolution against which it votes. The Articles provide
          that the opinion of the Founders Share Company in respect of the service
          or rescission of a Founders Share Control Notice shall be final and
          binding and may not be challenged on any grounds whatsoever.
      The Founders Share
          Company is entitled at any time to serve the company with a written
          request for an extraordinary general meeting and the directors are
          obliged to comply with such request. If they do not comply, the Founders
          Share Company is entitled to convene an extraordinary general meeting.
          If a Founders Share Control Notice has been served, however, the Founders
          Share Company can convene an extraordinary general meeting without
          first requesting that the directors do so.
      One quarter of the
          Reuters Trustees present at the relevant Trustees' meeting can bind
          all the Founders Share Company directors to exercise the voting rights
          attaching to the Founders Share so as to defeat a resolution that would
          be deemed to be a variation of the rights attached to the Founders
      Share. However, the vote of a majority Page 76 
      of the Reuters Trustees
        (the chairman of the Founders Share Company having a casting vote in the
        event of equality of votes) is required to determine whether a Founders
        Share Control Notice should be served and, if so, the manner in which the
        voting rights attaching to the Founders Share shall be exercised (excluding
        the vote of any Reuters Trustee who is associated with or materially financially
        interested in the person attempting to obtain control of the company).

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Restrictions
            on ownership**Ordinary
      shares.** Under the Articles, a person is 'interested'
      in shares if, among other things, he is interested directly, or through
      his family or one or more companies, or through an interest in association
      with others pursuant to an agreement or understanding, or through a trust
      or if he controls the voting rights of others. The definition of 'interest
      in shares' in the Articles is made by reference, with specified variations,
      to certain provisions of the Companies Act.
      **Disclosure of interests
          in ordinary shares.**The
          Articles provide for the disclosure of interests in the company's ordinary
          shares by reference to the Companies Act provisions mentioned above,
          with specified variations. Under these provisions as currently in force,
          if a person acquires an 'interest' (as defined therein, in a manner
          similar but not identical to the definition under the Articles) in
          voting shares of a public company amounting to 10% or more of the voting
          shares of any class, or if he increases or reduces such holding by
          at least 1% or if he ceases to have such holding, he is obliged to
          notify the company within two days of the day on which he acquired
          10% or any such change in his interest took place. Further, if his
          interest is a 'material interest' (defined as meaning all interests
          in shares subject to certain exceptions, including for interests arising
          by virtue of certain investment management arrangements) the 10% referred
          to above is reduced to 3%.
      The Articles provide
          for disenfranchisement of shares which are the subject of a notice
          under section 212 of the Companies Act (which allows a company to require
          disclosure of certain details concerning ownership of its shares) if
          the person served with the notice is in default in answering it. The
          Articles also provide for the imposition of restrictions on transferability
          of the shares concerned and on the right to receive dividends if such
          shares represent at least 0.25% of the class concerned. Such restrictions
          cannot, however, be imposed until the expiry of 14 days. Any such restrictions
          cease if the shares concerned are sold pursuant to a takeover offer
          or to an unconnected third party or through the London Stock Exchange.
          The restrictions on transferability only apply to certificated shares.
          Where a holder of uncertificated shares is in default in answering
          a section 212 notice, the Articles provide that the Founders Share
          Company may require the Group's directors to apply to the Court for
          such order as may be appropriate.
      **Disenfranchisement
          and disposal of excess interests.** Subject
          to certain exceptions described below, certain restrictions apply to
          persons that become 'interested' (as defined in the Articles) in 15%
          or more of the company's ordinary shares. If any person becomes interested
          in 15% or more of the company's outstanding shares (the Relevant Shares),
          the directors are required to serve a Restriction Notice on that person,
          on any other person known to the directors to have an interest in the
          Relevant Shares and, if different, on the registered holder of the
          Relevant Shares. While a Restriction Notice in respect of Relevant
          Shares is in force, a registered holder of the Relevant Shares is not
          entitled to attend or vote, either in person or by proxy, at any general
          meeting or at any meeting of the holders of any class of Reuters shares.
          In addition, a Restriction Notice will require such person to dispose
          of any Relevant Shares exceeding the 15% limit and supply evidence
          that such disposal has occurred within 21 days or such longer period
          as the directors consider reasonable. If such disposition is not made
          within the specified period, the directors must as far as they are
          able, dispose of any shares exceeding the 15% limit. Under the Articles,
          any belief, resolution, decision or action of the directors held, made
          or taken pursuant to any of the provisions concerning restrictions
          on ownership shall be conclusive, final and binding on all persons
          concerned and may not be challenged on any grounds whatsoever.
      The restrictions
          are subject to certain modifications where a person becomes interested
          in 15% or more of the issued shares of any class by reason of a rights
          issue or an underwriting in the ordinary course of its business.
      **The Founders Share.** Ownership
          of the Founders Share is restricted to the Founders Share Company.
          Under its Memorandum of Association, the Founders Share Company is
          not permitted, directly or indirectly, to dispose of the Founders Share
          or of any interest therein, or to grant any rights in respect of the
          Founders Share or any interest therein.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Pre-emptive
            rights, new issues of shares and repurchase of sharesHolders of ordinary shares have no pre-emptive rights under the
      Articles. However, the ability of the directors to cause Reuters to issue
      shares, securities convertible into shares or rights to shares, otherwise
      than pursuant to an employee share scheme, is restricted.
      Under the Companies
          Act, the directors are, with certain exceptions, unable to allot any
          equity securities without express authorisation, which may be contained
          in the Articles or given by its shareholders in general meeting, but
          which in either event cannot last for more than five years. The Companies
          Act imposes further restrictions on the issue of equity securities
          for cash other than issue by way of rights to existing shareholders
          unless the statutory requirement is displaced or modified by the shareholders
          in general meeting or under the company's Articles.
      At the company's
          annual general meeting to be held on 17 April 2003, a resolution will
          be proposed to authorise the directors to allot relevant securities,
          as defined in the Companies Act, including any equity securities, up
          to an aggregate nominal amount of £135,889,452 until the earlier
          to occur of the annual general meeting in 2004 or 16 July 2004. The
          resolution will also authorise equity securities, as defined in the
          Companies Act, to be issued within this limit by way of a rights offer,
          or otherwise pro rata to existing shareholders, but other issues of
          equity securities, except for shares issued pursuant to employee share
          schemes, will be limited to an aggregate of £17,906,540 in nominal
          value.
      Subject to applicable
          provisions of English law, the company may purchase its ordinary shares.
          Currently, it has general authority to repurchase up to 143,206,517
          ordinary shares at prices ranging from 25 pence to 5% above the average
          of the middle market quotations taken from the Daily Official List
          of the London Stock Exchange for the five business days before the
          purchase is made. At the annual general meeting on 17 April 2003, a
          resolution will be proposed to increase this authority to 143,252,325
          ordinary shares.

|                                                                                                                                                                                                                                                                                                                                                                                                                        
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Rights in
          a winding upIf Reuters
    Group PLC is wound up, the liquidator may, with the authority of an extraordinary
    resolution, divide among the holders of ordinary shares and the Founders
    Share, pro rata to their holdings, the company's assets (after satisfaction
    of liabilities to creditors), provided, however, that the Founders Share
    Company may receive
up to £1 and no more.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Variation
            of rights and alteration of share capitalIf, at any time, the company's share capital is divided into different
      classes of shares, the rights attached to any class may be varied, subject
      to the provisions of the Companies Act, with the consent in writing of
      holders of three-quarters in value of the shares of that class or upon
      the adoption of an extraordinary resolution passed at a separate meeting
      of the holders of the shares of the class. At every such separate meeting,
      all of the provisions of the Articles relating to proceedings at a general
      meeting apply, except that the quorum is to be the number of persons (which
      must be two or more) who hold or represent by proxy not less than one-third
      in nominal value of the issued shares of the class.
      The company can increase
          its share capital by ordinary resolution in conformity with the provisions
          of the Companies Act. However, new shares cannot have voting rights,
          which are not identical to those of ordinary shares without the prior
          written consent of the Founders Share Company. Furthermore, the company
          may issue shares with preferred and other special rights or restrictions,
          provided that the prior written consent of the Founders Share Company
          has been sought for issuing any shares with rights not identical to
          those of ordinary shares. The company can consolidate, divide and cancel
          any of its shares (other than the Founders Share) by extraordinary
          resolution and can reduce its share capital (other than the Founders
          Share).

| Page 77 Annual general
          meetings
and extraordinary general meetingsAnnual general meetings must be convened upon advance written notice
    of 21 days. An extraordinary general meeting must be convened upon advance
    written notice of 21 days for the passing of a special resolution and 14
    days for any other resolution, depending on the nature of the business to
    be transacted. The notice must specify the nature of the business to be transacted
    if it is other than routine business or if an extraordinary or a special
    resolution is proposed. The notice may also specify a time, not more than
    48 hours prior to the time fixed for the meeting, by which a person must
    be entered on the company's register in order to have the right to attend
    and vote at the meeting.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                                                                                                                                                                                                                                                           
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Limitations
          on voting and shareholdingThere are no limitations imposed by English law or the company's
    Articles on the right of non-residents or foreign persons to hold or vote
    ordinary shares or ADSs, other than the limitations that would generally
    apply to all of the company's shareholders.

|MATERIAL CONTRACTS
|------------------

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Instinet/Island
            merger agreement**In June 2002 Instinet entered into a merger agreement with Island
      ECN. The agreement provided for Instinet to acquire Island ECN for an aggregate
      of approximately 86 million shares of, and options and warrants to acquire
      shares of, Instinet common stock. The agreement also contemplated the payment
      of a US$1.00 per share dividend by Instinet to its stockholders prior to
      the completion of the merger. In connection with the merger agreement,
      Reuters entered into various stockholder and corporate agreements with
      Instinet and certain stockholders of Island providing for, among other
      things, director nomination rights and voting, restrictions on purchases,
      sales and issuances of Instinet shares, approval rights regarding certain
      transactions, and registration rights. Pursuant to these provisions, Reuters
      is restricted from transferring its Instinet shares until September 2003,
      and, with certain exceptions, is limited in acquiring additional shares
      of Instinet without the consent of Instinet's Board until September 2005,
      subject to earlier termination in some circumstances.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Bridge acquisition
          agreement**In 2001 Reuters
    entered into an asset purchase agreement with Bridge Information Systems,
    Inc. and certain of its subsidiaries, many of whom were, together with Bridge
    Information Systems, Inc., in bankruptcy proceedings under the US Bankruptcy
    Code. The agreement provided for the purchase of certain assets and businesses
    from Bridge for cash consideration of approximately £190 million plus
    the payment of certain liabilities related to contracts to be transferred
    to Reuters. Under the agreement, Reuters agreed to pay Bridge up to £7
    million a month from 1 July 2001 until closing (which occurred in September
    2001), and also to provide financing in the form of convertible debt to Bridge's
    network provider, Savvis, of up to an average of £5 million a month
    from May 2001 through to closing.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Savvis network
          services agreement**In connection
    with the Bridge acquisition Reuters entered into a binding term sheet with
    Savvis, Bridge's network service provider, under
    which Savvis agreed to provide internet protocol network services, internet
    access and co-location services (the Services) necessary to continue network
    services for the Bridge business and customers Reuters was acquiring. The
    term sheet was formalised by an agreement entered into by the parties in
    September 2001. The agreement, which has a five-year term, requires Reuters
    to purchase a minimum of £67 million worth of Services in the first
    year of the agreement, £63 million worth of Services in the second year, £59
    million worth of Services in the third year and £34 million worth of
    Services in the fourth and fifth years, subject to adjustment and reduction
    under certain circumstances. In accordance with the terms of the agreement,
    the minimum purchase amounts will be reduced by approximately £38 million
    (applied to later year minimums first), representing the amount of payments
    made by Bridge to Savvis for Services while the Bridge acquisition was pending.
    If Savvis does not meet certain required quality of service levels, Reuters
    is entitled to credits and, in the event of a material breach of such quality
    of service levels, Reuters is entitled to terminate the agreement.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Radianz  joint
            venture with Equant**In 2000 Reuters
      established with Equant a joint venture company (Radianz) to offer secure
      internet protocol network services to the financial services industry.
      Reuters has transferred substantially all of its telecommunications network
      assets into Radianz and now owns 51% of Radianz. To secure the long-term
      availability of the Radianz network, Reuters entered into a Network Services
      Agreement (the NSA) with Radianz in May 2000. The NSA has an initial term
      ending on 1 July 2005 and thereafter remains in full force and effect for
      successive one-year periods unless terminated by either party. Among other
      things, either party may terminate the NSA after the end of the initial
      term by one party giving not less than six months' notice which expires
      at the end of the initial five-year period or any subsequent renewal year.
      On termination, Radianz has agreed to provide reasonable assistance to
      Reuters to ensure that Reuters can migrate the services from Radianz to
      a third-party company.
      The standards for
          performance of services provided have been agreed between Reuters and
          Radianz. In addition, the NSA sets out the processes and procedures
          for managing the contract going forward. In particular the NSA sets
          out details for monthly performance reviews to review capacity service
          levels, operational changes and orders, introduction of new services
          and ongoing requirements by Reuters. There is also provision for quarterly
          meetings to discuss the contract and its operation and technical matters
          relating to the business continuity plans.
      Reuters has generally
          agreed to continue to use Radianz for its network services in support
          of global and strategic products during the term of the agreement.
          Detailed provisions in respect of rates and charges have been agreed
          between Radianz and Reuters which are believed to be competitive with
          the cost of reasonably comparable services. Radianz has agreed that
          it shall provide the network services to Reuters on terms which are
          no less favourable than reasonably comparable services offered to any
          other customer of Radianz, and Reuters has agreed to spend an agreed
          amount with Radianz annually.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Multex**The company,
    one of its wholly owned subsidiaries and Multex.com, Inc. have entered into
    a merger agreement providing for the acquisition by
    Reuters of all of the outstanding equity of Multex at US$7.35 per share.
    The agreement provides for the company's subsidiary to make a tender offer
    under the United States securities laws for all outstanding shares of Multex.
    The tender offer commenced on 26 February 2003, and its expiration date is
    25 March 2003, subject to extension in certain circumstances. Pursuant to
    the agreement, the tender offer is subject to a number of customary conditions,
    including receipt of standard regulatory approvals, and the tender of sufficient
    shares for Reuters to obtain at least a majority of Multex's fully diluted
    shares when added to the 6% interest it already holds. Multex's Chief Executive
    Officer and members of its senior management, who collectively hold approximately
    3.7% of Multex's shares not including options, have committed to support
    the deal by entering into a tender and voting agreement with the company
    obligating them to tender their shares, subject to certain exceptions. Subject
    to its completion, the tender offer will be followed by a merger in which
    all remaining Multex shareholders will receive the same per share price (subject
    to appraisal rights to the extent properly exercised) and Multex will become
    an indirect wholly-owned subsidiary of the company. The agreement provides
    for customary termination rights for the company and Multex and the payment
    by Multex of a US$5.5 million fee to the company if the agreement is terminated
    under certain circumstances. Under the merger agreement, certain of Multex's
    outstanding employee options with an exercise price less than the US$7.35
    per share acquisition price and which are scheduled to vest through 2004
    will be cancelled upon completion of the merger and holders of the options
    will instead be entitled to receive, on the date that their options would
    have vested, ordinary shares of the company with a value, calculated as of
    the date of the merger, equal to the difference between the acquisition price
    and the exercise price of the options (which difference amounts to approximately
    US$9 million (£6 million) in the aggregate). If the value of the ordinary
    shares has declined between the date of the merger and the date received
    by the applicable employees, the shortfall will be paid to the applicable
    employees by Reuters in cash. The net cash cost to Reuters of acquiring the
    Multex shares, other than the 6% interest already held by
    Reuters, is expected Page 78 
    to be approximately
          US$195 million (£121 million)
      on a fully diluted basis, net of exercise prices of all outstanding options
      and warrants with an exercise price below the acquisition price including the options
            described above, and after taking account of estimated transaction
            costs and cash estimated to become available to Reuters as a result
            of the acquisition (based on cash balances as of 31 December 2002).
      For a more detailed
          summary of the merger agreement, the Multex acquisition, and related
          matters, see the Offer to Purchase included as an exhibit to the Tender
          Offer Statement on Schedule TO filed by the company with the SEC on
          26 February 2003, and amendments thereto.

|INFORMATION FOR US SHAREHOLDERS
|-------------------------------

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Exchange
            control**Under English
      law and the 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.
      There are currently
          no UK foreign exchange control restrictions on remittances of dividends
          to non-resident holders of ordinary shares or on the conduct of Reuters
          operations.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Exchange
                rates**The
            following table sets forth, for the periods indicated, the average
            or the high and low Noon Buying Rates for pounds sterling
            in US dollars per £1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Fiscal
              year ended
      31 December                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|1998                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2003
      (to 24 February)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Month                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|August
              2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|September
              2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|October
              2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|November
              2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|December
              2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|January
              2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|February
              2003
      (to 24 February)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|*The
                average exchange rates have been calculated using the Noon Buying
                Rates on the last trading day of each calendar month during the
                period.
              On 24 February
                  2003 the Noon Buying Rate was US$1.59 per £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 and represented
                  by the ADSs. Also, fluctuations in the exchange rate may affect
                  the relative market prices of the ADSs in the US and the ordinary
                  shares in the UK.
              For the effect
                  on the Group's 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 Group, see operating
                  and financial review on page 32.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Taxation
            information for US shareholders**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 a decision to acquire the company's
      ordinary shares or ADRs. The following summaries of UK and US tax laws
      are based on current tax laws, current UK Inland Revenue published practice
      and the terms of the UK/US double tax treaty currently in effect (the Treaty)
      and the New Treaty (as defined below), as appropriate, all of which are
      subject to change at any time, possibly with retrospective effect.

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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------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|**1. UK taxation
            consequences** UK
        taxation of dividends  refund
        of tax creditsUnder current UK taxation legislation, no withholding tax will
        be deducted from dividends paid by the company. A shareholder that is
        a company resident for tax purposes in the UK will not generally be taxable
        on any dividend it receives from Reuters.
      A shareholder who
          is an individual resident for tax purposes in the UK is entitled to
          a tax credit on cash dividends paid by the company on ordinary shares
          equal to one-ninth of the cash dividend or 10% of the dividend plus
          the tax credit. Such shareholder will be taxable on the total of the
          dividend and the related tax credit, which will be regarded as the
          top slice of the shareholder's income. The tax credit may be set off
          against a UK resident individual shareholder's total income tax liability,
          but no cash refund will be available, save that where ordinary shares
          are held in Personal Equity Plans and Individual Savings Accounts,
          the tax credit on dividends received into such accounts before 6 April
          2004 will generally be repayable.
      Under the Treaty,
          a US holder (as defined under 'US taxation consequences') is entitled,
          in principle, to receive a payment from the UK Inland Revenue in respect
          of a dividend from the company in an amount equal to the tax credit
          to which a UK resident individual is generally entitled in respect
          of the dividend. However, the entitlement is subject to a deduction
          withheld under the Treaty. In this case, the amount of such deduction
          will be equal to the tax credit amount i.e., one-ninth of the dividend
          received. As a result, a US holder will not receive any payment from
          the UK Inland Revenue in respect of a dividend from the company but
          will have no further UK tax to pay in respect of that dividend either.
      Special rules apply
          for the purposes of determining the tax credit available to a US corporation
          which, either alone or together with one or more associated corporations,
          controls, directly or indirectly, 10% or more of the company's voting
          stock.
      The UK and US in
          2001 entered into a new tax treaty (the New Treaty) which has now been
          ratified by the UK Parliament and is awaiting ratification by the US
          Senate before its provisions come into force. It is not known precisely
          when these procedures will be completed, but it is expected to be some
          time in 2003. Once the New Treaty comes into force, US holders will
          have no entitlement to claim any tax credit from the UK Inland Revenue
          in respect of dividends as described above. There will be no further
          UK tax to pay in respect of cash dividends received from the company.
          See 'US taxation consequences  US taxation of dividends'.
      UK taxation
            of capital gainsThe
        following categories of US persons may be liable for both UK and US tax
        in respect of a gain on the disposal of ordinary shares or ADRs: (i)
        US citizens resident or 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
        or, in respect of corporations for accounting periods beginning on or
        after 1 January 2003, through a permanent establishment and which have
        used, held or acquired the ordinary shares or ADRs for the purposes of
        such trade, profession or vocation of such branch or agency or permanent
        establishment. However, subject to applicable limitations and provisions
        of the Treaty, 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.
      Under the New Treaty,
          capital gains on disposals of ordinary shares or ADRs will generally
          be subject to tax only in the jurisdiction of residence of the relevant
          holder as determined under both the laws of the UK and the US and as
          required by the terms of the New Treaty.
      The New Treaty also
          contains an anti-avoidance rule which will be relevant to individuals
          who are residents of either the UK or the US and who have been resident
          of the other jurisdiction (the US or the UK, as the case may be) at
          any time during the six years immediately preceding the relevant disposal
          of shares or ADRs. The New Treaty Page 79 
      provides that, in
          such circumstances, capital gains arising from the disposal may be
          subject to tax not only
            in the jurisdiction of which the holder is resident at the time of
            the disposal, but also in that other jurisdiction.
      UK inheritance
            taxAn 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 that convention, generally will not be subject to UK
      inheritance tax in respect of ordinary shares or ADRs on the individual's
      death, or on a transfer of 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 any
      tax paid in the UK to be credited against tax liable to be paid in the
      US, or for tax paid in the US to be credited against the tax payable in
      the UK, based on priority rules set out in the convention.
      UK stamp
            duty and stamp duty reserve taxNo UK stamp duty or interest thereon need be paid on the transfer
        of an ADR, or written agreement to transfer an ADR, provided that the
        instrument of transfer, or written agreement, 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.
      UK stamp duty will
          generally be charged on conveyances or transfers of ordinary shares,
          at the rate of 0.5% of the amount or value of the consideration, if
          any, for the transfer (rounded up to the next multiple of £5).
      SDRT will be imposed,
          at the rate of 0.5% of the amount or value of the consideration for
          the transfer, if an agreement is made for the transfer of ordinary
          shares, unless an instrument of transfer of the ordinary shares in
          favour of the purchaser, or its nominee, is executed and duly stamped
          within six years of the day that the agreement is made (or, in a case
          where the agreement is conditional, the day that the condition is satisfied)
          in which case, any SDRT paid will be repaid (together with interest
          where the SDRT is not less than £25) on a claim for repayment
          or, to the extent not paid, the charge to SDRT will be cancelled. 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.
      UK stamp duty or
          SDRT will generally be imposed on any instrument transferring ordinary
          shares to a person, or to a nominee or agent for such a person, whose
          business is or includes issuing depositary receipts (such as the ADRs)
          for relevant securities. In these circumstances, stamp duty or SDRT
          will be charged at the rate of approximately 1.5% of the amount or
          value of the consideration for conveyance or transfer on sale or, otherwise,
          1.5% of the value of the security transferred at the date the instrument
          is executed.
      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 stamp duty as a 'conveyance or transfer on sale' because
          it completes a sale of such ordinary shares, will be liable toad
          valoremstamp
          duty, at the rate of 0.5% of the amount or value 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 or transfer on sale', but will
          be liable to a fixed stamp duty of £5.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**2. US taxation
            consequences**The following is a summary of the material US federal income tax
      consequences of the ownership of ordinary shares or ADRs by a US holder
      that holds the ordinary shares or ADRs as capital assets and does not take
      into account the specific circumstances of any particular investors, some
      of which may be subject to special rules. In addition, the summary is based
      in part upon the representations of the Depositary and the assumption that
      each obligation in the Deposit Agreement and any related agreement will
      be performed in accordance with its terms.
      For the purposes
          of this discussion, a 'US holder' is any beneficial owner of ordinary
          shares or ADRs that is (i) a citizen or resident for tax purposes of
          the US, (ii) a corporation organised under the laws of the US or any
          US State, (iii) an estate the income of which is subject to US federal
          income tax without regard to its source, or (iv) a trust if a court
          within the US is able to exercise primary supervision over the administration
          of the trust and one or more US persons have the authority to control
          all substantial decisions of the trust.
      US taxation
            of dividendsThe dividend paid by the company generally will be included
        in the gross income of a US holder as ordinary income for US federal
        income tax purposes. The amount of dividend includable in income of a
        US holder includes any UK tax withheld from the dividend payment and
        amounts in respect of the UK tax credit. Such dividend will not be eligible
        for the dividends-received deduction generally allowed to US corporations
        with respect to dividends from other US corporations. The amount of the
        dividend distribution includable in income of a US holder will be the
        US dollar value of the pound sterling payments made, determined at the
        spot pound sterling/US dollar rate on the date such dividend distribution
        is includable in the income of the US holder, regardless of whether the
        payment is in fact converted into US dollars.
      The UK withholding
          tax will be eligible, subject to generally applicable limitations,
          for credit against the US holder's US federal income tax, assuming
          such holder is eligible for the benefits of the Treaty and elects to
          have the Treaty apply to such dividends. Subject to certain limitations,
          for foreign tax credit limitation purposes, the dividend will be income
          from sources outside the US, but generally will be treated separately,
          together with other items of 'passive income' (or, in the case of certain
          holders, 'financial services income'). In general, in the case of eligible
          US holders, subject to certain limitations, the UK withholding tax
          as determined by the Treaty (i.e., an amount equal to one-ninth of
          the cash dividend) will be treated as a foreign income tax that is
          eligible for credit against the US holder's federal income tax. To
          qualify for such credit, US holders must make an election on Form 8833
          (Treaty-Based Return Position Disclosure), which must be filed with
          their tax return, in addition to any other filings that may be required.
          US holders should consult their tax advisers as to the application
          of the foreign tax credit rules and their eligibility for Treaty benefits
          in their own circumstances.
      If the New Treaty
          is ratified, US holders will not be entitled to a UK tax credit and
          accordingly there will be no imposition of UK withholding tax and no
          associated US foreign tax credit. The New Treaty will generally be
          effective, in respect of taxes withheld at source, for amounts paid
          or credited on or after the first day of the second month after the
          New Treaty is ratified. Other provisions of the New Treaty will take
          effect on the first of January next following the date of ratification.
          If the New Treaty is ratified, the rules of the Treaty will remain
          in effect until the effective dates described above. However, a US
          holder will be entitled to elect to have the Treaty apply in its entirety
          for a period of 12 months after the effective dates of the New
          Treaty.
      US taxation
            of capital gainsUpon a sale or other disposition of ordinary shares or ADRs,
        a US holder will recognise a gain or loss for US federal income tax purposes
        in an amount equal to the difference between the US dollar value of the
        amount realised and the US holder's tax basis (determined in US dollars)
        in such ordinary shares or ADRs. Generally, such gain or loss will be
        capital gain or loss and will be long-term capital gain or loss if the
        US holder's holding period for such ordinary shares or ADRs exceeds one
        year. Any such gain or loss generally will be income or loss from sources
        within the US for foreign tax credit limitation purposes. Long-term capital
        gain of a non-corporate US holder is generally subject to a maximum tax
        rate of 20%.

|           
|-----------
|           
| Page 80 

|SUMMARY OF 2002 AND 2001 REVENUE BY QUARTER
|-------------------------------------------

|£m                                     |         |         |         | 2002    |         |         |         | 2001     
|-------------------------------------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ---------
|                                      
|**Revenue**                            | **Q1**  | **Q2**  | **Q3**  | **Q4**  | **Q1**  | **Q2**  | **Q3**  | **Q4**   
|                                      
|Recurring                              | 258     | 255     | 247     | 240     | 267     | 259     | 258     | 256      
|Outright                               | 16      | 20      | 11      | 33      | 10      | 19      | 21      | 46       
|Usage                                  | 14      | 14      | 13      | 13      | 13      | 14      | 13      | 12       
|                                      
|**Treasury**                           | **288** | **289** | **271** | **286** | **290** | **292** | **292** | **314**  
|                                      
|Recurring                              | 188     | 191     | 172     | 175     | 173     | 178     | 166     | 202      
|Outright                               | 8       | 13      | 10      | 18      | 15      | 15      | 19      | 23       
|Usage                                  | 17      | 17      | 14      | 11      | 1       | 1       | 1       | 21       
|                                      
|**Investment
                Banking** | **213** | **221** | **196** | **204** | **189** | **194** | **186** | **246**  
|                                      
|Recurring                              | 174     | 178     | 161     | 161     | 151     | 157     | 159     | 181      
|Outright                               | 4       | 9       | 9       | 10      | 9       | 9       | 10      | 12       
|Usage                                  | 1       | 1       | 1       |        |        |        |        | 1        
|                                      
|**Asset
                Management**   | **179** | **188** | **171** | **171** | **160** | **166** | **169** | **194**  
|                                      
|Recurring                              | 81      | 80      | 74      | 72      | 80      | 84      | 86      | 78       
|Outright                               |        | 1       | 1       |        | 2       | 1       |        | 4        
|Usage                                  | 1       | 1       | 3       | 1       | 2       | 3       | 3       | 7        
|                                      
|**Corporates & Media**                 | **82**  | **82**  | **78**  | **73**  | **84**  | **88**  | **89**  | **89**   
|                                      
|**Reuters**                            | **762** | **780** | **716** | **734** | **723** | **740** | **736** | **843**  
|US                                     | 118     | 115     | 110     | 126     | 198     | 190     | 150     | 145      
|International                          | 35      | 33      | 31      | 24      | 52      | 42      | 38      | 39       
|                                      
|**Instinet**                           | **153** | **148** | **141** | **150** | **250** | **232** | **188** | **184**  
|Intra-group                            | (3)     | (2)     | (2)     | (2)     | (3)     | (2)     | (4)     | (2)      
|                                      
|**Total
                revenue**      | **912** | **926** | **855** | **882** | **970** | **970** | **920** | **1,025**
|                                      

|           
|-----------
|           
| Page 81 

|ELEVEN YEAR CONSOLIDATED FINANCIAL SUMMARY
|------------------------------------------

|For
              the year ended 31 December                      | **2002
£m** | 2001
£m | 2000
£m | 1999
£m | 1998
£m | 1997
£m | 1996
£m | 1995
£m | 1994
£m | 1993
£m | 1992
£m
|----------------------------------------------------------------- | ----------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | -------
|                                                                 
|**Results**                                                       | ****        |         |         |         |         |         |         |         |         |         |        
|Revenue                                                           | **3,575**   | 3,885   | 3,592   | 3,125   | 3,032   | 2,882   | 2,914   | 2,703   | 2,309   | 1,874   | 1,568  
|Net
              interest(payable)/receivable                    | **(20)**    | (9)     | 3       | (4)     | 2       | 80      | 61      | 60      | 51      | 60      | 66     
|(Loss)/profit
              before tax                            | **(493)**   | 158     | 657     | 632     | 580     | 626     | 652     | 558     | 510     | 440     | 383    
|Taxation                                                          | **23**      | 107     | 136     | 196     | 196     | 236     | 210     | 185     | 162     | 140     | 123    
|(Loss)/profit
              attributable to ordinary shareholders | **(404)**   | 46      | 521     | 436     | 384     | 390     | 442     | 373     | 347     | 299     | 236    
|**Net
                asset**                                     |             |         |         |         |         |         |         |         |         |         |        
|Fixed
              assets                                        | **1,516**   | 1,963   | 1,868   | 1,205   | 1,098   | 1,046   | 1,026   | 999     | 687     | 571     | 499    
|Net
              current (liabilities)/assets                    | **(190)**   | (134)   | (293)   | (170)   | (577)   | 790     | 525     | 387     | 176     | 151     | 419    
|Long-term
              creditors                                 | **(354)**   | (344)   | (310)   | (284)   | (16)    | (37)    | (41)    | (135)   | (87)    | (32)    | (26)   
|Provisions                                                        | **(245)**   | (212)   | (112)   | (88)    | (116)   | (120)   | (51)    | (39)    | (36)    | (32)    | (23)   
|                                                                 
|                                                                  | **727**     | 1,273   | 1,153   | 663     | 389     | 1,679   | 1,459   | 1,212   | 740     | 658     | 869    
|                                                                 
|Tangible
              fixed assets                               |             |         |         |         |         |         |         |         |         |         |        
|Additions                                                         | **154**     | 276     | 282     | 244     | 296     | 361     | 372     | 304     | 319     | 268     | 199    
|Depreciation                                                      | **227**     | 246     | 276     | 310     | 331     | 312     | 283     | 250     | 221     | 204     | 186    
|                                                                  |             |         |         |         |         |         |         |         |         |         |        
|Development
              expenditure                             | **200**     | 294     | 323     | 197     | 200     | 235     | 202     | 191     | 159     | 110     | 79     
|                                                                  |             |         |         |         |         |         |         |         |         |         |        
|Free
                cash flow                                    | **40**      | 443     | 434     | 402     | 490     | 449     | 494     | 455     | 321     | 224     | 276    
|                                                                  |             |         |         |         |         |         |         |         |         |         |        
|                                                                  | **2002**    | 2001    | 2000    | 1999    | 1998    | 1997    | 1996    | 1995    | 1994    | 1993    | 1992   
|                                                                 
|**Ratios**                                                        |             |         |         |         |         |         |         |         |         |         |        
|(Loss)/earnings
              per ordinary share                  | **(29.0p)** | 3.3p    | 37.1p   | 30.9p   | 26.7p   | 24.0p   | 27.3p   | 23.2p   | 21.7p   | 18.0p   | 14.0p  
|Dividends
              per ordinary share                        | **10.0p**   | 10.0p   | 16.0p   | 14.65p  | 14.4p   | 13.0p   | 11.75p  | 9.8p    | 8.0p    | 6.5p    | 5.3p   
|Cash
              flow per ordinary share1                       | **3.8p**    | 35.5p   | 71.5p   | 71.6p   | 68.3p   | 61.0p   | 60.7p   | 52.7p   | 45.6p   | 40.3p   | 33.6p  
|Book
              value per ordinary share2                      | **30.7p**   | 68.2p   | 73.7p   | 40.5p   | 23.3p   | 99.9p   | 88.3p   | 73.7p   | 44.7p   | 40.6p   | 51.2p  
|Cash
              flow/book value3                               | **12.4%**   | 52.0%   | 97.0%   | 176.7%  | 292.0%  | 61.0%   | 68.8%   | 71.5%   | 102.0%  | 99.2%   | 65.7%  
|Profit
              before tax as a percentage of revenue        | **(13.8%)** | 4.1%    | 18.3%   | 20.2%   | 19.1%   | 21.7%   | 22.4%   | 20.6%   | 22.1%   | 23.5%   | 24.4%  
|Return
              on tangible fixed assets4                    | **(80.0%)** | 7.8%    | 78.3%   | 59.1%   | 48.2%   | 49.0%   | 60.0%   | 55.2%   | 57.6%   | 57.2%   | 53.2%  
|Return
              on equity5                                   | **(58.4%)** | 4.6%    | 65.0%   | 92.2%   | 78.5%   | 25.6%   | 33.7%   | 34.8%   | 50.8%   | 39.5%   | 29.9%  
|                                                                  |             |         |         |         |         |         |         |         |         |         |        
|UK
              corporation tax rate                             | **30%**     | 30%     | 30%     | 30%     | 31%     | 32%     | 33%     | 33%     | 33%     | 33%     | 33%    
|                                                                  |             |         |         |         |         |         |         |         |         |         |        
|**Infrastructure**                                                |             |         |         |         |         |         |         |         |         |         |        
|Shares
              issued (millions)                            | **1,433**   | 1,431   | 1,429   | 1,423   | 1,422   | 1,694   | 1,689   | 1,677   | 1,668   | 1,662   | 1,753  
|Employees                                                         | **17,414**  | 19,429  | 18,082  | 16,546  | 16,938  | 16,119  | 15,478  | 14,348  | 13,548  | 11,306  | 10,393 
|User
              accesses                                       | **493,000** | 592,000 | 558,000 | 520,858 | 482,380 | 429,000 | 362,000 | 327,100 | 296,700 | 227,400 | 200,800
|                                                                 

|Notes:
              1999 and
                  2000 have been restated following adoption of FRS 19.
              1999 and
                  2000 have been restated to reflect changes to reporting user
                  accesses in 1999.
              1995 and
                  1996 have been restated to reflect the effect of FRS 10 issued
                  in 1997 which required purchased goodwill and intangible assets
                  to be capitalised and amortised through the profit and loss
                  account.
              1992 and
                  1993 have been restated for the subdivision of every ordinary
                  share of 10 pence each into four new ordinary shares of 2.5
                  pence each in April 1994.
              1992 to 1994
                  fixed assets have been restated to reflect the effect of UITF
                  abstract 13 issued in 1995.
              Free cash
                  flow is defined as net cash inflow from operating activities,
                  before restructuring, plus net interest received less tax paid
                  and expenditure on tangible fixed assets.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Ratios:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
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|2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

|           
|-----------
|           
| Page 82 

|CROSS REFERENCE GUIDE TO FORM 20-F
|----------------------------------

|The information
              in this document that is referenced in the following table, constitutes
              Reuters Group annual report on Form 20-F for the year 2002 and
              shall be deemed to be filed with the Securities and Exchange Commission
              for all purposes. No other information is included in the 2002
              Form 20-F.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                              

|Item        | Page                                                                                                                                               
|----------- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|            |                                                                                                                                                    
|1           | **Identity
                of directors, senior management and advisers**                                                                          
|            |                                                                                                                                                    
|2           | **Offer
                statistics and expected timetable**                                                                                        
|            |                                                                                                                                                    
|3           | **Key
                information**                                                                                                                
|            | Selected financial
              data                                                                                                              
|            | Exchange rates                                                                                                                                     
|            | Capitalisation
              and indebtedness                                                                                                      
|            | Reasons for
              offer and use of proceeds                                                                                                
|            | Risk factors                                                                                                                                       
|            |                                                                                                                                                    
|4           | **Information
                on the company**                                                                                                     
|            | History and
              development of the company                                                                                               
|            | Principal capital
              expenditure                                                                                                        
|            | Business overview                                                                                                                                  
|            | Organisational
              structure                                                                                                             
|            | Property, plant
              and equipment                                                                                                        
|            |                                                                                                                                                    
|5           | **Operating
                and financial review and prospects**                                                                                   
|            | Operating results                                                                                                                                  
|            | Liquidity and
              capital resources                                                                                                      
|            | Research and
              development, patents and licences etc                                                                                   
|            | Trend information                                                                                                                                  
|            |                                                                                                                                                    
|6           | **Directors,
                senior management and employees**                                                                                     
|            | Directors and
              senior management                                                                                                      
|            | Compensation                                                                                                                                       
|            | Board practices                                                                                                                                    
|            | Employees                                                                                                                                          
|            | Share ownership                                                                                                                                    
|            |                                                                                                                                                    
|7           | **Major
                shareholders and related party transactions**                                                                              
|            | Major shareholders                                                                                                                                 
|            | Related party
              transactions                                                                                                           
|            | Interests of
              experts and counsel                                                                                                     
|            |                                                                                                                                                    
|8           | **Financial
                information**                                                                                                          
|            | Consolidated
              accounts and other financial information                                                                                
|            | Litigation                                                                                                                                         
|            | Dividend policy                                                                                                                                    
|            | Significant
              changes                                                                                                                  
|            |                                                                                                                                                    
|9           | **The
                offer and listing**                                                                                                          
|            | Offer and listing
              details  price history of stock                                                                                   
|            | Plan distribution                                                                                                                                  
|            | Markets                                                                                                                                            
|            | Selling shareholders                                                                                                                               
|            | Dilution                                                                                                                                           
|            | Expenses of
              the issue                                                                                                                
|            |                                                                                                                                                    
| Page 83 
|10          | **Additional
                information**                                                                                                         
|            | Share capital                                                                                                                                      
|            | Memorandum and
              Articles of Association                                                                                               
|            | Material contracts                                                                                                                                 
|            | Exchange controls                                                                                                                                  
|            | Taxation                                                                                                                                           
|            | Dividends and
              paying agents                                                                                                          
|            | Statement by
              experts                                                                                                                 
|            | Documents on
              display                                                                                                                 
|            | Subsidiary information                                                                                                                             
|            |                                                                                                                                                    
|11          | **Quantitative
                and qualitative disclosures about market risk**                                                                     
|            |                                                                                                                                                    
|12          | **Description
                of securities other than equity securities**                                                                         
|            |                                                                                                                                                    
|13          | **Defaults,
                dividend arrearages and delinquencies**                                                                                
|            |                                                                                                                                                    
|14          | **Material
                modifications to the rights of security holders and use of proceeds**                                                   
|            |                                                                                                                                                    
|15          | **Disclosure
                controls**                                                                                                            
|            |                                                                                                                                                    
|17          | **Financial
                statements**                                                                                                           
|            | Report of the
              auditors                                                                                                               
|            | Consolidated
              profit and loss account for each of the three years in the period
              ended 31 December 2002 and related notes
|            | Consolidated
              cash flow statement for each of the three years in the period ended
              31 December 2002 and related notes    
|            | Consolidated
              balance sheet as of 31 December 2002, 2001 and 2000 and related
              notes                                     
|            | Accounting policies                                                                                                                                
|            | Summary of differences
              between UK and US GAAP and related notes                                                                      
|            | Remuneration
              report                                                                                                                  
|            |                                                                                                                                                    
|18          | **Financial
                statements**                                                                                                           
|            |                                                                                                                                                    

|           
|-----------
|           
| Page 84 

|GLOSSARY
|--------

|**Term
                used in annual report**                                     | **US
                equivalent or brief description**                                                                                   
|---------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------
|                                                                                  
|**Allotted**                                                                       | Issued                                                                                                                                   
|                                                                                  
|**Associated
                undertakings**                                        | Affiliates
              accounted for under the equity method                                                                           
|                                                                                  
|**Called-up
                share capital**                                        | Ordinary
              shares, issued and fully paid                                                                                     
|                                                                                  
|**Capital
                allowances**                                             | Tax
              term equivalent to US tax depreciation allowances                                                                      
|                                                                                  
|**Cash
                at bank and in hand**                                       | Cash                                                                                                                                     
|                                                                                  
|**Class
                of business**                                              | Industry
              segment                                                                                                           
|                                                                                  
|**Combined
                Code of practice**                                      | A
              set of corporate governance principles and detailed codes of practice                                                    
|                                                                                  
|**Creditors**                                                                      | Accounts
              payable                                                                                                           
|                                                                                  
|**Creditors:
      Amounts falling 
      due after more than one year**           | Long-term
              debt                                                                                                             
|                                                                                  
|**Creditors:
      Amounts falling 
      due within one year**                    | Current
              liabilities                                                                                                        
|                                                                                  
|**Debtors**                                                                        | Accounts
              receivable                                                                                                        
|                                                                                  
|**Destination
                (of revenue)**                                       | The
              geographical area to which goods or services are supplied                                                              
|                                                                                  
|**Freehold**                                                                       | Ownership
              with absolute rights in perpetuity                                                                               
|                                                                                  
|**Interest
                receivable**                                            | Interest
              income                                                                                                            
|                                                                                  
|**Origin
                (of revenue)**                                            | The
              geographical area from which goods or services are supplied to
              a third party or another geographical area
|                                                                                  
|**Profit**                                                                         | Income                                                                                                                                   
|                                                                                  
|**Profit
                and loss account (statement)**                            | Income
              statement                                                                                                           
|                                                                                  
|**Profit
                and loss account reserve (under 'capital and reserves')** | Retained
              earnings                                                                                                          
|                                                                                  
|**Profit
                attributable to ordinary shareholders**                   | Net
              income                                                                                                                 
|                                                                                  
|**Proposed
                dividend**                                              | Dividend
              declared by directors but not yet approved by shareholders                                                        
|                                                                                  
|**Share
                capital**                                                  | Ordinary
              shares, capital stock or common stock issued and fully paid                                                       
|                                                                                  
|**Share
                premium account**                                          | Additional
              paid-in capital or paid-in surplus (not distributable)                                                          
|                                                                                  
|**Shares
                in issue**                                                | Shares
              outstanding                                                                                                         
|                                                                                  
|**Stocks**                                                                         | Inventories                                                                                                                              
|                                                                                  
|**Tangible
                fixed assets**                                          | Property
              and equipment                                                                                                     
|                                                                                  

|
|
|
|

|FINANCIAL DIARY FOR 2003
|------------------------

|Tuesday
              18 February                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Results
              for year 2002 announced                                                                                                                                       
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Wednesday
              12 March                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Ordinary
              shares go ex-dividend                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Wednesday
              12 March                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | ADSs
              go ex-dividend                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Tuesday
              18 March                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Annual
              report posted to shareholders                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Wednesday
              16 April                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | First
              quarter trading statement issued                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Thursday
              17 April                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Annual
              general meeting
            Time: 11.30
            am
            Venue: The
            Congress Centre,
      28 Great Russell Street,
      London WC1B 3LS
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Thursday
              24 April                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Final
              dividend for 2002 payable to ordinary shareholders on the register
              as at 14 March 2003                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Thursday
              1 May                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Final
              dividend payable to ADS holders on the record as at 14 March 2003                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Tuesday
              22 July                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Results
              for first six months of 2003 announced                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Wednesday
              30 July                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Ordinary
              shares go ex-dividend                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Wednesday
              30 July                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | ADSs
              go ex-dividend                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Wednesday
              3 September                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Interim
              dividend for 2003 payable to ordinary shareholders on the register
              as at 1 August 2003                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Wednesday
              10 September                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Interim
              dividend payable to ADS holders on the record as at 1 August 2003                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Thursday
              16 October                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Third
              quarter trading statement issued                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                     
|**Documents
              on display**Documents referred to in this report are filed in the US with the SEC and
      can be read and copied at the SEC's public reference room located at 450
      Fifth Street, NW Washington, DC 20549. Information on the operation of
      the public reference room can be obtained in the US by calling the SEC
      at 1-800-SEC-0330. Reuters Group public filings with the SEC are also available
      on the website maintained by the SEC at www.sec.gov.

|
|
|
|

|WHERE TO FIND US
|----------------

|**Corporate headquarters**
          85 Fleet Street
          London EC4P 4AJ
          Tel: 44 (0) 20
          7250 1122
          www.reuters.com
      Registered in England
          No: 3296375
      **Investor queries**
  Miriam McKay
  London
  Tel: 44 (0) 20 7542 7057
  Fax: 44 (0) 20 7353 3002
  e-mail: miriam.mckay@reuters.com
      Nancy Bobrowitz
  New York
  Tel: 1 646 223 5220
  Fax: 1 646 223 5238
  e-mail: nancy.bobrowitz@reuters.com
      **Media queries**
  Simon Walker
  London
  Tel: 44 (0) 20 7542 7800
  Fax: 44 (0) 20 7542 5458
  e-mail: simon.walker@reuters.com
      Nancy Bobrowitz
  New York
  Tel: 1 646 223 5220
  Fax: 1 646 223 5238
  e-mail: nancy.bobrowitz@reuters.com
      Registrar/Depositary:
        For dividend queries,
        duplicate mailings and address changes
      **Ordinary shares**
        Lloyds TSB Registrars
        The Causeway
        Worthing
        West Sussex BN99
        6DA
        UK
        Tel: 44 (0) 870
        601 5366
        Fax: 44 (0) 870
        900 0020
      **American Depositary
            Shares**
        JPMorgan Chase
        Bank
        JPMorgan Service
        Center
        PO Box 43013
        Providence RI 02940-3013
        USA
        Tel: 1 800 428
        4237 (for callers within the US)
        Tel: 1 781 575
        4328 (for callers outside the US)
        Fax: 1 781 575
        4088
      **Listings**
        London Stock Exchange
        (RTR) Nasdaq (RTRSY)
      Options on ordinary shares
          are traded on the London Traded Options Market. The American Stock
          Exchange in New York and the Chicago Board Options Exchange list options
          on American Depositary Shares of Reuters.
      **Form 20-F**
        This document is
        filed with the SEC and corresponds to the Form 10-K filed by US-based
        companies. Hard copies are available from the Investor Relations departments
        in London and New York. Electronic copies can be accessed through the
        internet on Reuters internet page (www.reuters.com)
        or from the SEC's EDGAR Database via the SEC's home page (www.sec.gov).
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|
|
|

|                                                                                                                                                                                                                                  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                  
|**SIGNATURES**                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                  
|The
        registrant hereby
        certifies that it meets all of the requirements for filing on Form 20-F
        and that it has duly caused and authorised the undersigned
        to sign this annual report on its behalf.
|                                                                                                                                                                                                                                  
|Date:
    18 March 2003                                                                                                                                                                                                           
|                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                  

|**CERTIFICATIONS**                           
|---------------------------------------------
|                                             
|I, Thomas
        Henry Glocer, certify that:
|                                             
|1.                                           
|                                             
|2.                                           
|                                             
|3.                                           
|                                             
|4.                                           
|                                             
|                                             
|                                             
|                                             
|5.                                           
|                                             
|                                             
|                                             
|6.                                           

|                           
|---------------------------
|Date:
        18 March 2003

|
|
|
|

|**CERTIFICATIONS**                          
|--------------------------------------------
|                                            
|I, David
        John Grigson, certify that:
|                                            
|1.                                          
|                                            
|2.                                          
|                                            
|3.                                          
|                                            
|4.                                          
|                                            
|                                            
|                                            
|                                            
|5.                                          
|                                            
|                                            
|                                            
|6.                                          

|                           
|---------------------------
|Date:
        18 March 2003
|                           

|
|
|
|

|**Item
          19. Exhibits**
|-------------------------------
|                               
|1.1                            
|                               
|2.1                            
|                               
|4.1                            
|                               
|4.2                            
|                               
|4.3                            
|                               
|4.4                            
|                               
|4.5                            
|                               
|4.6                            
|                               
|4.7                            
|                               
|4.8                            
|                               
|4.9                            
|                               
|8.1                            
|                               
|10.1                           
|                               

|
|
|
|