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

(Mark One)

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

                                       OR

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

For the fiscal year ended DECEMBER 31, 1998

OR

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

For the transition period from_______to________

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

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

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

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

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

     Securities  registered or to be registered pursuant to Section 12(g) of the
     Act: ORDINARY SHARES OF 25P EACH.

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

     Indicate the number of outstanding  shares of each of the issuer's  classes
of capital or common  stock as of the close of the period  covered by the annual
report.

               Ordinary Shares of 25p each.......... 1,421,600,759
               Founders Share of (pound)1...........             1

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

               Yes    _X_     No    ___

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

               Item 17 ___    Item 18 _X_


<PAGE>

                               TABLE OF CONTENTS

                                                                            Page
                                                                            ----
PART I
     ITEM 1.       Description of Business.................................... 3
     ITEM 2.       Description of Property....................................10
     ITEM 3.       Legal Proceedings..........................................10
     ITEM 4.       Control of Registrant......................................10
     ITEM 5.       Nature of Trading Market...................................12
     ITEM 6.       Exchange Controls and Other Limitations Affecting
                       Security Holders.......................................13
     ITEM 7.       Taxation...................................................13
     ITEM 8.       Selected Financial Data....................................17
     ITEM 9.       Management's Discussion and Analysis of Financial
                       Condition and Results of Operations....................21
     ITEM 9A       Quantitative and Qualitative Disclosures About
                       Market Risk............................................22
     ITEM 10.      Directors and Officers of Registrant.......................22
     ITEM 11.      Compensation of Directors and Officers.....................23
     ITEM 12.      Options to Purchase Securities from Registrant
                       or Subsidiaries........................................23
     ITEM 13.      Interest of Management in Certain Transactions.............25

PART II
     ITEM 14.      Description of Securities to be Registered.................25

PART III
     ITEM 15.      Defaults upon Senior Securities............................25
     ITEM 16.      Changes in Securities and Changes in Security
                       for Registered Securities..............................25

PART IV
     ITEM 17.      Financial Statements.......................................*
     ITEM 18.      Financial Statements.......................................26
     ITEM 19.      Financial Statements and Exhibits..........................26

SIGNATURES....................................................................27

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

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




                                       2
<PAGE>

     The  Consolidated  Financial  Statements of Reuters Group PLC ("Reuters" or
"Reuters  Group")  incorporated  herein by  reference  from  Reuters 1998 Annual
Report to Shareholders (the "1998 Annual Report to Shareholders")  are presented
in pounds  sterling  ("(pound)").  On December 31, 1998, the noon buying rate in
New York City for cable transfers in foreign currencies as announced for customs
purposes by the Federal  Reserve Bank of New York (the "Noon  Buying  Rate") was
$1.66 per  (pound) 1; on  February  12,  1999 the Noon Buying Rate was $1.63 per
(pound) 1. For  additional  information  on  exchange  rates  between  the pound
sterling and the US dollar, see "Exchange Rates" in Item 8 of this Report.

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

     On February 18, 1998 Reuters Holdings PLC ("Reuters Holdings")  consummated
a court approved capital reorganization (the "Capital  Reorganization") in which
shares of Reuters  Holdings were  exchanged for a combination of cash and shares
of Reuters Group. As a result,  Reuters  Holdings became a subsidiary of Reuters
Group.  In all other  respects the  business and assets of the Reuters  group of
companies were not affected.  For additional  information concerning the Capital
Reorganization, see Note 1 of Notes on the Consolidated Profit and Loss Account,
incorporated herein by reference from the 1998 Annual Report to Shareholders.

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

                                     PART I
                                     ------

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

     Reuters  supplies  the global  financial  markets and the news media with a
wide range of information and news products including  real-time financial data,
collective  investment  data,  numerical,   textual,  historical  and  graphical
databases plus news,  graphics,  news video, and news pictures.  Reuters designs
and installs enterprise-wide  information management and risk management systems
for the  financial  markets as well as  providing  equity and  foreign  exchange
transaction  systems.  It  extensively  uses  Internet  technologies  for  wider
distribution of information and news.

     Information  is obtained from 267 exchanges and  over-the-counter  markets,
from some 4,900 subscribers who contribute data directly to Reuters,  and from a
network of 2,072 journalists, photographers and camera operators. There are some
498,500  user  accesses for Reuters  products  located in  approximately  57,900
locations  around the world,  including  accesses by clients using equipment not
owned by Reuters.

                              INFORMATION SOURCES
                              -------------------

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

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



                                       3
<PAGE>

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

     Reuters  staff  also  report  and edit  general  and  specialized  news for
business and media subscribers in textual, video and audio form. At December 31,
1998,  Reuters  journalists,  photographers  and camera  operators were based in
reporting  bureaus  located in 182 cities in 108  countries.  Reuters  reporting
staff are  supported by part-time  staff in almost every  country.  Many Reuters
text journalists are financial or other market specialists.

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

                               PRINCIPAL PRODUCTS
                               ------------------

     Effective  January  1, 1999  Reuters  restructured  its  operations  from a
horizontal  business  managed by area and country  units to a vertical  business
managed on a product line basis.  The two main  business  divisions  are Reuters
Information  and Reuters Trading  Systems.  Reuters  electronic  equities broker
Instinet Corporation  ("Instinet"),  and TIBCO Software Inc. ("TIBCO Software"),
will continue to operate as autonomous subsidiaries.  Reuters geographical units
have been brought  together in the Global  Sales and  Operations  ("GSO")  group
responsible for the sale, installation,  delivery and support of the Information
and  Trading  Systems  divisions'  products.  An  analysis of revenue by product
category under the previous  structure is provided under the heading  "Operating
and  Financial  Review"  incorporated  herein by reference  from the 1998 Annual
Report to Shareholders.  The external reporting of financial performance will be
revised  with  effect  from the 1999  interim  announcement  to reflect  the new
organizational structure.

REUTERS INFORMATION
-------------------

     Reuters information  products include real-time  information and historical
information  databases.  These  products are  delivered to  subscribers  through
personal computer-based Reuters Terminals ("RTs"),  through  Reuters-supplied or
third-party  information  management  systems or, in the case of real-time data,
via  datafeeds.   Reuters   databases   carry  around  two  million   individual
instruments.  Reuters also supplies a software-only  version of its standard RT,
which allows Reuters information  products to be distributed over a subscriber's
own local area network and hardware.  Reuters  corporate  and media  information
business  and the  editorial  function  also  form part of  Reuters  Information
division.

     Reuters Information division focuses on four main markets: foreign exchange
and money;  commodities (including energy); fixed income; and equities.  Reuters
foreign  exchange and money market  products were its greatest source of revenue
in each of the last three years.

     During 1998  Reuters  continued  the rollout of its new  generation  "3000"
range of information  products.  By year end  approximately  48,000 accesses had
been  installed.  Reuters 3000 products  combine the  real-time  features of its
existing "2000" series (described below) with access to historical data, a range
of analytics and graphing capabilities,  textual and television news and Reuters
Mail,  an electronic  messaging  facility.  Subscribers  to the 3000 series also
receive a continuous  flow of market  related  news items as well as  background
economic  data and  analyses.  Non-real-time  components  of the 3000 series are
delivered to subscribers  over a high speed  proprietary  network using industry
standard Internet protocols.

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



                                       4
<PAGE>

     In addition to the international  products described above,  Reuters offers
many domestic information products focused on the needs of individual countries.
In May 1998 Reuters  launched  Reuters  Plus, an advanced  equities  trading and
analytics  tool for US equities which  includes  real-time and historical  data,
time and sales, charting and Reuters news. A range of optional products produced
by third  parties to augment  Reuters news and market data is also  available to
subscribers.  Reuters is  increasingly  using web  technology and offers several
information products for password-protected Internet and intranet delivery.

     Reuters recently acquired a number of businesses in the funds  information,
shareholder and benchmarking analysis sector,  including Harwick Stafford Wright
Limited in 1997;  Lipper  Analytical  Services,  Inc.  ("Lipper"),  BOPP ISB and
Citywatch in 1998; and CAMRA  Consulting and the investment  trust data business
of BT Alex. Brown in 1999. These businesses,  which have been combined under the
Lipper brand, track 65,000 funds domiciled in 44 countries with assets in excess
of US$7.6 trillion.  Historical  performance data goes back to 1959 and includes
open-ended (mutual) funds, closed-ended funds and variable annuity (unit-linked)
funds.

     Corporate and Media  Information.  Reuters  corporate and media information
business  includes textual news services for print media,  broadcast and on-line
clients.  These services cover politics,  general news,  finance,  economics and
sports.  Reuters  supplies its news pictures and news  graphics  services to the
traditional and new media. Reuters news is supplied to most of the major portals
on the Internet. Reuters is also using the Internet to provide information about
Reuters  itself,  and its products,  to existing and potential  customers at its
website "http://www.reuters.com".

     Reuters operates one of the world's largest  international  television news
agencies,   Reuters   Television  News,  which  supplies  unedited  coverage  to
broadcasters.  It holds minority interests in Independent  Television News (ITN)
in the UK and ANI in India, and has shareholdings in ventures  operating 24-hour
radio networks in the UK and Switzerland.

     In addition,  Reuters  provides a range of near  real-time  and  historical
financial  information news products and related technology to the corporate and
professional markets.  Reuters Business Briefing, the principal product range in
this market,  provides access to 10 years' business  information from one of the
world's most comprehensive databases.

     Editorial.  The news content of all Reuters products is gathered by Reuters
editorial  operations.  Reuters  delivers  financial  and media news  worldwide,
producing  more than 10,000  news  reports a day in over  twenty  languages.  In
addition to its textual  news,  Reuters  provides  television  and news pictures
coverage and operates a global  financial  television news channel (RTV) for its
clients in the financial markets.

REUTERS TRADING SYSTEMS
-----------------------

     Reuters  Trading  Systems  division  groups  together  Reuters   management
systems, transaction products (excluding Instinet), risk management products and
other  applications.  The  primary  purpose  of the  division  is to  supply  an
enterprise-wide open framework with transactional and risk management facilities
of choice. The division is divided into several major sectors:

     Financial Enterprise Systems.  This area principally focuses on the design,
installation  and  maintenance  of  digital  and  video  information  management
systems.   These  systems  allow  access  to  Reuters   real-time   information,
information databases and transaction products, products of other data suppliers
and the customer's own in-house computer  facilities.  Reuters two main products
in this sector,  Triarch  2000 and TIBCO  Information  Bus ("TIB"),  are digital
systems  offering a choice of operating  systems and platforms  using local area
networks to distribute the data.

     TIB is the  principal  product of TIBCO  Finance  Technology  Inc.  ("TIBCO
Finance",  formerly  TIBCO  Inc.),  a US company  acquired in 1994.  In 1997 the
business of TIBCO Inc. was  restructured.  A new company,  TIBCO  Software,  was
formed and is being managed as a  non-integrated  subsidiary (see below).  TIBCO
Finance  continues  to focus on the  financial  sector in and beyond the trading
room.



                                       5
<PAGE>

     Risk  Management  Systems.  Reuters  offers  a  number  of risk  management
products which  encompass  front-end  trading  systems (deal  capture,  position
keeping,  decision support tools,  tactical risk  management),  local and global
credit and limit  management,  and firmwide risk  analysis.  These systems cover
cash and  derivatives  financial  instruments  in the areas of money and foreign
exchange, fixed income and equities and interest rates related markets.

     Money and Foreign Exchange  Transaction  Systems.  Reuters delivers desktop
software,  specialized  networks and customer support to enable dealers to trade
in the money and foreign exchange markets.

     Dealing  2000-1  enables fast  electronic  communication  among  dealers to
negotiate and conclude trades in foreign exchange and other instruments. Dealing
2000-1  has become a leading  conversational-based  trading  system for  dealers
specializing in the interbank foreign exchange and deposits markets.

     Through its UK subsidiary Reuters Transaction  Services Limited ("RTSL"), a
regulated wholesale money market  institution,  Reuters operates Dealing 2000-2,
an electronic  brokerage service for interbank spot and forward foreign exchange
dealers. This automatic,  anonymous service matches bid and offer orders using a
central computer, verifying that the counterparties have sufficient and mutually
acceptable  credit.  During 1999  Reuters  expects to commence  the  progressive
upgrade of customers to the next generation, Dealing 3000, platform.

     Securities  Transactions Systems. This is a new area which Reuters proposes
to develop,  building  from its present  capability  and adding new  elements as
required,  to  accomplish a fully  integrated  package of order  routing,  order
management  and  execution  capabilities  for the  securities  markets.  In 1998
Reuters acquired Liberty SA ("Liberty"), which provides securities order routing
and order management facilities on a global basis and will form the platform for
further product  development.  Reuters also owns a 34.2% interest in GL Trade, a
French  company that provides order  execution and exchange  gateways for direct
connection to electronic exchanges.

                          NON-INTEGRATED SUBSIDIARIES
                          ---------------------------

INSTINET
--------

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

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

     In  February  1999  Instinet  announced  a new  initiative  to  explore  an
extension of its business into the fixed income market.

     Affiliates  of Instinet are members of the  American  Stock  Exchange,  the
Boston  Stock  Exchange,  the  Cincinnati  Stock  Exchange,  the  Chicago  Stock
Exchange,  the  Philadelphia  Stock Exchange,  the Pacific Stock  Exchange,  the
Chicago Board Options  Exchange,  the Toronto Stock  Exchange,  the London Stock
Exchange,  Tradepoint Stock Exchange,  the Frankfurt Stock Exchange,  the XETRA,
the SBF Paris Bourse,  the Swiss  Exchange,  the Hong Kong Stock  Exchange,  the
Stockholm Stock Exchange and the Amsterdam  Exchanges N.V. An Instinet affiliate
has a license  from the  Ministry  of  Finance  in Japan to operate as a foreign
securities firm with a Tokyo branch.



                                       6
<PAGE>

TIBCO SOFTWARE
--------------

     TIBCO  Software  was formed in 1997 to pursue  opportunities  for  applying
TIBCO technology to sectors outside finance, including the Internet. At December
31, 1998, options amounting to 30% of the issued share capital of TIBCO Software
(on a fully  diluted  basis) had been granted to employees of TIBCO  Finance and
TIBCO Software;  of these,  options  representing 5% of the issued share capital
had  vested  and  been  exercised.  In  addition,   TIBCO  Software  has  issued
convertible  preferred shares to two outside investors,  CISCO Systems, Inc. and
Mayfield  Venture  Capital  Fund,  which  at the  end of 1998  owned  7% and 5%,
respectively,  of the fully  diluted  share  capital  of TIBCO  Software.  TIBCO
Software's main product  offering is the Active  Enterprise suite which provides
the ability to integrate applications across an enterprise.

                        DATA AND COMMUNICATIONS NETWORKS
                        --------------------------------

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

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

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

                          PRINCIPAL GEOGRAPHIC MARKETS
                          ----------------------------

     Reuters  products are  distributed to 157  countries.  Prior to the January
1999  restructuring,  operations were divided for financial  reporting  purposes
into  three  principal  geographical  areas:  Europe,  Middle  East and  Africa,
Asia/Pacific,  and the Americas,  with the world-wide operations of Instinet and
the  TIBCO  companies  reported  separately.  An  analysis  of  revenue,  costs,
contribution  and  assets  by  these  markets  is  provided  under  the  heading
"Operating  and  Financial  Review"  and  in  Notes  2 and  15 of  Notes  on the
Consolidated  Financial  Statements,  both incorporated herein by reference from
the 1998 Annual Report to Shareholders.

     In connection with the 1999  restructuring,  the GSO group was organized to
manage worldwide sales, customer support and technical operations for divisional
products.

                           SUBSCRIBERS AND MARKETING
                           -------------------------

     Reuters  information  products are billed by number of user accesses.  User
accesses include terminals,  accesses to datafeeds, slave screens, portable data
screens and pagers.  The number of user  accesses at the end of each of the last
three  years  (broken  down into the  product  categories  in  effect  under the
previous organizational structure) is set forth below.

                                                  At December 31,
                                           ---------------------------
                                              1998      1997      1996
                                           -------   -------   -------
Information Products ...................   444,900   386,000   321,000
Transaction Products ...................    40,500    38,000    33,500
Professional Products ..................    13,100    11,000     7,500
                                           -------   -------   -------
Total ..................................   498,500   435,000   362,000
                                           =======   =======   =======



                                       7
<PAGE>

     Information  relating to user  accesses and an analysis of  subscribers  by
type are provided under the heading "Operating and Financial Review" and in Note
14 of Notes on the Consolidated Cash Flow Statement, both incorporated herein by
reference from the 1998 Annual Report to Shareholders.

     The  majority of Reuters  revenue is  recurring  and  generally  covered by
contracts  of  indefinite  period,  terminable  on  one or  two  years'  notice.
Individual  services within a contract may be cancelled on twelve,  six or three
months' notice.  Charges are based upon the particular  products  purchased by a
subscriber  and the number of user  accesses.  Payment  terms are  generally  in
advance.  Charges for certain other Reuters products vary according to volume of
use. These include the Instinet System,  Dealing 2000-2 and certain  information
database products.

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

                             DEVELOPMENT ACTIVITIES
                             ----------------------

     Expenditures  for  development,  which  exclude costs  associated  with the
Millennium  Programme,  aggregated  (pound)  200  million in 1998,  (pound)  235
million in 1997 and (pound) 202 million in 1996. These expenditures  principally
related to information  products and transaction  products (as defined under the
previous organizational structure), which respectively accounted for (pound) 131
million  (1997 - (pound) 162 million) and (pound) 51 million  (1997 - (pound) 60
million)  of  the  total.   Activities  during  1998  included   continuing  the
development of the 3000 series products,  development of domestic  products such
as Reuters  Plus for the US market,  improvements  to data  collection  systems,
further   development  by  Instinet  and  of  other  transaction   products  and
development relating to TIBCO Software and Internet products.

     During  1998,  efforts to  address  the  transition  to the Euro as part of
European  Monetary  Union  integration  and issues  associated  with  Millennium
deadlines  necessitated  diversion  of  development  effort to  upgrade  certain
products  and phase out others.  For  information  relating to Reuters  European
Monetary  Union and Millennium  Programmes  see the  discussion  included in the
"Operating and Financial Review"  incorporated herein by reference from the 1998
Annual Report to Shareholders.

     Greenhouse Fund. Reuters has a number of small targeted investments in high
technology and selected  content  companies to which Reuters can bring expertise
and  a  diverse  global  customer  base.  In  return  Reuters  gains  access  to
entrepreneurs who generate new ideas, technologies and products.

                         EQUIPMENT SUPPLY AND SERVICING
                         ------------------------------

     Reuters  central  computers  are  presently  supplied  by  Compaq  Computer
Corporation,  with a smaller  number of computers  from  International  Business
Machines Corporation,  NCR Corporation,  Sun Microsystems  Corporation and other
manufacturers.  Reuters central computers are installed and normally  maintained
by the supplier. Operation is carried out by Reuters personnel.

     Reuters  installs  and  provides  first level  maintenance  for client site
equipment  either  directly  or in some  countries  via  sub-contractors.  These
installations   are  usually  based  on  equipment   supplied  either  by  Intel
Corporation or more recently by  International  Business  Machines  Corporation.
Some clients specify and supply such equipment themselves and may be responsible
for its maintenance.  All Reuters application  software on central computers and
client site systems is maintained by Reuters.

                                  COMPETITION
                                  -----------

     Reuters faces  competition  in all market sectors and  geographical  areas.
Some rival vendors compete across a range of markets and in most major financial
centers. Other vendors are more specialized, either in markets or location.



                                       8
<PAGE>

REUTERS INFORMATION
-------------------

     Competitors  in the  provision of  information  for the  financial  markets
include Bloomberg L.P.  ("Bloomberg");  Bridge Information  Systems  ("Bridge"),
including the newly-acquired Telerate Inc. (formerly known as Dow Jones Markets)
and the ADP front  office  business  of  Automatic  Data  Processing  Inc.;  ICV
Datastream   International   Ltd.   ("Datastream"),   a  subsidiary  of  Primark
Corporation;  Quick  Corporation  of Japan;  and Telekurs  A.G. of  Switzerland.
Competition to the Lipper funds information business comes from Morningstar, the
Standard & Poor's  Micropal  unit,  Value  Line and  Thomson  Corporation's  CDA
Weisenberger.

     Competition  for the  supply of news to the  media  comes  from  Associated
Press,  Agence  France  Presse,  Dow Jones  Newswires and a number of other news
agencies and national newspapers which syndicate their news. Competition for the
supply of news pictures comes mainly from Associated Press, Agence France Presse
and the European  Press Agency.  The main  competitor  to Reuters  Television is
Associated Press Television News.

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

REUTERS TRADING SYSTEMS
-----------------------

     The Electronic  Broking Service ("EBS")  competes with the foreign exchange
spot  matching  service  provided  by Reuters  Dealing  2000-2  and, to a lesser
degree,  with Dealing 2000-1. The EBS partnership  comprises a number of leading
European,  US and Japanese banks. Reuters money and foreign exchange transaction
products also compete with voice brokers in the relevant markets.

     Competitors in the supply of financial enterprise systems include Misys plc
("Misys"),  British  Telecommunications  plc, CSK Software,  a subsidiary of CSK
Corporation,  Bridge and a large number of other  vendors.  In the  provision of
risk  management  systems on a global basis  Reuters  competes with SunGard Data
Systems,  Inc.,  Misys and  Algorithmics,  Inc.  Many other  vendors offer these
systems locally.

INSTINET
--------

     In the provision of equity  transaction  products,  Instinet competes with,
among others,  the SelectNet  System of the National  Association  of Securities
Dealers,  Inc. (the "NASD"),  which enables NASD members to trade electronically
in  OTC  stocks,  and  other  so-called  "electronic   communications  networks"
("ECNs"),  including Bloomberg Tradebook L.L.C., a subsidiary of Bloomberg,  and
the Island System.  In addition,  the NASD is considering a number of changes to
the NASDAQ  marketplace,  some of which could put the NASD in direct competition
with Instinet (see  "Operating  and Financial  Review - Cautionary  Statements -
NASD Initiatives",  incorporated herein by reference from the 1998 Annual Report
to  Shareholders).  In its capacity as a broker-dealer,  Instinet  competes with
other  broker-dealers  (including  many of its own customers) for  institutional
order flow. In addition,  the  securities  exchanges  (including  the Tradepoint
Stock  Exchange in the UK) and other  broker-dealers  offer  competing  crossing
services.

                             GOVERNMENT REGULATIONS
                             ----------------------

REUTERS INFORMATION
-------------------

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

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

REUTERS TRADING SYSTEMS
-----------------------

     RTSL is subject to  regulation  by the FSA  equivalent  to that  applied to
broking  participants in the London foreign exchange market,  including  capital
adequacy  requirements;  this regulatory  role was 




                                       9
<PAGE>

transferred  from the Bank of England to the FSA on June 1, 1998. The operations
of RTSL's Singapore branch are regulated by the Monetary Authority of Singapore,
and on June 9,  1998  RTSL was  approved  as a money  broker  by the  Hong  Kong
Monetary Authority.

     Liberty is  regulated as a service  company by the FSA under the  Financial
Services Act 1986 and by the Luxembourg Monetary Institute.

INSTINET
--------

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

     In  December  1998  the  US  Securities  and  Exchange  Commission  ("SEC")
promulgated new rules overhauling the regulation of certain "alternative trading
systems".  The  rules  expand  the SEC's  interpretation  of the  definition  of
"exchange" under the US securities laws to encompass a broad range of electronic
brokerage  activities,  including those conducted by Instinet.  The SEC has also
implemented  rules  governing  market-maker  and  exchange  specialist  usage of
Instinet and other ECNs.  See the discussion  under the headings  "Operating and
Financial  Review - Cautionary  Statements - SEC Rules for  Alternative  Trading
Systems" and "- SEC Rules on ECN Usage"  incorporated  herein by reference  from
the 1998 Annual Report to Shareholders.

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

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

     For  information  concerning  a joint  venture to develop a building in the
Times Square section of New York City see  "Operating and Financial  Review" and
Note 18 of Notes on the Consolidated  Balance Sheet, both incorporated herein by
reference from the 1998 Annual Report to Shareholders.

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

     For information  concerning a grand jury  investigation  regarding  Reuters
Analytics Inc., a US subsidiary based in Stamford,  Connecticut,  see "Operating
and Financial Review - Cautionary Statements - Reuters Analytics" and Note 29 of
Notes on the Consolidated  Balance Sheet, both incorporated  herein by reference
from the 1998 Annual Report to Shareholders.

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

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

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

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

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



                                       10
<PAGE>

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

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

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

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

     The first set of restrictions  contained in the Articles applies to persons
that become  "interested" in 15% or more of Reuters  Ordinary Shares of 25p each
("Ordinary Shares") outstanding at any time. The term "interested" is defined in
the Articles by  reference  to  provisions  of the  Companies  Act 1985 of Great
Britain,  as amended (the "Companies Act"), which require persons to disclose to
public  companies   interests  in  voting  shares  in  excess  of  a  prescribed
percentage.  (At  present,  material  interests  of 3% of the  class  and  other
interests of 10% of the class must be disclosed.) Subject to certain exceptions,
all shares held by a person who  reaches the 15% limit will be  disenfranchised.
Moreover, Reuters Group is empowered to effect an involuntary disposition of the
number of shares by which a person exceeds the 15% limit if that person fails to
do so on demand (which involuntary  disposition may be made, if appropriate,  by
means of an  instruction  to effect an  electronic  transfer  of  uncertificated
shares).

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

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

                             PRINCIPAL SHAREHOLDERS
                             ----------------------

ORDINARY SHARES
---------------

     As  of  February  12,  1999,  there  were  1,410,099,869   Ordinary  Shares
outstanding,  excluding  12,275,400  Ordinary  Shares owned by certain  Employee
Share Ownership Trusts. See Note 18 of Notes on the Consolidated  Balance Sheet,
incorporated  herein by reference  from the 1998 Annual Report to  Shareholders.
Reuters has received notice from The Capital Group Companies, Inc. under section
198 of the  Companies  Act,  that on  February  12,  1999 it and its  affiliates
together  held in their  capacity as  investment  



                                       11
<PAGE>

managers  75,504,136  Ordinary  Shares  (representing  5.31%  of  Reuters  share
capital).  On that date,  to Reuters  knowledge,  all  directors and officers of
Reuters as a group (17  persons)  had an interest in an  aggregate  of 1,196,068
Ordinary  Shares,  representing  approximately  0.1% of the  total  outstanding,
excluding  an aggregate  of  1,168,849  Ordinary  Shares that may be acquired by
directors  and officers  pursuant to the share option and  restricted  share and
share rights schemes referred to in Item 12 of this Report.

THE FOUNDERS SHARE
------------------

     Reuter  Trustees are  nominated by a Nomination  Committee  which  includes
certain  serving  Reuter  Trustees,  one person  nominated  by each of four news
associations  and two persons  appointed  by the  Chairman  of  Reuters.  Reuter
Trustees may not be directors or employees of Reuters.

     The Reuter Trustees currently in office are as follows:

                                                                         Trustee
                                                                           Since
                                                                         -------

Leonard Terry Berkowitz ................................................   1998
The Right Hon. the Lord Browne-Wilkinson ...............................   1989
Sir Michael Checkland ..................................................   1994
Claude Neville David Cole CBE, .........................................   1984
John Elliott Christopher Dicks OBE .....................................   1984
Pehr Gustaf Gyllenhammar ...............................................   1997
Sir Christopher Mallaby GCMG, GCVO .....................................   1998
Dame Sheila Masters ....................................................   1998
Kenneth Morgan OBE .....................................................   1984
Sir William Purves CBE, DSO ............................................   1998
J. Michael Robson ......................................................   1998
Sir Frank Jarvis Rogers (Chairman) .....................................   1989
Arthur Ochs Sulzberger .................................................   1994
Ernest James Lyle Turnbull AO ..........................................   1993
Richard John Winfrey ...................................................   1987

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

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

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

     The table below sets forth,  for the periods  indicated,  (i) the  reported
high and low sales  prices for the Ordinary  Shares based on the Daily  Official
List of the  London  Stock  Exchange  and (ii) the  reported  high and low sales
prices of the ADSs on NASDAQ,  except that the price  information  included  for
periods  prior to the Capital  Reorganization  (January 1, 1997 to February  18,
1998) is for the  ordinary  shares  of 2.5p  each of  Reuters  Holdings  and the
American Depositary Shares which represented them. The number of Ordinary Shares
and American  Depositary Shares delivered in the Capital  Reorganization was set
to, among other things, facilitate comparability of share price with the Reuters
Holdings  shares  and ADSs,  respectively.  Accordingly,  the  prices  for prior
periods  have  not  been  restated.  However,  see  Note  (1)  to the  table  of
Consolidated Income Statement Data, Amounts in Accordance with US GAAP in Item 8
of  this  Report,  with  respect  to  the  US  GAAP  treatment  of  the  Capital
Reorganization  and its retroactive  effect on the number of shares  outstanding
and per share amounts.



                                       12
<PAGE>

<TABLE>
<CAPTION>
                                                                The London
                                                              Stock Exchange         NASDAQ
                                                             ----------------   --------------------
                                                             Pounds Per Share    US Dollars per ADS
                                                             ----------------   --------------------
                                                               High     Low      High        Low
                                                             -------  -------   --------  ----------
<S>                                                             <C>     <C>     <C>          <C>
1997
First Quarter..............................................     7.57    5.98      76-3/4          58
Second Quarter.............................................     7.07    5.73      69-1/2          56
Third Quarter..............................................     7.40    5.55      71-1/2      56-3/4
Fourth Quarter.............................................     7.82    5.90      75-5/8          60

1998
First Quarter .............................................     6.94    5.18      67-1/8      50-1/4
Second Quarter.............................................     7.70    6.15      74-3/4      61-5/8
Third Quarter..............................................     6.93    4.22      68-3/4      43-7/8
Fourth Quarter.............................................     6.54    4.12    63-15/16      42-1/8

1999
First Quarter (to February 12).............................     9.71    6.13     94-3/8      62-1/16

</TABLE>

     As of  February  12,  1999,  459,518  Ordinary  Shares and ADRs  evidencing
31,944,534 ADSs (representing  191,667,204  Ordinary Shares) were held of record
in the US. These  Ordinary  Shares and ADRs were held by 106 record  holders and
2,767 record  holders,  respectively,  and  represented  0.03% or evidenced ADSs
representing  13.5%,  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.

ITEM 6.  EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS
-------  ------------------------------------------------------------------

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

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

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

     The  following  discussion  of taxation is intended  only as a  descriptive
summary and does not purport to be a complete  technical  analysis or listing of
all  potential  tax  effects  relevant  to the  Ordinary  Shares  or  ADRs.  The
statements  of UK and US tax laws set forth  below are based on the laws and the
UK  Inland  Revenue  practice  in  force  as of the  date  of this  Report.  The
statements  herein are subject to any changes in UK or US law, and in any double
taxation  convention between the US and the UK, occurring after the date of this
Report.

UK TAXATION OF DIVIDENDS - REFUND OF TAX CREDITS
------------------------------------------------

     POSITION BEFORE APRIL 6, 1999
     -----------------------------

     General.  When paying a dividend on Ordinary  Shares  before April 6, 1999,
Reuters will be liable to pay to the UK Inland Revenue  advance  corporation tax
("ACT")  currently at a rate equal to 25% of the cash dividend paid. UK resident
individual  shareholders  are  entitled  to a tax  credit  equal to the ACT paid
against  such  individual  shareholder's  total  income  tax  liability  or,  in
appropriate cases, a cash refund of the ACT paid.

     Under  the  terms  of  the  UK/US  Double  Taxation  Convention  1975  (the
"Treaty"),  which is being  renegotiated,  a US resident individual or corporate
portfolio  holder of an Ordinary Share or ADR who is not also resident in the UK
for UK tax purposes  (an  "eligible  US holder")  generally  will be entitled to
receive from 



                                       13
<PAGE>

the UK Inland Revenue payment of a refund ("Refund") of the tax credit available
to UK  resident  shareholders  currently  at a rate  equal  to  25% of the  cash
dividend.  A 15% withholding tax will be imposed on the sum of the dividend plus
the Refund (the "Gross Dividend").  For example, at current rates, an (pound) 80
dividend  results in a (pound)  20 Refund.  The Gross  Dividend  of (pound)  100
((pound) 80 plus (pound) 20) is subject to a UK  withholding  tax of (pound) 15.
Thus, the eligible US holder receives (pound) 85.

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

     Arrangements  for  Payment of Refund.  Subject to certain  exceptions,  the
Refund will (subject to the 15%  withholding  tax on the Gross Dividend) be paid
by Reuters to an eligible US holder  together with the associated  dividend.  To
establish its  entitlement  to the Refund,  the eligible US holder must complete
the  declaration  on the reverse of the dividend check and present the check for
payment  within three months from the date of its issue.  In the case of ADRs or
Ordinary Shares held through The Depository Trust Company ("DTC"), a declaration
as to the conditions  entitling the beneficial  eligible US holder to the Refund
should be completed by the  broker-dealer  or bank member of DTC which holds the
Ordinary Shares or ADRs on behalf of such eligible  holder.  These  arrangements
can be terminated without notice by the UK Inland Revenue.

     An  eligible  US holder who does not come  within  these  arrangements  may
obtain  the  Refund  by filing a claim for  refund  directly  with the UK Inland
Revenue,  in the manner and at the time described in US Revenue Procedure 80-18,
1980-1 C.B. 623 and US Revenue  Procedure  81-58,  1981-2 C.B.  678,  summarized
below.  Claims  for  payment  must be made  within  six  years of the UK year of
assessment (generally, the 12-month period ending April 5 in each year) in which
the related  dividend  was paid.  The first claim by an eligible US holder for a
Refund  must be made by sending  the  appropriate  UK form in  duplicate  to the
Director of the US Internal Revenue Service Center with which the  shareholder's
last  federal  income tax return was filed.  Forms may be obtained by writing to
the US Internal  Revenue  Service,  Assistant  Commissioner  International,  950
L'Enfant Plaza South, S.W., Washington, D.C. 20024, Attention: Taxpayers Service
Division.  Because  a  Refund  claim is not  considered  made  until  the UK tax
authorities  receive the appropriate  form from the US Internal Revenue Service,
forms should be sent to the US Internal  Revenue  Service well before the end of
the applicable limitation period. Any subsequent claims by an eligible US holder
for  payment  of a  Refund  should  be  filed  directly  with  the UK  Financial
Intermediaries and Claims Office, Fitz Roy House, PO Box 46, Nottingham NG2 1BD,
England.

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

     POSITION ON AND AFTER APRIL 6, 1999
     -----------------------------------

     Under  provisions  introduced  in the UK  Finance  Act  1998  ACT  will  be
abolished  with  effect  from April 6,  1999,  so that no ACT will be payable by
Reuters on  payment of a cash  dividend  on or after  that date.  The  proposal,
however,  envisages  a  system  of  "shadow  ACT" to  govern  the  rate at which
companies can utilise  surplus ACT that they have on April 6, 1999 against their
corporation tax liability in later years.



                                       14
<PAGE>

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

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

US TAXATION CONSEQUENCES
------------------------

     The following is a summary of certain 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 purposes of this  discussion,  a "US holder" is any beneficial owner of
Ordinary  Shares or ADRs that is (i) a citizen  or  resident  of the US,  (ii) a
corporation organized under the laws of the US or any 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.

     TAXATION OF DIVIDENDS
     ---------------------

     Subject to the passive foreign  investment company ("PFIC") rules discussed
below,  the Gross Dividend  generally will be treated as dividend  income for US
federal  income tax  purposes.  Such  dividend  will not be eligible for the 70%
dividends  received  deduction  allowed  to US  corporations.  The amount of the
dividend distribution  includible 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 includible in
the  income of the US  holder,  regardless  of  whether  the  payment is in fact
converted into US dollars.  Generally,  any gain or loss resulting from currency
exchange  fluctuations  during the period from the date the dividend  payment is
includible in income to the date such payment is converted  into US dollars will
be treated  as  ordinary  income or loss.  Such gain or loss will  generally  be
income from sources within the US for foreign tax credit limitation purposes.

     The withholding tax will be eligible,  subject to certain limitations,  for
credit against the US holder's US federal income tax. However,  a US holder will
be denied a foreign tax credit (and  instead  allowed a  deduction)  for foreign
taxes imposed on a dividend if the US holder has not held the Ordinary Shares or
ADRs for at least 16 days in the 30-day holding period  beginning 15 days before
the  ex-dividend  date.  Any days  during  which a US holder  has  substantially
diminished  its risk of loss on the  Ordinary  Shares  or ADRs  are not  counted
toward meeting the 16-day holding  period  required by the statute.  A US holder
that is under  an  obligation  to make  related  payments  with  respect  to the
Ordinary Shares or ADRs (or  substantially  similar or related property) also is
not entitled to claim a foreign tax credit with respect to a foreign tax imposed
on a dividend.  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").  US holders  should  consult their tax
advisors as to the  application  of the  foreign  tax credit  rules in their own
circumstances.

     TAXATION OF CAPITAL GAINS
     -------------------------

     The following categories of persons may be liable for both UK and US tax in
respect  of a gain on the  sale of  Ordinary  Shares  or ADRs:  (i) US  citizens
ordinarily resident in the UK, (ii) US corporations resident in the UK by reason
of their  business  being managed or controlled in the UK, and (iii) US citizens
or corporations




                                       15
<PAGE>

which are trading or carrying  on a  profession  or vocation in the UK through a
branch or agency which  constitutes a permanent  establishment or fixed base and
which have used,  held or acquired the Ordinary  Shares or ADRs for the purposes
of such trade, profession or vocation or such branch or agency. However, subject
to applicable limitations,  such persons may be entitled to a tax credit against
their US federal  income tax liability for the amount of UK capital gains tax or
UK  corporation  tax on  chargeable  gains (as the case may be) which is paid in
respect of such gain.

     Subject to the PFIC rules discussed below, upon a sale or other disposition
of  Ordinary  Shares or ADRs,  a US holder  will  recognize  gain or loss for US
federal income tax purposes in an amount equal to the difference  between the US
dollar value of the amount realized 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,  will be  long-term  capital  gain or loss if the US
holder's  holding  period for such Ordinary  Shares or ADRs exceeds one year and
any such gain and loss  generally  will be income 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%.

     PFIC
     ----

     Reuters believes that its Ordinary Shares and ADRs should not be treated as
stock of a PFIC for US federal  income tax  purposes,  but this  conclusion is a
factual  determination  made  annually  and thus may be subject  to  change.  If
Reuters  were to be  treated  as a PFIC,  unless a US holder  elects to be taxed
annually on a mark-to-market  basis with respect to the Ordinary Shares or ADRs,
a gain  realized on the sale or other  disposition  of  Ordinary  Shares or ADRs
would,  in general,  not be treated as capital  gain,  and a US holder  would be
treated  as  if  such  holder  had  realized  such  gain  and  certain   "excess
distributions"  ratably over the holder's holding period for the Ordinary Shares
or ADRs and would be taxed at the  highest tax rate in effect for each such year
to which the gain was allocated,  together with an interest charge in respect of
the tax attributable to each such year.

     INFORMATION REPORTING AND BACKUP WITHHOLDING
     --------------------------------------------

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

UK INHERITANCE TAX
------------------

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

UK STAMP DUTY AND STAMP DUTY RESERVE TAX
----------------------------------------

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



                                       16
<PAGE>

     Ad valorem  stamp  duty will be charged  and  payable by the  purchaser  on
conveyances  or transfers of Ordinary  Shares at the rate of 50p per (pound) 100
(or part thereof) of the consideration, if any, for the transfer.

     SDRT  will be  imposed,  at the rate of 0.5% of the  consideration  for the
transfer,  if an  agreement is made for the sale of Ordinary  Shares,  unless an
instrument  of transfer of the Ordinary  Shares in favor of the purchaser or its
nominee  is  executed  and duly  stamped  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 the charge to SDRT will be repaid
or 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.

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

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

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

     The selected  financial  information  set forth below is derived,  in part,
from the Consolidated  Financial  Statements  incorporated by reference from the
1998 Annual Report to Shareholders, which is filed as an exhibit to this Report.
The selected data should be read in  conjunction  with the financial  statements
and related notes,  as well as the Operating and Financial  Review  incorporated
herein by reference from the 1998 Annual Report to Shareholders.

     The  Consolidated  Financial  Statements are prepared in accordance with UK
GAAP,  which differ in certain respects from US GAAP. A summary of the principal
differences  between UK and US GAAP, a reconciliation to US GAAP and a condensed
US GAAP balance sheet are set forth in the  Consolidated  Financial  Statements,
appearing on pages 79 to 81 of the 1998 Annual Report to  Shareholders,  and are
incorporated herein by reference.



                                       17
<PAGE>

<TABLE>

CONSOLIDATED INCOME STATEMENT DATA:

<CAPTION>
                                                                              YEAR ENDED DECEMBER 31,
                                                    -------------------------------------------------------------------------
                                                             1998           1997           1996           1995           1994
                                                    -------------   ------------   ------------   ------------   ------------
                                                                      (IN MILLIONS, EXCEPT PER SHARE DATA)

<S>                                                 <C>             <C>            <C>            <C>            <C>
AMOUNTS IN ACCORDANCE WITH
  UK GAAP:

Revenue ..........................................   (pound)3,032   (pound)2,882   (pound)2,914   (pound)2,703   (pound)2,309

Operating profit before interest .................            550            541            592            510            432

Profit on ordinary activities before taxation ....            580            626            652            558            481

Profit on ordinary activities after taxation .....            384            390            442            373            319

PROFIT ATTRIBUTABLE TO ORDINARY SHAREHOLDERS .....            384            390            442            373            318
                                                    =============   ============   ============   ============   ============

BASIC EARNINGS PER ORDINARY SHARE ................           26.7p          24.0p          27.3p          23.2p          19.9p
                                                    =============   ============   ============   ============   ============

FULLY DILUTED EARNINGS PER ORDINARY SHARE ........           26.6p          23.8p          27.0p          22.9p          19.6p
                                                    =============   ============   ============   ============   ============

BASIC EARNINGS PER ADS ...........................          160.3p         144.2p         164.0p         139.3p         119.4p
                                                    =============   ============   ============   ============   ============

FULLY DILUTED EARNINGS PER ADS ...................          159.7p         143.1p         161.7p         137.3p         117.7p
                                                    =============   ============   ============   ============   ============

Dividends declared per ordinary share
  (including  UK tax credit) .....................           16.5p          16.3p          14.7p          12.3p          10.0p
                                                    =============   ============   ============   ============   ============

Dividends declared per ADS (including
  UK tax credit) .................................           98.8p          97.5p          88.1p          73.5p          60.0p
                                                    =============   ============   ============   ============   ============

Weighted average number of ordinary
  shares (in millions) ...........................          1,438          1,623          1,616          1,605          1,602
                                                    =============   ============   ============   ============   ============

</TABLE>





                                       18
<PAGE>

<TABLE>

CONSOLIDATED INCOME STATEMENT DATA (CONTINUED):

<CAPTION>
                                                                              YEAR ENDED DECEMBER 31,
                                                    -------------------------------------------------------------------------
                                                             1998           1997           1996           1995           1994
                                                    -------------   ------------   ------------   ------------   ------------
                                                                      (IN MILLIONS, EXCEPT PER SHARE DATA)

<S>                                                 <C>             <C>            <C>            <C>            <C>
AMOUNTS IN ACCORDANCE WITH
  US GAAP

Revenue ..........................................   (pound)3,032   (pound)2,882   (pound)2,914   (pound)2,703   (pound)2,309

Income before taxes on income ....................            572            618            645            544            463

NET INCOME .......................................            392            386            440            366            303
                                                    =============   ============   ============   ============   ============

BASIC EARNINGS PER ORDINARY SHARE(1) .............           27.8p          27.4p          31.4p          26.3p          21.8p
                                                    =============   ============   ============   ============   ============

Diluted earnings per ordinary share(1) ...........           27.7p          27.2p          31.0p          25.9p          21.5p
                                                    =============   ============   ============   ============   ============

BASIC EARNINGS PER ADS(1) ........................          166.6p         164.5p         188.3p         158.0p         130.8p
                                                    =============   ============   ============   ============   ============

Diluted earnings per ADS(1) ......................          166.0p         163.4p         185.8p         155.4p         128.7p
                                                    =============   ============   ============   ============   ============

Dividends  paid per ordinary  share
  (including UK tax  credit)(1) ..................          121.2p          17.5p          14.8p          12.1p           9.9p
                                                    =============   ============   ============   ============   ============

Dividends paid per ADS (including UK
  tax credit)(1) .................................          727.5p         104.7p          88.7p          72.7p          59.3p
                                                    =============   ============   ============   ============   ============

Weighted average number of ordinary
  shares (in millions)(1) ........................          1,411          1,407          1,401          1,391          1,388
                                                    =============   ============   ============   ============   ============

<FN>
--------------------

(1)  On February 18, 1998 Reuters Holdings  consummated a court approved Capital  Reorganization in which shares of Reuters Holdings
     were exchanged for a combination of shares of Reuters Group and approximately (pound) 1.5 billion in cash. (See Note 1 of Notes
     on Consolidated Profit and Loss Account incorporated herein by reference from the 1998 Annual Report to Shareholders.) Under US
     GAAP this transaction was deemed a share consolidation  combined with a special dividend and,  accordingly,  earnings per share
     and per ADS and dividends per share and per ADS amounts have been  retroactively  restated.  Under UK GAAP no  restatement  was
     deemed  appropriate as the cash payment was considered a repurchase of shares and the number of new shares in Reuters Group was
     set to facilitate comparability of per share amounts with those of Reuters Holdings.
</FN>
</TABLE>



                                                             19
<PAGE>

<TABLE>

CONSOLIDATED BALANCE STATEMENT DATA:

<CAPTION>
                                                                              YEAR ENDED DECEMBER 31,
                                                    -------------------------------------------------------------------------
                                                             1998          1997           1996           1995           1994
                                                    -------------  ------------   ------------   ------------   ------------
                                                                      (IN MILLIONS, EXCEPT PER SHARE DATA)

<S>                                                 <C>            <C>            <C>            <C>            <C>
AMOUNTS IN ACCORDANCE WITH UK GAAP:
Total assets .....................................  (pound) 2,705  (pound) 2,913  (pound) 2,575  (pound) 2,369  (pound) 1,882
Long-term debt and provisions for charges ........             52             65             71            162            109
Capital employed before minority interest ........            372          1,661          1,458          1,211            973
AMOUNTS IN ACCORDANCE WITH US GAAP:
Total assets .....................................          2,722          2,907          2,562          2,288          1,828
Long-term debt. ..................................             75             86             84            105             68
Shareholders' equity .............................            504          1,754          1,561          1,299          1,048

</TABLE>


DIVIDENDS
---------

     The  table  below  sets  forth  the  amounts  of  interim,  final and total
dividends  (excluding any  associated UK tax credit  discussed in Item 7 of this
Report) paid in respect of each fiscal year  indicated.  Pound sterling  amounts
per share  have been  translated  into US cents per ADS (each  representing  six
Ordinary Shares) at the Noon Buying Rate on each of the respective payment dates
for such interim and final  dividends.  The 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 Capital  Reorganization  and as reported  under US
GAAP. See Note (1) to the table of Consolidated  Income Statement Data,  Amounts
in Accordance with US GAAP, above.

<TABLE>
<CAPTION>
                                         PENCE PER SHARE                                     CENTS PER ADS
                             --------------------------------------    ----------------------------------------------
FISCAL YEAR ENDED
DECEMBER 31,                 INTERIM          FINAL           TOTAL           INTERIM           FINAL           TOTAL
-----------------            -------    -----------    ------------    --------------    ------------    ------------

<S>                           <C>             <C>            <C>             <C>               <C>             <C>   
DIVIDENDS IN ACCORDANCE
  WITH UK GAAP:
1994 ......................     1.90           6.10            8.00             17.80           58.56           76.36
1995 ......................     2.30           7.50            9.80             21.39           67.92           89.31
1996 ......................     2.75           9.00           11.75             25.71           87.56          113.27
1997 ......................     3.10           9.90           13.00             29.92           99.05          128.97
1998(1) ...................     3.40          11.00           14.40             34.22

DIVIDENDS RETROACTIVELY
  STATED IN ACCORDANCE
  WITH US GAAP:
1994 ......................     2.19           7.04            9.23             20.54           67.57           88.11
1995 ......................     2.65           8.65           11.30             24.68           78.37          103.05
1996 ......................     3.17          10.38           13.55             29.67          101.03          130.70
1997 ......................     3.58           9.90           13.48             34.52           99.05          133.57
1998(1)(2) ................   108.02          11.00          119.02          1,063.32

<FN>
--------------------

(1)  The final dividend in respect of 1998 is payable on April 26, 1999 to holders of Ordinary Shares on the register
     at March 19,  1999 and on April 30,  1999 to  holders of ADSs on the  register  at March 19,  1999,  and will be
     converted into US dollars from sterling at the rate prevailing on April 26, 1999.

(2)  The 1998 interim  dividend amount in accordance with US GAAP consists of the interim dividend of 3.40p per share
     (34.22  cents per ADS) paid in  September  1998 and the amount  recorded  as a  dividend  under the terms of the
     Capital Reorganization consummated on February 18, 1998 of 104.62p per share (1,029.10 cents per ADS).
</FN>
</TABLE>

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



                                       20
<PAGE>

                                 EXCHANGE RATES
                                 --------------

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

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
DECEMBER 31,                           AVERAGE*          HIGH            LOW     PERIOD END
------------------                   ---------     ----------     ----------    -----------

<S>                                       <C>            <C>            <C>            <C> 
1994 ...............................      1.54           1.64           1.46           1.57
1995 ...............................      1.58           1.64           1.53           1.55
1996 ...............................      1.57           1.71           1.49           1.71
1997 ...............................      1.65           1.70           1.58           1.64
1998................................      1.66           1.72           1.61           1.66
1999 (through February 12, 1999) ...      1.64           1.66           1.62           1.63
<FN>
--------------------
*    The  average of the  exchange  rates on the last  trading day of each  calendar  month
     during the period.
</FN>
</TABLE>

     On February 12, 1999 the Noon Buying Rate was $1.63 per (pound) 1.

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

     For the effect on Reuters  results of  operations  of  fluctuations  in the
exchange  rates  between  the  pound  sterling  and the other  major  currencies
(including  the US dollar) in which revenues are received and  expenditures  are
made by Reuters,  see "Operating and Financial  Review"  incorporated  herein by
reference  from the 1998  Annual  Report to  Shareholders,  which is filed as an
exhibit to this Annual Report on Form 20-F.

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

     Reuters  discussion  and  analysis of  financial  condition  and results of
operations  appears  on  pages  35  to 49  of  Reuters  1998  Annual  Report  to
Shareholders under the heading  "Operating and Financial  Review",  incorporated
herein by reference from the 1998 Annual Report to Shareholders.  The discussion
is  designed  to  comply  with  both  the  requirements  of this  Item 9 and the
recommendations  of the July 1993 Statement,  "Operating and Financial  Review",
issued by the UK Accounting Standards Board.

     The focus of Reuters discussion is on the financial  statements included in
the 1998 Annual Report to Shareholders, which are prepared in accordance with UK
GAAP. A summary of differences  between UK GAAP and US GAAP, a reconciliation to
US GAAP and a condensed US GAAP balance sheet are set forth in the  Consolidated
Financial  Statements,  appearing on pages 79 to 81 of the 1998 Annual Report to
Shareholders, and are incorporated herein by reference.

                             CAUTIONARY STATEMENTS
                             ---------------------

     All statements  other than  statements of historical  fact included in this
Report and the 1998 Annual  Report to  Shareholders  incorporated  by  reference
herein  are,  or may be  deemed to be,  forward-looking  statements  within  the
meaning of Section  27A of the  Securities  Act of 1933 and  Section  31E of the
Securities  Exchange  Act of 1934.  Certain  important  factors that could cause
actual results to differ materially from those discussed in such forward-looking
statements are described under "Cautionary  Statements" and "Year 2000 Readiness
Disclosure"  in the  "Operating  and Financial  Review"  incorporated  herein by
reference  from the 1998  Annual  Report to  Shareholders.  All written and oral
forward-looking  statements made on or after the date hereof and attributable to
Reuters are expressly qualified in their entirety by such Cautionary Statements.



                                       21
<PAGE>

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

     Quantitative  and  qualitative  disclosures  about market risk are provided
under the  sub-heading  Treasury  Management on pages 43 to 45 of the "Operating
and Financial  Review",  and in Note 13 of Notes on the  Consolidated  Cash Flow
Statement,  both incorporated herein by reference from the 1998 Annual Report to
Shareholders.

ITEM 10.  DIRECTORS AND OFFICERS OF REGISTRANT
--------  ------------------------------------

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

     The directors and executive officers of Reuters are as follows:

<TABLE>
<CAPTION>
                                                                                                    POSITION HELD
NAME                                    POSITION                                                        SINCE
---------                               -------------------                                         -------------

<S>                                     <C>                                                         <C>
DIRECTORS:
Sir Christopher Anthony Hogg .........  Chairman; Director (1)                                      1985; 1984
Peter James Denton Job ...............  Chief Executive; Director                                   1991; 1989
Robert Oscar Rowley ..................  Finance Director                                            1990
Robert Patten Bauman .................  Director (1)                                                1994
Sir John Anthony Craven ..............  Director (1)                                                1997
Michael Philip Green .................  Director (1)                                                1992
Jean-Claude Marchand .................  Chief Executive, GSO Group; Director                        1999; 1996
Roberto G Mendoza ....................  Director (1)                                                1998
Richard Lake Olver ...................  Director (1)                                                1997
John Michael Coldwell Parcell ........  Chief Executive, Reuters Information; Director              1999; 1996 
Charles James Francis Sinclair .......  Director (1)                                                1994
David Granger Ure ....................  Chief Executive, Reuters Trading Systems; Director          1999; 1989
Andre-Francois Helier Villeneuve .....  Chairman of Instinet; Chairman of Strategic Planning;       1989; 1999
                                          Director                                                  1989
Sir David Alan Walker ................  Director (1)                                                1994

EXECUTIVE OFFICERS:
Stephen Francis Mitchell .............  General Counsel and Secretary                               1998
Geoffrey Arthur Weetman ..............  Director of Human Resources                                 1998
Philip Kenneth Wood ..................  Deputy Finance Director                                     1994
<FN>
--------------------

(1)  Non-executive director.
</FN>
</TABLE>

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

     The Chairman and all non-executive directors,  except Michael Green, served
on the  Remuneration  and  Audit  Committees  of  the  Board  in  1998  and  all
non-executive directors served on the Nomination Committee in 1998. Summaries of
the functions of the  Remuneration  Committee and the Audit Committee  appear on
pages 24 and 32,  respectively,  of the 1998 Annual Report to Shareholders which
is incorporated herein by reference.  During 1998, Reuters maintained  insurance
for the  directors  and certain  employees  against  liabilities  in relation to
Reuters.

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

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



                                       22
<PAGE>

     At each AGM of Reuters  one-third of the directors  (or, if their number is
not a multiple of three,  the number nearest to but not greater than  one-third)
shall retire from office by rotation.  A retiring director shall be eligible for
re-election.  For  additional  information  see the Report on  Remuneration  and
Related  Matters  which  appears on pages 24 to 31 of the 1998 Annual  Report to
Shareholders referred to above.

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

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

     For the year ended  December 31, 1998, the aggregate  compensation  paid or
accrued by Reuters and its subsidiaries to all directors and officers as a group
(24 persons) for services in all capacities was (pound) 8.8 million.

     The  aggregate  compensation  paid to all directors and officers as a group
included  (pound) 1.7 million accrued as bonuses to the executive  directors and
officers  pursuant to a plan based upon the extent to which three  targets  were
met. The targets covered first, Reuters objectives for millennium compliance and
Euro conversion;  second,  the growth in operating  profit at constant  exchange
rates; and third, the growth in earnings per share.  Many of the objectives were
achieved, some in full and some partially.

     Also  included  in  aggregate   compensation  was  a  (pound)  1.2  million
termination  settlement  with one  officer  relating  to one  year's  salary,  a
partially  earned  bonus and an accrual for his  prorated  interest in a rolling
four-year profit sharing plan operated by a subsidiary.

     For further information  relating to Reuters senior executive  remuneration
policy and  compensation,  see the Report on  Remuneration  and Related  Matters
which appears on pages 24 to 31 of the 1998 Annual Report to Shareholders and is
incorporated herein by reference.

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

     Reuters has established a number of employee share schemes.  These include:
(i) a share option plan  introduced in 1998 ("Plan 2000") under which  employees
became entitled to a single award of  non-transferable  options to acquire up to
2,000 shares;  (ii) a long term incentive plan, a performance related share plan
and an international Save As You Earn ("SAYE") plan  ("International SAYE Plan")
introduced by Reuters Group in 1997, which have  substantially the same terms as
Reuters Holdings' 1997 Long Term Incentive Plan, 1997 Performance  Related Share
Scheme and 1994 SAYE  Scheme,  respectively,  referred  to below;  and (iii) two
executive  share plans of Reuters Group (one for use in the US and the other for
the rest of the world) which were used to provide  replacement  options to those
persons who surrendered  options granted under Reuters  Holdings' 1984 Executive
Schemes referred to below.

     Reuters  employee share schemes also include the following plans of Reuters
Holdings  in  respect of which no  further  grants of options or rights  will be
made,  but under which options  remain  outstanding:  (1) a long-term  incentive
scheme   introduced   in   1993   under   which   non-transferable   awards   of
performance-based  restricted  shares or rights  exercisable for shares on a one
for one basis (share  rights) were made annually to key senior  executives  (the
"1993 Long-Term Incentive Scheme"); (2) a long-term incentive plan introduced in
1997 under which non-transferable awards of performance-based share options were
made annually to key senior  executives  (the "1997 Long Term Incentive  Plan");
(3) a long-term incentive scheme introduced in 1995 under which non-transferable
awards of  performance-based  share rights were made annually to executives (the
"1995  Performance  Related Share  Scheme");  (4) a long-term  incentive  scheme
introduced in 1997 under which non-transferable  performance-based share options
were  granted  annually  to  executives  (the "1997  Performance  Related  Share
Scheme");  (5) a SAYE  share  option  scheme  adopted  in 1994 (the  "1994  SAYE
Scheme");  (6) three SAYE share option  schemes  adopted in 1984 (the "1984 SAYE
Schemes"); and (7) two executive share option schemes adopted in 1984 (the "1984
Executive Schemes"). In connection with the Capital  Reorganization,  mechanisms
were introduced so that, upon exercise of options and rights  outstanding  under
these Reuters  Holdings plans,  the person  exercising his option or right would
receive Ordinary Shares of Reuters Group.



                                       23
<PAGE>

     For additional  information relating to Reuters employee share schemes, see
the Report on  Remuneration  and Related Matters which appears on pages 24 to 31
of  the  1998  Annual  Report  to  Shareholders  and  Note  30 of  Notes  on the
Consolidated  Balance Sheet, both incorporated herein by reference from the 1998
Annual Report to Shareholders.

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

OUTSTANDING OPTIONS AND RESTRICTED SHARES
-----------------------------------------

     Information   concerning  options,   restricted  shares  and  share  rights
outstanding  under Reuters share option and restricted share schemes at February
12, 1999 is set forth below:

<TABLE>
<CAPTION>
                                                 NUMBER OF ORDINARY
                                                  SHARES ISSUABLE
                                                  UPON EXERCISE OF
                                                 OPTIONS OR SUBJECT
                                                 TO RESTRICTED SHARE        RANGES OF EXERCISE
                                                    OR SHARE RIGHT         PRICES PER ORDINARY          RANGE OF
SCHEMES/PLANS                                         AWARDS(1)          SHARE (POUND) OR ADS ($)    EXPIRATION DATES
--------------------------                       -------------------    -------------------------    ----------------

<S>                                                       <C>           <C>                            <C>
OPTIONS:
1984 SAYE (2)...................................           3,901,860                  (pound)3.94              11/99
                                                                                           $34.98              11/99
1994 SAYE (2)...................................           8,207,053    (pound)3.51 - (pound)6.01       4/00 - 10/02
International SAYE (2)..........................           4,790,119                  (pound)4.78      10/01 - 10/03
                                                                                           $47.10      10/01 - 10/03
1984 Executive (3)..............................           1,262,930    (pound)1.50 - (pound)4.93        2/00 - 2/05
                                                                                  $15.94 - $43.72        2/00 - 2/05
Plan 2000.......................................          25,348,000                  (pound)5.50               9/05
                                                 -------------------
TOTAL...........................................          43,509,962
                                                 ===================
SHARES SUBJECT TO RESTRICTIONS OR RIGHTS:
1993 Long-Term Incentive (4)....................             927,228               Not applicable       2/99 - 12/02
1997 Long-Term Incentive (5)....................             518,290       (pound)0 - (pound)6.40              12/03
1995 Performance Related (6)....................              88,824               Not applicable              12/01
1997 Performance Related (5)....................           2,951,252       (pound)0 - (pound)6.40      12/03 - 12/04
                                                 -------------------
TOTAL                                                      4,485,594
                                                 ===================
</TABLE>

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

(1)  Includes Ordinary Shares represented by ADSs.

(2)  The  exercise   price  of  options   granted  under  the  1984,   1994  and
     International  SAYE  schemes is  effectively  fixed at 20% below the market
     price at the start of either a three-year or a five-year savings period. In
     general,  these options  become  exercisable  at the end of that period and
     remain exercisable for six months thereafter.

(3)  The exercise price of options  granted under the 1984 Executive  Schemes is
     the market price either at or shortly before the date of grant. Under their
     original  terms,   these  options  become  exercisable  during  the  period
     commencing  on the  third  anniversary  of the  date of grant  (the  second
     anniversary in the case of options issued to US-based employees) and ending
     on either the seventh or the tenth  anniversary of the date of grant.  As a
     result of the  Capital  Reorganization  all  options  expired on August 18,
     1998,  but  holders  could elect to replace  their  original  options  with
     unapproved  Reuters  Group  options that have the same  exercise  price but
     generally lapse one year later.



                                       24
<PAGE>

(4)  Includes 510,184  restricted shares and 90,136 options relating to 1994 and
     1995 awards respectively, which are vested.

(5)  The 1997 long-term  incentive and performance related awards granted in the
     UK (a total of 417,688 shares and 1,423,147 shares,  respectively)  have an
     exercise price  equivalent to the market value of the underlying  shares on
     the date of the  grant,  and are  linked  with a cash  bonus  equal to such
     exercise  price.  The share  rights  and  linked  cash  bonus  vest and are
     exercisable only in tandem.

(6)  All options  outstanding  under the 1995  Performance  Related Share Scheme
     have vested.

     Of the total number of Ordinary  Shares subject to  outstanding  options at
February  12,  1999,  85,272  Ordinary  Shares were  subject to options  held by
directors  and  officers of Reuters,  27,272 of which were  granted  pursuant to
savings related schemes,  18,000 of which were granted pursuant to Plan 2000 and
40,000  of which  were  granted  pursuant  to the  1984  Executive  Schemes.  In
addition,  Ordinary  Shares subject to  restrictions or rights held by directors
and officers at February 12, 1999 included  1,044,979  shares  awarded under the
1993 and 1997  long-term  incentive  plans  (435,831  vested) and 38,598  shares
awarded under the 1995 and 1997 performance related share plans (5,638 vested).

     At February 12, 1999  options,  restricted  shares and/or share rights were
held by the Chairman and the executive directors as follows:

<TABLE>
<CAPTION>
                            SAVINGS                                   LONG-TERM INCENTIVE
                            RELATED                    EXECUTIVE         SCHEMES/PLANS
                            SCHEMES      PLAN 2000       SCHEME       VESTED   NON-VESTED
                            -------   ------------   -------------   -------   ----------

<S>                          <C>             <C>            <C>       <C>         <C>
Sir Christopher Hogg......   2,065              --              --        --           --
P.J.D. Job................   3,508           2,000              --    98,579      130,030
J-C. Marchand.............   3,098           2,000              --    41,385       87,799
J.M.C. Parcell............   2,065           2,000          40,000    36,611       57,549
R.O. Rowley...............   3,508           2,000              --    61,587       80,834
D.G. Ure..................      --           2,000              --    66,527       85,996
A-F.H. Villeneuve.........   3,508           2,000              --    66,527       85,996
</TABLE>

     For additional information concerning options,  restricted shares and share
rights  held by the  executive  directors,  see the Report on  Remuneration  and
Related Matters, incorporated herein by reference from the 1998 Annual Report to
Shareholders.

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

     Not applicable.

                                    PART II
                                    -------

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

     Not applicable.



                                    PART III
                                    --------

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

     Not applicable.

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

     Not applicable.



                                       25
<PAGE>

                                    PART IV
                                    -------

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

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

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

(a)  FINANCIAL STATEMENTS:
     ---------------------

<TABLE>
<CAPTION>
                                                                                         Annual Report to
                                                                                            Shareholders
                                                                                     -----------------------
                                                                                                    Related
                                                                                                     Notes
                                                                                        Pages        Pages
                                                                                     -----------   ---------

<S>                                                                                  <C>           <C>
Incorporated by reference from the 1998 Annual Report to Shareholders:

Report of the auditors .............................................................        34

   Consolidated profit and loss account for each of the three years in the period
     ended December 31, 1998 .......................................................        50      51 to 56

   Consolidated cash flow statement for each of the three years in the period
     ended December 31, 1998 .......................................................        57      58 to 62

   Consolidated balance sheet as of December 31, 1998, 1997 and 1996 ...............        63      64 to 74

   Accounting policies .............................................................  77 to 78

   Summary of differences between UK and US GAAP ...................................        79      80 to 81

   Report on Remuneration and Related Matters ......................................  24 to 31

</TABLE>

     The consolidated  financial  statements listed in the above index which are
included in the 1998 Annual Report to  Shareholders  are hereby  incorporated by
reference.  With the  exception  of the pages  listed in the above index and the
items  incorporated  by  reference  in Items 1, 2, 3, 8, 9, 9A, 10, 11 and 12 of
this report, the 1998 Annual Report to Shareholders is not to be deemed filed as
part of this Report.

(b)  EXHIBITS
     --------

2.4  Consent of  PricewaterhouseCoopers  for incorporation by reference in Forms
     S-8 of their report dated February 12, 1999.

2.5  Consent of  PricewaterhouseCoopers  for incorporation by reference in Forms
     F-3 of their report dated February 12, 1999.

4.   The 1998 Annual Report to Shareholders of Reuters Group PLC.

27   Financial Data Schedule


                                       26
<PAGE>

SIGNATURES
----------

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

                                                     REUTERS GROUP PLC
                                                     -----------------
                                                       (Registrant)



Dated: March 5, 1999                                 By  /s/ Robert O. Rowley
                                                         -----------------------
                                                         Robert O. Rowley
                                                         Finance Director