AUDIT COMMITTEE

With the exception of Michael Green all the non-executive directors, including the Chairman, served on the Audit Committee during 1997. Charles Sinclair chairs the Audit Committee. The Finance Director and the Deputy Finance Director attend its meetings. All executive directors are invited to attend. The Audit Committee meets regularly twice a year, with further meetings as required.

The Audit Committee reviews the half year and annual financial results before they are approved by the Board. In doing so it focuses on any changes in accounting practice, major areas of judgement, the going concern assumption and compliance with accounting principles and regulatory requirements and it ensures that the annual report presents a balanced and understandable assessment of the company's financial position and prospects.

The committee may examine whatever aspects it deems appropriate of the group's financial affairs, its internal and external audits and its exposure to risks of a regulatory or legal nature. It keeps under review the effectiveness of Reuters system of accounting and internal financial controls, for which the directors are responsible (see statement of directors responsibilities). It also keeps under review the company's programme to monitor compliance with its legal, regulatory and contractual obligations. This programme was established in 1997 to consolidate and extend separate compliance activities previously undertaken.

The Audit Committee reviews the plans and findings of the internal and external auditors with them each year. The auditors have unrestricted access to the Audit Committee. The Audit Committee recommends the appointment of the company's external auditors.