REUTERS GROUP PLC ANNUAL REPORT AND ACCOUNTS 1999

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Notes on the consolidated balance sheet continued20. Creditors: Amounts falling due within one year1999 1998 1997£M £M £MTrade creditors 118 126 135Accruals 352 369 298Instinet counterparty creditors 328 186 77Deferred income 50 43 38Other creditors 42 35 36Other taxation and social security 47 33 36Amounts owed to joint ventures and associates 18 – –955 792 620Bank overdrafts 114 13 42Bank loans 2 3 6Other borrowings 191 989 –Current UK corporation and overseas taxation 263 232 269Proposed dividend 154 155 1401,679 2,184 1,077Current UK corporation and overseas taxation comprises:1999 1998 1997£M £M £MUK corporation tax:Advance corporation tax – – 47Mainstream corporation tax 138 105 134Overseas taxes 125 127 88263 232 269Accruals for 1998 and 1997 have been restated following the introduction of UK Financial Reporting Standard No. 12 (see note 25).21. Creditors: Amounts falling due after more than one year1999 1998 1997£M £M £MOther borrowings 261 – –Bank borrowings – 4 18Accruals 14 12 19Amounts owed to joint ventures 9 – –284 16 3722. Concentration of credit riskReuters is exposed to concentrations of credit risk. Reuters invests in UK and US government securities and with high credit quality financial institutions. Reuterslimits the amount of credit exposure to any one financial institution. Reuters is also exposed to credit risk from its trade debtors which are concentrated in thefinancial community. Reuters estimates that approximately 59% of its subscribers are financial institutions, 27% are corporations in other sectors of the businesscommunity, 6% are from the news media and 8% are government institutions and individuals worldwide (1998 – 57%, 29%, 5% and 9% respectively).Instinet is exposed to the possibility of trades between its counterparties failing to settle. Due to the settlement mechanisms employed, the maximum exposure isgenerally limited to the market movement between the trade date and the settlement date. There are no material unprovided off balance sheet exposures or positionsin respect of trades undertaken on or prior to 31 December 1999.62 Reuters Group PLC Annual Report 1999
23. Pensions and similar obligationsReuters has established various pension arrangements covering the majority of its employees. In all plans, except those which are internally funded, the assets areheld separately from those of the company and are independently administered.Defined contribution plansReuters operates 28 defined contribution plans covering approximately 65% of its employees, of which the largest plan, the Reuters Pension Fund, coversapproximately 23% of employees. Members of this plan contribute 6% of basic salaries and Reuters is required to make an annual contribution of 9.525% ofmembers’ basic salaries regardless of the funding status of the plan. Reuters does not have the ability to recover assets held by the plan, nor can it be required tomake additional payments to the plan over and above the annual contributions referred to above. Custodial responsibility for the assets of the plan rests with twosubstantial and independent UK investment managers.Defined benefit plansReuters also operates 32 defined benefit plans covering approximately 15% of employees. Individually, these plans are of a relatively minor nature. They are subjectto regular valuations based on the accepted actuarial practice and standards within the country in which the plan is established. The largest plans are directlyinvested and others are invested in insurance contracts. The remainder are internally funded in accordance with local practice with provisions in the subsidiaryundertakings to recognise the pension obligations.Where necessary, additional provisions have been established for the group’s plans in accordance with UK Statement of Standard Accounting Practice 24 based onindependent actuarial advice.Post-retirement medical benefitsIn the US, Reuters provides unfunded post-retirement medical benefits to certain US employees. The principal assumptions used in the most recent actuarialvaluation undertaken at 31 December 1999 were that health care costs would increase by 7% per annum per head over the next year decreasing to 6% in 2001 andremain at 6% thereafter.The movement on pension provisions and similar obligations was as follows:1999 1998 1997£M £M £MOpening balance 36 28 30Profit and loss account (see note 2):Defined contribution plans 36 35 32Defined benefit plans 10 14 11Post-retirement medical benefits 3 1 149 50 44Utilised in the year (46) (42) (46)Closing balance 39 36 2824. Deferred taxation liabilities/(assets)1999 1998 1997£M £M £MOpening balance (51) (58) (48)Profit and loss account 11 7 (10)Closing balance (40) (51) (58)The closing balance is analysed below:Timing differences:Fixed asset related 5 7 (1)Other (45) (58) (57)(40) (51) (58)Reuters has provided for all potential deferred tax liabilities in respect of timing differences and has provided for deferred UK income and foreign withholdingtaxes that will be triggered by the expected future remittance of earnings by overseas subsidiary undertakings. Reuters has not provided for deferred UK incomeand foreign withholding taxes relating to unremitted earnings where remittance of these earnings is not currently anticipated in the foreseeable future. Reutersestimates that these unrecognised taxes would total approximately £166 million at 31 December 1999.Reuters Group PLC Annual Report 1999 63
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REUTERS GROUP PLC ANNUAL REPORT AND
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2 Financial highlights3 Five year s
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From the Chairman.Theus now is Inte
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Reuters, wherChief Executive Peter
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Peter Job talks about theprojection
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TO FIND OUT MORE VISITwww.reuters.c
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Page 18 and 19: Board of Directors1 2 34 567 8Non-e
Page 20: Financial Review and Statements Con
Page 23 and 24: the world. In 1999, television, tex
Page 25 and 26: appointments of non-executive direc
Page 27 and 28: EXECUTIVE DIRECTORS’ SERVICECONTR
Page 29 and 30: The table below shows the number of
Page 31 and 32: Vested options on Reuters Group PLC
Page 33 and 34: Statement of directors’ responsib
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Page 37 and 38: growth of 6% at comparable rates. I
Page 39 and 40: OtherYear to 31 December£m 1999 19
Page 41 and 42: ownership trust compared with £7 m
Page 43 and 44: market value of the Greenhouse Fund
Page 45 and 46: through internet-based infrastructu
Page 47 and 48: Notes on the consolidated profit an
Page 49 and 50: 2. Operating costs1999 % 1998 % 199
Page 51 and 52: 4. Taxation on profit on ordinary a
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Page 55 and 56: 11. Analysis of net fundsBANK/OTHER
Page 57 and 58: 12. Derivatives and other financial
Page 59 and 60: Reconciliation of movements in shar
Page 61 and 62: 15. Tangible assetsOFFICECOMPUTER E
Page 63: 17. Stocks1999 1998 1997£M £M £M
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Page 71 and 72: 32. Acquisitions and disposalsDurin
Page 73 and 74: Balance sheet of Reuters Group PLC
Page 75 and 76: Accounting policiesAccounting basis
Page 77 and 78: Summary of differences between UK a
Page 79 and 80: 38. Adjustments to shareholders’
Page 81 and 82: Other information for shareholdersI
Page 83 and 84: Financial diary for 2000Tuesday 8 F
Page 85 and 86: 1999 1998H1 H2 FY H1 H2 FYCosts £M
Page 87 and 88: 1999 1998Net assets £M £MReuters
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Page 94: www.reuters.com/ REUTERS GROUP PLC
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REUTERS GROUP PLC ANNUAL REPORT AND ACCOUNTS 1999

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