news corporation - morningstar

Annual Report 2001

News Corporation

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Producing and distributing the most compelling content to the farthest reaches of the globe.

Revenues by Industry Segment 2001

Filmed Entertainment

Television

Cable Network Programming

Magazines/Inserts

Newspapers

Book Publishing

Other

Operating Income by Industry Segment 2001


Television


Magazines/Inserts

Newspapers

Book Publishing

Other

The News Corporation Limitedas of June 30, 2001

18%

7%

4%

11%

27%

26%

7%

14%

29%

7%

-4%

16%

32%

6%

Television

United StatesFOX Broadcasting Company (a)Fox Television Stations (a)

WNYW New York, NYKTTV Los Angeles, CAWFLD Chicago, ILWTXF Philadelphia, PAWFXT Boston, MAKDFW Dallas, TXKDFI-TV Dallas, TXWTTG Washington, DCWJBK Detroit, MIWAGA Atlanta, GAKRIV Houston, TXWTVT Tampa, FLWJW Cleveland, OHKSAZ-TV Phoenix, AZKDVR Denver, COKTVI St. Louis, MOWDAF-TV Kansas City, MO WITI Milwaukee, WIKSTU Salt Lake City, UTWBRC Birmingham, AL WHBQ-TV Memphis, TN WGHP Greensboro, NC KTBC Austin, TXChris-Craft (10 stations) (c)

Twentieth Television (a)Echostar Communications Corporation (5%)

United Kingdom and EuropeBritish Sky Broadcasting (36.3%)Stream (50%)Balkan News Corporation

Asia (except Japan)STARChannel [V] Music Networks Limited PartnersPhoenix Satellite Television Holdings Limited (ESPN STAR Sports (50%)VIVA Cinema (50%)Asia Sports Group Limited (20%)

JapanSKY PerfecTV! (8.1%)News Broadcasting Japan (80%)JSky Sports (14.3%)Sky Movies Corporation (50%)Nihon Eiga Satellite Broadcasting (15%)

Latin AmericaCanal Fox (a)Sky Latin America DTH Platforms

Mexico - Innova (30%)Brazil - NetSat (36%)Sky Multi-Country Partners (30%)

Telecine (b) (12.5%)Cine Canal (b) (22.5%)

Australia and New ZealandFOXTEL (25%)Fox Sports Australia (50%)Sky Network Television (29.5%)


United StatesFox Filmed Entertainment (a)

Twentieth Century Fox Film CorpFox 2000 PicturesFox Searchlight PicturesFox MusicTwentieth Century Fox Home

EntertainmentTwentieth Century Fox Licensing

and MerchandisingFox InteractiveTwentieth Century Fox TelevisionFox Television StudiosRegency Television (b) (50%)Blue Sky Studios

AustraliaFox Studios Australia (b) (50%)

MexicoFox Studios Baja (a)

(a) Held by News Corporation’s 82.8%-owned FEG (c) Acquisition of Chris-Craft, BHC and UTV was completed subsequent to June 30(b) Reflects percentage held by News Corporation’s 82.8%-owned FEG (d) Fox Regional Sports Networks are all owned 100% except Fox Sports Net South is 88%

The words “expect”, “estimate”, “anticipate”, “predict”, “believe” and similar expressions and variations thereof are intended to identify forward-looking statements. These statements appear in a number of places in this document and include statements regarding the intent, belief or current expectations of The News Corporation Limited, its Directors or its Officers with respect to, amongother things, trends affecting the group’s financial condition or results of operations. Readers of this document are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The Company does not ordinarily make projections of its future operating results and undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


United StatesFox News Channel (a)Fox Cable Networks Group (a)

FXFox Movie ChannelFox Sports NetworksFox Regional Sports Networks

(13 owned and operated) (d)Regional Programming Partners (b) (40%)

(interests in 8 regional sports networks,Metro Channels, New York Knicks,New York Rangers, Madison Square Garden and Radio City Music Hall)

Sunshine Network (b) (63%)Speedvision Network (b) (32%)Outdoor Life Network (b) (33%)Fox Sports International (b) (50%)CTV SportsNet (b) (20%)National Sports Partners (b) (50%)National Advertising Partners (b) (50%)National Geographic Channel - Domestic (b) (66.7%)National Geographic Channel - International (b) (50%)Fox Family Worldwide (b) (49.5%)Los Angeles DodgersSTAPLES Center (b) (40%)LA Sports and Entertainment District (b) (40%)HealthSouth Training Center (b) (40%)Fox Sports Skybox (b) (70%)

AsiaHathway Cable & Datacom Private Ltd (26%)KOOs Group (15 Affiliated Cable Systems) (20%)

Newspapers

United StatesNew York Post

United KingdomThe TimesThe Sunday TimesThe SunNews of the WorldTSL Education

AustraliaMore than 100 national, metropolitan, suburban,regional and Sunday titles, including the following:

The AustralianThe Weekend AustralianThe Daily TelegraphThe Sunday TelegraphHerald SunSunday Herald SunThe Courier-Mail (41.7%)Sunday Mail (Qld) (41.7%)Northern Territory NewsSunday TerritorianThe AdvertiserSunday Mail (SA) The MercurySunday TasmanianThe Sunday Times

New ZealandIndependent Newspapers (44.3%)Pacific Islands Monthly

FijiThe Fiji TimesSunday Times

Papua New GuineaPost-Courier (63%)

Magazines and Inserts

United States and CanadaGemstar-TV Guide International Inc (38.5%)News America Marketing

In-StoreFSI (SmartSource Magazine)SmartSource iGroupNews Marketing Canada

The Weekly Standard

AustraliaInsideOut

New ZealandIndependent Newspapers (44.3%)

(14 national magazines)

Book Publishing

United States, Canada, United Kingdom & Europe and AustralasiaHarperCollins Publishers

Other

United StatesHealtheon/WebMD (0.6%)Rawkus Entertainment (80%)OmniSky Corporation (17.4%)

United Kingdom and EuropeNDS (79%)epartnersBroadsystemBroadsystem VenturesThe Wireless Group (19%)Convoys GroupSky Radio (71.5%)Radio 538 (42%)News Outdoor Group (75%)

Australia and AsiaNews InteractiveNews ConnectFestival RecordsNational Rugby League (50%)Netease.com (8.5%)Indya.com (37.5%)Explocity.com (25%)Indiaproperties.com (19.9%)Egurucool.com (15%)Baazee.com (15%)

Year ended June 30, 2001 2000 1999 1998 1997

RevenuesUnited States $ 19,094 $ 16,665 $ 16,199 $ 14,002 $ 10,054United Kingdom 4,185 3,600 3,569 3,095 2,665

Australasia 2,299 2,178 2,006 1,852 1,670Total Revenues $ 25,578 $ 22,443 $ 21,774 $ 18,949 $ 14,389

Earnings before interest, taxes, depreciation and amortization(EBITDA)

United States $ 2,463 $ 2,121 $ 2,212 $ 2,100 $ 1,265United Kingdom 1,021 891 766 724 581Australasia 315 292 284 237 174

Total EBITDA $ 3,799 $ 3,304 $ 3,262 $ 3,061 $ 2,020

Income before abnormal items $ 1,282 $ 1,259 $ 1,471 $ 1,800 $ 1,295

Net Income $ (746) $ 1,921 $ 1,088 $ 1,682 $ 720Earnings per shareIncome before abnormal items $ 0.30 $ 0.30 $ 0.37 $ 0.46 $ 0.38Net income $ (0.19) $ 0.47 $ 0.27 $ 0.43 $ 0.20Financial PositionAssets $ 84,961 $ 65,585 $ 53,972 $ 54,484 $ 41,358Total Debt $ 18,805 $ 15,431 $ 13,167 $ 14,422 $ 11,339

Operating Income by Geographic Segment 2001

Financial Highlights

(in Millions of Australian Dollars except for Earnings Per Share)

United Kingdom and Europe

United States

Australasia7%

67%

26%

Filmed Entertainment | Television | Cable Network Programming | Newspapers | Magazines & Inserts | Book Publishing | Other

The News Corporation Limited

4

5

Year ended June 30, 2001 2000 1999 1998 1997

RevenuesUnited States $ 10,303 $ 10,507 $ 10,106 $ 9,489 $ 7,837United Kingdom 2,258 2,270 2,227 2,097 2,077Australasia 1,241 1,374 1,252 1,255 1,302Total Revenues $ 13,802 $ 14,151 $ 13,585 $ 12,841 $ 11,216

Earnings before interest, taxes, depreciation and amortization(EBITDA)

United States $ 1,329 $ 1,338 $ 1,380 $ 1,423 $ 986United Kingdom 551 562 478 491 453Australasia 170 184 177 161 136

Total EBITDA $ 2,050 $ 2,084 $ 2,035 $ 2,075 $ 1,575

Income before abnormal items $ 691 $ 794 $ 917 $ 1,220 $ 1,009

Net Income $ (445) $ 1,213 $ 678 $ 1,140 $ 561Earnings per ADR Income before abnormal items $ 0.64 $ 0.77 $ 0.92 $ 1.26 $ 1.18Net income $ (0.46) $ 1.18 $ 0.67 $ 1.17 $ .64Financial PositionAssets $ 42,999 $ 39,279 $ 35,697 $ 33,012 $ 31,019Total Debt $ 9,517 $ 9,242 $ 8,708 $ 8,738 $ 8,504

Revenues by Geographic Segment 2001

Financial Highlights

(in Millions of U.S. Dollars except for Earnings Per ADR)

United Kingdom and Europe

United States

Australasia9%

75%

16%


Filmed Entertainment | Television | Cable Network Programming | Newspapers | Magazines & Inserts | Book Publishing | Other

6

There is no greater measure of a person or a company

than the ability to grow stronger in the face of adversity.

In fiscal 2001, News Corporation encountered worldwide

challenges – a global economic downturn, the consequent

fall in advertising spending, currency fluctuations in key

markets – and met them with success.

Chief Executive’s Review

Our success this past year came not from

any new strategy or venture but from

a diligent focus on the Company’s core

strengths: the fundamental skills and assets that

have made News Corporation one of the world’s

major media companies.

We turned to our strength in filmmaking and

released some of the year’s most successful

motion pictures, including the record-breaking

X-Men and Cast Away, the internationally cele-

brated Moulin Rouge and, shortly after the end

of the fiscal year, Planet of the Apes.

We demonstrated our strength in television

production by creating more series for U.S.

primetime television than any competitor,

becoming the only studio to supply top-quality

programming to all six major broadcast networks.

Our Filmed Entertainment

segment enjoyed an

excellent year, more than

doubling its operating

income.

Mr. Rupert MurdochChairman and Chief Executive



7

And we increased the strength of our own

television platforms as the FOX network

achieved its most competitive season ever, FX

and Fox News Channel enjoyed breakout suc-

cess on cable and STAR and BSkyB expanded

and improved their satellite operations across

Asia and Europe.

Meanwhile, our print businesses – chiefly

newspapers, book publishing and consumer

promotions – maintained their leadership in

highly competitive markets.

Overall, our results for fiscal 2001 were

slightly lower than the previous year, with rev-

enues of US$13.8 billion and operating income

of US$1.67 billion. I would have preferred

that both figures be far higher and, if not for

deteriorating economic conditions in key mar-

kets, I am certain they would have been.

World economic downturns are, of

course, beyond our control. I am

pleased to report, however, that in

fiscal 2001 we made the very most of the factors

we could control: our world-class creative con-

tent and its delivery to big screens, small screens

and onto the printed page. Allow me to detail

the impressive progress at our existing businesses

as well as several important acquisitions and

divestments we made during the past year.

Our Filmed Entertainment segment enjoyed

an excellent year, more than doubling its operat-

ing income to US$271 million. Those results

were driven by the record-breaking theatrical

releases of X-Men and Cast Away; by the solid

and steady success of motion pictures like What

Lies Beneath, Dr. Dolittle 2 and Moulin Rouge;

and by popular low-budget and niche films like

Dude, Where’s My Car? and Quills.

But the box office success of these films was

only the beginning of their profitability. More

and more profits are flowing to our bottom line

from the DVD and video sales of our recent

releases and from our worldwide film library.

In fiscal 2001, Twentieth Century Fox Home

Entertainment achieved US$1 billion in net

sales for the first time ever. These DVD and

video sales provide a steady revenue stream that

counters much of the famous volatility of the

movie business.

Our expanding Twentieth Century Fox

Television (TCFTV) division reinforced its posi-

tion as the leader in television production as it

created more primetime series for U.S. networks

than any other studio. TCFTV produced

three of the four biggest new hits last season –

Dark Angel and Boston Public for FOX and Yes,

Dear for CBS – in addition to signing signifi-

cantly more favorable licensing agreements for

Buffy the Vampire Slayer and Dharma and Greg.

Crucially, many of TCFTV’s shows have become

long-running hits, setting them up for sales

into the lucrative syndication market. Of the

16 TCFTV shows that are returning this season,

fully half will have entered the syndication mar-

ket by fiscal 2003, and the remaining eight series

are leading prospects to feed the highly profitable

syndication pipeline in subsequent years.

In the Television segment, the FOX network

engineered a pleasing turnaround. After faithfully

working to rebuild its programming lineup, FOX

posted the most growth among total viewers

of any network during the year. FOX finished

the season only three-tenths of a ratings point

behind first-place NBC while winning the

battle for viewers in the important young adult,

male and teen demographics. Nominated in

2001 for a record 40 Emmy Awards, FOX has

launched four new hit series in the past two

seasons – Malcolm in the Middle, Titus, Boston

Public and Dark Angel – and is earning wide-

spread critical acclaim for its upcoming slate

of shows in 2001-2002.

Twentieth Century Fox

Television reinforced

its position as the

leader in television

production as it created

more primetime series

for U.S. networks

than any other studio.


8

Meanwhile, our increasingly valuable U.S.

cable networks continued to make dramatic

gains. FX, our general entertainment channel,

emerged as cable television’s fastest-growing

network. Our decision to air NASCAR auto

racing on FX proved a major ratings winner.

And Fox News Channel graduated from promis-

ing upstart to the industry’s brightest star as it

celebrated its first full fiscal year of profitability.

Fox News regularly beat CNN in ratings while

increasing its subscriber numbers to nearly

68 million.

In addition, the Company launched the

National Geographic Channel in partnership

with National Geographic Television in January.

Instantly available to 10 million cable sub-

scribers in the U.S., the channel – whose brand

and outstanding programming are world-famous

– secured additional cable launch commitments

that will increase its penetration to more than

35 million homes by 2005.

In Asia, STAR increased its operating income

by nearly 24 percent on the strength of advertis-

ing gains across its Asian markets – particularly

in India, where STAR Plus broadcast the vast

majority of the country’s most popular shows.

Led by STAR Plus’s remarkable advertising

gains and threefold increase in viewers, results

increased substantially across STAR’s businesses.

During the year, STAR also continued its pow-

erful expansion with two pioneering investments

in Asia’s cable industry: the acquisition of a 26

percent stake in Hathway Cable, India’s second-

largest cable network; and a partnership with

Taiwan’s KOOs Group to create the region’s

first interactive digital cable TV platform.

In the UK, BSkyB achieved 25 percent

revenue growth as its direct-to-home (DTH)

subscriber base increased to 5.5 million. Just as

encouraging was the 7 percent rise in annual rev-

enue per subscriber (ARPU), while DTH churn

declined to 10 percent. With a full 97 percent of

its service now digital, BSkyB is well-positioned

to turn off its analog service and see even greater

increases in the all-important ARPU – already

growing ahead of predictions – that will ensure

revenue growth and profits in the future.

HarperCollins acquired and incorporated one

of the most prestigious publishing houses in the

U.K., Fourth Estate, in addition to earning greater

profits and posting more bestsellers than ever.

And our newspapers, including some of the

best-known mastheads in the world, maintained

their circulations and market shares despite

difficult economic conditions. Record sterling

profits at the UK newspapers and continued

strength at the top of the Australian market were

a tribute to News Corporation’s nearly 50 years

of excellence in the newspaper industry.

Of course, the year was not without its disap-

pointments, in particular the underperformance

of our new media businesses. News Corporation

was not immune to the widely-lamented down-

fall of the dot-coms, and along with other media

companies we were forced to consolidate or

close several of our Internet-related operations

during the year.

Yet I’m pleased to report that these investment

failures were more than matched by a series of

strategic acquisitions and divestments that better

equip the Company to compete in the future.

In May 2001, the Company acquired an addi-

tional 17 percent interest in Gemstar-TV

Guide International from Liberty Media,

making News Corporation the largest shareholder

in the world’s leading provider of interactive

programming guides. An increasingly vital tool

in the digital television age, Gemstar’s interactive

programming guides (IPGs) were made avail-

able in more than 12 million American homes

by the end of the fiscal year. New long-term

Fox News Channel

graduated from

promising upstart to

the industry's brightest

star as it celebrated

its first full fiscal year

of profitability.


9

agreements with a half-dozen cable television

companies in the U.S. ensure that the reach

and the value of our IPGs will increase with the

growth of interactive television.

Shortly after the end of the fiscal year, News

Corporation finalized its acquisition of the

10 U.S. television stations formerly owned by

Chris-Craft Industries. While our station

group has been a leading profit engine for the

Company for years, these additional stations

significantly expand our presence in the top

10 television markets in the country. As a result

of the acquisition and subsequent station swaps

with ClearChannel Communications and

Viacom, we will also enjoy the benefits of seven

duopolies in the U.S. Fox Television Stations

will own two stations in New York, Los Angeles,

Dallas, Houston, Washington, Phoenix and

Minneapolis, enabling significant operational

cost savings and additional opportunities

for advertisers.

Also following the close of the fiscal year,

News Corporation and our partner Saban

Entertainment announced the sale of Fox Family

Worldwide to Walt Disney Company for approxi-

mately US$5.3 billion, including the assumption

of approximately US$2.3 billion in debt. We

are proud to have helped build Fox Family into

a valuable global franchise, and pleased with our

earnings and cash proceeds from the sale of this

powerful asset.

In addition, News Corporation announced

the merger of Stream, our Italian pay TV opera-

tions, with Telepiu, owned by Vivendi Universal’s

Canal+. The resulting company, to be called

Telepiu, will be one-quarter owned by News

Corporation. If approved by Italian and E.U.

regulatory authorities, the merger would mean

considerable savings for News Corporation as we

compete with new efficiency for the potentially

immense rewards of the Italian pay TV market.

Yet far and away the Company’s most

exciting development – and the one that

kept us busiest in fiscal 2001 – was

that of Sky Global Networks, our worldwide

network of satellite pay TV operations and relat-

ed assets. Sky Global is a truly global collection

of locally powerful television providers, one

we plan to build into the largest distribution

platform in the world. Shortly after the end of

the fiscal year, we entered formal negotiations

with General Motors and its subsidiary, Hughes

Electronics, to merge Sky Global with Hughes.

At the time of writing, these negotiations

remain difficult and inconclusive. Regardless of

the outcome, we will maintain our long-term

plan to become a major force in television

distribution as well as production.

Our company has been built by a worldwide

team of people and businesses with an awesome

ability to adapt and excel. To evolve as quickly

and successfully as our company has for nearly

five decades requires a workforce of exceptional

talent. And turning around underperforming

operations, maintaining leadership positions

in fiercely competitive markets and rapidly

integrating new assets requires employees with

uncommon dedication. Every day, the employ-

ees of News Corporation’s companies are asked

to excel, and every day they do so with great –

and growing – success.

I am extremely grateful, this year and every

year, to the men and women of News Corporation

who work so hard to please our customers around

the world and to increase the value of our com-

pany for you, our shareholders. I look forward

with all shareholders and employees of the

Company to a future of even greater reward.

Sky Global is a truly

global collection

of locally powerful

television providers,

one we plan to build

into the largest

distribution platform

in the world.


Our leading film and television studios reach hundreds of millions of

peoplearound the world.

10


News Corporation’s filmed entertainment division has released some of the most successful motion pictures of all time and produces more shows for primetime television than any other studio. Encompassing both the film and television productionindustries, the segment’s hit movies and top-rated TV series highlighted the strength of News Corporation’s creative content in fiscal 2001.

Fox Filmed Entertainment released 21 motion pictures during the fiscal year–14 produced by Fox’s mainstream units and released by Twentieth Century Fox,five produced and released by Fox Searchlight Pictures and two co-produced withthe partly-owned New Regency Films – as the film division’s operating incomesoared over the previous year’s.

The year opened with the record-breaking release of X-Men, which grossedapproximately US$300 million in domestic and international box office revenues.What Lies Beneath, a co-production with DreamWorks, was released in July andgrossed US$267 million worldwide. In December the teen hit Dude, Where’s My Car?earned box office receipts that were virtually three times its modest budget; yet thatsuccess was eclipsed by the phenomenal performance of Cast Away, another joint venture with DreamWorks, which shattered the record for Christmas weekend openings in the U.S before earning more than US$425 million at the box officeworldwide. Cast Away was one of the year’s biggest hits, earning Tom Hanks an Oscar nomination for best actor and making Robert Zemeckis (who also directedWhat Lies Beneath) the first filmmaker in history with two US$100 million-grossing pictures in the same year. And Moulin Rouge, starring Nicole Kidman and produced in the Company’s Australian studios, premiered at the Cannes Film Festival in Maybefore generating steady revenues at cinemas around the world.

Meanwhile, Monkeybone and Say It Isn’t So werereleased during the third quarter to disappointing

box office results.Soon after the end of fiscal 2001, Twentieth

Century Fox released a slate of successful films. In July, Dr. Dolittle 2 generated strong box officereceipts and Planet of the Apes enjoyed the biggest

opening ever for a non-holiday weekend, grossing more than US$69 million.

Fox Studios Australia, a 50/50 jointventure with Lend Lease, had a busy fiscalyear in Sydney. In addition to director Baz Luhrmann’s Moulin Rouge, the studio

produced Star Wars Episode Two, JerryBruckheimer’s Down and Under, The Quiet American,

and the landmark international television seriesCrash Palace. In its first full year open to the public,

the studio’s cinema, retail and dining precinct drew more than five million visitors.

Filmed Entertainment Television | Cable Network Programming | Newspapers | Magazines & Inserts | Book Publishing | Other

News Corporation has released some of the most successful motion pictures of all time.



12

An increasingly important – and reliably profitable – part of the Company’sfilm operations is its video and DVD business, Twentieth Century Fox HomeEntertainment. In fiscal 2001, Twentieth Century Fox Home Entertainment earnedmore than US$1 billion in net revenues as profits climbed to record levels for thefourth consecutive year. X-Men grossed US$137 million on video and DVD duringthe fiscal year, and Cast Away shot to number one in its June debut, selling over one million DVDs in its first 48 hours. DVD revenues were strong throughout the year, fueled by such million-unit sellers as Fight Club, Big Momma’s House, Me, Myself & Irene and Men of Honor.

Twentieth Century Fox Home Entertainment International achieved the biggest rental year in its history, increasing its revenues by nearly 19 percent on the strength of successful titles like X-Men, Fight Club, The Beach and Me,Myself & Irene.

In television production, Twentieth Century Fox Television produced three of last season’s four new hits on the U.S. networks: Dark Angel and Boston Public, the year’s top two new dramas, for FOX; and Yes, Dear, CBS’s strongest new series. For the second consecutive year, Twentieth Century Fox Television was the number one supplier of primetime shows to U.S. broadcast networks – and

the studio’s dominance continues for a third yearin the 2001-2002 season, for which the studio is supplying an industry-record 24 series. TwentiethCentury Fox Television is the only television studiosupplying programming to all six major U.S.broadcast networks.

Twentieth Century Fox Television made sev-eral significant licensing deals during fiscal 2001,including the licensing of Buffy the Vampire Slayerto UPN for two years at US$2.3 million perepisode (an increase of US$1.2 million a show) and the one-year renewal of ABC’s rights to

Dharma & Greg at US$2 million per episode (up from US$1.1 million a show). Inthe next two calendar years, Twentieth Century Fox Television will deliver six showsinto U.S. syndication, feeding a profitable syndication pipeline and reinforcing thestudio’s stature as one of the most successful television program producers in history.

Fox Television Studios, the Company’s integrated collection of independently-run production houses, delivered 64 hours of primetime programming to major U.S.networks in fiscal 2001, a 15 percent increase over the previous year. Fox TelevisionStudios’ two main production units, Regency Television (a joint venture with New Regency Entertainment) and the Greenblatt Janollari Studio, have producedsix successful broadcast network series – including Malcolm in the Middle, which was nominated for eight Emmy Awards and won a Peabody Award in 2001.

Twentieth Century Fox International Television enjoyed its sixth consecu-tive year of record revenues, bolstered by the unprecedented performance of Titanic,while increasing television series sales and solid feature film sales in the U.S. market. New output deals, like the ones recently concluded in Japan and Australia for payTV and in Brazil and Japan for broadcast TV, ensure robust revenue streams for the company in future years.

News Corporation's television

studios produce more shows

for primetime network television

than any other company.


13


Our television platforms

reachthree-quarters of the earth’s population.

14


Filmed Entertainment Television Cable Network Programming | Newspapers | Magazines & Inserts | Book Publishing | Other

News Corporation is an increasingly powerful television presence in the U.S.

Spanning the planet, pioneering the industry’s most innovative technologies andbroadcasting popular news, sports and entertainment to three-quarters of the world’s population, News Corporation’s television operations are without equal.The Company is an international leader in satellite and digital television, and itsbroadcast network and station group give News Corporation an increasingly powerful television presence in the U.S.

At the FOX Broadcasting Company, fiscal 2001 marked the most competitiveseason in the network’s history. FOX finished a close second in the key demographic of adults 18-49, up from its third-place finish the year before, while ranking numberone among young adults, teens and male view-ers. The network’s 40 Emmy nominations werethe most ever garnered by FOX, and its successin launching four new hit series in the past twoseasons – Malcolm in the Middle, Titus, BostonPublic and Dark Angel – was unmatched by anyother network.

FOX’s 7 percent ratings improvementamong total viewers, the most growth of anyU.S. broadcast network, was driven by thestrong performance of both new and establishedshows. Boston Public and Dark Angel were the top two new dramas on television while mid-season hit Grounded for Life was the highest-rated new comedy on any networkamong teens. Boston Public, That ’70s Show, The X-Files and the perennially popularPolice Videos, Cops and America’s Most Wanted all consistently won their time slots.FOX reigned on weekends, ranking number one among young adults on Fridaynights, number one among key adult demographics on Saturday nights, and numberone among key adult and teen demographics on Sunday nights with its lineup

Television

The network’s 40 Emmy

nominations were the most

ever garnered by FOX.

15


16

of Futurama, King of the Hill, The Simpsons, Malcolm in the Middle and The X-Files. In its 12th season, The Simpsons ranked among the top 10 most-watched primetimeprograms and posted significant gains over its ratings of the previous year.

In July 2001, News Corporation completed its purchase of the 10 stationsowned by Chris-Craft Industries, giving the Company one of the strongest televisionstation groups in the U.S. These new properties of the Fox Television Stationsgroup – the most profitable of News Corporation’s television businesses in fiscal 2001 – create duopolies in the nation’s largest markets of New York and Los Angeles,resulting in more programming options, premium advertising rates, and operating cost efficiencies.

Sky Global Networks, comprising the majority of the Company’s internationalsatellite television platforms and related assets, was formed shortly before the start offiscal 2001. During the year, Sky Global entered negotiations with General Motorsand its subsidiary Hughes Electronics, owner of U.S. satellite television providerDirecTV and other assets, with a view to merging Sky Global with Hughes. Such a merger would create a network of satellite television operations that would reachcustomers throughout much of the world.


17

In the UK, News Corporation’s 36.3 percent-owned BSkyB increased itsrevenues by 25 percent and operating profit by 88 percent while adding nearly a million direct-to-home (DTH) subscribers. Following the successful migrationof subscribers from analog to digital service, 97 percent of BSkyB’s subscriberswere digital by the end of the fiscal year, positioning the company to benefit from the greater efficiency and revenues of a fully digital service. BSkyB’s annualrevenue per user rose 7 percent while DTH churn declined to 10 percent, indicat-ing strong customer satisfaction. With more than 240 channels available via

digital satellite – including 22 wholly-owned channels, 16 joint venture channels,68 third-party channels, 82 audio music and radio channels and 37 free-to-airchannels – BSkyB offered a broader choice to more viewers than ever before.

STAR, News Corporation’s pan-Asian television operation, enjoyed rev-enue growth exceeding 60 percent, driven by strong advertising gains throughoutSTAR’s broadcast region and by the success of its programming in India. At theend of the fiscal year, STAR was broadcasting 39 of India’s top 50 shows, havingincreased its advertising revenue in that country by 139 percent. STAR Plus,STAR’s flagship Hindi general entertainment channel, was the country’s number

BSkyB offered a broader choice to more viewers than ever before.


18

one cable channel, quadrupling its audience over the prior year. Across Asia, in marketsranging from the Middle East to Pakistan to Singapore, an average of 63 millionviewers watched STAR every day.

The evolution of STAR (formerly STAR TV) was evident not only in the success of its core television broadcasting business but in the company’s expansioninto cable distribution and FM radio. In fiscal 2001, STAR made two landmarkinvestments in Asia’s cable industry. In September 2000, the company acquired 26 percent of Hathway Cable, India’s second-largest cable network reaching 2.5 million homes. In May 2001, STAR forged an agreement with Taiwan’s KOOs


19

Group to create China Network Systems, 20 percent owned by STAR, makingTaiwan a regional pioneer in interactive digital cable TV. Shortly after the fiscalyear ended, STAR teamed with Music Broadcast Private Limited to launch RadioCity, India’s first licensed commercial FM radio station, in Bangalore. Five moreFM radio stations are expected to be launched in Mumbai, Delhi, Patna, Nagpurand Lucknow during fiscal 2002.

In China, the Phoenix Chinese Channel, 37.6 percent owned by STAR,remained the number one international television channel in China, reachingmore than 42 million homes. In January 2001, Phoenix Satellite TelevisionHoldings launched two new channels – Phoenix InfoNews Channel, the first satellite channel to deliver 24-hour news programming in Mandarin, andPhoenix North America Chinese Channel, providing news, drama and lifestyleprograms 24 hours a day to Chinese communities in the U.S.

China’s Channel [V], 87.5 percent owned by STAR, increased its audienceand bolstered its status as one of the country’s most popular television platforms.In January 2001, the seventh annual Channel [V] Chinese Music Awards ceremonymore than doubled its viewership over the year before, reaching an audience ofnearly 90 million people.

FOXTEL, Australia’s leading pay TV operator and 25 percent owned byNews Corporation, increased revenues and subscribers, reaching more than halfthe country’s pay TV homes. FOXTEL expanded its channel lineup and launcheda range of new programs during the fiscal year, including the first worldwide payTV drama series, Crash Palace, to be aired by FOXTEL in Australia, TV3 in NewZealand, BSkyB in the UK and News Corporation’s international entertainmentchannels in Spain, Latin America and Japan.

In Bulgaria, the start-up Balkan News Corporation was a groundbreakingsuccess. Launched in November, the unit’s television station, bTV, quickly devel-oped a popular and politically independent programming schedule and becameoperationally profitable before the end of fiscal 2001.

After the fiscal year ended, News Corporation announced it would mergeStream, the Company’s 50 percent-owned Italian pay TV operator, with Telepiu.The resulting entity, to be called Telepiu, will be one-quarter controlled by News Corporation. The merger is subject to Italian regulatory approval.

STAR broadcast

39 of India’s top 50 shows.


Our fast-growing cable operations reach

more than 400 million

subscribers..

20



News Corporation’s cable network operations have grown at an extraordinary pace to produce strong revenues, industry-altering channels and some of the most popularprogramming on cable television.

Fox Cable Networks Group, which includes all of News Corporation’s cableprogramming operations except Fox News Channel, posted substantial gains in subscribers, ratings and revenue during the past fiscal year.

FX, one of cable television’s few general entertainment networks, emerged asthe fastest-growing network on cable, producing record revenue and profit growthfor the fiscal year. FX’s subscribers increased by 36 percent as the channel reachedmore than 66 million homes in the U.S. FX’s success was built on its original comedyseries, exclusive made-for-television movies and NASCAR auto racing, which drovethe network’s ratings in May 2001 up 121 percent over the prior year.

21

Filmed Entertainment | Television Cable Network Programming Newspapers | Magazines & Inserts | Book Publishing | Other

The Company's cable properties have increased subscribers, ratings and revenue at an extraordinary pace.


22

Fox Sports Net, the Company’s 21 regional sports networks, continued to dominate the local sports television market. During the fiscal year, Fox Sports Netlaunched its increasingly popular Local Sports Report, whose ratings rose 60 percentafter moving to primetime in April.

In its fifth year of operation, Fox News Channel celebrated its first full year ofprofitability while expanding its subscriber base from 50 million to almost 68 millionsubscribers. For the past two fiscal years, Fox News Channel was the fastest-growingcable news network; in fiscal 2001 that momentum carried the channel to new heightsas Fox News beat CNN’s ratings in five out of the last six months of the year. FoxNews Channel’s primetime and 24-hour ratings more than doubled, putting the channel in an excellent position to become the leader in cable news.

The strength of its NASCAR programming led the Company to announce thatit would increase its 32 percent stake in racing channel Speedvision to 85 percent inJuly 2001. It is expected that the acquisition will be made virtually cash-free by theexchange of the Company’s minority investments in The Golf Channel (exchanged in fiscal 2001) and Outdoor Life Network (to be exchanged in fiscal 2002) for stakes

Fox News Channel beat

CNN's ratings in five

out of the last six months

of the year.


23

in Speedvision. Ownership of Speedvision will enable the Company to maximize the value of its long-term commitment to NASCAR by using a cable platform with 40 million subscribers.

In January 2001, the Company and its partner, National Geographic Television,launched the National Geographic Channel into approximately 10 million Americanhomes. Since then, the channel has secured commitments to expand to 35 millionhomes within the next four years.

Shortly after the end of the fiscal year, News Corporation and Haim Saban,Chairman and Chief Executive Officer of Fox Family Worldwide, announced theiragreement to sell Fox Family Worldwide to Walt Disney Company for approximatelyUS$5.3 billion, including the assumption of approximately US$2.3 billion in debt.Excluded from this transaction was Fox Kids Network, a leading children’s broadcasttelevision network, which News Corporation agreed to acquire in full.

The Company’s world-famous Los Angeles Dodgers baseball team drew morethan three million fans to Dodger Stadium for the fifth consecutive year and for the15th time in its history, a Major League Baseball record.

Meanwhile, the Company’s 40 percent-owned STAPLES Center, home of the Los Angeles Lakers and Clippers basketball teams and the Los Angeles Kings icehockey team, was awarded Arena of the Year by the venue and concert industry.

Speedvision will enable the

Company to maximize the value

of its long-term commitment

to NASCAR by using a cable

platform with 40 million

subscribers.


Our newspapers reach more

readersin more countries than those of any other English-language publisher.

24


Filmed Entertainment | Television | Cable Network Programming Newspapers Magazines & Inserts | Book Publishing | Other

Newspapers

News Corporation is the world's leading English-language newspaper publisher.

With operations on four continents, hundreds of mastheads and some 15,000employees worldwide, News Corporation’s newspaper business is unmatched by any other English-language publisher. In fiscal 2001, the Company’s newspaperscontinued to excel in their markets despite challenging economic conditions.

In the past year, 70 percent of all British adults read a News Internationalpaper. Such powerful market presence helped the Company’s newspapers in the UKachieve double-digit operating income growth, in local currency terms, despite theweakening advertising market.

The Times, one of the world’s most revered papers, maintained its 30 percentmarket share, helped in part by the successful re-launch of its Saturday edition. The Sunday Times continued to be the nation’s largest-circulation Sunday broad-sheet with sales of almost 1.4 million – the paper’s greatest sales figure in more than 20 years.

25


26

The Sun averaged nearly four million more readers each issue than its nearestcompetitor, while News of the World continued its reign as the UK’s most widely-readSunday publication, selling more than twice as many copies as any rival paper.

TSL Education, the Company’s publisher of educational magazines, enjoyed a highly profitable year. Strong classified advertising helped The Times EducationalSupplement, the teaching profession’s weekly newspaper in the UK, to increase itsprofits significantly. The Times Higher Education Supplement and Nursery World

also continued to be profitable weekly publications. The Times Literary Supplement, theworld’s oldest literary newspaper, will celebrate its centenary in January 2002. Meanwhile,Worldwide Learning, a new distance learning business focused on corporate education,won a number of substantial contracts in the financial services sector in China.

News Limited’s newspapers in Australia started fiscal 2001 with award-winningcoverage of the Olympic Games in Sydney, an unprecedented team effort that helpedcirculation and ad sales soar in the first quarter.

The Australian, the nation’s pre-eminent broadsheet, maintained its circulationdespite difficult market conditions.

In Sydney, the Daily Telegraph reaped more than three-quarters of the addi-tional newspaper sales generated by the Olympics and remained New South Wales’shighest-circulating daily newspaper, outselling its nearest rival almost two-to-one onweekdays. Its Sunday stablemate, the Sunday Telegraph, widened its sales marginover its nearest competitor to 150,000, reaching 35 percent of the New South Walespopulation each week.

The Daily Telegraph reaped

more than three-quarters

of the additional newspaper

sales generated by the

Olympics.


27

In fiscal 2001, the Herald & Weekly Times Limited continued to thrive,accounting for 72 percent of all metropolitan newspaper sales in Victoria. The HeraldSun maintained its position as Australia’s highest-circulating daily paper, while theSunday Herald Sun was one of the country’s few papers to post significant circulationgains over the previous year. In February, in a first for Australia, the Herald & WeeklyTimes launched MX, a free, full-color commuter tabloid distributed every weekday.MX nearly doubled its circulation by the end of the fiscal year.

At the Company’s 41.7 percent-owned Queensland Newspapers, The Courier-Mail’s circulation dipped slightly in fiscal 2001, while the Sunday Mail maintained its sales. Both publications focused with increasing success on drawing more youngand female readers.

In South Australia, The Advertiser turned 143 years old and maintained itsstrong circulation figures, reinforcing its status as Adelaide’s favorite publication.

In New Zealand, News Corporation’s 44.3 percent-owned IndependentNewspapers Limited remained the country’s leading newspaper publisher, increasingrevenues and operating income, in local currency terms, as its 100 titles continued to post strong sales.

In the U.S., the New York Post, nearing two hundred years of continuous publication, became the only daily metropolitan newspaper in the nation to achieveseven consecutive years of circulation growth while its rivals’ circulations declined.Fiscal 2001 also marked the completion of a state-of-the-art printing facility that will enhance the production and distribution capabilities of the paper and enable color printing.

The New York Post’s

state-of-the-art printing

facility will enhance

production and distribution

and enable color printing.


In fiscal 2001, News Corporation became the largest shareholder in Gemstar-TVGuide International, the world’s leading provider of interactive programming guidesand the supremely popular TV Guide magazine.

In May 2001, the Company acquired an additional 17 percent stake in Gemstar-TV Guide from Liberty Media in exchange for preferred shares in News Corporation.The transaction increased News Corporation’s interest in Gemstar-TV Guide to 38.5 percent. Formed in July 2000 through the merger of Gemstar InternationalGroup and TV Guide, Gemstar-TV Guide is a global leader in television entertain-ment technology and media, with products licensed to more than 180 companies in the cable, satellite, Internet and computer industries. Its TV Guide magazineremained the biggest-selling weekly magazine in the U.S.

During the fiscal year, Gemstar-TV Guide forged long-term agreements withCharter Communications, Canadian Cable Systems Alliance, Cogeco Cable, ShawCablesystems, Comcast Communications and Adelphia Communications to deployGemstar-TV Guide’s interactive programming guides across those companies’ digital platforms. By the end of the year, the company’s interactive program guideswere available in more than 12 million American homes.

The TV Guide brand continued to expand beyond the magazine and its circulation of nearly 10 million to become an increasingly powerful multi-media presence. The TV Guide Channel, a tele-vised combination of channel listings and original programming, reached more than 55 million households, an increase of nearlytwo million homes, as it posted impressive ratings. TV Guide Online increased its num-ber of users by more than 30 percent and at the end of the fiscal year was recording 92 million page views per month. TV Guide

Magazines and Inserts

Filmed Entertainment | Television | Cable Network Programming | Newspapers Magazines & Inserts Book Publishing | Other

Gemstar-TV Guide is a global leader in television entertainment technology and media.

28


Our magazines, newspaper inserts and in-store coupons reach tens of millions of

consumersevery week.

29


31

Interactive, TV Guide’s interactive digital television platform, expandedfrom four million to seven million households during the fiscal year andis now available through nearly 2,000cable systems across the U.S.

News America Marketing, NewsCorporation’s portfolio of consumer promo-tion media, reaches millions of shoppers everyweek in stores, on the Internet and in the pages ofSmartSource Magazine, the most widely circulatedinsert in the U.S. In fiscal 2001, News AmericaMarketing extended its innovative product lines to provide more media for advertisers and greater discounts for consumers, solidifying its leadership of the in-store consumer promotion industry.

In Australia, News Magazines launched its first title,InsideOut, shortly before the start of fiscal 2001. The creativeand practical home design magazine increased its circulation by

6 percent during the year, despite an overall decline amonghome and lifestyle magazines, and was nominated for

four Australian Magazine Publishers awards.In the U.S., the Company’s political

magazine, The Weekly Standard,increased its advertising revenue byalmost 50 percent as its circulation continued to rise.

TV Guide Interactive expanded

to seven million households

during the fiscal year and is now

available through nearly 2,000

cable systems across the U.S.


Our award-winning

booksreach more than 150 million readers a year.

32


Filmed Entertainment | Television | Cable Network Programming | Newspapers | Magazines & Inserts Book Publishing Other

HarperCollins Publishers, News Corporation’s book publishing division, is anundisputed industry leader and both a literary and financial success. In fiscal 2001,HarperCollins achieved record profitability and topped bestseller lists worldwidewhile adding a prestigious imprint to its operations.

The year’s successes were a testimony to the popularity of HarperCollins’s books.HarperCollins had a record 93 titles on the New York Times bestseller lists, 10 of themreaching the number one position. The company also populated the New York Timesnew children’s bestseller list with 27 titles. Among those titles were the seven bookscomprising the enormously popular Series of Unfortunate Events by Lemony Snicket,which had sold nearly 1.5 million copies by the end of the fiscal year. Meanwhile, inthe UK, the company posted 48 titles on The Sunday Times bestseller list.

HarperCollins also earned several of the publishing industry’s highest awards. In October 2000, Gao Xingjian, author of Soul Mountain – first published in Englishby HarperCollins Australia – was awarded the 2000 Nobel Prize for Literature. InApril 2001, Hirohito and the Making of Modern Japan by Herbert P. Bix, published by HarperCollins in the U.S., Australia and New Zealand, was awarded the PulitzerPrize for Non-Fiction. The Pulitzer Prize for Fiction was presented to Michael Chabonfor his novel The Amazing Adventures of Kavalier and Clay, which was published byHarperCollins in the UK, Australia and New Zealand. And HarperCollins UK’s Man

and Boy by Tony Parson wasnamed Book of the Year at theBritish Book Awards.

In July 2000, HarperCollinsannounced the purchase ofFourth Estate, one of the UK’smost respected publishing houses,which was incorporated as a newdivision of HarperCollins UK.The following month, the com-pany announced the launch of Rayo, a groundbreakingimprint that will publish titlesin English and Spanish for thefast-growing Hispanic market. In May 2001, HarperCollinsAustralia/New Zealand launched

its new A&R Classics line, a series of classic Australian works published as high-quality paperbacks.

Fiscal 2001 was also the first year of HarperCollins’ long-term arrangement to handle Scholastic’s customer service, billing and credit functions, which providedsteady and significant additional revenues during the year.

HarperCollins achieved record profitability and topped bestseller lists worldwide.

Book Publishing

33


34

Zondervan, HarperCollins’ Evangelical Christian book division, published thetop five bestselling Bibles in the Christian Book Association for the year 2000. In fiscal2001, for the third time in five years, a Zondervan book, Fresh Wind, Fresh Fire byJim Cymbala, was named Book of the Year by Christian Retailers.

During the fiscal year, HarperCollins launched several initiatives that reinforcedits position at the vanguard of the modern publishing industry. In October 2000, the company joined forces with BET.com, the largest African American portal on theInternet, to create an innovative book channel. HarperCollins also forged an agreementwith The Book Report Network to create high-quality Web sites for HarperCollins’authors in the most comprehensive alliance to date between an Internet portal and a publisher. And in February 2001, the company launched PerfectBound, the indus-try’s first global e-book imprint, publishing electronic titles in the U.S., the UK,Canada, Australia and New Zealand.

HarperCollins had a record 93 titles on the New York Times bestseller lists,

10 of them reaching the number one position.


Filmed Entertainment | Television | Cable Network Programming | Newspapers | Magazines & Inserts | Book Publishing Other

35

Other

News Corporation’s NDS, a global leader in digital television technology, increased itssubscribers by 33 percent in fiscal 2001. NDS, which supplies vital conditional accesssoftware to nearly half the world’s digital satellite pay TV customers, also grew its revenues 34 percent and its operating income 63 percent as the company won newcustomers in Europe, the Americas and Asia.

In December 2000, NDS acquired Orbis Technology, the leading developer ofsports betting software for digital TV, the Internet and mobile technologies. During thefiscal year the company opened new offices in New York, Berlin and Bangalore as wellas launching a foreign enterprise office in Beijing in May 2001.

NDS also forged strategic agreements with several new platforms, continuing to thrive at the cutting edge of the global digital television industry. In August 2000,NDS signed a contract to provide Tevel, a leading cable TV operator in Israel, with

NDS increased its subscribers

and revenues while expanding

to new offices in the U.S.,

Germany, India and China.

NDS supplies software to nearly half the world's digital satellite pay TV customers.


36

crucial systems and technologies as it moves from analog to digital service. In Spain,NDS won a contract with Auna Group to help create one of the largest digital cableTV systems in Europe. NDS was also part of the winning consortium, announced at the end of the fiscal year, that will launch Korea Digital Satellite Broadcasting, thecountry’s first digital pay TV operation.

News Corporation’s Broadsystem, one of the UK’s leading providers of outsourced database management and marketing communications, enjoyed anotheroutstanding year, with revenues up 16 percent. Having won significant contracts with the UK government and Procter & Gamble during the fiscal year, Broadsystem is well-positioned for long-term and sustainable growth.

In Australia, the National Rugby League, 50 percent owned by NewsCorporation, continued to draw strong crowds while winning substantial corporateendorsement with the signing of Telstra, the Australian communications company, asthe league’s major sponsor. Fox Sports’ pay TV broadcasts of the Telstra Premiershipdrew a 20 percent larger audience than the previous year, and the NRL continued to dominate free-to-air programming in Sydney. Long-term pay TV agreements weresecured with Fox Sports in Australia and with Sky Television in New Zealand.

Meanwhile, the News Corp Music Group concluded licensing agreements in fiscal 2001 with Sony Music Entertainment in Japan and Sony Music Asia thatexpanded the company’s presence to every major music market outside the U.S.Festival Mushroom Records Australia celebrated a highly successful fiscal year,producing five number one albums and six number one singles on the Australiancharts. Festival Mushroom Records New Zealand also achieved a number one albumand single, both associated with Moulin Rouge, a film released by News Corporation’sTwentieth Century Fox.

News Corp Music Group

is a growing presence in every

major music market outside

the U.S.


37


A.C.N. 007 910 330

Concise Report

For the year ended 30 June, 2001

Table of Contents

Page

Statement of Corporate Governance 39

Directors’ Report 44

Concise Financial Report

Discussion and Analysis 54

Statement of Financial Performance 56

Statement of Financial Position 57

Statement of Cash Flows 58

Notes to the Concise Financial Report 59

Directors’ Declaration 64

Independent Audit Report 65

Shareholder Information 66

Board of DirectorsThe Board of Directors (the “Board”) oversees the business of The News Corporation Limited and its controlled entities (“theCompany”). To assist in the execution of its responsibilities, the Board has established a number of Board Committees including a Nominating Committee, Compensation Committee, Share Option Committee and Audit Committee. It has also established an overall framework of internal control and a business risk management process, and has adopted appropriate ethical standards.Directors are classified as either Executive or Non-executive Directors, the former being those Directors engaged in full timeemployment by the Company.

The Board currently comprises seven Executive Directors, including the Chairman, and nine Non-executive Directors, ensuringindependence and objectivity.

The Company’s Constitution authorises the Board to appoint Managing Directors (including the Chief Executive) with specificauthorised duties and to elect a Chairman to preside at meetings. If a vote which needs to be decided by a majority vote results in a tie, the Chairman is granted a second and deciding vote.

Re-appointment of DirectorsThe Company’s Constitution provides that at every annual general meeting, one-third (or the nearest number to but not exceedingone-third) of the Directors (exclusive of any Managing Director, Directors of an age greater than 72 years and Directors appointedsince the most recent annual general meeting) shall retire from office and all vacant directorships may be filled at that meeting.

The Directors to retire in each year are the Directors who have been in office longest since their last election or appointment.Retiring Directors are eligible for re-election. No Director (other than any Managing Director) can serve for a term longer thanthree years without re-election. Further, Directors appointed since the last annual general meeting must retire but are eligible to be re-elected for a three year term. Directors who are older than 72 must retire each year and are eligible to be re-elected for a one year term.

Directors may wish to seek independent advice relating to their duties as Board members. Any Director wishing to do this, at theCompany’s expense, requires the prior consent of the Chairman. The Chairman considers these requests on a case by case basis.

Nominating CommitteeThe Nominating Committee consists of the following Directors:

K R Murdoch ACA S B KnightA M Siskind

The Nominating Committee meets as required to consider the composition of the Board which must satisfy the following parameters:

• there must be a minimum of five Directors;• at least two Directors must be residents of Australia; and• the Board members should represent a broad range of expertise and experience.

If at any time the Nominating Committee is of the view that any of the above criteria is not satisfied, the Nominating Committeewill nominate candidates for Board positions to the Board which then needs to vote on those candidates. Persons voted into Boardpositions in this way then need to be re-elected by the shareholders at the next annual general meeting if they are to continue tohold office. The Nominating Committee will ask any Directors who are not properly performing their duties to retire.

39

Annual Report 2001

Statement of Corporate Governance

for the year ended 30 June, 2001

Compensation CommitteeThe Compensation Committee consists of the following Directors:

J A M Erkko KBES S Shuman

Details of Directors’ remuneration, superannuation and retirement payments are set out on page 51.

The Compensation Committee is established to review and make recommendations to the Board on the remuneration of the Chief Executive and to review and make recommendations to the Chief Executive on the remuneration of the other senior executive officers.

Share Option CommitteeThe Share Option Committee consists of the following Directors:

K R Murdoch ACA M Siskind

The Share Option Committee determines to whom and how many options should be granted in furtherance of the Company’s share option plans.

Audit CommitteeThe Audit Committee consists of the following Non-executive Directors:

S S Shuman, ChairmanJ A M Erkko KBEA S B KnightT J Perkins

The Audit Committee, which operates under a Charter approved by the Board, meets at least twice each year with the Company’sinternal and external auditors. The purpose of these meetings is:

• to review the yearly and half-yearly financial results and statements, the findings of the audit, and any adjustment requiredas a result of the audit;

• to recommend to the Board that the financial statements be approved;

• to discuss any problems foreseen in the audit process;

• to discuss with the external auditors their judgements about the quality of the accounting policies applied in the financial statements;

• to review the external auditors’ fees and performance and discuss with them their independence;

• to review the annual internal audit plan and the results of internal audit’s activities;

• to review the adequacy of internal controls; and

• to advise the Board on any other requested issues.

The Audit Committee invites senior executives of the Company, including the Chief Financial Officer and Group General Counsel,to participate in its meetings.

40


Statement of Corporate Governance (Continued)

Executive CommitteeAs at the date of the Directors’ Report the Company’s Executive Committee is composed of the following members:

K R Murdoch AC Chairman and Chief Executive, The News Corporation LimitedA Ball Chief Executive, British Sky Broadcasting Group plcC Carey President and Chief Executive Officer, Sky Global Networks, Inc.P Carlucci Chairman and Chief Executive Officer, News America MarketingP Chernin President and Chief Operating Officer, The News Corporation LimitedD F DeVoe Senior Executive Vice President, Chief Financial Officer, The News Corporation LimitedA Disney Executive Vice President for Content, The News Corporation LimitedJ Gianopulos Chairman, Fox Filmed EntertainmentG Ginsberg Executive Vice President, Investor Relations and Corporate Communications, The News Corporation LimitedS Grushow President, Fox Television Entertainment Group D Hill Chairman and Chief Executive Officer, Fox Sports Television GroupL Hinton Executive Chairman, News International plcB Mulligan Chairman, Fox TelevisionJ R Murdoch Executive Vice President, The News Corporation Limited; Chairman and Chief Executive Officer, STAR GroupL K Murdoch Chairman, News Limited; Deputy Chief Operating Officer, The News Corporation LimitedA Peled Chief Executive Officer, NDS Group plcM Pompadur Executive Vice President, The News Corporation LimitedT Rothman Chairman, Fox Filmed EntertainmentJ Shell President and Chief Executive Officer, Fox Cable NetworksA M Siskind Senior Executive Vice President, Group General Counsel, The News Corporation LimitedM Stern Chairman and Chief Executive Officer, Fox Television Stations

The primary objectives of the Executive Committee are to strengthen the co-ordination and profitability of the Company’s activities.For purposes of advising the Board, the Executive Committee also considers strategic direction, brand management, corporatecommunications, human resources and risk management.

In the implementation of its Charter the Executive Committee:

• discusses major operating issues;

• evaluates opportunities and business risks;

• refines and redefines the Company’s priorities worldwide and by market; and

• reviews and sets the strategic focus and direction of all major businesses of the Company.

41

Annual Report 2001


Internal Controls and Risk ManagementAn internal audit function operates under a Charter which defines the purpose, authority and responsibility of the Internal AuditGroup. The Group’s mission is to provide an independent assessment of risk and the effectiveness of the Company’s worldwideoperational, administrative and financial internal control environment.

The areas of emphasis for the conduct of the assessment include the:

• adequacy, appropriateness and effectiveness of accounting and operating controls;

• economy and efficiency with which resources are employed;

• extent of compliance with Company policies and procedures;

• accuracy of and security over data and information;

• accountability for the Company’s assets to safeguard against loss; and

• adequacy of reviews made by the operating companies to ensure an effective internal control environment is fostered.

The results of each audit and proposed recommendations are reported on a timely basis to the management responsible forimplementing changes.

The Internal Audit Group reports to the Company’s Audit Committee and meets with it at least twice a year to review the annualInternal Audit Plan and the results of its activities.

The activities of the Internal Audit Group are separate and distinct from the external auditors. Active coordination between the two groups is recognised as essential in order to maximise the Company’s return on investment for audit services.

Ethical StandardsAt a Board meeting on 27 February 1996, the Board adopted “Standards of Business Conduct”. The Standards confirm theCompany’s policy to conduct its affairs in compliance with all applicable laws and regulations and observe the highest standards ofbusiness ethics. The Company intends that the spirit, as well as the letter of those standards is followed by all Directors, officers and employees of the Company, its subsidiaries and divisions. This is communicated to each new Director, officer and employee and has already been communicated to those in positions at the time the Standards were adopted.

42



The Standards deal with the following main areas:

* corporate assets and information:

(a) company funds and property;

(b) corporate records and accounting;

(c) confidential and proprietary information;

(d) insider trading; and

(e) legal disputes.

* conflicts of interest;

* dealing with others:

(a) government officials;

(b) business hospitality; and

(c) prohibited payments.

* equal opportunity and unlawful harassment;

* safety of the workplace and environmental protection; and

* relationships with competitors and other trade practices.

Employees are encouraged to raise any matters of concern with their supervisor or the relevant company’s general counsel.

ShareholdersShareholders play an integral part in corporate governance. To give effect to this the Board ensures that shareholders are kept fullyinformed through:

* the Annual Report which is distributed to all shareholders and the Full Financial Report which is available to all shareholderson request;

* disclosures made to the Australian Securities and Investment Commission, US Securities and Exchange Commission, and theStock Exchanges in Australia, New York, New Zealand and London; and

* notices and explanatory memoranda of extraordinary and general meetings.

Shareholders may raise matters of concern at general meetings and have the ultimate control in corporate governance as they votefor the members of the Board, the Company’s governing body.

43

Annual Report 2001


The Directors present their report together with the Concise Financial Report of the Company for the year ended 30 June, 2001and the auditors’ independent audit report thereon.

DirectorsThe following Directors were in office during the period 1 July, 2000 to the date of this report:

K R Murdoch AC(Age 70). Managing Director and Chief Executive Officer of The News Corporation Limited since 1979,Chairman since 1991.Director of Fox Entertainment Group, Inc. since 1985, Chairman since 1992 and Chief Executive Officer since 1995.Chairman of STAR Group from 1993 to 1998, Director since 1993.Director of British Sky Broadcasting Group plc since 1990 and Chairman since 1999.Director of Fox Family Worldwide, Inc. since 1996.Director of China Netcom Corporation (Hong Kong) Limited since February 2001.Director of Gemstar-TV Guide International, Inc. since June 2001.Member of the Nominating and Share Option Committees of The News Corporation Limited.

G C Bible(Age 64). Chairman and Chief Executive Officer of Philip Morris Companies Incorporated since 1995.Director of The New York Stock Exchange since 1995.Non-executive Director of The News Corporation Limited since 1998.

C Carey(Age 47). Director, President and Chief Executive Officer of Sky Global Networks, Inc. since June 2001.Executive Director and Co-Chief Operating Officer of The News Corporation Limited since 1996.Director of Fox Entertainment Group, Inc. since 1992 and Co-Chief Operating Officer since 1998.Director of STAR Group since 1993.Director of Fox Family Worldwide, Inc. since 1996.Non-executive Director of NDS Group plc since 1998.Director of TV Guide, Inc. from 1999 to 2000, Director of Gemstar-TV Guide International, Inc. since 2000.Director of Gateway, Inc. since 1996.

P Chernin(Age 50). Executive Director, President and Chief Operating Officer of The News Corporation Limited since October 1996.Director, President and Chief Operating Officer of Fox Entertainment Group, Inc. since August 1998.Director of Sky Global Networks, Inc. since June 2001.Director of TV Guide, Inc. from 1999 to 2000.Member of Advisory Board of PUMA AG since 1999.Director of E*Trade Group, Inc. since 1999.

44


Directors’ Report


K E Cowley AO(Age 66). Director of Independent Newspapers Limited since 1990, Chairman since March 2001.Chairman of PMP Communications Limited from 1992 to March 2001.Director of The Commonwealth Bank of Australia from 1997 to March 2001.Director of The News Corporation Limited from 1979, Non-executive Director since 1997.

D F DeVoe(Age 54). Deputy Finance Director of The News Corporation Limited from 1985 to 1990. Chief Financial Officer and FinanceDirector since 1990.Director of Fox Entertainment Group, Inc. since 1991, Senior Executive Vice President and Chief Financial Officer since 1998.Director of STAR Group since 1993.Director of British Sky Broadcasting Group plc since 1994.Non-executive Director of NDS Group plc since 1996.Director of Sky Global Networks, Inc. since June 2001.Director of Gemstar-TV Guide International, Inc. since June 2001.

R Eddington(Age 51). Chief Executive of British Airways plc since 2000.Non-executive Director of The News Corporation Limited since 2000, Executive Director from 1999 to 2000.Non-executive Director of John Swire & Sons Pty Limited since 1997.Non-executive Director of Qantas Airways Limited since February 2001.

J A M Erkko KBE(Age 68). Non-executive Director of The News Corporation Limited since 1992.Director of Finair from 1982 to 1993.Chairman of Eurocable Oy Board of Directors from 1987 to 1995.Vice Chairman of Kymmene Group from 1991 to 1995.Director of SanomaWSOY Group since 1999; Chairman from 1999 to March 2001. Chairman of Sanoma Corporation from 1972to 1999.Member of the Audit and Compensation Committees of The News Corporation Limited.

A S B Knight(Age 61). Executive Director of The News Corporation Limited from 1991 to 1994, Non-executive Director since 1994.Member of the Audit and Nominating Committees of The News Corporation Limited.Non-executive Director of Rothschild Investment Trust Capital Partners plc since 1997.

G J Kraehe(Age 58). Non-executive Director of The News Corporation Limited since January 2001.Managing Director and Chief Executive Officer of Southcorp Limited from 1994 to March 2001.Director and Member of the Business Council of Australia since 1999.Director of National Australia Bank since 1997.Director of Brambles Industries since 2000.

J R Murdoch(Age 28). Director of The News Corporation Limited since December 2000.Chairman and Chief Executive Officer of STAR Group since 2000.Non-executive Director of NDS Group plc since 1999.Director of YankeesNets LLC since 1999.

45

Annual Report 2001

Directors’ Report (Continued)

L K Murdoch(Age 29). Director of News Limited since 1995, Chairman since 1997.Director of The News Corporation Limited since 1996 and Senior Executive Vice President from 1999 to 2000. Deputy Chief Operating Officer since 2000.Director of Beijing PDN Xinren Information Technology Co. Ltd. since 1996.Deputy Chairman of STAR Group since 1995.Director of Foxtel Management Pty Limited since 1998.

T J Perkins(Age 69). Senior Partner at Kleiner Perkins Caufield & Byers since 1980.Director of Compaq Computer Corporation since 1997.Non-executive Director of The News Corporation Limited since 1996.Member of the Audit Committee of The News Corporation Limited.

B C Roberts Jr.(Age 58). Chairman of Worldcom, Inc. since 1998. Director of MCI Communications Corporation from 1985 to 1998, Chairman from 1992 to 1998. Non-executive Director of The News Corporation Limited since 1995.

S S Shuman(Age 66). Executive Vice President and Managing Director of Allen & Company Incorporated since 1970. Non-executive Director of The News Corporation Limited since 1982.Director of Bayou Steel Corporation since 1986.Director of Western Multiplex Corporation since 2000.Director of Six Flags, Inc. since 2000.Member of the Audit and Compensation Committees of The News Corporation Limited.

A M Siskind(Age 62). Director and Group General Counsel of The News Corporation Limited since 1991, Senior Executive Vice Presidentsince 1996. Director of British Sky Broadcasting Group plc since 1992.Director of STAR Group since 1993.Non-executive Director of NDS Group plc since 1996.Director, Senior Executive Vice President and General Counsel of Fox Entertainment Group, Inc. since 1998.Director of Sky Global Networks, Inc. since 1998.Member of the Nominating and Share Option Committees of The News Corporation Limited.

46



Directors’ MeetingsThe following Directors were in office during the financial year, and attended the following number of Board meetings:

Meetings of CommitteesDirectors’ Meetings Nominating Audit

Number of meetings held: 6 1 4

Number of meetings attended:K R Murdoch AC 6 1G C Bible 6C Carey 5P Chernin 6K E Cowley AO 5D F DeVoe 6R Eddington 6J A M Erkko KBE 5 2A S B Knight 5 2G J Kraehe 3J R Murdoch 4L K Murdoch 6T J Perkins 6 3B C Roberts Jr. 6S S Shuman 6 4A M Siskind 6 1

Numerous other meetings of the Board attended by a quorum of two or more Directors were held to deal with the day to daybusiness of the Company.

Principal Activities of the CompanyThe principal activities of the Company during the financial year were:

• filmed entertainment;• television;• cable network programming;• magazines and inserts;• newspapers; and• book publishing.

The principal activities of associated entities include:

• satellite, television and cable broadcasting;• newspaper publishing; and• print and electronic television guidance applications.

47

Annual Report 2001


Group ResultsProfit before change in accounting policy and abnormals was $1,282 million (2000 $1,259 million). The net loss attributable tomembers of the parent entity was $746 million (2000 $1,921 million profit). This result is after absorbing the after tax charge of$686 million (2000 $nil) arising from a change in accounting policy. The Company and its associates also recorded a net abnormalcharge after tax of $1,342 million (2000 $662 million gain).

These results are after deducting the outside equity interest in controlled entities.

DividendsThe following dividends have been paid or proposed since the beginning of the financial year:

a) The Directors of The News Corporation Limited recommend the payment on 11 October, 2001 of a final unfrankeddividend of 1.5 cents per ordinary share and 3.75 cents per preferred limited voting ordinary share (“preferred share”) on the issued shares at 7 September, 2001, the entitlement date for the proposed final dividend. The final dividend willabsorb $142 million subject to the operation of the Company’s Dividend Reinvestment Plan. A discount of 10% willapply to the weighted average market price of the ordinary and preferred shares used to determine the respectiveentitlements under the Dividend Reinvestment Plan.

b) An interim dividend franked to 50%, in respect of profits for the year ended 30 June, 2001 of 1.5 cents per ordinary share and 3.75 cents per preferred share totalling $112 million was paid or distributed according to the operation of the Company’s Dividend Reinvestment Plan on 28 April, 2001.

c) A final fully franked dividend of 1.5 cents per ordinary share and 3.75 cents per preferred share totalling $111 million was provided for in last year’s accounts. The dividend of $111 million was paid or distributed according to the operationof the Company’s Dividend Reinvestment Plan on 18 October, 2000.

d) Unfranked dividends were paid on the outstanding perpetual preference shares during the year amounting to $51 million.

48



Review of OperationsA review of the operations of the Company during the financial year and of the results of those operations is detailed in the frontsection of this Annual Report.

State of Affairs of the Company during the Financial YearThe Directors are not aware of any significant change in the state of affairs of the Company that occurred during the financial yearwhich has not been covered elsewhere in this Annual Report.

Likely DevelopmentsOther than matters referred to in this report and in the state of affairs of the Company in the review of operations, the Directorshave no reference to make to likely developments in the operations of the Company and the expected results of those operations insubsequent financial years. In the opinion of the Directors, any further disclosure would prejudice the interest of the Company.

Environmental RegulationsThe Company’s operations are subject to various environmental regulations in the countries in which it has a presence.

In Australia the Company has an established environmental management system in each jurisdiction which monitors compliancewith existing environmental regulations and new regulations as they are enacted. The management system includes procedures to be followed should an incident occur which adversely impacts the environment. The Company’s operations hold all relevantenvironmental licences and permits and have implemented monitoring procedures to ensure that it complies with licence conditions.

The Directors are not aware of any breaches of any legislation during the financial year which are material in nature.

Subsequent EventsThe Directors are not aware of any matter or circumstance that has arisen since the end of the financial year that has significantlyaffected or may significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in the financial years subsequent to the current financial year, except as referred to in Note 8 of the ConciseFinancial Report.

49

Annual Report 2001


Directors and Senior Executives’ Remuneration

Non-executive DirectorsFees paid to Non-executive Directors on the Board take into consideration the level of fees paid to Board members of othermultinational corporations, the size and complexity of the Company’s operations and the responsibilities and workload requirements of Board members.

Because the focus of the Board is on the long-term direction of the Company, there is no direct link between Non-executiveDirector remuneration and the short-term results of the Company.

Directors’ fees are not paid to Executive Directors since the responsibilities of Board membership are considered in determiningremuneration provided as part of the normal employment conditions.

Executive DirectorsThe broad remuneration policy is to ensure each compensation package properly reflects the relevant person’s duties andresponsibilities and that remuneration is competitive in attracting, retaining and motivating people of the highest quality. As theCompany operates in a highly competitive environment and continually seeks to improve value for shareholders, it is imperative that remuneration levels are set to be among the leaders of major multinational corporations, in the appropriate markets.

50



Directors and Senior Executives’ Remuneration (Continued)The table below sets out the fees and other amounts paid by the Company to Non-executive Directors of the Company for the year ended 30 June 2001:

Name Fees Other Value Total NumberAmounts of Options of Options

Granted Granted[1] [2] [3] [4]

US$000 US$000 US$000 US$000

Non-executive DirectorsG C Bible 37 44 81 12,000K E Cowley AO 29 44 73 12,000R Eddington 42 44 86 12,000J A M Erkko KBE 36 44 80 12,000A S B Knight 53 44 97 12,000G J Kraehe 16 16T J Perkins 40 44 84 12,000B C Roberts Jr. 37 44 81 12,000S S Shuman 120 44 164 12,000

The table below sets out the fees and other amounts paid by the Company to Executive Directors and the five officers receiving thehighest emoluments, of the Company, for the year ended 30 June, 2001:

Name Salary Bonuses Other Value of Total Number of Amounts Options Options

Granted Granted[1] [2] [3] [5]

US$000 US$000 US$000 US$000 US$000

Executive DirectorsK R Murdoch AC 4,357 3,000 221 7,578C Carey 1,638 3,000 26 986 5,650 240,000P Chernin 7,000 8,500 527 4,106 20,133 1,000,000D F DeVoe 1,675 2,000 41 986 4,702 240,000J R Murdoch 700 300 10 2,053 3,063 500,000L K Murdoch 1,250 500 24 821 2,595 200,000A M Siskind 1,650 1,000 52 986 3,688 240,000

OfficersR Ailes 2,283 2,500 6 1,027 5,816 250,000J Gianopulos 1,500 750 26 2,401 4,677 584,800S Grushow 2,000 2,250 22 930 5,202 226,400T Rothman 1,500 750 25 2,495 4,770 607,600M Stern 1,850 2,374 30 4,291 8,545 1,250,000[6]

51

Annual Report 2001


Directors and Senior Executives’ Remuneration (continued)[1] Other amounts comprise contributions to the Company pension plans and the cost of limited non-cash benefits in addition

to salary for executives in line with local country regulations and competitive market conditions.

[2] These options are valued using the Black-Scholes Option Pricing Model. These options are granted under the Company’svarious executive share option plans described in the Full Financial Report Note 24.

[3] All options were granted during the financial year.

[4] The exercise price of the options is A$17.83 and the options expire on 18 October, 2010 for each Director.

[5] The exercise price is A$18.15 and the options expire on 1 August, 2010.

[6] Received two grants:500,000 options – the exercise price is A$18.15 and the options expire on 1 August, 2010; and750,000 options – the exercise price is A$12.68 and the options expire on 1 January, 2011.

Directors’ Interests and benefitsInformation on Directors’ Shareholdings as at the date of this report are contained in the Full Financial Report Note 31.

Share OptionsDetails of the share options are disclosed in the Full Financial Report Note 24. Since 30 June, 2001 no options have lapsed.

The options carry no right to participate in any other share issue and no options have been exercised by a Director, except as notedin the Full Financial Report Note 31.

Indemnification of DirectorsTo the extent permitted by law, the Company has indemnified (fully insured) each Director, principal executive officer and secretaryof the Company.

The Company has agreed to indemnify these officers against any liability that may arise as a result of work performed in theirrespective capacities.

The Directors have not included details of the nature of the liabilities covered or the amount of the premium paid in respect of the Directors’ and Officers’ Liability and Legal Expenses insurance contracts as such disclosure is prohibited under the terms of the contract.

52



Rounding of AmountsThe parent entity is a company of the kind specified in Australian Securities and Investments Commission class order 98/0100. In accordance with that class order, amounts in this report and the accompanying Concise Financial Report have been rounded off to the nearest million dollars unless specifically stated to be otherwise.

This report is made and signed in accordance with a resolution of Directors.

K R Murdoch AC

Director

D F DeVoe

Director

16 August, 2001

53

Annual Report 2001


About the Concise Financial ReportThe financial statements and disclosures in the Concise Financial Report on pages 56 to 63 have been derived from The NewsCorporation Limited’s Full Financial Report for the year ended 30 June, 2001. A more comprehensive understanding of theCompany’s financial performance, financial position and financing and investing activities is given in the Full Financial Report.

A copy of the Full Financial Report, including the Independent Audit Report on the Full Financial Report, is available and will be sent to any shareholder without charge on request by phoning Australia 61 2 9288 3233, United Kingdom 44 207 782 6000 or United States 1 212 852 7059. All reports can be accessed via the internet at www.newscorp.com.

Statement of Financial PerformanceOperating income for the year to 30 June, 2001 was $3.1 billion, an increase of $0.4 billion, or 13% over the previous year. Thisperformance resulted from improvements in the annual operating profits in the Filmed Entertainment, Cable Network Programming,and Book Publishing segments due to strong theatrical and home video performances of current year releases, growth in the cablesubscriber base, along with improved ratings, and higher margin title sales at HarperCollins. These results were partially offset by a lower contribution from the television segment as a result of a soft US advertising market. Operating income was alsofavourably impacted by a continued weakening of the Australian dollar against the US dollar.

During the year, losses from associated entities amounted to $162 million before abnormal charges, a decline of $66 million over the previous year. These improved results were primarily driven by continued growth of direct to home subscriptions across several pay television platforms, despite higher programming costs.

The Company recorded abnormal gains of $1.0 billion and abnormal charges of $2.3 billion during the year, resulting in a netabnormal charge after tax of $1.3 billion. The net abnormal charge primarily arose from the write-down of the Company’sinvestment in One.Tel and various new media investments, and the restructure of the Healthon / WebMD transaction, offsetpartially by gains on disposals of assets, including shares in Echostar. In addition, the Company recorded a one-off net charge after tax and outside equity interest of $0.7 billion arising from a change in accounting policy with regards to, amongst other things, the treatment of marketing and development costs incurred in the production and distribution of films.

Profit before change in accounting policy and abnormals was $1.3 billion, up 2% on the previous year.

54


Discussion and Analysis of the Financial Statements


Statement of Financial PositionTotal assets as at 30 June, 2001 increased $19.4 billion to $85.0 billion from the prior year total of $65.6 billion. The major changesoccurred in the following:

• Cash increased $1.0 billion to $5.6 billion as outlined in the commentary on the statement of cash flows;

• Current receivables increased $1.4 billion to $6.7 billion, and current inventories by $0.6 billion to $3.3 billion largely due to the favourable exchange impact of a weakened Australian dollar;

• Investments in associated entities increased $11.4 billion to $20.0 billion. This increase was primarily due to theacquisition of a further 17% of Gemstar - TV Guide, investment in various cable and pay television operations in Asia and Europe, and a favourable exchange impact;

• Other investments decreased $2.1 billion to $3.1 billion largely due to the impact of recording a writedown in theinvestments in One.Tel and Healtheon / WebMD; and

• Non current inventories increased $1.2 billion to $5.2 billion, property, plant and equipment increased $1.2 billion to $7.1 billion and publishing rights, titles and television licences increased $4.2 billion to $31.1 billion. These increases allprimarily reflect favourable exchange movements.

Total liabilities as at 30 June, 2001 increased by $4.4 billion to $37.4 billion from $32.9 billion as at 30 June, 2000. The majorreason for this increase is the exchange impact of a weakened Australian dollar against the US dollar, partially offset by the impact on liabilities of the restructured Healtheon / WebMD transaction.

Statement of Cash FlowsOverall cash increased by $1.0 billion to $5.6 billion due to the following:

• Cash provided by operating activity was $0.9 billion after considering the further investment of $0.9 billion in inventories,primarily in acquiring sporting rights and television programming inventories;

• Cash used in investing activities was a net amount of $1.8 billion. Investment spend was $3.1 billion, reflectinginvestments in cable and pay television operations in Asia and Europe, investment in the first half of the year in variousnew media businesses, and continued support for both Sky Latin America and various U.S. cable channels. Proceeds fromthe sale of non-current assets amounted to $2.4 billion, reflecting the sales of Echostar shares, The Health Network, The Golf Channel, and TM3. In addition, a further $1.1 billion was spent on upgrades to property, plant and equipment,the largest project being at the New York Post;

• Cash provided by financing activities was $1.2 billion, driven by the issuance of Liquid Yield Option Notes due February2021, raising $1.5 billion; and

• The weakening of the Australian dollar increased reported cash on hand by $0.6 billion.

55

Annual Report 2001

Discussion and Analysis of the Financial Statements (Continued)

Consolidated

2001 2000Note A$ million

Sales revenue 2 25,578 22,443Operating expenses 17,642 16,047Selling, general and administrative expenses 4,137 3,092Depreciation and amortisation 706 562

Operating income 2 3,093 2,742

Net (loss) from associated entities 4 (249) (298)

Borrowing costs (1,268) (1,169)Interest income 333 355

Net borrowing costs (935) (814)Dividend on exchangeable preferred securities (90) (79)

Profit before change in accounting policy, abnormals and tax 1,819 1,551

Abnormal gains before tax 5 1,023 1,530Abnormal charges before tax 5 (2,297) (344)Change in accounting policy before tax 6 (1,107)

Profit (loss) from ordinary activities before tax (562) 2,737

Income tax benefit (expense)Ordinary activities before change in accounting policy and abnormals (428) (225)Abnormal gains and charges 5 19 (454)Change in accounting policy 421

Net income tax benefit (expense) 12 (679)

Net profit (loss) from ordinary activities after tax (550) 2,058

Outside equity interests (196) (137)

Net profit (loss) attributable to members of the parent entity (746) 1,921

Net exchange gains arising on translation of net assets of controlled entities 3,372 2,223Additional investment by an associated entity 1,060

Total change in equity other than those resulting from transactions with owners as owners 3,686 4,144

Profit before change in accounting policy and abnormals 2 1,282 1,259

Earnings per share on net profit (loss) attributable to members of the parent entityBefore change in accounting policy and abnormals $0.297 $0.303After change in accounting policy and abnormals $(0.192) $0.469

Diluted earnings per share is not materially different from basic earnings per share.The Statement of Financial Performance is to be read in conjunction with the accompanying notes.

56


Statement of Financial Performance


Consolidated


AssetsCurrent AssetsCash 5,615 4,638Receivables 6,683 5,331Inventories 3,259 2,646Other 616 512Total Current Assets 16,173 13,127Non-Current AssetsReceivables 762 509Investments in associated entities 20,022 8,602Other investments 3,129 5,204Inventories 5,219 4,027Property, plant and equipment 7,110 5,948Publishing rights, titles and television licences 31,051 26,884Goodwill 519 348Tax assets 103 95Other 873 841Total Non-Current Assets 68,788 52,458Total Assets 84,961 65,585

Liabilities and Shareholders’ EquityCurrent LiabilitiesInterest bearing liabilities 63 50Payables 8,777 7,986Tax liabilities 550 662Provisions 386 310Total Current Liabilities 9,776 9,008Non-Current LiabilitiesInterest bearing liabilities 18,742 15,381Payables 4,465 4,664Tax liabilities 426 704Provisions 290 153Total Non-Current Liabilities 23,923 20,902Exchangeable preferred securities 3,667 3,015Total Liabilities including exchangeable preferred securities 37,366 32,925Shareholders’ EquityContributed equity 20,735 11,369Reserves 10,899 6,819Retained profits 7 10,906 11,691Shareholders’ equity attributable to members of the parent entity 42,540 29,879Outside equity interests in controlled entities 5,055 2,781Total Shareholders’ Equity 47,595 32,660Total Liabilities and Shareholders’ Equity 84,961 65,585The Statement of Financial Position is to be read in conjunction with the accompanying notes.

57

Annual Report 2001

Statement of Financial Position

as at 30 June, 2001

Consolidated

2001 2000A$ million

Operating activityNet profit (loss) attributable to members of the parent entity (746) 1,921Adjustment for non-cash and non-operating activities:Associated entity earnings net of dividends 242 295Depreciation and amortisation 706 562Provisions and other 188 142Abnormal items after tax 1,342 (662)Change in accounting policy after tax 686Change in assets and liabilities:Receivables (410) (598)Inventories (889) (1,088)Payables (199) (39)Cash provided by operating activity 920 533

Investing and other activityProperty, plant and equipment (1,113) (671)Investments (3,053) (4,157)Proceeds from sale of non-current assets 2,387 3,341Cash (used) by investing activity (1,779) (1,487)

Financing activityIssuance of debt 1,496Repayment of debt (63) (1,621)Issuance of shares in a subsidiary 317Issuance of shares 56 127Repurchase of preferred shares, net (91) (1,166)Dividends paid (205) (236)Leasing and other finance costs (5) (52)Cash provided (used) by financing activity 1,188 (2,631)

Net (decrease) increase in cash 329 (3,585)Opening cash balance 4,638 7,483Exchange movement on opening cash balance 648 740Closing cash balance 5,615 4,638

Gross cash flows from operating activityCash from trading operationsReceipts 25,176 21,846Payments (23,120) (20,300)

2,056 1,546Dividend and distribution receipts 86 74Interest receipts 302 283Interest payments (1,225) (1,127)Income tax payments (209) (164)Dividends paid on exchangeable preferred securities (90) (79)Cash provided by operating activity 920 533For the purposes of the Statement of Cash Flows, cash includes cash at bank, on deposit and on hand.The Statement of Cash Flows is to be read in conjunction with the accompanying notes.

58


Statement of Cash Flows


Consolidated

2001 2000A$ million

Note1 Basis of preparation of concise financial report

The Concise Financial Report has been prepared in accordance with the Corporations Act (2001), Accounting Standard AASB 1039“Concise Financial Reports” and other mandatory professional reporting requirements. The financial statements and specificdisclosures have been derived from The News Corporation Limited’s Full Financial Report for the financial year. Other informationincluded in the Concise Financial Report is consistent with The News Corporation Limited’s Full Financial Report. The ConciseFinancial Report does not, and cannot be expected to, provide as full an understanding of the financial perfomance, financial positionand financing and investing activities of the Company as the Full Financial Report.

At the beginning of the current financial year, the Company changed its accounting policy with regards to, amongst other things, thetreatment of marketing and development costs incurred in the production and distribution of films whereby marketing and certaindevelopment costs, previously capitalised and expensed over time, are now expensed as incurred. This change in accounting policyprovides better comparability of the Company’s results against its competitors and has also ensured continued consistency with UnitedStates generally accepted accounting principles for producers and distributors of films. The net impact of this change in accountingpolicy net of outside equity interest was a one-off pre-tax charge to profit of $1,107 million with an associated tax benefit of $421 million.The effect of this change is a reduction in net profit attributable to members of $686 million and a corresponding reduction in thecarrying value of inventory of $1,338 million, a reduction in tax liabilities of $509 million and in outside equity interest of $143 million.

In accordance with the requirements of AASB 1041 “Revaluation of Non-Current Assets”, publishing rights, titles and television licences,investments and land and buildings previously carried at valuation were reverted to a cost basis of measurement. For the purpose oftransitioning to a cost basis, the existing revalued carrying amounts at 1 July, 2000 were deemed to be their cost. This change inaccounting policy had no impact on the financial position or financial performance of the Company as presented in this financial report.

The Company discloses as abnormal gains and charges the financial impact of transactions which are included within profit (loss) from ordinary activities that are considered abnormal by reason of their size, nature and effect on the Company’s financial performancefor the year.

Except as noted above, the financial statements have been prepared on a basis consistent with the previous year, and in accordance with historic cost principles.

The principal component of operating expenses is the amortisation of film and television programming costs which amounted to $9,751 million (2000 $8,401 million).

Note 2 Industry and geographic segment data

By industrySales revenueFilmed entertainment 6,625 6,115Television 7,008 5,843Cable network programming 2,696 2,005Magazines and inserts 1,675 1,585Newspapers 4,600 4,448Book publishing 1,907 1,634Other 1,067 813

25,578 22,443

59

Annual Report 2001

Notes to and Forming Part of the Concise Financial Report


Consolidated


Note 2 Industry and geographic segment data (continued)

By industry (continued)Operating incomeFilmed entertainment 503 188Television 991 1,120Cable network programming 197 120Magazines and inserts 437 411Newspapers 904 870Book publishing 205 141Other (144) (108)Operating income 3,093 2,742Net (loss) from associated entities before abnormals 4 (162) (228)Net borrowing costs (935) (814)Dividend on exchangeable preferred securities (90) (79)Tax on ordinary activities before change in accounting policy and abnormals (428) (225)Outside equity interest (196) (137)Profit before change in accounting policy and abnormals 1,282 1,259AssetsFilmed entertainment 8,527 7,467Television 21,135 16,782Cable network programming 9,545 7,448Magazines and inserts 2,929 2,518Newspapers 8,627 7,656Book publishing 3,340 2,775Other 2,093 2,495Corporate assets and investments 28,765 18,444

84,961 65,585

By geographic areaSales revenueUnited States 19,094 16,665United Kingdom 4,185 3,600Australasia 2,299 2,178

25,578 22,443Operating incomeUnited States 2,079 1,835United Kingdom 816 727Australasia 198 180Operating income 3,093 2,742Net (loss) from associated entities before abnormals 4 (162) (228)Net borrowing costs (935) (814)Dividend on exchangeable preferred securities (90) (79)Tax on ordinary activities before change in accounting policy and abnormals (428) (225)Outside equity interest (196) (137)Profit before change in accounting policy and abnormals 1,282 1,259AssetsUnited States 43,110 34,674United Kingdom 7,514 7,293Australasia 5,572 5,174Corporate assets and investments 28,765 18,444

84,961 65,585Sales are grouped by countries of origin.There were no material intersegment sales within geographic areas.Australasia comprises Australia, Asia, Fiji, Papua New Guinea and New Zealand.

60


Notes to and Forming Part of the Concise Financial Report (Continued)

Consolidated


Note 3 Dividends

Dividends provided for or paid during the year:

Class of Shares Dividend Frankingper share

Ordinary 1.5 cents Unfranked 31 30Ordinary 1.5 cents Fully franked (36%) 31Ordinary 1.5 cents Franked to 50% (34%) 31Preferred limited voting ordinary 3.75 cents Unfranked 111 95Preferred limited voting ordinary 3.75 cents Fully franked (36%) 80Preferred limited voting ordinary 3.75 cents Franked to 50% (34%) 81Perpetual preference shares 1 Unfranked 51 45Subsidiary preference shares 2 5.147% Unfranked 3

7 305 2841 Adjustable rate cumulative preference dividends.2 This class of equity was retired in July 1999.

For full payment details of the above mentioned dividends refer to Directors’ Report on page 48.

The balance of the franking account adjusted for franking credits which will arise from the payment of income tax provided for inthe financial statements, and after deducting franking credits to be used in payment of the above dividends, is $14 million (30%)(2000 $26 million (34%)).

Note 4 Associated entities

Operating (loss) (136) (125)Abnormals (90) (84)

Operating (loss) after abnormals (226) (209)

Income tax expense attributable to operating income (26) (103)Income tax benefit attributable to abnormals 3 14

Income tax expense (23) (89)

Operating (loss) after tax (249) (298)

61

Annual Report 2001


Consolidated


Note 5 Abnormal gains and chargesAbnormal gains:EchoStar transaction 415 598News Digital Systems float 220Disposal of non-current assets 608 712

1,023 1,530

Abnormal charges:Disposal and write down of non-current assets (1,037) (208)Restructuring costs (258) (136)Healtheon/WebMD transaction, net (a) (426)Write down of investment in One.Tel (b) (576)

(2,297) (344)

Income tax (expense) benefit attributable to abnormal items 19 (454)

Abnormal (loss) profit after tax (1,255) 732

(a) As a result of the restructure of the Company’s investment in Healtheon/WebMD (“WebMD”), the Company swapped out of itspreferred stock investment and recognised an impairment loss on its remaining common stock interest in WebMD. In exchangefor the preferred shares the Company received the ownership interest in The Health Network (“THN”), warrants to purchaseadditional common stock in WebMD, a reduction in its obligation to provide future media services to and license content fromWebMD and the elimination of future funding commitments to an international joint venture. The reduction in the carryingvalue of the Company’s obligations are non-cash and not reflected in the Statement of Cash Flows. The Company subsequentlysold its interest in THN.

(b) In May, 2001, the Company became aware of serious financial problems at One.Tel Limited, an Australian telecommunicationscompany in which the Company owns approximately 24% of the outstanding equity. Upon completion of One.Tel’s auditors’review of its current financial condition in late May, One.Tel was placed in administration. The carrying value of the investmentin One.Tel has been fully written down due to its plans to liquidate its operations.

Note 6 Change in accounting policyChange in accounting policy before tax (1,107)

At the beginning of the current financial year, the Company changed its accounting policy with regards to, amongst other things, thetreatment of marketing and development costs incurred in the production and distribution of films whereby marketing and certaindevelopment costs, previously capitalised and expensed over time, are now expensed as incurred. This change in accounting policyprovides better comparability of the Company’s results against its competitors and has also ensured continued consistency withUnited States generally accepted accounting principles for producers and distributors of films. The net impact of this change inaccounting policy net of outside equity interest was a one-off pre-tax charge to profit of $1,107 million with an associated tax benefitof $421 million. The effect of this change is a reduction in net profit attributable to members of $686 million and a correspondingreduction in the carrying value of inventory of $1,338 million, a reduction in tax liabilities of $509 million and in outside equityinterest of $143 million.

Note 7 Retained profitsRetained profits at the beginning of the financial year 11,691 9,737Net profit (loss) attributable to members of the parent entity (746) 1,921Dividends provided for or paid 3 (305) (284)Aggregate amount transferred from reserves 266 317

Retained profits at the end of the financial year 10,906 11,691

62



Note 8 Subsequent events

The Company and Liberty Media Corporation (“Liberty”) at 30 June, 2001, each owned 50% of Fox Sports International. On 15July, 2001, under a pre-existing option, Liberty exercised its right to sell its 50% interest in Fox Sports International to the Companyin exchange for an aggregate 3,633,866 ADRs of the Company representing 14,535,464 preferred shares. Under the terms of thistransaction, the Company will transfer the acquired interest in Fox Sports International to Fox Entertainment Group, Inc. (“FEG”)for approximately 3,632,000 shares of FEG Class A common shares. The transaction is expected to close during the second quarterof fiscal 2002.

In July, 2001, the US Federal Communications Commission approved the Company’s acquisition of Chris-Craft Industries, Inc.,BHC Communications, Inc. and United Television, Inc. Total consideration paid amounted to US$2.03 billion in cash and theissuance of 68,854,209 ADRs representing 275,416,836 preferred limited voting ordinary shares. The Company subsequentlytransferred the acquired business (excluding approximately US$1.7 billion in cash) to FEG which will operate the acquired stations.FEG issued the Company 122,244,272 Class A common shares of FEG. This increased the Company’s equity interest in FEG from 82.76% to approximately 85.25% while its voting interest remained at 97.8%.

In March, 2001, certain investors in Speedvision Network LLC (“Speedvision”) and Outdoor Life Network LLC (“Outdoor Life”)exercised their rights to require certain subsidiaries of FEG to purchase all of the interests held by them in Speedvision and OutdoorLife. The aggregate ownership percentage of the investors was approximately 53.44% and 50.23% of Speedvision and Outdoor Life, respectively. Based on independent fair value determinations of these interests, on 25 July, 2001, FEG paid total consideration of approximately US$401 million and US$309 million to purchase the investors’ interests in Speedvision and Outdoor Life,respectively, which resulted in FEG owning approximately 85.46% of Speedvision and approximately 83.18% of Outdoor Life. The remaining interests in Speedvision and Outdoor Life are owned by Comcast Corporation (“Comcast”). As a result of FEG’spurchase of the additional 53.44% of Speedvision as described above, the Company will consolidate the results of Speedvision.

Shortly after the exercise of the Speedvision and Outdoor Life purchase options described above, FEG entered into a PurchaseAgreement with Comcast pursuant to which FEG may sell its approximate 83.18% interest in Outdoor Life to Comcast. Pursuantto the Purchase Agreement, Comcast can elect to call FEG’s interest in Outdoor Life during the 30 day period which commenced on 25 July, 2001 and ends on 23 August, 2001 for approximately US$512 million.

In July, 2001, the Company entered into an agreement with Vivendi Universal and certain of its subsidiaries (“Vivendi”) to merge the Company’s interest in Stream, S.p.A. with Vivendi’s interest in Telepiu, S.p.A. subject to regulatory approval. Upon regulatoryapproval of the merger, the Company has agreed to purchase Telecom Italia’s interest in Stream such that the Company will own100% of Stream prior to merger. The merged entity will be 25% owned by the Company and 75% owned by Vivendi. TheCompany will have the right, exercisable at eighteen months from closing of the merger and again at thirty-six months from closing of the merger, to increase its stake in the merged entity to 50%.

In December, 2000, Haim Saban, Chairman and Chief Executive Officer of Fox Family Worldwide, Inc. (“FFW”), exercised hisright to require Fox Broadcasting Company to purchase all of the Class B Common Stock of FFW held by Mr Saban, other formerstockholders of Saban Entertainment, Inc. and their transferees (“the Saban Interest”). In January, 2001, a subsidiary of FoxBroadcasting Company exercised its option to purchase the Saban Interest. In July, 2001, the Company, Haim Saban and the other stockholders of FFW reached a definitive agreement to sell FFW to The Walt Disney Company (“Disney”) for totalconsideration of approximately US$5.3 billion (including the assumption of certain debt). Fox Broadcasting Company has enteredinto programming arrangements with Disney to allow the continued broadcast of certain FFW programming on Fox affiliatesthrough the Fox Kids Network following closing of the FFW sale to Disney. This transaction is expected to close during the second quarter of fiscal 2002.

63

Annual Report 2001


The Directors of The News Corporation Limited declare that:

a) the Concise Financial Report set out on pages 54 to 63 complies with Accounting Standard AASB 1039 “Concise FinancialReports”; and

b) has been derived from and is consistent with the Full Financial Report for the financial year.

This declaration is made in accordance with a resolution of Directors.

K R Murdoch AC

Director

D F DeVoe

Director

16 August, 2001

64


Directors’ Declaration


INDEPENDENT AUDIT REPORT

To the Members of The News Corporation Limited:

ScopeWe have audited the concise financial report of The News Corporation Limited for the financial year ended 30 June, 2001 as set out on pages 54 to 64, in order to express an opinion on it to the members of the Company. The Company’s directors areresponsible for the concise financial report.

Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the concisefinancial report is free of material misstatement. We have also performed an independent audit of the full financial report of TheNews Corporation Limited for the year ended 30 June, 2001. Our audit on the full financial report was signed on 16 August, 2001and was not subject to any qualification.

Our procedures in respect of the audit of the concise financial report included testing that the information in the concise financialreport is consistent with the full financial report and examination, on a test basis, of evidence supporting the amounts, discussion and analysis, and other disclosures which were not directly derived from the full financial report. These procedures have beenundertaken to form an opinion whether, in all material respects, the concise financial report is presented fairly in accordance withAccounting Standard AASB1039 “Concise Financial Reports”.

The audit opinion expressed in this report has been formed on the above basis.

Audit OpinionIn our opinion, the concise financial report of The News Corporation Limited complies with Accounting Standard AASB1039“Concise Financial Reports”.

Arthur AndersenChartered Accountants

Martyn ScrivensPartner16 August, 2001

Liability limited by the Accountants Scheme, approved under the Professional Standards Act 1994 (NSW)

65

Corporate Ownership - Ordinary SharesNumber of ordinary shareholders 41,442Voting rights On show of hands - one vote for each memberOn poll - one vote for each share held

Distribution of shareholding1 - 1,000 27,1211,001 - 5,000 11,1555,001 - 10,000 1,56310,001 - 100,000 1,353100,001 and over 250

Holding less than a marketable parcel 1,954

Top twenty shareholders as at 16 August, 2001Cruden Investments Pty. Limited and controlled entities 607,821,230Citicorp Nominees Pty. Limited 409,192,990Chase Manhattan Nominees Limited 227,898,049National Nominees Limited 168,204,330Westpac Custodian Nominees Limited 129,762,642ANZ Nominees Limited 77,129,127AMP Life Limited 37,623,252Queensland Investment Corporation 34,592,673Commonwealth Custodial Services Limited 32,096,540JP Morgan Custodial Services Pty. Limited 23,000,053HSBC Custody Nominees (Australia) Limited 20,759,429Cogent Nominees Pty. Limited 19,067,431Perpetual Trustees Victoria Limited 15,052,057MLC Limited 14,966,307RBC Global Services Australia Nominees Pty. Limited 13,653,024The National Mutual Life Association of Australasia Limited 11,133,492Perpetual Trustees Nominees Limited 10,304,864Perpetual Nominees Limited 9,788,969News Nominees Pty. Limited 9,151,882NRMA Nominees Pty. Limited 8,897,830

1,880,096,171

Percentage of issued ordinary shares held by twenty largest holders 89.88%

Substantial shareholdersCruden Investments Pty. Limited and controlled entities 607,821,230

66


Shareholder Information

as at 16 August, 2001

Corporate Ownership - Preferred Limited Voting Ordinary SharesNumber of preferred limited voting ordinary shareholders 18,170

Voting rights - preferred limited voting ordinary shares do not have voting rights except:

(a) upon any proposed resolution to reduce the share capital of The News Corporation Limited, or to sanction the disposal of thewhole of the property, business and undertaking of The News Corporation Limited, or when any preferential dividend declaredon such share has been declared and due for payment, and remains unpaid for more than six months; or

(b) upon any proposed resolution which directly affects the rights or privileges of preferred limited voting ordinary shareholders,

in which case a preferred limited voting ordinary shareholder has the same voting rights as those conferred on ordinary shareholdersin respect of each ordinary share.

Distribution of shareholding1 - 1,000 10,9371,001 - 5,000 5,3355,001 - 10,000 88910,001 - 100,000 787100,001 and over 222


Top twenty shareholders as at 16 August, 2001Citicorp Nominees Pty. Limited 1,826,381,089Cruden Investments Pty. Limited and controlled entities 231,040,214Chase Manhattan Nominees Limited 215,184,345National Nominees Limited 118,550,348Westpac Custodian Nominees Limited 84,307,564Commonwealth Custodial Services Limited 37,527,727Queensland Investment Corporation 36,069,291AMP Life Limited 33,379,829MLC Limited 25,556,082Cogent Nominees Pty. Limited 20,217,286JP Morgan Custodial Services Pty. Limited 20,042,505Perpetual Trustees Nominees Limited 18,358,043ANZ Nominees Limited 16,513,852Perpetual Trustees Victoria Limited 15,005,475NRMA Nominees Pty. Limited 12,059,627RBC Global Services Australia Nominees Pty. Limited 11,087,665ING Life Limited 10,760,954Perpetual Nominees Limited 10,683,320The National Mutual Life Association of Australasia Limited 8,551,108Ogier Trustee Limited 7,859,712

2,759,136,036

Percentage of issued preferred limited voting ordinary shares held by twenty largest holders 93.94%

67

Annual Report 2001

Shareholder Information (Continued)

as at 16 August, 2001

68


Board of Directors and Executive Management Committee

Directors

K. Rupert Murdoch, ACChairman and Chief Executive

Geoffrey C. Bible

Chase Carey

Peter Chernin

Kenneth E. Cowley, AO

David F. DeVoe

Roderick I. Eddington

Dr. Aatos J. Erkko, KBE

Andrew S.B. Knight

Graham Kraehe

James R. Murdoch

Lachlan K. Murdoch

Thomas J. Perkins

Bert C. Roberts, Jr.

Stanley S. Shuman

Arthur M. Siskind

K. Rupert MurdochChairman and Chief ExecutiveNews Corporation

Tony BallChief ExecutiveBritish Sky Broadcasting

Chase CareyPresident and Chief Executive OfficerSky Global Networks

Paul CarlucciChairman and Chief Executive OfficerNews America Marketing

Peter CherninPresident and Chief Operating OfficerNews Corporation

David F. DeVoeSenior Executive Vice Presidentand Chief Financial OfficerNews Corporation

Anthea DisneyExecutive Vice President, ContentNews Corporation

James N. GianopulosChairmanFox Filmed Entertainment

Gary GinsbergExecutive Vice President, Investor Relations and Corporate CommunicationsNews Corporation

Sandy GrushowPresidentFox Television Entertainment Group

David HillChairman and Chief Executive OfficerFox Sports Television Group

Les HintonExecutive ChairmanNews International plc

Brian MulliganChairmanFox Television

James R. MurdochChairman and Chief Executive OfficerSTAR Group

Lachlan K. MurdochDeputy Chief Operating OfficerNews Corporation

Abe PeledChief Executive OfficerNDS

Martin PompadurExecutive Vice PresidentNews Corporation

Thomas RothmanChairmanFox Filmed Entertainment

Jeff ShellPresident and Chief Executive OfficerFox Cable Networks

Arthur M. SiskindSenior Executive Vice Presidentand Group General CounselNews Corporation

Mitchell SternChairman and Chief Executive OfficerFox Television Stations

Executive Management Committee

SecretariesKeith D. Brodie (Sydney)Robert K. Moon (Adelaide)Laura A. O'Leary (New York)

Head Office2 Holt StreetSydney, N.S.W. Australia 2010Telephone 61 (2) 9288 3000

Registered Office121 King William StreetAdelaide, S.A. Australia 5000Telephone 61 (8) 8206 2000

A.C.N007 910 330

AuditorsArthur Andersen Chartered Accountants

Share ListingsOrdinary Shares and PreferredLimited Voting Ordinary Shares

Australian Stock Exchange LimitedThe London Stock ExchangeNew York Stock Exchange The New Zealand Stock Exchange

Share RegistersComputershare Investor Services Pty LtdLevel 5, 115 Grenfell StreetAdelaide, S.A.Australia 5000Telephone 61 (8) 8236 2300

Computershare Services plcP.O. Box 82The PavilionsBridgwater RoadBristolBS99 7NHTelephone 44 (870) 702 0003

ADR DepositaryCitibank, N.A.ADR Department111 Wall Street, 5th FloorNew York, New York 10043Shareholder Services Telephone 1 (877) 248 4237

Requests for Annual ReportsAustralasia:2 Holt StreetSydney, N.S.W. Australia 2010Telephone 61 (2) 9288 3233

United Kingdom:1 Virginia StreetLondon, E98 1XYTelephone 44 (20) 7782 6000Fax 44 (20) 7895 9020

United States:1211 Avenue of AmericasNew York, NY 10036Telephone 1 (212) 852 7059

Through the Web:www.newscorp.com/public/ir/index

Financial StatementsThe financial statements in this ConciseAnnual Report have come from theGroup’s full 2001 Financial Report. A copy of the Full Financial Report is available free of charge upon request from the addresses above.

The News Corporation Limited Notice of MeetingA separate Notice of Meeting and ProxyForm are enclosed with this report.

The interactive version of the News Corporation 2001 Annual Report can be found at: www.newscorp.com

Supplemental Information

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The News Corporation Limited Full Financial Report 2001

Note PageStatements of Financial Performance 2Statements of Financial Position 3Statements of Cash Flows 4Significant accounting policies 1 5Industry and geographic segment data 2 9Sales revenue 3 12Profit before change in accounting policy, abnormals and tax 4 12Associated entities 5 13Abnormal gains and charges 6 14Change in accounting policy 7 15Income tax expense 8 15Dividends 9 16Earnings per share 10 16Remuneration of Directors and Executives 11 17Current assets 12 18Non-current receivables 13 18Investments 14 19Non-current inventories 15 22Property, plant and equipment 16 23Publishing rights, titles and television licences 17 25Goodwill 18 25Other non-current assets 19 25Current liabilities 20 26Non-current liabilities 21 27Interest bearing liabilities 22 28Exchangeable preferred securities 23 31Contributed equity 24 32Reserves 25 36Retained profits 26 37Outside equity interests in controlled entities 27 37Contingent liabilities 28 38Commitments 29 39Superannuation commitments 30 40Related party disclosure 31 42Controlled entities 32 44Acquisitions and disposals 33 57Subsequent events 34 59Directors’ Declaration 60Independent Audit Report 61Shareholder information 62

The Directors’ Report is on page 44 of the Annual Report.

1

Full Financial Report

Index

Consolidated Parent Entity

2001 2000 2001 2000Note A$ million A$ million

Sales revenue 2, 3 25,578 22,443Operating expenses 17,642 16,047Selling, general and administrative expenses 4,137 3,092Depreciation and amortisation 4 706 562

Operating income 2 3,093 2,742

Net (loss) from associated entities 5 (249) (298)

Borrowing costs 4 (1,268) (1,169)Investment income 4 333 355 2,511 2,984

Net borrowing costs (935) (814) 2,511 2,984Dividend on exchangeable preferred securities 4 (90) (79)

Profit before change in accounting policy, abnormals and tax 1,819 1,551 2,511 2,984

Abnormal gains before tax 6 1,023 1,530Abnormal charges before tax 6 (2,297) (344)Change in accounting policy before tax 7 (1,107)

Profit (loss) from ordinary activities before tax (562) 2,737 2,511 2,984

Income tax benefit (expense)Ordinary activities before change in accounting policy

and abnormals (428) (225)Abnormal gains and charges 6 19 (454)Change in accounting policy 421

Net income tax benefit (expense) 8 12 (679)

Net profit (loss) from ordinary activities after tax (550) 2,058 2,511 2,984

Outside equity interests (196) (137)

Net profit (loss) attributable to members of the parent entity (746) 1,921 2,511 2,984

Net exchange gains arising on translation ofnet assets of controlled entities 25 3,372 2,223

Additional investment by anassociated entity 25 1,060

Total change in equity other than those resulting from transactions with owners as owners 3,686 4,144 2,511 2,984

Profit before change in accounting policy and abnormals 2 1,282 1,259 2,511 2,984

Earnings per share on net profit (loss) attributableto members of the parent entity 10

Before change in accounting policy and abnormals $0.297 $0.303After change in accounting policy and abnormals $(0.192) $0.469

The Statements of Financial Performance are to be read in conjunction with the accompanying notes.

2


Statements of Financial Performance




AssetsCurrent Assets 12Cash 5,615 4,638 6 2Receivables 6,683 5,331 8,227 2,960Inventories 3,259 2,646Other 616 512Total Current Assets 16,173 13,127 8,233 2,962Non-Current AssetsReceivables 13 762 509Investments in associated entities 14 20,022 8,602Other investments 14 3,129 5,204 28,379 22,376Inventories 15 5,219 4,027Property, plant and equipment 16 7,110 5,948Publishing rights, titles and television licences 17 31,051 26,884Goodwill 18 519 348Tax assets 19 103 95Other 19 873 841Total Non-Current Assets 68,788 52,458 28,379 22,376Total Assets 84,961 65,585 36,612 25,338

Liabilities and Shareholders’ EquityCurrent Liabilities 20Interest bearing liabilities 63 50Payables 8,777 7,986Tax liabilities 550 662Provisions 386 310 142 111Total Current Liabilities 9,776 9,008 142 111

Non-Current Liabilities 21Interest bearing liabilities 18,742 15,381Payables 4,465 4,664Tax liabilities 426 704Provisions 290 153Total Non-Current Liabilities 23,923 20,902Exchangeable preferred securities 23 3,667 3,015Total Liabilities including exchangeable preferred securities 37,366 32,925 142 111

Shareholders’ EquityContributed equity 24 20,735 11,369 22,268 13,282Reserves 25 10,899 6,819 311 311Retained profits 26 10,906 11,691 13,891 11,634Shareholders’ equity attributable to members of

the parent entity 42,540 29,879 36,470 25,227Outside equity interests in controlled entities 27 5,055 2,781Total Shareholders’ Equity 47,595 32,660 36,470 25,227Total Liabilities and Shareholders’ Equity 84,961 65,585 36,612 25,338

Contingent liabilities 28Commitments 29The Statements of Financial Position are to be read in conjunction with the accompanying notes.

3


Statements of Financial Position

as at 30 June, 2001



Operating activityNet profit (loss) attributable to members of the parent entity (746) 1,921 2,511 2,984Adjustment for non-cash and non-operating activities:Associated entity earnings net of dividends 242 295Depreciation and amortisation 706 562Provisions and other 188 142Abnormal items after tax 1,342 (662)Change in accounting policy after tax 686Change in assets and liabilities:Receivables (410) (598) (2,542) (2,208)Inventories (889) (1,088)Payables (199) (39) 31 (776)Cash provided by operating activity 920 533Investing and other activityProperty, plant and equipment (1,113) (671)Investments (3,053) (4,157)Proceeds from sale of non-current assets 2,387 3,341Cash (used) by investing activity (1,779) (1,487)Financing activityIssuance of debt 1,496Repayment of debt (63) (1,621)Funding from related entities 133 127Issuance of shares in a subsidiary 317Issuance of shares 56 127Repurchase of preferred shares, net (91) (1,166)Dividends paid (205) (236) (129) (125)Leasing and other finance costs (5) (52)Cash provided (used) by financing activity 1,188 (2,631) 4 2Net (decrease) increase in cash 329 (3,585) 4 2Opening cash balance 4,638 7,483 2Exchange movement on opening cash balance 648 740Closing cash balance 12 5,615 4,638 6 2Gross cash flows from operating activityCash from trading operationsReceipts 25,176 21,846Payments (23,120) (20,300)

2,056 1,546Dividend and distribution receipts 86 74Interest receipts 302 283Interest payments (1,225) (1,127)Income tax payments (209) (164)Dividends paid on exchangeable preferred securities (90) (79)Cash provided by operating activity 920 533

For the purposes of the Statements of Cash Flows, cash includes cash at bank, on deposit and on hand as reported in Note 12. The Statements of Cash Flows are to be read in conjunction with the accompanying notes.

4


Statements of Cash Flows


Note 1 Significant accounting policies

Underlying principlesThe Full Financial Report has been prepared as a general-purpose financial report that complies with the requirements of theCorporations Act (2001), Australian Accounting Standards and Urgent Issues Group Consensus Views. Except for a change in policyfor accounting for films and a change in the basis of measuring certain classes of non-current assets, the Full Financial Report has beenprepared on a basis consistent with the previous year. Except for the basis of measurement of certain non-current assets, previouslyrevalued, now stated at deemed cost, the full financial report has been prepared in accordance with historical cost convention.

Where necessary, comparative amounts have been adjusted to conform with changes in the current year presentation.

Principles of consolidationThe consolidated accounts include the financial statements of the parent entity, The News Corporation Limited (“TNCL”) and itscontrolled entities, referred to collectively throughout this report as the Company. For financial reporting purposes, control generallymeans ownership of a majority interest in an entity but may, in certain instances, result from other considerations, including acompany’s capacity to dominate decision making in relation to the financial and operating policies of the entity.

Although TNCL has less than a majority voting interest in Fox Television Holdings, Inc. (“FTH”), this entity is included in theconsolidated accounts because (i) the Company has the ability to redeem the majority voting interest at any time, (ii) the dividendson and the amounts to be paid on redemption of the majority voting interest are fixed, and not related to the performance of FTH,and (iii) senior management of FTH, including its Board of Directors, consists solely of persons employed by the Company. As aresult, the controlling financial interest in FTH rests with the Company through its common stock ownership of FTH.

These consolidated accounts also include the Company’s portion of the results of associated entities over which it has significantinfluence. Where accounting policies of associated entities differ from those adopted by the Company, adjustments have been madeto achieve consistency with the accounting policies followed by the Company.

Financial statements of foreign controlled entities and associated entities presented in accordance with foreign accounting practicesare, for consolidation purposes, adjusted to comply with Company policy and generally accepted accounting principles in Australia.

Revenue recognitionRevenues from the theatrical distribution of motion pictures are recognised when motion pictures are exhibited. Revenues fromvideo sales, net of a reserve for returns, are recognised on the date that video units are made widely available for sale by retailers.Revenues from the licensing of feature films and television programming are recorded when the material is available for telecastingby the licensee and when certain other conditions are met.

Licence agreements for the telecast of theatrical and television product in the broadcast network, syndicated television and cabletelevision markets are routinely entered into in advance of their available date for telecast. Cash received in connection with suchcontractual rights for which revenue is not yet recognisable is classified as deferred revenue within payables. Because deferredrevenue generally relates to contracts for the licensing of theatrical and television product which has already been produced, therecognition of revenue for such completed product is principally only dependent upon the commencement of the availability periodfor telecast under the terms of the related licence agreement.

Television advertising revenue is recognised as the commercials are aired. Subscriber fees received from cable system operators anddirect broadcast satellite services are recognised as revenue as services are provided.

Advertising revenue from newspapers, magazines and inserts is recognised when the advertisements are published. Revenue frombooks and newspaper circulation revenues are recognised upon shipment, net of returns.

5


Notes to and forming part of the Full Financial Report


InventoriesInventories are valued at the lower of cost and net realisable value. Cost is determined by the first in first out or average cost methodfor the greater part of inventories depending on the nature of the item, and by specific identification for the balance.

Program rights, and the related liability, for entertainment programs and sporting events aired principally by the Company’s televisionstations are recorded at cost when the programs are available for telecast. These costs are amortised on a straight line basis, generallybased on the usage of the program or term of the licence. The current portion of program rights represents the estimated amount tobe amortised in the next financial year. The related liability is classified as current or non-current in accordance with payment terms.

The Company has a number of multi-year contracts for the television rights of certain sporting events. At the inception of thesecontracts and at each subsequent reporting date, the Company will evaluate the recoverability of the costs associated therewith, usingaggregate advertising revenues directly associated with the program material and related expenses. When an evaluation indicatesthat a multi-year contract will result in an ultimate loss, additional amortisation is provided to recognise such loss in the current year.

The costs of sports contracts entered into by Fox Broadcasting are recorded as an expense based on the ratio of each period’soperating income to estimated total operating income. Estimates of total operating income can change and, accordingly, arereviewed periodically and amortisation is adjusted as necessary.

Projects in progress are carried at cost which consists of the cost of material, labour and appropriate overhead expenses.

Film costs include direct production, production overhead and capitalised interest costs, net of any allocated amounts received fromoutside investors. These costs, as well as participation and talent residuals, are amortised on an individual film basis in the ratio thatthe current year’s gross revenues bears to management’s estimate of total ultimate gross revenues from all sources. Developmentcosts are allocated to production overheads as the relevant projects are produced. Development costs for projects not produced afterthree years are written off.

Film costs are stated at the lower of unamortised cost or estimated net realisable value on an individual film or television series basis.Revenue forecasts for both motion pictures and television products are continually reviewed by management and revised whenwarranted by changing conditions. When estimates of total revenues and other events or changes in circumstances indicate that amotion picture or television production has a net realisable value that is less than its unamortised cost, a loss is recognised in thecurrent year for the amount by which the unamortised cost exceeds the film or television production’s net realisable value. Theunamortised costs of completed motion picture and television productions which are recoverable from primary markets andtelevision productions in process under contract of sale are classified as current assets.


Non-current assetsNon-current assets are written down to the recoverable amount where the carrying value of the non-current asset exceeds the recoverableamount. The recoverable amount of publishing rights, titles and television licences and goodwill has been determined by discounting theexpected net inflow of cash arising from their continued use or sale.

6




Investment in associated entitiesThe Company uses the equity method of accounting for its investments in associated entities. Under this method investments inassociated entities are initially recognised at cost of acquisition and carrying value is subsequently adjusted for increases or decreasesin the Company’s share of post-acquisition results and reserves of each associated entity. The investments in associated entities aredecreased by the amount of dividends received or receivable.

Interests in non-controlled partnerships and joint venture entities are accounted for using equity accounting principles and areincluded within investments in associated entities.

Property, plant and equipmentThe directors have elected under section 334(5) of the Corporations Act (2001) to apply Accounting Standard AASB 1041“Revaluation of Non-Current Assets” [Revised 2001] for the financial year ended 30 June, 2001.

In accordance with the requirements of AASB 1041 “Revaluation of Non-Current Assets”, land and buildings previously carried atvaluation were reverted to a cost basis of measurement. For the purpose of transitioning to a cost basis, the existing revaluedcarrying amounts at 1 July, 2000, were deemed to be their cost. This change in accounting policy had no impact on the financialposition or financial performance of the Company as presented in this financial report.

Depreciation is provided on property, plant and equipment at rates appropriate to write off the net book value over the expecteduseful life of each class of asset. Leasehold land and buildings are amortised over the shorter of the period of the lease or the usefullife of the asset.

Publishing rights, titles and television licencesThe directors have elected under section 334(5) of the Corporations Act (2001) to apply Accounting Standard AASB 1041“Revaluation of Non-Current Assets” [Revised 2001] for the financial year ended 30 June, 2001.

In accordance with the requirements of AASB 1041 “Revaluation of Non-Current Assets”, publishing rights, titles and televisionlicences previously carried at valuation were reverted to a cost basis of measurement. For the purpose of transitioning to a cost basis,the existing revalued carrying amounts at 1 July, 2000 were deemed to be their cost. This change in accounting policy had no impacton the financial position or financial performance of the Company as presented in this financial report.

As a creator and distributor of branded information and entertainment copyrights, the Company has significant and growing intangibleassets, including free and cable television networks and stations, television licences, sport franchises, entertainment franchises,newspaper mastheads, publishing rights and other copyright products and trademarks. These assets are stated at cost. While televisionlicences in the United States are renewable every five years, the Directors have no reason to believe that they will not be renewed.

The Company regularly assesses the carrying amount of intangible assets to ensure that they are not carried at a value greater thantheir recoverable amount. This assessment is primarily based on the Company’s estimate of maintainable earnings before interest,tax, depreciation and amortisation (“EBITDA”) and an appropriate market-based EBITDA multiple.

No amortisation is provided against these assets since, in the opinion of the Directors, the life of the publishing rights, titles andtelevision licences is indefinite.

GoodwillWhere the purchase consideration and incidental expenses exceed the fair value of the identifiable net assets acquired, the differenceis assigned to goodwill and written off against operating income on a straight line basis over the period the benefits are expected toarise, but not exceeding twenty years.

7




Developing businessesCosts incurred in the development of major new activities are capitalised until the operations are commenced on a commercial basis. Atthat point any readily identifiable intangibles, such as publishing rights, titles and licences but not goodwill, are recorded at cost andaccounted for in accordance with the relevant accounting policy. Any other costs are amortised over the period in which benefits areexpected to be received.

Capitalisation of interestInterest cost on funds invested in major projects with substantial development and construction phases is recorded as a capital cost untilproduction or operations commence. Thereafter, the capitalised interest is amortised over the period in which benefits are expected to bereceived.

Provision for employee entitlementsProvision has been made for benefits accruing to employees in relation to such matters as annual leave, long service leave and non-superannuation post retirement benefits. All on-costs are included in the determination of the provision. Provisions for annual leave andthe current portion of long service leave are measured at their nominal amounts. The non-current portion of these provisions ismeasured at the present value of estimated future cash flows.

Income taxesThe Company follows tax effect accounting procedures. Income tax expense is calculated on the accounting profit after adjusting forpermanent differences. Future income tax benefits relating to tax losses are not recognised as an asset unless the benefit is virtually certainof being realised. Income taxes on cumulative timing differences are reflected in the statement of financial position as future income taxbenefit or deferred income tax liability at income tax rates that are expected to apply when the underlying timing differences reverse.

There is no present intention to remit to Australia the retained profits or reserves of foreign controlled entities or to realise revaluationsurpluses through the sale of revalued assets. Accordingly, no provision has been made for withholding or other taxes that may becomepayable overseas or in Australia as a result of such remittance or realisation.

Abnormal gains and chargesThe Company discloses as abnormal gains and charges the financial impact of transactions which are included within profit (loss) fromordinary activities that are considered abnormal by reason of their size, nature and effect on the Company’s financial performance for theyear.

Financial instrumentsThe fair value of financial instruments, including cash and cash equivalents, investments and long-term debt, is generally determined byreference to market values resulting from trading on national securities exchanges. In cases where quoted market prices are not available,fair value is based on an estimate using present value or other techniques.

Foreign currenciesFinancial statements of self sustaining foreign controlled entities are translated using the current rate method whereby trading results areconverted at the average rates of exchange for the year and assets and liabilities are converted at the closing rates on the period end date.Any exchange differences arising on the translation are taken directly to the foreign exchange fluctuation reserve. Equity in retainedprofits and reserves of overseas associated entities are also converted at the closing rates on the period end date.

All realised and unrealised gains or losses of a trading nature are brought to account within profit (loss) from ordinary activities.

8




Consolidated


Note 2 Industry and geographic segment data

By industry

Sales revenueFilmed entertainment 6,625 6,115Television 7,008 5,843Cable network programming 2,696 2,005Magazines and inserts 1,675 1,585Newspapers 4,600 4,448Book publishing 1,907 1,634Other 1,067 813

25,578 22,443

Operating incomeFilmed entertainment 503 188Television 991 1,120Cable network programming 197 120Magazines and inserts 437 411Newspapers 904 870Book publishing 205 141Other (144) (108)

Operating income 3,093 2,742Net (loss) from associated entities before abnormals 5 (162) (228)Net borrowing costs (935) (814)Dividend on exchangeable preferred securities (90) (79)Tax on ordinary activities before change in accounting policy and abnormals (428) (225)Outside equity interest (196) (137)

Profit before change in accounting policy and abnormals 1,282 1,259

AssetsFilmed entertainment 8,527 7,467Television 21,135 16,782Cable network programming 9,545 7,448Magazines and inserts 2,929 2,518Newspapers 8,627 7,656Book publishing 3,340 2,775Other 2,093 2,495Corporate assets and investments 28,765 18,444

84,961 65,585

9




Consolidated



By industry (continued)Depreciation and amortisationFilmed entertainment 136 97Television 168 140Cable network programming 79 56Magazines and inserts 17 12Newspapers 222 198Book publishing 14 8Other 70 51

706 562

Capital expenditureFilmed entertainment 123 129Television 102 182Cable network programming 117 130Magazines and inserts 33 19Newspapers 607 121Book publishing 12 10Other 119 80

1,113 671

10




Consolidated



By geographic areaSales revenueUnited States 19,094 16,665United Kingdom 4,185 3,600Australasia 2,299 2,178

25,578 22,443

Operating incomeUnited States 2,079 1,835United Kingdom 816 727Australasia 198 180

Operating income 3,093 2,742Net (loss) from associated entities before abnormals 5 (162) (228)Net borrowing costs (935) (814)Dividend on exchangeable preferred securities (90) (79)Tax on ordinary activities before change in accounting policy and abnormals (428) (225)Outside equity interest (196) (137)


AssetsUnited States 43,110 34,674United Kingdom 7,514 7,293Australasia 5,572 5,174Corporate assets and investments 28,765 18,444

84,961 65,585

Depreciation and amortisationUnited States 384 286United Kingdom 205 164Australasia 117 112

706 562

Capital expenditureUnited States 837 473United Kingdom 197 109Australasia 79 89

1,113 671

Sales are grouped by countries of origin.There were no material intersegment sales within geographic areas.Australasia comprises Australia, Asia, Fiji, Papua New Guinea and New Zealand.

11





2001 2000 2001 2000A$ million A$ million

Note 3 Sales revenue

Sales revenueRendering of services (a) 25,578 22,443

25,578 22,443

(a) Items have been reclassified between captions in the 2000 comparatives.

Note 4 Profit before change in accounting policy, abnormals and tax

Operating income is arrived at after charging:Loss on sale of property, plant and equipment 45 16Operating lease rentals 76 91Trade debts written off 79 37Net charge to provisions for:Doubtful debts and rebates 151 166Employee entitlements 91 87Sundry 70 65Auditors’ remuneration 49 33

Amounts paid or payable for auditing the accounts of the parent entity and certain controlled entities totalled $12,976,000 (2000$9,833,000) and for other services $34,294,000 (2000 $17,938,000). Additionally, included are $413,000 (2000 $1,065,000) as paid orpayable to other auditors for the audit of certain controlled entities and $1,198,000 (2000 $4,627,000) for the provision of otherservices by those other auditors.

The principal component of operating expenses is the amortisation of film and television programming costs which amounted to$9,751 million (2000 $8,401 million).

As at 30 June, 2001, the Company had approximately 31,400 (2000 33,800) full-time equivalent employees worldwide.

Depreciation and amortisationGoodwill 53 41Fixed assets 608 472Leased assets 45 49

706 562

12






Note 4 Profit before change in accounting policy, abnormals and tax (continued)

Borrowing costsInterest paid to:Unrelated entities (1,268) (1,169)

(1,268) (1,169)

Investment incomeDividend income from:Controlled entities 2,500 2,984

2,500 2,984

Interest income from:Controlled entities 11Unrelated entities 251 283Associated entities 82 72

333 355 11

Total investment income 333 355 2,511 2,984

Dividends paid on exchangeable preferred securities (90) (79)

Interest capitalised:Property, plant and equipment and other assets 66 24Film inventories 49 59

115 83

Amortisation of capitalised interest 55 51

Note 5 Associated entities

Operating (loss) (136) (125)Abnormals (90) (84)

Operating (loss) after abnormals (226) (209)

Income tax expense attributable to operating income (26) (103)Income tax benefit attributable to abnormals 3 14

Income tax expense (23) (89)

Operating (loss) after tax 25 (249) (298)

13






Note 6 Abnormal gains and charges

Abnormal gains:EchoStar transaction 415 598News Digital Systems float 220Disposal of non-current assets 608 712

1,023 1,530

Abnormal charges:Disposal and write down of non-current assets (1,037) (208)Restructuring costs (258) (136)Healtheon/WebMD transaction, net (a) (426)Write down of investment in One.Tel (b) (576)

(2,297) (344)

Income tax (expense) benefit attributable to abnormal items 19 (454)

Abnormal (loss) profit after tax (1,255) 732

a) As a result of the restructure of the Company’s investment in Healtheon/WebMD (“WebMD”), the Company swapped out of itspreferred stock investment and recognised an impairment loss on its remaining common stock interest in WebMD. In exchangefor the preferred shares the Company received the ownership interest in The Health Network (“THN”), warrants to purchaseadditional common stock in WebMD, a reduction in its obligation to provide future media services to and license content fromWebMD and the elimination of future funding commitments to an international joint venture. The reduction in the carrying valueof the Company’s obligations are non-cash and not reflected in the Statement of Cash Flows. The Company subsequently sold itsinterest in THN.

b) In May, 2001, the Company became aware of serious financial problems at One.Tel Limited, an Australian telecommunicationscompany in which the Company owns approximately 24% of the outstanding equity. Upon completion of One.Tel’s auditors’review of its current financial condition in late May, One.Tel was placed in administration. The carrying value of the investmentin One.Tel has been fully written down due to its plans to liquidate its operations.

14






Note 7 Change in accounting policy

Change in accounting policy before tax (1,107)


Note 8 Income tax expense

Profit (loss) from ordinary activities before tax (562) 2,737 2,511 2,984Net (loss) from associated entities (249) (298)

(313) 3,035 2,511 2,984Prima facie tax at 34% (2000 36%) (106) 1,093 854 1,074Income tax (benefit) expense (12) 679

Difference (94) 414 854 1,074

Difference due to:Different tax rates applicable in countries other than Australia (43) 85Dividends on which tax is rebateable 12 24 850 1,073Capital items (305) (55)Investment and capital allowances 112 93Other permanent differences between accounting and tax profit 9 (9) 4 1Reduction in current year income tax expense due to tax

losses not recorded in prior years 138 296Current year losses not reflected in income tax expense (17) (20)

(94) 414 854 1,074

As at 30 June, 2001, the Company has unrecouped income tax losses available to offset against future years’ taxable income. Theestimated benefit of losses which have not been brought to account in the future income tax benefit or deducted from the provisionfor deferred income tax is $32 million (2000 $86 million). The benefits will be recognised if future taxable income is sufficient and ofa nature which qualifies under statutes in effect at the time the deduction is made. The benefit of the losses which have been broughtto account is recognised in future income tax benefit (Note 19) and deferred income tax liability (Note 21).

15






Note 9 Dividends

Dividends provided for or paid during the year:

Class of Shares Dividend Franking per share

Ordinary 1.5 cents Unfranked 31 30 31 30 Ordinary 1.5 cents Fully franked (36%) 31 31 Ordinary 1.5 cents Franked to 50% (34%) 31 31 Preferred limited voting ordinary 3.75 cents Unfranked 111 95 111 95 Preferred limited voting ordinary 3.75 cents Fully franked (36%) 80 80 Preferred limited voting ordinary 3.75 cents Franked to 50% (34%) 81 81 Perpetual preference shares 1 Unfranked 51 45 Subsidiary preference shares 2 5.147% Unfranked 3

26 305 284 254 236 1 Adjustable rate cumulative preference dividends.2 This class of equity was retired in July 1999.For full payment details of the above mentioned dividends refer to Directors’ Report on page 48 of the Concise Report.

The balance of the franking account adjusted for franking credits which will arise from the payment of income tax provided for inthe financial statements, and after deducting franking credits to be used in payment of the above dividends, is $14 million (30%)(2000 $26 million (34%)).

Note 10 Earnings per share


EPS before change in accounting policy and abnormals $0.297 $0.303EPS after change in accounting policy and abnormals $(0.192) $0.469

In the calculation of earnings per share the change in accounting policy is net of tax and outside equity interest as described in Note7. Abnormals are net of tax as described in Note 5 and Note 6.

The weighted average number of shares used in the calculation of earnings per share was 4,140,845,600 (2000 4,003,250,503).Diluted earnings per share is calculated using the weighted average number of ordinary shares, preferred limited voting ordinaryshares and the number of shares that will arise upon the conversion of options and warrants of certain controlled entities,outstanding at the end of each period. Diluted earnings per share is not materially different from basic earnings per share.

16




Note 11 Remuneration of Directors and Executives

DirectorsThe Directors of The News Corporation Limited who received, or were due to receive, remuneration (including brokerage,commissions, bonuses, retirement payments, salaries and share options) directly or indirectly from the Company or a related party, asshown in the following bands, were:

$ 2001 2000 $ 2001 20000 - 9,999 1 5,670,000 - 5,679,999 1

20,000 - 29,999 1 6,830,000 - 6,839,999 180,000 - 89,999 1 8,710,000 - 8,719,999 1

100,000 - 109,999 1 9,070,000 - 9,079,999 1110,000 - 119,999 3 10,470,000 - 10,479,999 1130,000 - 139,999 1 14,040,000 - 14,049,999 1140,000 - 149,999 1 16,770,000 - 16,779,999 1150,000 - 159,999 4 18,980,000 - 18,989,999 1170,000 - 179,999 1 20,590,000 - 20,599,999 1240,000 - 249,999 1 21,690,000 - 21,699,999 1300,000 - 309,999 1 1 37,310,000 - 37,319,999 1

2,460,000 - 2,469,999 1 66,280,000 - 66,289,999 14,800,000 - 4,809,999 1 102,460,000 - 102,469,999 1

Total remuneration, including salaries, retirement payments, share option, and other benefits as employees, received or due andreceivable by Directors of the parent entity was $89,271,700 (2000 $259,560,700) . Total remuneration of Directors of the parententity and controlled entities was $89,993,700 (2000 $261,387,700).

Australian ExecutivesTotal remuneration, including salaries, retirement payments, share options and other benefits as employees, received or due andreceivable by Australian based Executive Officers was $13,825,000 (2000 $13,758,000).

The number of Australian based Executive Officers of the parent entity and the Company whose income including benefits was atleast $100,000 is shown in their relevant income bands.

$ 2001 2000 $ 2001 2000

100,000 - 109,999 1 300,000 - 309,999 3 2140,000 - 149,999 1 1 310,000 - 319,999 1 2150,000 - 159,999 3 2 320,000 - 329,999 1 3170,000 - 179,999 2 2 330,000 - 339,999 2 1180,000 - 189,999 1 2 340,000 - 349,999 3190,000 - 199,999 3 3 350,000 - 359,999 3200,000 - 209,999 5 2 360,000 - 369,999 1 1210,000 - 219,999 3 4 380,000 - 389,999 1220,000 - 229,999 3 3 420,000 - 429,999 1230,000 - 239,999 4 3 430,000 - 439,999 1240,000 - 249,999 1 460,000 - 469,999 1 1250,000 - 259,999 2 4 480,000 - 489,999 1260,000 - 269,999 2 1 580,000 - 589,999 1270,000 - 279,999 1 610,000 - 619,999 1280,000 - 289,999 3 680,000 - 689,999 1290,000 - 299,999 2 2 940,000 - 949,999 1

17






Note 12 Current assets

Cash 5,615 4,638 6 2

Interest earned on cash deposits ranged from 1.79% to 7.25% (2000 3.00% to 6.75%) per annum.

ReceivablesTrade receivables 6,553 5,320Trade receivables owing by associated entities 296 189Less provision for doubtful debts and rebates 541 438

6,308 5,071Non-trade amounts owing by controlled entities 8,227 2,960Non-trade amounts owing by unrelated entities 346 206Non-trade amounts owing by associated entities 29 54

6,683 5,331 8,227 2,960

These receivables are primarily denominated in US dollars and located in the United States of America.

InventoriesAt cost: Raw materials 177 186Finished goods 283 294Work and projects in progress 86 81Television and film product 2,774 2,123

Total at cost 3,320 2,684Provision for dimunition in value:Finished goods 61 38

Total provision for dimunition in value 61 38

3,259 2,646

OtherPrepayments 616 512

616 512

Note 13 Non-current receivables

Trade receivables 331 224Other receivables 431 285

762 509

These receivables are primarily denominated in US dollars and located in the United States of America.

18






Note 14 Investments

Investments in associated entities (b) Listed securities 13,494 3,893Unlisted securities 4,296 3,079Joint Ventures 1,813 1,219Investment loans 419 411

20,022 8,602

Other Investments (c)

Investments in controlled entities (a) 28,379 22,376

28,379 22,376

Investments in unrelated entitiesListed securities 1,447 3,925Unlisted securities 1,682 1,279

3,129 5,204

Quoted value of listed securities:Associated entities 27,468 30,909Other unrelated entities 2,426 6,252

29,894 37,161

(a) Comparative amounts previously carried at valuation have been reclassified to deemed cost in line with accounting standardAASB 1041 “Revaluation of Non-Current Assets”.

19




Consolidated

2001 2000A$ million

Note 14 Investments (continued)

(b) The Company’s investments in associated entities (excluding joint venture entities) consist principally of:

Company Principal Activities Percentage OwnershipGemstar-TV Guide

International, Inc. U.S. print and electronic guidance company 38.5% (2000 Nil) 11,721TV Guide, Inc. U.S. print and electronic guidance company Nil (2000 43.6%) 3,091Regional Programming U.S. partnership holding interests in

Partners sporting networks, teams and arenas 40.0% 1,835 1,625BSkyB Group plc U.K. satellite TV broadcaster 36.3% (2000 37.1%) 1,392 445Fox Family Worldwide Family television programming venture 49.5% 857 691Koo’s Cable Systems Taiwan cable TV operator 20% (2000 Nil) 477Ventures Arena U.S. company holding interests in

sporting arenas 40.0% 260 210Independent Newspapers

Limited New Zealand newspaper publisher 44.3% (2000 49.7%) 256 251FOXTEL Australian pay TV operator 25.0% 199 184Queensland Press Limited Australian newspaper publisher 41.7% 156 158

The Company’s investments in joint venture entities consist principally of:

Company Principal Activities Percentage OwnershipStream, S.p.A. Italian pay TV provider 50.0% 952 503National Rugby League Australian rugby league football

competition 50.0% 160 160Fox Sports

International U.S. cable TV operator 50.0% 151 112

(c) The Company’s investment in unrelated entities consist principally of:

Company Principal Activities Percentage OwnershipEchostar Communications Satellite broadcaster 5.2% (2000 7.1%) 873 936KirchPayTV GmbH Holding company for commercial TV,

film and sporting rights, new media, production and film technology 2.5% (2000 Nil) 427

The Wireless Group plc Commercial Radio Operator 40.32% (voting 19.90%) 146 132Healtheon/Web MD Internet Healthcare company 0.6% (2000 5.2%) 37 1,477One.Tel Limited Telecommunications provider 23.7% 576

Associated entities financial summary

The following is a financial summary of material associated entities:Total assets 41,743 20,461Total liabilities 16,935 13,580Net loss (474) (942)

20




Consolidated


Note 14 Investments (continued)

Movement in carrying amount of investments in associated entitiesBalance at beginning of year 8,602 7,659Net (loss) from associated entities (a) (249) (298)Dividends and distributions received from associated entities (80) (66)Movement due to foreign exchange fluctuation 1,295 632Additional investment in joint venture entities 578 1,005Additional investment in other entities 398 662Write down of investment (158)Elimination of associates’ reciprocal shareholding in the Company (6) (37)Additional investment by an associated entity (b) 25 1,060Non cash investment in an associated entity (c) 7,920Carrying value of investments acquired 838 2,052Carrying value of investments disposed (176) (3,007)

Balance at end of year 20,022 8,602

(a) Losses are after capitalisation of $571 million (2000 $292 million) start up costs. Costs incurred in the development of major newventures are capitalised until the operations commence on a commercial basis.

(b)During the year British Sky Broadcasting Group, plc (“BSkyB”) issued equity for several transactions, including the satisfaction ofthe acquisition of Sports Internet Group and the remaining shares in British Interactive Broadcasting Holdings Limited (“BiB”)reducing the Company’s share of BSkyB from 37.1% to 36.3%. In accordance with AASB 1016 “Accounting for Investments inAssociates” the Company has recorded an increase in its investment in BSkyB and a corresponding increase in reserves of $1,060million representing the Company’s increased share of BSkyB’s reserves following the above transactions.

(c) In September, 2000, TNCL announced it would acquire Liberty Media Corporation’s (“Liberty Media”) 21.3% interest inGemstar-TV Guide International (“Gemstar-TVG”) with Liberty Media transferring (a) approximately 20% of its interest inGemstar-TVG to Sky Global Networks, Inc. (“SGN”), a wholly owned subsidiary of TNCL, for newly issued shares of Class Acommon stock of SGN, and (b) approximately 80% of its interest in Gemstar-TVG to TNCL in exchange for approximately121.5 milllion ADRs representing 486 million TNCL preferred limited voting ordinary shares. In May, 2001, TNCL acquiredapproximately 80% of Liberty Media’s 21.3% interest in Gemstar-TVG. Liberty Media will also exchange its 10% interest in theSky Latin America entities, operated as Sky Brazil, Sky Mexico, and SMCP, to SGN for additional shares of Class A commonstock of SGN. These transactions are subject to regulatory approval. In the event that SGN does not complete its anticipatedIPO by 27 November, 2001, Liberty Media will be relieved of its obligation to exchange its 10% interests in the Sky LatinAmerica entities and its remaining 20% interest in Gemstar-TVG will be directly acquired by TNCL. The acquisition by TNCLof a further interest in Gemstar-TVG through the issuance of preferred shares is a non-cash transaction, with investments andcontributed equity increasing by $7,920 million.

Associated entities have various commitments incurred during the normal course of business. The Company has no obligationsunder any of these arrangements other than those included within Note 28.

21






Note 15 Non-current inventories

At cost: Film costs in process 1,620 1,329Finished goods 194 116Television and film product 3,405 2,582

5,219 4,027

Total interest capitalised in film inventories at 30 June, 2001, amounts to $87 million (2000 $68 million). Interest has beencapitalised at 8.00% (2000 8.00%).

On 30 March, 2001, the Company’s film distribution arrangement with New Millennium Investors, LLC (“New Millenium”)expired. The Company acquired the outstanding equity of New Millenium and repaid all of New Millenium’s existing debt, resultingin the acquisition of film inventories of US$650 million and elimination of current and non-current payables of US$ 117 million.

Concurrently, the Company entered into a new series of film rights agreements whereby a controlled consolidated subsidary of theCompany, Cornwall Venture LLC (“CVL”), that holds certain library film rights, will fund the production costs of all eligible films,as defined, to be produced by Twentieth Century Fox Film Corporation (“TCF”), a subsidiary of the Company, between 2001 and2004. CVL is a separate legal entity from TCF and has separate assets and liabilities. CVL issued US$ 752 million of a preferredlimited liability membership interest (the “Preferred Interest”), which is presented on the consolidated Statement of FinancialPosition as outside equity interests in controlled entities. The Preferred Interest has no fixed redemption rights but is entitled to anallocation of the gross receipts to be derived by CVL from the distribution of each eligible film. Such allocation consists of (a) areturn on the Preferred Interest (the “Preferred Payments”), based on certain reference rates (generally based on US commercialpaper rates or LIBOR) prevailing on the respective dates of determination, and (b) a redemption of the Preferred Interest, based on acontractually determined amortisation schedule. The Preferred Interest has a preference in the event of a liquidation of CVL equalto the unredeemed portion of the investment plus any accrued and unpaid Preferred Payments. The Company owns the controllingequity interest in CVL. Accordingly, CVL is consolidated as the Company has control over the strategic and operational decisionsof CVL and control of all film rights held by CVL.

22






Note 16 Property, plant and equipment

Freehold land and perpetual leasesAt cost (a) 435 389

435 389

Freehold buildingsAt cost (a) 2,730 2,152Less depreciation 396 297

2,334 1,855

Leasehold premisesLeasehold land at cost (a) 158 144Leasehold buildings at cost 1,147 1,010

1,305 1,154Less amortisation 290 218

1,015 936

Plant and equipmentAt cost 6,039 4,789Less depreciation 2,948 2,262

3,091 2,527

Plant and equipment under leaseAt cost 389 390Less amortisation 154 149

235 241

7,110 5,948


23






Note 16 Property, plant and equipment (continued)

Freehold land and perpetual leasesBalance at beginning of year 389 360Additions 12Disposals (10) (9) Movement due to foreign exchange fluctuation 56 26

Balance at end of year 435 389

Freehold buildingsBalance at beginning of year 1,855 1,565Additions 322 230Disposals (34) (5)Depreciation (72) (56)Movement due to foreign exchange fluctuation 263 121


Leasehold premisesBalance at beginning of year 936 944Additions 50 7Disposals (35) (47)Amortisation (32) (28)Movement due to foreign exchange fluctuation 96 60

Balance at end of year 1,015 936

Plant and equipmentBalance at beginning of year 2,527 2,358Additions 845 536Disposals (72)Depreciation (536) (416)Movement due to foreign exchange fluctuation 255 121


Plant and equipment under leaseBalance at beginning of year 241 244Additions 4Disposals (17)Amortisation (13) (21)Movement due to foreign exchange fluctuation 24 14

Balance at end of year 235 241

24






Note 17 Publishing rights, titles and television licences

At cost (a) 31,051 26,884

31,051 26,884


Note 18 Goodwill

At cost 1,221 905Less amortisation 702 557

519 348

Note 19 Other non-current assets

Deferred tax assetsFuture income tax benefit 103 95

103 95

OtherPrepayments 873 841

873 841

An amount of $16 million (2000 $32 million) is included in future income tax benefit relating to tax losses carried forward.

25






Note 20 Current liabilities

Interest bearing liabilities 22Bank loans - unsecured 63 50

63 50

PayablesTrade payables 5,635 5,239Other payables 3,142 2,747

8,777 7,986

These payables are primarily denominated in US dollars and located in the United States of America.

Tax liabilitiesIncome tax provision 550 662

550 662

ProvisionsDividends 142 111 142 111Employee entitlements 142 127Sundry 102 72

386 310 142 111

Current interest bearing liabilities are repayable in the following currencies: (amounts shown in millions) 3,143 (2000 JPY3,127) Japanese Yen 50 50300 (2000 INR Nil) Indian Rupees 13

63 50

26






Note 21 Non-current liabilities

Interest bearing liabilities 22Bank loans - unsecured 150 198Loans - unsecured 18,592 15,183

18,742 15,381

PayablesTrade payables 2,801 2,765Other payables 1,664 1,899

4,465 4,664

These payables are primarily denominated in US dollars and located in the United States of America.

Tax liabilitiesDeferred income tax provision 426 704

426 704

ProvisionsEmployee entitlements 133 113Sundry 157 40

290 153

Non-current interest bearing liabilities are repayable in the following currencies: (amounts shown in millions) 150 (2000 $150) Australian Dollars 150 1509,429 (2000 JPY12,535) Japanese Yen 150 1989,333 (2000 US$9,006) United States Dollars 18,442 15,033

18,742 15,381

At 30 June, 2001 the impact of the foreign currency movements vis a vis the Australian dollar increased reported debt by $2,762million (2000 $1,395 million). The translation of all foreign assets and liabilities resulted in a $3,372 million increase (2000 $2,223million) in the foreign exchange fluctuation reserve, as shown in Note 25.

Income tax benefits attributable to tax losses deducted in arriving at the provision for deferred income tax amounted to $545 million(2000 $404 million).

27






Note 22 Interest bearing liabilities

Bank loans: Term loan and revolving credit facilities 213 248less current maturities 63 50

Total long term bank loans payable 150 198

Aggregate maturities of bank loans:Not later than one year 63 50Later than one year not later than five years 150 198

213 248

The Company has a US$2 billion (as amended) Revolving Credit Agreement. The significant terms of the agreement include therequirements for the Company to maintain specific gearing and cash flow ratios and limitations on secured indebtedness. Thematurity of this facility is 30 June, 2004. The Company pays interest for borrowings in US dollars at LIBOR plus 0.50%. Acommitment fee of 0.15% is payable on the unused portion of the available credit. There were no borrowings made against thisfacility during fiscal 2000 or fiscal 2001.

Term loans include a facility for Yen 22 billion at an interest rate of 4.20% per annum. This facility matures in June 2005.

Total unused credit facilities as at 30 June, 2001 amounted to $4,101 million (2000 $3,366 million).

28






Note 22 Interest bearing liabilities (continued)

Loans payable unsecuredZero Coupon Exchangeable notes (US$8m) due March 2002 7 48 5/8% Senior notes (US$ 500m) due February 2003 (a) 988 8358 1/2% Senior notes (US$ 500m) due February 2005 (a) 988 8358.75% Senior subordinated notes (US$ 170m) due February 2006 (c) 332 2818.875% Senior notes (US$ 500m) due August, 2007 (h) 988 8359.75% Senior discount notes (US$405) due August, 2007 (i) 719 5536.625% Senior debentures (US$ 350m) due January 2008 (b) 692 5847 3/8% Senior debentures (US$ 200m) due October 2008 (b) 395 33410 1/8% Senior debentures (US$ 300m) due October 2012 (a) (d) 593 5019 1/4% Senior debentures (US$ 500m) due February 2013 (a) 988 835Liquid Yield Option Notes (LYONs) ™ (US $934m) due March 2013 (e) 7848 5/8% Senior debentures (A$ 150m) due February 2014 (b) 150 1507.6% Senior debentures (US$ 200m) due October 2015 (b) 395 3348% Senior debentures (US$ 400m) due October 2016 (b) 790 6687.25% Senior debentures (US$ 350m) due May 2018 (b) 692 5848 1/4% Senior debentures (US$ 250m) due August 2018 (b) 494 417Liquid Yield Option Notes (LYONs) ™ (US $1,515m) due Feb 2021 (f) 1,5138 7/8% Senior debentures (US$ 250m) due April 2023 (b) 494 4177 3/4% Senior debentures (US$ 200m) due January 2024 (b) 395 3347 3/4% Senior debentures (US$ 90m) due February 2024 (b) 178 1509 1/2% Senior debentures (US$ 200m) due July 2024 (b) 395 3348 1/2% Senior debentures (US$ 200m) due February 2025 (b) 395 3347.7% Senior debentures (US$ 250m) due October 2025 (b) 494 4177.43% Senior debentures (US$ 240m) due October 2026 (b) 474 4017.125% Senior debentures (US$ 200m) due April 2028 (b) 395 3347.3% Senior debentures (US$ 200m) due April 2028 (b) 395 3347.28% Senior debentures (US$ 200m) due June 2028 (b) 395 3347.625% Senior debentures (US$ 200m) due November 2028 (b) 395 3346.703% MOPPrS (US$ 150m) due May 2034 (g) 296 2508.45% Senior debentures (US$ 200m) due August 2034 (b) 395 3348.15% Senior debentures (US$ 300m) due October 2036 (b) 593 5016.75% Senior debentures (US$ 250m) due January 2038 (b) 494 4177.75% Senior debentures (US$ 600m) due December 2045 (b) 1,186 1,0027.9% Senior debentures (US$ 150m) due December 2095 (b) 296 2508.25% Senior debentures (US$ 100m) due October 2096 (b) 198 167Other 5 5Total long term unsecured loans 18,592 15,183Total long term unsecured bank loans payable 150 198

Total non-current interest bearing liabilities 18,742 15,381

29







Aggregate maturities of loans payable: Not later than one year 7Later than one year not later than five years 2,308 1,674Later than five years 16,277 13,509

18,592 15,183

a) The terms include covenants which, among other things, restrict secured indebtedness to 10% of tangible assets and in certaincircumstances limit new senior indebtedness. Redemption may occur, at the option of the holders, at 101% of the principal plusan accrued interest amount in certain circumstances where a change of control is deemed to have occurred.

b) The terms include covenants which, among other things, restrict secured indebtedness to 10% of tangible assets. Redemptionmay occur, at the option of the holders, at 101% of the principal amount in certain circumstances where a change of control isdeemed to have occurred.

c) These notes were issued by Heritage Media Corporation, an indirect subsidiary of The News Corporation Limited, and payinterest semi-annually at a rate of 8.75% per annum.

d) The senior debentures can be redeemed, at the option of the Company, on or after 15 October, 2002 at specified premiums.

e) The notes pay no periodic interest and the aggregate principal on maturity of US$934 million represents a yield of 5.5% perannum on the issue price. The holders may exchange the notes at any time into shares or ADRs of The News CorporationLimited, or at the option of the Company the cash equivalent thereof, at a fixed exchange rate of 56.904 ordinary shares and28.452 preferred shares per US$1,000 note. The notes were fully redeemed in April 2001. This resulted in a cash payment ofapproximately US$10 million and an increase in Contributed Equity of A$819 million. The issuance of ordinary and preferredshares in satisfaction of the redemption of the notes is a non-cash transaction.

f) The notes pay no periodic interest and the aggregate principal amount at maturity of US$1,515 million represents a yield of 3.5%per annum on the issue price. The holders may exchange the notes at any time into shares or ADRs of The News CorporationLimited or, at the option of the Company, the cash equivalent thereof at a fixed exchange rate of 48.5932 preferred shares perUS$1,000 note. The notes are redeemable at the option of the holders on certain dates at specified redemption values. TheCompany, at its election, may satisfy the redemption amounts in cash, ADRs or any combination thereof. The Company canredeem the notes in cash at any time on or after 28 February, 2006 at specified redemption values. The notes were recorded at adiscount and are being accreted using the effective interest rate method.

g) In May 1998, the Company issued 6.703% Mandatory Par Put Remarketed Securities (“MOPPrS”) due 21 May, 2034. Inconnection with the issuance of MOPPrS, the Company entered into a remarketing agreement dated 21 May, 1998 (the“Remarketing Agreement”), with the Remarketing Dealer named therein (the “Remarketing Dealer”), pursuant to which theMOPPrS are subject to mandatory tender in favour of the Remarketing Dealer on 21 May, 2004 (the “Remarketing Date”), for apurchase price equal to 100% of the principal amount of the outstanding MOPPrS. Upon the Remarketing Dealer’s election toremarket the MOPPrS, the interest rate to the 21 May, 2034 maturity date of the MOPPrS will be adjusted to reach the sum of5.958% plus the applicable spread (as defined in the Remarketing Agreement). In the event the Remarketing Dealer does notelect to remarket the MOPPrS, they will mature on the Remarketing Date.

h) These notes were issued by Fox Sports Networks, LLC (“Fox Sports”), an indirect subsidiary of The News Corporation Limited,and pay interest semi-annually at a rate of 8.875%. The terms include covenants that, among other things, limit the incurrence ofadditional debt by Fox Sports and distributions to partners.

i) These notes were issued by Fox Sports. Interest accretes to principal at an effective rate of 6% until February 2003; thereaftercash interest is payable semi-annually at a rate of 9.75%. The terms include covenants that, among other things, limit theincurrence of additional debt by Fox Sports and distributions to partners.

30




Consolidated

2001 2000A$ million


Foreign Exchange Swaps Foreign currency borrowings are exceeded by foreign currency assets of controlled entities. Certain foreign currency loans, whichapproximate US$690 million (2000 US$690 million), are included in non-current borrowings and are subject to currency swapagreements. These currency swap agreements are principally yen denominated, and have a range of maturity dates. The currencyswap agreements are restated to fair value at year end.

Exchange gains or losses relating to debt which is designated as unhedged are brought to account in the Statement of FinancialPerformance. Gains or losses related to hedged debt are brought to account in the Foreign Exchange Fluctuation reserve. Suchamounts were not material in 2001 or 2000.

Note 23 Exchangeable preferred securities

9,725,669 Exchangeable Trust Originated Preferred Securities (a) 1,883 1,590

Redeemable Preferred Securities (b) 1,784 1,425

3,667 3,015

(a) In November, 1996, The News Corporation Limited (“TNCL”), through a trust (the “Exchange Trust”) wholly-owned by NewsAmerica, Incorporated (“NAI”), a subsidiary of TNCL, issued 10 million 5% Exchangeable Trust Originated Preferred Securities(the “Exchangeable Preferred Securities”) for aggregate gross proceeds of US$1 billion. Such proceeds were invested in (i)preferred securities representing a beneficial interest of NAI’s 5% Subordinated Discount Debentures due 12 November, 2016(the “Subordinated Debentures”) and (ii) 10,000,000 warrants to purchase from NAI ordinary shares of British Sky BroadcastingGroup, plc. (“BSkyB”) (the “Warrants”). These investments represent the sole assets of the Exchange Trust. Cumulative cashdistributions are payable on the Exchangeable Preferred Securities at an annual rate of 5%. The Exchangeable PreferredSecurities are mandatorily redeemable on 12 November, 2016 or earlier to the extent of any redemption by NAI of anySubordinated Debentures or Warrants. TNCL has the right to pay cash in US dollars equal to the market value of the BSkyBordinary shares for which the Warrants are exercisable in lieu of delivering freely tradeable shares. TNCL and certain of itsdirect and indirect subsidiaries have certain obligations relating to the Exchangeable Preferred Securities, the preferred securitiesrepresenting a beneficial interest in the Subordinated Debentures, the Subordinated Debentures and Warrants which amount toa full and unconditional guarantee of the respective issuer’s obligations with respect thereto.

(b) MCI Communications (“MCI”) and TNCL are currently in the process of negotiating their arrangements relating to theunwinding of American Sky Broadcasting, LLC (“ASkyB”). MCI and TNCL have agreed that, subject to certain conditions, thenew arrangements will provide that TNCL and MCI will be responsible for 80.1% and 19.9%, respectively, of the costs relatingto ASkyB. In conjunction with the new arrangement, the Company has recorded a liability of approximately US$800 millionrelated to its requirement to issue redeemable preferred securities to MCI.

31






Note 24 Contributed equity

2,091,801,440 (2000 2,037,326,936) ordinary shares 5,432 4,799 6,469 5,8272,660,797,506 (2000 2,140,956,890) preferred limited

voting ordinary shares 14,813 6,080 15,799 7,455

20,245 10,879 22,268 13,282

3,800,000 perpetual preference shares (a) 132 13210,000,000 8 5/8% cumulative perpetual preference shares (a) 358 358

490 490

20,735 11,369 22,268 13,282

(a) A subsidiary of The News Corporation Limited issued 10,000,000 8 5/8% cumulative perpetual preference shares in July 1993 and afurther 3,800,000 adjustable rate perpetual preference shares in July 1994. These shares may only be redeemed at the option of TheNews Corporation Limited after 30 July, 1998 and rank after all debt holders in respect to both capital and dividends. Dividends onthese shares can only be paid out of available profits and as such are treated as equity instruments.

Queensland Press Limited, an associated entity of the Company, holds 312 million (2000 312 million) ordinary shares and 151 million(2000 151 million) preferred limited voting ordinary shares (“preferred shares”) in The News Corporation Limited. Consolidated issuedcapital has been reduced to remove this reciprocal shareholding in accordance with AASB 1016 “Accounting for Investments inAssociates”. Investments in associates have been reduced by the same amount. The average shares used to calculate earnings per sharehas been adjusted accordingly as in prior years.

The following table shows the movements in ordinary and preferred shares during the year.

Number of sharesOrdinary Preferred

Balance as at 1 July, 2000 2,037,326,936 2,140,956,890Exercises/conversions of potential shares 435,450 8,841,358Shares issued in return for equity in

Gemstar-TV Guide International 14 485,853,636Dividend reinvestment 1,934,849 3,778,644 Share buyback (4,684,999)Shares issued in respect of Zero and LYONs ™ note conversions 52,104,205 26,051,977

Balance as at 30 June, 2001 2,091,801,440 2,660,797,506

32




2001 2000

Note 24 Contributed equity (continued)

Share Buyback

In August 2000 the Company filed a notice to commence an on-market buyback of up to US$1.5 billion. During the year theCompany acquired and cancelled 4,684,999 preferred shares for $91 million.

Share Options

The Company has a number of different share option arrangements as outlined below. As at 16 August, 2001 there are 310,500options outstanding over ordinary shares and 192,021,130 options outstanding over preferred shares.

Executives’ Share Option Scheme, Share Option Plan and Australian Executive Option Plan

The arrangements of these three plans provide that options may be granted for up to 5% of the Company’s issued share capital toemployees of management or equivalent status, including Executive Directors. The exercise price of the options issued under thearrangements is the weighted average market price of the shares sold on the Australian Stock Exchange during the five trading daysimmediately prior to the date the option is granted. Options granted under the Scheme may be exercised after the secondanniversary of being granted. The options granted under the Scheme expire 57 months after the date of being granted and may berenewed for a term of five years by the grant of a further option with substantially the same terms and conditions as the existingoption. Options granted under the Plan and Australian Executive Option Plan (“AEOP”) have a term of 10 years after the date ofgrant. The options granted under the Plan and the AEOP vest and become exercisable as to one quarter on each anniversary of thegrant. These three plans allow the Company to procure the transfer of issued ordinary or preferred shares to option holders ratherthan issue new shares to them.

Details of options outstanding over one ordinary and one half preferred share under the Scheme as at 16 August, 2001 are as follows:

Number of Exercise Price Date of ExpirationOptions $ of Options

Outstanding24,000 6.04 October 2002

2,500 6.71 November 200210,000 7.34 February 200340,000 7.35 March 200320,000 7.50 May 200324,000 10.86 October 200346,000 10.29 February 2004

120,000 8.29 July 200424,000 8.26 October 2004

310,500

On issue 1 July, 2000 (1 July, 1999) 725,950 2,779,750Exercised during the period (415,450) (2,211,750)Expired during the period

Outstanding at 16 August, 2001 (16 August, 2000) 310,500 568,000

33




2001 2000


Details of options over one preferred share outstanding under the Share Option Plan and AEOP as at 16 August, 2001 are as follows:

Number of Exercise Price Date of ExpirationOptions Outstanding $ of Options

25,000 5.70 March 20022,058,000 4.79 August 2002

12,000 6.09 October 200250,000 4.78 November 200425,000 4.57 January 2005

120,000 6.79 June 200535,000 7.03 July 200539,000 6.33 October 2005

172,500 6.41 - 6.56 December 200515,000 6.39 February 2006

100,000 6.61 March 20068,566,500 5.17 July 20062,542,000 5.82 - 5.83 October 2006

300,000 5.58 November 2006300,000 5.60 December 2006275,000 5.67 - 5.70 January 2007

15,481,792 4.79 August 20072,500 7.06 September 2007

151,502 6.09 - 6.20 October 200744,000 8.69 April 2008

400,000 10.09 August 20082,180,000 9.35 September 2008

15,759,672 7.98 - 8.08 October 200815,700 9.01 December 2008

863,300 9.78 - 9.88 January 20094,507,700 10.78 March 2009

19,256,650 10.46 September 200936,904,000 10.55 - 22.11 November 2009

40,000 13.74 December 200996,832 13.01 - 15.43 January 2010

10,600,000 15.86 - 17.75 May 201027,714,828 18.15 August 2010

643,600 17.83 - 21.54 October 2010250,000 17.72 - 17.81 November 2010

1,383,000 12.68 - 14.08 January 201152,000 14.73 March 2011

150,982,076

On issue at 1 July, 2000 (1 July, 1999) 131,358,091 86,987,900Issued during the period 32,205,080 69,255,450Exercised during the period (8,942,127) (20,448,770)Lapsed during the period (3,638,968) (6,665,564)Outstanding at 16 August, 2001 (16 August, 2000) 150,982,076 129,129,016

34




2001 2000


Other PlansConsequent to the acquisition of New World Communications Group Incorporated, Heritage Media Corporation and Chris-CraftIndustries, these Share Option Plans granted participants the right to purchase ADRs of the Company, each of which represents fourpreferred shares. At 16 August, 2001, the following options (all of which are fully vested) remain outstanding:

New World /Heritage OptionsOn issue at 1 July, 2000 (1 July, 1999) 623,986 1,005,004Issued during the periodExercised during the period (30,143) (386,550)Lapsed during the period

Outstanding at 16 August, 2001 (16 August, 2000) 593,843 618,454

US$ exercise price range US$1.15 - US$3.87Expiration dates May 2003 - December 2006

Chris-Craft Industries OptionsOn issue at 1 July, 2000 (1 July, 1999)Issued during the period 32,954,318Exercised during the period (198,182)

Outstanding at 16 August, 2001 (16 August, 2000) 32,756,136

US$ exercise price range US$3.17 - US$8.11Expiration dates May 2002 - May 2010

News International Sharesave SchemeIn October, 1997, shareholders approved the establishment of a sub-plan to The News Corporation Share Option Plan. The U.K.Sub-plan is a salary sacrifice savings scheme, which was established for the benefit of U.K. resident employees of News Internationalplc, an indirect, wholly owned subsidiary of The News Corporation Limited, to provide those employees with an opportunity toparticipate in the equity of The News Corporation Limited. The U.K. Sub-plan involves the grant of options over preferred sharesto participating employees. The option entitles holders to call for the delivery to them of these shares upon the maturity of 3, 5 or 7year savings plans which were implemented in conjunction with the Plan. The options have an exercise price which represents adiscount of up to 20% of the market price of the shares at the date of the grant of the option. The exercise price is paid by anautomatic withdrawal from the participant’s saving plan in favour of the Trustee who, on exercise of the option, uses those proceedsto acquire the requisite number of shares and transfer them to the participant. At the date of the employee’s election, the options hadan exercise price range of STG 2.104 to 4.192 per share. As at 16 August, 2001, 7,533,825 options were outstanding under the Planwith expiration dates from February 2002 to February 2008.

35






Note 25 Reserves

SummaryAsset revaluation 3,143 3,143 311 311Foreign exchange fluctuation 7,237 3,865Associated entities 519 (189)

10,899 6,819 311 311

Asset revaluationBalance at beginning of year 3,143 3,145 311 311Transfer (to) retained earnings on disposal of

non-current assets (2)

3,143 3,143 311 311

Foreign exchange fluctuationBalance at beginning of year 3,865 1,642Net exchange gains arising on translation of net assets of

controlled entities 3,372 2,223

7,237 3,865

36






Note 25 Reserves (continued)

Associated entitiesOperating (loss) after tax 5 (249) (298)Reserve balance at beginning of year (189) 302Dividends and distributions received (80) (66)Adjustment of conversion rates (23) (26)Additional investment by an associated entity 14 1,060Transfer (to) retained profits on disposal (101)

Reserve balance at end of year 519 (189)

Attributable to interest in joint venture entities (586) (400)

Note 26 Retained profits

Retained profits at the beginning of the financial year 11,691 9,737 11,634 8,886Net profit (loss) attributable to members of the parent entity (746) 1,921 2,511 2,984Dividends provided for or paid 9 (305) (284) (254) (236)Aggregate amount transferred from reserves 266 317

Retained profits at the end of the financial year 10,906 11,691 13,891 11,634

Note 27 Outside equity interests in controlled entities

Capital (a) 4,734 2,566Retained profits 319 213Reserves 2 2

5,055 2,781

(a) Includes the Preferred Interest issued by CVL in connection with the new series of film rights agreements entered into by theCompany as more fully described in Note 15.

37




Parent Entity

2001 2000A$ million

Note 28 Contingent liabilities

Guarantees given by the parent entity in respect of controlled and associated entities:

Borrowings 18,805 15,431

Under terms of deeds of indemnity, any deficiency of funds if any Australian wholly owned controlled entity is wound up, will bemet by the parent entity.

Other LiabilitiesTNCL has guaranteed certain liabilities for equity affiliates of STAR. These guarantees include letters of credit, performance bonds,transponder and other leases. The aggregate of the guarantees is approximately US$108 million and extend through May 2004.

TNCL has also guaranteed various transponder leases for certain associated companies operating in Latin America. The aggregateof these guarantees is approximately US$384 million and extends through 2019.

World Sports Group, an unrelated entity, has acquired the exclusive rights to transmit and exploit the signals for the 2003 and 2007Cricket World Cups and other related International Cricket Council (“ICC”) cricket events for a minimum guarantee of US$550million over the next seven years. TNCL and World Sports Group will manage these rights through a 50/50 joint venture. TNCLhas guaranteed this contract and has been granted the first right of refusal and the last right to match for TNCL or any of itsaffiliates, for the broadcast rights in their respective territories. As of 30 June, 2001, the remaining minimum guarantee is US$491million over the six year term.

Various claims arise in the ordinary course of business against controlled entities. The amount of the liability (if any) at 30 June,2001 cannot be ascertained, and the parent entity believes that any resulting liability would not materially affect the financial positionof the Company.

Income tax would arise if certain fixed assets, investments and publishing rights, titles and television licences were disposed. As thereis no present intention to dispose of any of these assets, the Directors believe it would be misleading to record any amount againstthis contingency.

The News Corporation Limited, Telstra Corporation Limited (“Telstra”) and Publishing & Broadcasting Limited (“PBL”) areparticipants in a partnership known as FOXTEL, which has established a Pay TV operation in Australia. FOXTEL, The NewsCorporation Limited, Telstra and PBL have entered into long term channel supply agreements with various parties for exclusivecable rights to their programming. The agreements prescribe that payments of approximately US$994 million (2000 US$1,120million) for programming are based on subscriber numbers subject to a minimum annual payment. The Company’s 25% share of theguaranteed minimum program payment is:

Minimum program paymentsNot later than one year 51 46 Later than one year not later than five years 200 174 Later than five years 240 248

491 468

During 2000, TNCL sold all of its interest in Ansett Worldwide Aviation Services (“AWAS”). Following the sale, TNCL hasreceived an indemnity from the acquirer of its interest in AWAS against the contingent liability for the guarantee of certain leveragedlease transactions. These guarantees total $322 million (2000 $770 million) and the Company will only be liable for this contingentliability if the indemnity cannot be satisfied.

38






Note 29 Commitments

Contracts for capital expenditureBuildings 33 19 Plant and machinery 176 95

209 114

Payablenot later than one year 181 111 later than one year not later than five years 28 3

209 114

Lease commitmentsAggregate amount contracted forLand and buildings 3,696 2,496 Plant and machinery 268 130

3,964 2,626

Lease commitments comprise:Operating leases payablenot later than one year 240 199 later than one year not later than five years 912 725 later than five years 2,812 1,702

3,964 2,626

Other commitmentsCommitment to broadcast television programs 22,754 14,266 Other 3,804 2,136

26,558 16,402

Payablenot later than one year 5,169 3,406 later than one year not later than five years 15,347 9,070 later than five years 6,042 3,926

26,558 16,402

39




Note 30 Superannuation commitments

The Company participates in more than 70 pension plans covering substantially all employees. The Company has a legallyenforceable obligation to contribute to some plans and is not required to contribute to others. Australian and Asian plans includeboth contributory and non-contributory defined benefit plans and non-contributory accumulation plans. The plans of the UnitedKingdom controlled entities include both contributory accumulation plans, contributory and non-contributory defined benefitpension plans covering all employees, while the plans of the United States subsidiaries include both defined benefit pension plansand non-contributory and contributory accumulation plans covering all employees not covered by union administered plans.Accumulated plan benefits and plan net assets for the Company’s defined benefit plans as at 30 June, 2001 are as follows:

Plans where: Assets Projected TotalExceed Benefits

Projected ExceedBenefits Assets

A$ million A$ million A$ millionActuarial present value of accumulated benefit obligationsVested 696 1,034 1,730Non-vested 3 3

Total accumulated benefit obligation 699 1,034 1,733Effect of projected future salary increases 18 98 116

Total projected benefit obligations 717 1,132 1,849Plan assets at market value 971 943 1,914

Plan assets in excess of (less than) projected benefit obligations 254 (189) 65

The weighted average accrued discount rates used in determining the actuarial present value of accumulated plan benefits rangedfrom 6.0% to 7.75%. The Company believes that these discount rates are representative of the prevailing long term interest ratesexisting at 30 June, 2001. Additionally, salary increase assumptions ranged from 3.5% to 5.5% and investment return assumptionsranged from 7.0% to 10.0%. Assets of the plans are invested primarily in managed funds which invest primarily in a combination ofequity and fixed income investments.

40




Note 30 Superannuation commitments (continued)

Details of the major plans in which the Company participates are:

Type of Company Contribution Actuarial AssessmentName of Fund Benefit Obligations Date By

AustraliaNewsSuper Defined benefit and As required to fund 1 July, 1999 William M Mercer

defined contribution defined benefit Pty LimitedNews Employees Superannuation Defined benefit and As required to fund 1 July, 1998 William M Mercer

Trust defined contribution defined benefit Pty LimitedNews Limited Group Defined contribution 6% and 8% of members’ Not applicable

Superannuation Fund salaries

Hong KongStar TV Provident Fund Non-contributory Contributions by Company Not applicable

accumulation plan based on 10% of base salaryStar Mandatory Provident Fund Contributory and 5% of members’ relevant Not applicable

defined benefit monthly income

United KingdomNews International plc Pension Non-contributory and As required to fund 1 July, 1998 William M Mercer

and Life Assurance Plan defined benefit defined benefit Limitedfor Senior Executives

News International Pension Plan Contributory and 8% of members’ 1 October, 1998 William M Mercerdefined contribution basic pay Limited

HarperCollins Pension & Life Contributory and As required to fund 31 March, 2000 Watson / Wyatt Assurance Scheme defined benefit defined benefit Consultants &

ActuariesHarperCollins Executive Pension Contributory and As required to fund 31 March, 2000 Watson /Wyatt

& Life Assurance Scheme defined benefit defined benefit Consultants & Actuaries

Digimedia Vision Pension and Life Contributory and As required to fund 1 December, 1998 William M MercerAssurance Plan defined benefit defined benefit Limited

United StatesNews America, Inc. Non-contributory As required to fund 1 July, 1998 Consulting Actuaries

Employees’ Pension and defined benefit defined benefit International, Inc.Retirement Plan

Fox Pension Plan Non-contributory As required to fund 1 January, 1998 Buck Consultantsdefined benefit defined benefit

Fox Investment Plan Contributory The Company matches Not applicable(401(k) Plan) defined contribution up to 3% of eligible

compensationPension Plan for Union Contributory As required to fund defined 1 January, 1998 Buck Consultants

Employees of Fox defined benefit benefit plus voluntary Television Stations, Inc. member contributions

Los Angeles Dodgers’ Non-contributory As required to fund 1 January, 1999 The Epler CompanyPension Plan defined benefit the benefit

Los Angeles Dodgers’ Frozen contributory No contributions - Not applicableSavings Plan (401(k) Plan) defined contribution frozen plan

The HarperCollins Non-contributory From 1% to 14% of Not applicableRetirement Plan defined accumulation members’ gross wages

News America, Inc. Contributory and The Company matches Not applicableSavings Plan defined contribution up to 3% of eligible

compensation

41




Consolidated

2001 2000A$ million

Note 31 Related party disclosureDirectors in office during the past two financial yearsK R Murdoch AC A S B KnightG C Bible G J Kraehe appointed January 2001C Carey L B A Moratti retired September 1999G C C Chang retired February 2000 J R Murdoch appointed December 2000P Chernin L K MurdochK E Cowley AO T J PerkinsD F DeVoe B C Roberts Jr.R Eddington appointed September 1999 S S ShumanJ A M Erkko KBE A M Siskind

Shares and options held by DirectorsThe relevant interest of each Director in the share capital of the Company, as notified by the Directors to the Australian StockExchange Limited in accordance with section 235(1) of the Corporations Act (2001), at the date of this report is as follows:

The News Corporation Limited Fox Entertainment Preferred Group

Preferred Limited VotingOrdinary Limited Voting Ordinary Share Ordinary Share Ordinary

Shares Ordinary Shares Options Options SharesK R Murdoch AC * 31,780 8,492 24,000,000 5,000G C Bible 36,000C Carey 5,040,000 5,000P Chernin 16,275,000 4,444K E Cowley AO 50,000 172,000D F DeVoe 2,930,000 4,000R Eddington 873,000J A M Erkko KBE 24,000 30,000 54,000A S B Knight** 1,467,348 400,000 48,000G J Kraehe 5,093J R Murdoch 3,274 1,673 682,352L K Murdoch 11,699 890 3,040,000T J Perkins 20,912 48,000B C Roberts Jr. 24,000S S Shuman 121,871 641,031 24,000 84,000A M Siskind 27,871 50,143 3,400,000 4,000

* K R Murdoch additionally is deemed to have a relevant interest in shares by reason of his beneficial and trustee interests inCruden Investments Pty. Limited, a substantial shareholder, and may also be entitled (as defined in the Corporations Act(2001)), to shares by reason of his connection with Kayarem Pty. Limited, which has a relevant interest in an additional17,276,714 ordinary shares and 8,725,517 preferred limited voting ordinary shares.

** A S B Knight is deemed to have an interest by reason of his beneficial interest in a settlement, the trustees of which are RoyalBank of Canada Trustees Limited and Blomfield Trustees (Jersey) Limited.

Other than disclosed elsewhere in this note, since the end of the previous financial year no Director of the Company has received, orbecome entitled to receive, a benefit by reason of a contract made by the Company or a related corporation with the Director orwith a firm of which they are a member or with a company in which they have a substantial financial interest.

42




Consolidated

2001 2000A$ million

Note 31 Related party disclosure (continued)

Share and option transactions with Directors and Director related entitiesShares and options acquired from the entity during the year: Ordinary shares 1,032,726 681,169Preferred limited voting ordinary shares 1,297,746 6,220,667Preferred limited voting ordinary share options 2,516,000 46,160,800

The exercising of options and the acquisition and disposal of shares were made on terms and conditions no more favourable thanthose offered to other share and option holders.

Other Director transactionsDirectors of the Company and Directors of its related parties, or their director-related entities, conduct transactions with entitieswithin the Company that occur within a normal employee, customer or supplier relationship on terms and conditions no morefavourable than those with which it is reasonable to expect the entity would have adopted if dealing with the Director or director-related entity at arm’s length in similar circumstances. These transactions include the following and have been quantifiedbelow where the transactions are considered likely to be of interest to users of the financial statements.

During the year there were numerous transactions between the Company and Queensland Press Limited. Queensland Press Limitedis controlled by Cruden Pty. Limited in which K R Murdoch, by reason of his beneficial and trustee interest, may be deemed to havean interest. The net value of these transactions was $62,432,000 (2000 $67,223,000). Details of these transactions are outlined below:

A$’000 A$’000

Transactions with Queensland Press LimitedActing as agent for the purchase of newsprint 75,372 81,631Provision of editorial, advertising and other resources 3,892 3,251Provision of printing and distribution facilities (21,442) (22,745)Provision of printed matter 4,610 5,086

62,432 67,223

Transactions with other related partiesSale of programming inventory 258,892 155,420Provision of broadcasting systems 240,715 201,379Provision of channel compilation and uplink services 25,837 12,868Lease of transponder capacity 16,797 11,919Provision of administrative services 5,985 3,612Sale of advertising 57,749 4,044Sale of telephony services 85,539

43




THE NEWS CORPORATION LIMITED # AustA.C.N. 000 024 028 Pty. Limited # AustA.C.N. 091 552 984 Pty. Limited AustA.N. Investments Pty. Limited # AustAccess Securities Pty. Limited # AustAdelaide Rams Pty. Limited AustAdvertiser Newspapers Limited # AustAdvertiser-News Weekend Publishing

Company Pty. Limited # AustAH SO Pty. Limited AustAllied Press Pty. Limited** PNGALW Pty. Limited # AustAustralian Indoor Tennis Championships Pty. Limited # AustAustralian News Network Pty. Limited # AustAyr Newspapers Pty. Limited # AustB.B.A.C. Pty. Limited # AustBinni Pty. Limited # AustBookcraft Printing Pty. Limited AustCable Media Investment Pty. Limited AustCanberra Raiders Marketing Pty. Limited AustCareerone Pty. Limited AustCareerone Services Pty. Limited AustCello-Gloss Pty. Limited AustCentral Coast Publications Pty. Limited # AustCitynet Pty. Limited # AustControl Investments Pty. Limited # AustCumberland Printers Pty. Limited # AustDavies Brothers Limited # AustEP Securities Pty. Limited Austepartners Pty. Limited AustF.T.H. Properties Limited** FijiFestival Allied International

Trading House Pty. Limited # AustFestival Books and Associates Limited** Hong KongFestival Music Pty. Limited # AustFestival Records (NZ) Ltd** NZFestival Records Pty. Limited # AustFiji Times Limited** FijiFlying Nun Records (Australia) Pty. Limited # AustFlying Nun Records Limited** NZGoFish Online Pty. Limited AustGoFish Online Services Pty. Limited AustGraphon (Typesetters) Pty. Limited AustGraphon Printing (NSW) Pty. Limited AustHarperCollins B.V. NetherlandsHWT (N.S.W.) Pty. Limited # AustLarrikin Entertainment Pty. Limited AustLeader Associated Newspapers Pty. Limited # Aust

Leader Media Group Pty. Limited # AustLeteno Pty. Limited AustLisrich Pty. Limited # AustLower Burdekin Newspaper Company Pty. Limited # AustMelodian Records Pty. Limited # AustMessenger Press Pty. Limited # AustMirror Newspapers Limited # AustMushroom Assets Pty. Limited # AustMushroom Distribution Services Pty. Limited # AustMushroom Multi Media Pty. Limited # AustMushroom Records International B.V. NetherlandsMushroom Records Pty. Limited # AustN.Q.N. Investments Pty. Limited # AustNational Rugby League Investments Pty. Limited AustNationwide News Pty. Limited # AustNews Broadcasting Australia Pty. Limited AustNews Cayman (Finance) Limited Cayman IslandsNews Cayman Investment Limited Cayman IslandsNews Cayman Limited Cayman IslandsNews Classifieds Network (NCN) Pty. Limited # AustNews Connect Pty. Limited # AustNews Group Holdings Pty. Limited # AustNews Holdings (NZ) Limited ** NZNews Interactive Pty. Limited # AustNews Interactive Sports Australia Pty. Limited AustNews Limited # AustNews Magazines Operations Pty. Limited AustNews Magazines Pty. Limited AustNews Netherlands B.V. NetherlandsNews NT Investments Limited # AustNews Pay TV Pty. Limited AustNews PD Investments Pty. Limited # AustNews Securities B.V. NetherlandsNews Sports Programming Pty. Limited # AustNews TV Magazines Pty. Limited AustNews U.S. Holdings Pty. Limited # AustNewscorp Cayman Islands Limited Cayman IslandsNewscorp Music Pty. Limited # AustNewscorp Overseas Limited Cayman IslandsPacific Publications (Fiji) Limited** FijiPerth Print Pty. Limited # AustPicture This Records Pty. Limited # AustPure Magazine Pty. Limited AustRadmar Pty. Limited # AustRosella Music Pty. Limited AustRugby International Pty. Limited # AustSparad (No 9) Pty. Limited # AustSports Online Pty. Limited # Aust

44




Note 32 Controlled entitiesCountry of Country of

Company Incorporation Company Incorporation

SRC Holdings Limited Cayman IslandsStandard Newspapers Limited # AustStar China Investment (No. 1). Limited Cayman IslandsSuper League Pty. Limited AustTejeku Pty. Limited # AustTelevision Broadcasters Investments Pty. Limited AustTerrace Investments Pty. Limited # AustThanatos Pty. Limited AustThe Herald and Weekly Times Limited # AustThe North Queensland Newspaper Company Limited # AustThe Sydney Suburban Newspaper Company

Pty. Limited # AustT-Net Online Pty. Limited # AustUnited Media Pty. Limited # AustWespre Limited # AustWinston Investments Pty. Limited # Aust

News Publishers Holdings Pty. Limited # AustNews Cayman 2000 Limited Cayman IslandsNews Cayman DTH (Mexico) Ltd. Cayman IslandsNews Cayman DTH Limited Cayman IslandsNews Cayman Holdings Limited Cayman IslandsNews DTH (Latin America) Investments Ltd. Cayman IslandsNews DTH (Mexico) Investments Ltd. Cayman IslandsNews DTH do Brasil Comercios & Paticipacoes BrazilNews DTH Investment Ltd. Cayman IslandsNews Finance (Cayman) Limited Cayman IslandsNews Finance Pty. AustNews Printing Limited** Hong KongNews Publishers Investments Pty. Limited # AustNews Regional Sports Holdings Limited Cayman IslandsNews Regional Sports Member Limited Cayman IslandsSmartSource Marketing Pty. Limited AustStar Group Limited Cayman Islands

Star Television Limited BVI21st Century Holdings Limited Hong Kong21st Century Pacific Holdings Limited Hong KongAcetic Investments Limited MauritiusAll Satellite TV Equipment Co Limited BVIAll Satellite TV Equipment Company Limited Hong KongAnurak Investments Limited MauritiusAsia Productions Limited MauritiusAsia Broadcasting FZE DubaiAsian Music Corporation Limited BVIBest Alliance Profits Limited BVIBuzzer Investments Limited MauritiusCable Technology Asia Corporation Philippines

Crombie International Ltd. MauritiusDigital Star Company Limited Cayman IslandsDimples Investments Limited BVIEastrise Profits Limited BVIEdgecliff Investments Limited MauritiusE-Entertainment Limited BVIEL Television Limited BVIFieldmouse Production Inc. USAForcewide Limited Hong KongFortune Star Pictures Limited Cayman IslandsFruition Goal Limited BVIGreat Energy Enterprises Limited BVIHong Kong DTV Company Limited Hong KongHutchvision Hong Kong Limited Hong KongIndian Region Broadcasting Limited Hong KongInternational Global Newtorks B.V. NetherlandsInvicom Limited UKKushmore Profits Limited BVILivewire Programme Trading Co. Private Limited IndiaMandarin-Media Assets Limited BVIMaximum Marks Limited ** Hong KongMedia Assets (BVI) Limited BVIMedia Assets Limited Hong KongMedia Consultancy YH KoreaMoonglow International Limited BVIMulberry Investments Limited MauritiusNew Found International Limited BVINews Communications Hong Kong Hong KongNews Corporation (China) Limited HLNews Finance HK Ltd. Hong KongNews PD Investments (BVI) Limited BVIPine Hill Investments Private Limited MauritiusPrecision Components Private Limited IndiaPT Senturi Duapuluh Satu IndonesiaQuazar Investments (Mauritius) Limited MauritiusSatellite Television Asian Region B.V. BVISatellite Television Asian Region Limited Hong KongShining Profits Limited BVISky Hill Enterprises Limited Hong KongSpanish Investments Limited MauritiusStar (Middle East) Limited BVIStar (Taiwan) Limited BVIStar Africa Limited Cayman IslandsStar Alfaro Ltd. Cayman IslandsStar Asian Movies Limited BVIStar Astorga Ltd. Cayman IslandsStar Baazee Investment Limited BVIStar Barbastro Ltd. Cayman Islands

45




Note 32 Controlled entities (continued)Country of Country of


Star Daroca Ltd. Cayman IslandsStar DTH (No. 1) Co. Limited MauritiusStar EKCS Cable Holding Company Limited Cayman IslandsStar Encryption Networks Limited Cayman IslandsStar India Private Limited IndiaStar Indiaproperties Investment Limited BVIStar International Movies Limited BVIStar Investment Company Limited TaiwanStar ISP Ltd. MauritiusStar Lerida Ltd. Cayman IslandsStar Macedo Ltd. Cayman IslandsStar Mertola Ltd. Cayman IslandsStar Motilla Ltd. Cayman IslandsStar Regional (SEA) Pte. Limited SingaporeStar Serpra Ltd. Cayman IslandsStar Television Advertising Limited BVIStar Television Asia Limited BVIStar Television Entertainment Limited BVIStar Television Holdings Limited BVIStar Television News Limited BVIStar Television Oriental Limited BVIStar Television Productions Limited BVIStar Television Technical Services Limited BVIStar TV (Nominees) Limited Hong KongStar TV Filmed Entertainment (HK) Limited Hong KongStar TV Filmed Entertainment Limited BVIStar Villena Ltd. Cayman IslandsStar Zafra Ltd. Cayman IslandsStarfish International Private Ltd. MauritiusStar-Travel.com Limited BVISTARTV ATC Holding Limited BVIStar-TV Hotel Services Limited Hong KongStar-TV Subscriptions Limited Hong KongSTARTV.COM (BVI) Limited BVISTARTV.COM Holdings Limited BermudaSuperfair Development Limited Hong KongSVJ Holding Limited MauritiusWorkbest Limited BVIXXI Century Holdings Limited Hong KongYarraton Limited BVI

Newscorp Investments UKAdmacroft Limited UKAdvanced Database Marketing Limited UKAIM (Active Independent Marketing) Limited UKApplied Decision Systems Limited UKBroadsystem Limited UKBroadsystem Ventures Limited UK

Canterpath Investments Limited UKCanterpath Limited UKCentrecore Limited UKConvoys (London Wharves) Limited UKConvoys Limited UKConvoys Pension Trustees Limited UKConvoys Transport Limited UKCRAIB Limited IrelandCrescent Wharves Limited UKDelphi Internet Limited UKDeptford Cargo Handling Services Limited UKe-partners Capital Limited UKe-partners Limited UKEric Bemrose Limited UKEric Bemrose Staff Pension Trustees Limited UKEric Bemrose Works Pension Trustees Limited UKFestival Records International Limited UKFiori Limited UKFiredup.com Limited UKFlying Nun (UK) Limited UKHDM Worboys Limited UKHomeground Marketing Limited UKInfectious Records Limited UKIntegrated Solutions Development Limited UKKIP Limited UKLearnfree Limited UKLogovaz News Corporation LLC RussiaLyntress Limited UKMedia Debt Collections Limited UKMultimedia Holdings B.V. NetherlandsMurdoch Magazines (UK) Limited UKMushroom Records (UK) Limited UKNews (UK) Limited UKNews Advertising Sales, Inc. USANews America DTH Techco, Inc. USANews Collins Holdings Limited UKNews Collins Limited UKNews Corp Europe S.r.l. ItalyNews Financial Services Limited Cayman IslandsNews German Television Holdings GmbH GermanyNews Group Newspapers Limited UKNews International (Advertisements) Limited UKNews International Associated Services Limited UKNews International Distribution Limited UKNews International Newspapers (Knowsley) Limited UKNews International Newspapers (Scotland) Limited UKNews International Newspapers Limited UKNews International Pension Trustees Limited UK

46






News International plc UKNews International Supply Company Limited UKNews International Television Investment

Company Limited UKNews International Television Limited UKNews Investments UK Limited USANews Japan Programming Services Limited UKNews Magazines Holdings Limited UKNews NCH UKNews Network Holdings Limited UKNews Network Limited UKNews Notes Limited UKNews of the World Limited UKNews Offset Limited UKNews Omnimedia Limited UKNews Outdoor Limited UKNews Promotions Limited UKNews Publishers Limited BermudaNews Retail Services Limited UKNews Telemedia Europe Limited UKNews Television B.V. NetherlandsNews Television Japan UKNews Television Limited UKNews Times Holdings Limited UKNews UK Nominees Limited UKNewscorp Finance Limited Cayman IslandsNewscorp Finance N.V. Netherlands AntillesNewscorp Japan Holdings B.V. NetherlandsNewscorp Japan Investments B.V. NetherlandsNewscorp Netherlands Antilles N.V. Netherlands AntillesNewscorp Preference Limited Cayman IslandsNGN Editorial Pension Trustees Limited UKNGN Executive Pension Trustees Limited UKNGN Staff Pension Trustees Limited UKNI Syndication Limited UKNursery World Limited UKOrdinto Investments UKRadio Modern LLC RussiaRadio Nostalgia LLC RussiaSalcombe Securities Limited UKSatellite Marketing and Advertising Limited UKSESLA, Inc. USASky Channel Limited UKSky Global Holdings, Inc. USASky Global Networks, Inc. USASky Global Operations, Inc. USASky Global Services, Inc. USAStar Advertising Sales Limited UK

The News Corporation Limited Japan JapanThe Sun Limited UKThe Sunday Times Limited UKThe Times Educational Supplement Limited UKThe Times Higher Educational Supplement Limited UKThe Times Limited UKThe Times Literary Supplement Limited UKThe Times Network Systems Limited UKThe Times Pension Trusts Limited UKTimes Newspapers Holdings Limited UKTimes Newspapers Limited UKTimes Newspapers Production Company Limited UKTNL Pension Trustees Limited UKTower Trustees Limited UKTSL Education Limited UKUltra Production LLC RussiaVirginia Three Limited UKVirginia Two Limited UKWelling Storage Limited UKWorldwide Learning Limited UK

Harpercollins Publishers Inc. USAEditora Harper & Row de Brazil Ltda. BrazilEditora Vida Ltda. BrazilHarperCollins Japan, Inc. USAThe Zondervan Corporation USAVida Publishers, Inc. USAZonderben, Inc. USAZondervan (republica Dominicana) S.A Dominican RepublicZondervan International, Inc. USVIZondervan Leasing Corporation USA

Harpercollins (UK) UKBartholomew Limited UKCartographic Services (Cirencester) Limited UKCobuild Limited UKCollins Desktop Publishing Limited NZDolphin Bookclub Limited UKDovcom Nominees Pty. Limited AustDove Communications Trust AustFourth Estate Limited UKGeorge Allen & Unwin (Publ) Limited UKGeorge Allen & Unwin (Storage) Limited UKGolden Press Pty. Limited AustHarper Educational (Australia) Pty. Limited AustHarperCollins Canada Limited CanadaHarperCollins Investments (UK) Limited UKHarperCollins Publishers (Australia) Pty. Limited Aust

47






HarperCollins Publishers (New Zealand) Limited NZHarperCollins Publishers Limited UKHarperCollins Publishers Pensions Trustee Co. Limited UKHarperCollins Publishers Pty Limited AustMarshall Pickering Holdings Limited UKPollokshields Printing Services Limited UKThorsons Publishers Limited UKThorsons Publishing Group Limited UKTimes Books Group Limited UKTimes Books Limited UKUnwin Hyman Limited UKWilliam Collins Holdings Limited UKWilliam Collins International Limited UKWilliam Collins Sons & Company Limited UK

News Publishing Australia Limited USAASkyB Holdings, Inc. USAAustair, Inc. USABalkan News Corporation EAD BulgariaBroadsystem Incorporated USADLO Corporation USAEFL Licensing, Inc. USA epartners Limited USAEvergreen Trading Co, Inc. USAFEG Holdings, Inc. USAFox, Inc. USAFox Studios East, Inc. USAFox TV 10 Holdings, Inc. USAHeiko, LLC USAHeritage Broadcasting Group, Inc. USAHeritage GP, Inc. USAHeritage Media Corporation USAHeritage Media Management, Inc. USAHeritage Media Services, Inc. USAHMI Broadcasting Corporation USALJL Corp. USAMurdoch Publications, Inc. USANAHI Real Estate Corporation USANAPI G.P. Corp., Inc. USANAPI/WNS, Inc. USANews Air, Inc. USANews America DTH Leasing, Inc. USANews America Finance, Inc. USANews America Holdings Incorporated USANews America Incorporated USANews America In-Store, Inc. USANews America Magazines, Inc. USANews America Marketing FSI, Inc. USA

News America Marketing In-Store Services, Inc. USANews America Marketing Interactive, Inc. USANews America Marketing Properties, Inc. USANews America Publishing Incorporated USANews America Real Estate, Inc. USANews Bulgaria, Inc. USANews Digital Media, Inc. USANews Group / Times Newspapers U.K., Inc. USANews Group Realty Corporation USANews In-Flight Network Company USANews Limited of Australia, Inc. USANews Marketing Canada Corp. CanadaNews PLD LLC USANews Romania Inc. USANews Sports Programming, Inc. USANews T Investments, Inc. USANews T Magazines, Inc. USANews T Operations, Inc. USANews Television Romania S.r.l. RomaniaNews Triangle Finance, Inc. USANews TV Romania B.V. NetherlandsNYP Holdings, Inc. USANYP Realty Corporation USAOmni Holdings, Inc. USARepaca, Inc. USARugged Limited BermudaSan Antonio Film Features, Inc. USASmart Source Direct, Inc. USASports Team Analysis and Tracking System of Missouri, Inc. USATENC, Inc. USAThe Express-News Corporation USAWorld Printing Company, Inc. USA

48






AH CB Pty. Limited Aust 72.72%AH WR Pty. Limited Aust 62.50%APR City LLC* Russia 46.05%APR City/TVD LLC* Russia 46.05%AR Technologies LLC* Russia 46.05%Beijing PDN Xinren Information

Technology Co. Limited China 69.60%Channel [V] Music Networks Limited Partnership HK 87.50%DDUP LLC* Russia 46.05%Exclusiv Media S.R.L Romania 75.00%Fairmont Technologies Limited* BVI 46.05%Infosports NRL Pty. Limited Aust 90.00%Media Support Services Limited* BVI 46.05%Mercury Outdoor Displays Limited* BVI 46.05%Microtrans Limited UK 80.00%Natural History Limited NZ 80.00%News Broadcasting Japan KK Japan 80.00%News Out of Home BV Netherlands 75.00%News Outdoor Hungary Kft Hungary 75.00%Newsett Ltd. UK 50.00%Outdoor Systems Limited* BVI 46.05%Outdoor Systems LLC* Russia 46.05%Outdoor Technologies Limited* BVI 46.05%Outdoor Technologies LLC* Russia 46.05%Post Courier Limited PNG 62.50%Primesite Limited* BVI 46.05%Primesite LLC* Russia 46.05%Rawkus Entertainment LLC USA 80.00%Service Reklama LLC* Russia 46.05%Sky Radio A.B. Sweden 71.50%Sky Radio B.V. Netherlands 71.50%Sky Radio Limited UK 71.50%Sky Radio Reklam A.B. Sweden 71.50%South Pacific Post Pty. Limited PNG 62.50%Tianjin Golden Mainland

Development Company Limited China 60.00%Town & City II S.A Poland 75.00%TVC Limited* BVI 46.05%TVC UK Limited* UK 46.05%TVD LLC* Russia 46.05%

FOX ENTERTAINMENT GROUP, INC. USA 82.76%19th Holdings Corporation USA 82.76%21st Century Fox Film Corporation USA 82.76%Affiliated Regional Communications Ltd. USA 51.31%AHN/FIT Cable, LLC USA 82.76%AHN/FIT Holdings, Inc. USA 82.76%AHN/FIT Internet, LLC USA 82.76%

AHN/FIT Ventures, Inc. USA 82.76%Ameristar Music Publishing Co. USA 82.76%Ames Entertainment Ltd. Canada 82.76%ARC Holding, Ltd. USA 51.31%Auction Media Ventures, LLC USA 82.76%Baja Holdings, Inc. USA 82.76%Baja Studios, Inc. USA 82.76%Bazmark Film Pty. Limited Aust 82.76%Because He Can Productions, Inc. USA 82.76%Blue Sky Studios, Inc. USA 82.76%Bob Productions, Inc. USA 82.76%BST, S.A. de C.V. Mexico 82.76%Camp Management

Incorporated, S.A. Dominican Republic 78.62%Cannell Entertainment, Inc. USA 82.76%Cannell Production Services, Inc. Canada 82.76%Can’t Can’t Productions, Inc. USA 82.76%CBS/Fox French Film Licensing Corporation USA 82.76%Centfox Film GmbH Austria 82.76%Centfox Film, GESmbH Austria 82.76%Cinemascope Products, Inc. USA 82.76%Colony Productions, Ltd. Canada 82.76%Constance Music, Inc. USA 82.76%Cotton Cage Productions, Inc. USA 82.76%Cornwall Venture, LLC *** USA 8.28%Crash, LLC USA 82.76%D.A.W. Productions, Inc. USA 82.76%Daredevil Productions, Inc. USA 82.76%Deliberate Intent Productions Ltd. Canada 82.76%Deliberate Intent, Inc. USA 82.76%Deluxe Laboratories Film Storage, Inc. USA 82.76%Digital Leaseholds, Inc. USA 82.76%Dobsong Music Corp. USA 82.76%Dodgertown, Inc. USA 78.62%Drive-In Cinemas Limited Kenya 82.76%Echoes in the Darkness Productions, Inc. Canada 82.76%Emmett Street Films, Inc. USA 82.76%Evergreen Television Production, Inc. USA 82.76%F4 Productions, Inc. USA 82.76%FA Productions, Inc. USA 82.76%FBC Sub, Inc. USA 82.76%FEG Finco, Inc. USA 82.76%Final Stretch Productions, Inc. USA 82.76%Fit TV Holdings, LLC USA 82.76%FLAC Worldwide LLC USA 82.76%Four Star Entertainment Corp. USA 82.76%Four Star International, Inc. USA 82.76%Fourtel Music Publishing Company USA 82.76%

49




Note 32 Controlled entities (continued)Country of Percent Country of Percent

Company Incorporation Ownership Company Incorporation Ownership

Fox Animation Los Angeles, Inc. USA 82.76%Fox Animation Studios, Inc. USA 82.76%Fox Australia Investments Pty. Limited Aust 82.76%Fox Australia Pty. Limited Aust 82.76%Fox Baseball Holdings, Inc. USA 78.62%Fox Basketball Holdings, LLC USA 82.76%Fox Broadcast Music, Inc. USA 82.76%Fox Broadcasting Company USA 82.76%Fox Broadcasting Sub, Inc. USA 82.76%Fox Cable Network Services, LLC USA 82.76%Fox Cable Networks Ventures, Inc. USA 82.76%Fox Center Productions, Inc. USA 82.76%Fox Circle Productions, Inc. USA 82.76%Fox Daytime Prods., Inc. USA 82.76%Fox Development Group, Inc. USA 82.76%Fox East Productions, Inc. USA 82.76%Fox Film A/S Norway 82.76%Fox Film ApS Denmark 82.76%Fox Film De Cuba S.A. Cuba 82.76%Fox Film de la Argentina S.A. Argentina 82.76%Fox Film Do Brasil Ltda. Brazil 82.76%Fox Film Music Corporation USA 82.76%Fox Filmed Entertainment Australia Pty. Limited Aust 82.76%Fox Hockey Holdings, LLC USA 82.76%Fox Home Entertainment Ltd. UK 82.76%Fox Home Entertainment Worldwide, LLC USA 82.76%Fox Interactive Ltd. UK 82.76%Fox Interactive Television, LLC USA 82.76%Fox Interactive, Inc. USA 82.76%Fox Interamericana S.A. Mexico 82.76%Fox International Entertainment

Channel Espana S.L. Spain 82.76%Fox International Equity, Inc. USA 82.76%Fox International, Inc. USA 82.76%Fox Island Productions, Inc. USA 82.76%Fox Japan Movie Channels, Inc. USA 82.76%Fox Japan Television Programming Services, Inc. USA 82.76%Fox Lane Productions, Inc. USA 82.76%Fox LAPTV LLC USA 82.76%Fox Latin American Channel, Inc. USA 82.76%Fox Lone Star Holdings, LLC USA 61.66%Fox Media Services, Inc. USA 82.76%Fox Moore Park Pty. Limited Aust 82.76%Fox Motion Picture Venture No. 1, Inc. USA 82.76%Fox Movie Channel, Inc. USA 82.76%Fox Movietonews, Inc. USA 82.76%Fox Music, Inc. USA 82.76%Fox Net, Inc. USA 82.76%

Fox News Holdings, Inc. USA 82.76%Fox News Network, LLC USA 82.76%Fox News Productions, Inc. USA 82.76%Fox News Service, Inc. USA 82.76%Fox News, Inc. USA 82.76%Fox Nitetime Prods., Inc. USA 82.76%Fox On Air Music, Inc. USA 82.76%Fox Partnership Investment Pty. Limited Aust 82.76%Fox Pathe Home Entertainment Limited UK 82.76%Fox Pay - Per - View Services, Inc. USA 82.76%Fox Professional Services 2, LLC USA 82.76%Fox Professional Services 3, LLC USA 82.76%Fox Professional Services, LLC USA 82.76%Fox Records, Inc. USA 82.76%Fox Regional Sports Holdings II, Inc. USA 82.76%Fox Regional Sports Holdings, Inc. USA 82.76%Fox Regional Sports Member II, Inc. USA 82.76%Fox Searchlab, Inc. USA 82.76%Fox Searchlight Pictures, Inc. USA 82.76%Fox Services, Inc. USA 82.76%Fox Software, Inc. USA 82.76%Fox Sports Arena, LLC USA 82.76%Fox Sports Basketball, LLC USA 82.76%Fox Sports CNS, LLC USA 82.76%Fox Sports Digital Nets, Inc. USA 82.76%Fox Sports Hockey, LLC USA 82.76%Fox Sports Net Arizona, LLC USA 82.76%Fox Sports Net Baseball, LLC USA 82.76%Fox Sports Net Bay Area Holdings, LLC USA 82.76%Fox Sports Net Canada Holdings, LLC USA 82.76%Fox Sports Net Chicago Holdings, LLC USA 82.76%Fox Sports Net Detroit, LLC USA 82.76%Fox Sports Net Distribution, LLC USA 82.76%Fox Sports Net Finance, Inc. USA 82.76%Fox Sports Net Financing, LLC USA 82.76%Fox Sports Net Minnesota Holdings, LLC USA 82.76%Fox Sports Net Minnesota, LLC USA 82.76%Fox Sports Net National Ad Sales Holdings, LLC USA 82.76%Fox Sports Net National Network Holdings, LLC USA 81.93%Fox Sports Net Northwest, LLC USA 82.76%Fox Sports Net Pittsburgh, LLC USA 82.76%Fox Sports Net Rocky Mountain (GP) USA 61.24%Fox Sports Net Utah, LLC USA 82.76%Fox Sports Net West 2, LLC USA 82.76%Fox Sports Net West, LLC USA 82.76%Fox Sports Net, LLC USA 82.76%Fox Sports Networks, LLC USA 82.76%Fox Sports OLN, LLC USA 82.76%

50






Fox Sports Productions, Inc. USA 82.76%Fox Sports Regional News, LLC USA 82.76%Fox Sports RPP Holdings, LLC USA 82.76%Fox Sports SV, LLC USA 82.76%Fox Sports Ventures Productions, LLC USA 82.76%Fox Square Productions (Canada), Inc. USA 82.76%Fox Square Productions, Inc. USA 82.76%Fox Stations Sales, Inc. USA 82.76%Fox Studio Operations Pty. Limited Aust 82.76%Fox Television Animation, Inc. USA 82.76%Fox Television Australia Pty. Limited Aust 82.76%Fox Television Group S. de R.L. de C.V. Mexico 82.76%Fox Television Holdings, Inc. USA 82.76%Fox Television Stations of Birmingham, Inc. USA 82.76%Fox Television Stations of Philadelphia, Inc. USA 82.76%Fox Television Stations, Inc. USA 82.76%Fox Television Studios Productions, Inc. USA 82.76%Fox Television Studios, Inc. USA 82.76%Fox Transactional TV, Inc. USA 82.76%Fox Tunes, Inc. USA 82.76%Fox Unit Investment Pty. Limited Aust 82.76%Fox Video International Corporation USA 82.76%Fox West Pictures, Inc. USA 82.76%Fox World Productions, Inc. USA 82.76%Fox Worldwide Telecommunications LLC USA 82.76%Fox Worldwide Television LLC USA 82.76%Fox Worldwide Theatrical LLC USA 82.76%Fox/Staples Center Sky Box, LLC USA 57.93%Fox/UTV Holdings, Inc. USA 82.76%Foxfilmes Limitada Portugal 82.76%Foxlab, Inc. USA 82.76%Fox-NGC (International) Holdings, Inc. USA 82.76%Fox-NGC (US) Holdings, Inc. USA 82.76%FoxStar Productions, Inc. USA 82.76%FoxVideo International Distribution, Inc. USA 82.76%FoxVideo New Zealand Limited NZ 82.76%FoxView, Inc. USA 82.76%FRSM FX, Inc. USA 82.76%FRSM West, Inc. USA 82.76%FRT Productions, Inc. USA 82.76%FSO Productions, Inc. USA 82.76%FST Advertising, Inc. USA 82.76%FTS Boston, Inc. USA 82.76%FTS Investments, Inc. USA 82.76%FTS North Carolina, Inc. USA 82.76%FTS Philadelphia, Inc. USA 82.76%FWA Productions, Inc. USA 82.76%fx Holdings, Inc. USA 82.76%

FX Networks, LLC USA 82.76%Galaxy Way Finance Company, Inc. USA 82.76%Galaxy Way Productions, Inc. USA 82.76%Galileo Productions, Inc. USA 82.76%GATV Productions, Inc. USA 82.76%Genesis Video Entertainment, Inc. USA 82.76%Giant Bowling Pin Productions, Inc. USA 82.76%Glen Avenue Films, Inc. USA 82.76%Glimpse of Hell Productions Ltd. Canada 82.76%Glimpse of Hell Productions, Inc. USA 82.76%Glow Productions Ltd. Canada 82.76%Gold Key Entertainment, Inc. USA 82.76%Gone Fission, Inc. USA 82.76%Good Ghouls, Inc. USA 82.76%Greenleaves Productions, Inc. USA 82.76%GTH-103, Inc. USA 82.76%Guthy-Renker Holding Corporation USA 82.76%Harmon Cove Productions, Inc. USA 82.76%Harsh Realm US Prodco, Inc. USA 82.76%Highgate Pictures, Inc. USA 82.76%Highgate Productions, Inc. USA 82.76%Hispano FoxFilm S.A.E. Spain 82.76%In-Cine Distribuitora Cinematografica, S.L. Spain 82.76%J&A Productions, Inc. Canada 82.76%Junior High Productions, Inc. USA 82.76%KDFW License, Inc. USA 82.76%KDFW Television, Inc. USA 82.76%KNSD License, Inc. USA 82.76%Kronenberg Chronicles, Inc. USA 82.76%KSAZ License, Inc. USA 82.76%KSAZ Television, Inc. USA 82.76%KTBC License, Inc. USA 82.76%KTBC Television, Inc. USA 82.76%KTVI License, Inc. USA 82.76%KTVI Television, Inc. USA 82.76%L.C. Holding Corp. USA 82.76%LAPTV A Corporation USA 82.76%LAPTV B Corporation USA 82.76%Latin America Finance Company, Inc. Cayman Islands 82.76%Leap Off Productions, Inc. USA 82.76%Learning Corporation of America USA 82.76%Learning Corporation of America Films, Inc. USA 82.76%Les Productions Fox Europa S.A. France 82.76%Liberty Productions, Inc. USA 82.76%Liberty/Fox ARC L.P. USA 81.93%Liberty/Fox Southeast LLC USA 82.76%Liberty/Fox Sunshine LLC USA 82.76%Library Holdings, Inc. USA 82.76%

51






Looks At Productions, Inc. USA 82.76%Los Angeles Dodgers, Inc. USA 78.62%Marvel Music Groups, Inc. USA 82.76%Mighty Marvel Music Corporation USA 82.76%Millennium Canadian Productions East Ltd. Canada 82.76%Millennium Canadian Productions Ltd. Canada 82.76%Millennium US Prodco, Inc. USA 82.76%Mirror Pictures Corporation USA 82.76%Monet Lane Prods., Inc. USA 82.76%Monty Two, Inc. USA 82.76%Moore Park Production Services Pty. Limited Aust 82.76%Movietonews, Inc. USA 82.76%Moving Target Productions, Inc. USA 82.76%MT 2 Services, Inc. USA 82.76%MT 3 Services, Inc. USA 82.76%MT 4 Services, Inc. USA 82.76%MT Services, Inc. USA 82.76%MVP Video Productions, Inc. USA 82.76%NA Property Holdings, Inc. USA 82.76%National Studios, Inc. USA 82.76%Natural History New Zealand Ltd. NZ 82.76%Netherlands Fox Film Corporation B.V. Netherlands 82.76%New Dallas Media, Inc. USA 82.76%New DMIC, Inc. USA 82.76%New Millennium Investors LLC USA 82.76%New World Administration USA 82.76%New World Animation, Ltd. USA 82.76%New World Communications Group Incorporated USA 82.76%New World Communications of Atlanta, Inc. USA 82.76%New World Communications of Detroit, Inc. USA 82.76%New World Communications of Kansas City, Inc. USA 82.76%New World Communications of Milwaukee, Inc. USA 82.76%New World Communications of Ohio, Inc. USA 82.76%New World Communications of St Louis, Inc. USA 82.76%New World Communications of Tampa, Inc. USA 82.76%New World Distribution, Inc. USA 82.76%New World Entertainment, Ltd. USA 82.76%New World International (Australia), Ltd. USA 82.76%New World Knowledge, Inc. USA 82.76%New World Licensing, Inc. USA 82.76%New World Music Publishing Corp. USA 82.76%New World Pictures, Ltd. USA 82.76%New World Song, Inc. USA 82.76%New World Television (NWT) France SRLA France 82.76%New World Television Incorporated USA 82.76%New World Television Productions, Inc. USA 82.76%New World Television Programming USA 82.76%New World Video USA 82.76%

New World/Genesis Distribution USA 82.76%News From The Edge Productions Ltd. Canada 82.76%News From The Edge, Inc. USA 82.76%News Germany Holding GmbH Germany 82.76%News Preferred Finance, Inc. USA 82.76%NF Productions, Inc. USA 82.76%Northgate Productions, Inc. USA 82.76%NW Communications of Austin, Inc. USA 82.76%NW Communications of Phoenix, Inc. USA 82.76%NW Communications of San Diego, Inc. USA 82.76%NW Communications of Texas, Inc. USA 82.76%NW Management Incorporated USA 82.76%NW Programs Incorporated USA 82.76%NWC Acquisition Corporation USA 82.76%NWC Holdings Corporation USA 82.76%NWC Intermediate Holdings Corporation USA 82.76%NWC Management Corporation USA 82.76%NWC Sub I Holdings Corporation USA 82.76%NWC Sub II Holdings Corporation USA 82.76%NWCG Holdings Corporation USA 82.76%NWE Acquisition Inc. USA 82.76%NWE Holdings Corporation USA 82.76%NWE Sub I Incorporated USA 82.76%NWTV Intermediate Holdings Corporation USA 82.76%O/Y Fox Film A/B Finland 82.76%P&T Productions, Inc. USA 82.76%Panoramic Productions, Inc. USA 82.76%Pico Films, Inc. USA 82.76%Plaid Jacket Productions, Inc. USA 82.76%President Video Limited UK 82.76%Prime Network LLC USA 50.48%Prime Time Media, Inc. USA 82.76%Rags Productions, Inc. USA 82.76%Ray Tracing Films, Inc. USA 82.76%Redweed Productions, LLC USA 82.76%Rewind Music, Inc. USA 82.76%Say It Isn’t So Productions, Inc. USA 82.76%SC Productions, Inc. USA 82.76%Schrodinger’s Cat Productions, Inc. USA 82.76%SCI Sub 1 Incorporated USA 82.76%SCI Subsidiary Corporation USA 82.76%SCPI, Inc. USA 82.76%Servicios BST, S.A. de C.V. Mexico 82.76%Shadow In The Sun USA USA 82.76%Shoot the Horse Productions, Inc. USA 82.76%Small Cages Productions, Inc. USA 82.76%SOB Productions, Inc. USA 82.76%Sports Geniuses, Inc. USA 82.76%

52






Sports Holding, Inc. USA 51.31%SportSouth Holdings, LLC USA 61.66%Springwood Productions, Inc. USA 82.76%Sprocket Music, Inc. USA 82.76%STF Productions, Inc. USA 82.76%Strange World Productions, Inc. USA 82.76%Strike-A-Match Productions, Inc. USA 82.76%Stronghold, Inc. USA 82.76%Studios De La Playa, S.A. de C.V. Mexico 82.76%TCF Canadian TV Enterprises, Inc. USA 82.76%TCF Digital Holdings, Inc. USA 82.76%TCF Distributing, Inc. USA 82.76%TCF Eastern Europe, Inc. USA 82.76%TCF Harsh Realm Productions, Inc. USA 82.76%TCF Music Publishing, Inc. USA 82.76%TCF Speed II Productions, Inc. USA 82.76%TCFTV Canadian Productions, Inc. USA 82.76%TCFTV Canadian Services, Inc. USA 82.76%TCFTV CanPro II, Inc. Canada 82.76%TCFTV CanPro III Ltd. Canada 82.76%TCFTV CanPro, Inc. USA 82.76%TCFTV US Prodco #1, Inc. USA 82.76%TCFTV US Prodco #2, Inc. USA 82.76%TCFTV US Prodco #3, Inc. USA 82.76%TCFTV US Prodco #4, Inc. USA 82.76%TCFTV US Prodco #5, Inc. USA 82.76%TCFTV US Prodco #6, Inc. USA 82.76%TCFTV Van II Services Ltd. Canada 82.76%TCFTV Van Services Ltd. Canada 82.76%TCFTV Worldwide Productions, Inc. USA 82.76%The Barn Productions, Inc. USA 82.76%The Colony Productions, Inc. USA 82.76%The Fox Interactive Store, Inc. USA 82.76%The Fox Store, Inc. USA 82.76%The Greenblatt Janollari Studio, Inc. USA 82.76%The H/W Health & Fitness LLC USA 82.76%The Health Network LLC USA 82.76%The Test Productions, Inc. USA 82.76%Tour of Duty Productions, Inc. USA 82.76%TVF II Productions, Inc. USA 82.76%TVF Productions, Inc. USA 82.76%TVM Productions, Inc. USA 82.76%TVT License, Inc. USA 82.76%Twentieth Century Fox (Far East), Inc. USA 82.76%Twentieth Century Fox A/O Russian Federation 82.76%Twentieth Century Fox Canada Limited Canada 82.76%Twentieth Century Fox Chile, Inc. USA 82.76%Twentieth Century Fox Distributing Corporation USA 82.76%

Twentieth Century Fox Film (East) Private Limited Singapore 82.76%

Twentieth Century Fox Film (Malaya) Sendirian Berhad Malaysia 82.76%

Twentieth Century Fox Film Belge S.A. Belgium 82.76%Twentieth Century Fox Film Company

(Export) Limited UK 82.76%Twentieth Century Fox Film Company Limited UK 82.76%Twentieth Century Fox Film Company

Services Limited UK 82.76%Twentieth Century Fox Film Corporation USA 82.76%Twentieth Century Fox Film

Corporation (Australia) Pty. Limited Aust 82.76%Twentieth Century Fox Film Corporation

Societe D’Exploitation Pour La Suisse Switzerland 82.76%Twentieth Century Fox Film de Mexico, S.A. Mexico 82.76%Twentieth Century Fox Film Distributors Pty. Limited Aust 82.76%Twentieth Century Fox Film Netherlands B.V. Netherlands 82.76%Twentieth Century Fox Films S.A. Panama 82.76%Twentieth Century Fox France, Inc. USA 82.76%Twentieth Century Fox Home Entertainment AB Sweden 82.76%Twentieth Century Fox Home

Entertainment Australia Pty. Limited Aust 82.76%Twentieth Century Fox Home Entertainment B.V. Netherlands 82.76%Twentieth Century Fox Home

Entertainment Canada Limited Canada 82.76%Twentieth Century Fox Home

Entertainment de Mexico S.A. de C.V. Mexico 82.76%Twentieth Century Fox Home

Entertainment Espana S.A. Spain 82.76%Twentieth Century Fox Home Entertainment France France 82.76%Twentieth Century Fox Home

Entertainment Germany GmbH Germany 82.76%Twentieth Century Fox Home Entertainment Italy Italy 82.76%Twentieth Century Fox Home

Entertainment Japan KK Japan 82.76%Twentieth Century Fox Home Entertainment Korea Korea 82.76%Twentieth Century Fox Home

Entertainment Latin America, Inc. Cayman Islands 82.76%Twentieth Century Fox Home Entertainment Limited UK 82.76%Twentieth Century Fox Home

Entertainment Middle East, Inc. USA 82.76%Twentieth Century Fox Home

Entertainment South Pacific Pty. Limited Aust 82.76%Twentieth Century Fox Home Entertainment, Inc. USA 82.76%Twentieth Century Fox Hong Kong, Inc. USA 82.76%Twentieth Century Fox Import Coporation USA 82.76%Twentieth Century Fox India, Inc. USA 82.76%

53






Twentieth Century Fox Inter-America, Inc. USA 82.76%Twentieth Century Fox International Corporation USA 82.76%Twentieth Century Fox International Limited UK 82.76%Twentieth Century Fox International

Telecommunications Distribution, Inc. USA 82.76%Twentieth Century Fox International

Television Distribution, Inc. USA 82.76%Twentieth Century Fox International Television, Inc. USA 82.76%Twentieth Century Fox International

Theatrical Distribution, Inc. USA 82.76%Twentieth Century Fox Italy S.p.A., Inc. Italy 82.76%Twentieth Century Fox Italy S.p.A., Inc. USA 82.76%Twentieth Century Fox Korea, Inc. Korea 82.76%Twentieth Century Fox Latin America

Theatrical, Inc. Cayman Islands 82.76%Twentieth Century Fox Licensing &

Merchandising Limited UK 82.76%Twentieth Century Fox Merchandise Store, Inc. USA 82.76%Twentieth Century Fox of Germany GmbH Germany 82.76%Twentieth Century Fox Pakistan, Inc. USA 82.76%Twentieth Century Fox Pay Television

(Australia) Pty. Limited Aust 82.76%Twentieth Century Fox Peruana S.A. Peru 82.76%Twentieth Century Fox Philippines, Inc. Philippines 82.76%Twentieth Century Fox Productions Limited UK 82.76%Twentieth Century Fox Puerto Rico, Inc. Puerto Rico 82.76%Twentieth Century Fox Studio Club USA 82.76%Twentieth Century Fox, Sweden Aktiebolaget Sweden 82.76%Twentieth Century Fox Telecommunications

International, Inc. USA 82.76%Twentieth Century Fox Television Limited UK 82.76%Twentieth Century Fox Thailand, Inc. USA 82.76%Twentieth Century Fox Titanic Productions, Inc. USA 82.76%Twentieth Century Fox Trinidad Limited Trinidad 82.76%Twentieth Century Fox Worldwide Productions, Inc. USA 82.76%Twentieth Century Fox Inc., U.S.A. USA 82.76%Twentieth Television, Inc. USA 82.76%Twenty-First Century Film Corporation USA 82.76%Twenty-First Century Fox Corporation USA 82.76%Twenty-First Century Fox Film Company Limited UK 82.76%Twenty-First Century Fox Film Distributors

Pty. Limited Aust 82.76%Twenty-First Century Fox Italy S.r.I. Italy 82.76%Twenty-First Century Fox Mexico, S.A. de C.V. Mexico 82.76%Twenty-First Century Fox Varieties, Inc. USA 82.76%Van Ness Films, Inc. USA 82.76%Venue Merchandising, Inc. USA 78.62%Very Imaginative Pictures, Inc. USA 82.76%

VNE, Inc. USA 82.76%Vox Filmworks (Canada), Inc. Canada 82.76%WAGA License, Inc. USA 82.76%WBRC and WGHP Holdings Corporation USA 82.76%WBRC and WGHP Television Corporation USA 82.76%WBRC License, Inc. USA 82.76%WDAF License, Inc. USA 82.76%WDAF Television, Inc. USA 82.76%Wedron Silica Company USA 82.76%West End Circle Studios, Inc. USA 82.76%Westgate Productions, Inc. USA 82.76%WFXT, Inc. USA 82.76%WGHP License, Inc. USA 82.76%WITI License, Inc. USA 82.76%WJBK License, Inc. USA 82.76%WJW License, Inc. USA 82.76%Wolg Productions, Inc. USA 82.76%World War III Productions Ltd. Canada 82.76%World War III Productions, Inc. USA 82.76%X-F Productions, Inc. USA 82.76%

NDS GROUP plc. UK 78.88%Digi Media Vision Limited UK 78.88%Karnit LLC USA 78.88%Karnit TV Commerce Limited Israel 78.88%NDS Americas, Inc. USA 78.88%NDS Asia Pacific Limited UK 78.88%NDS Asia Pacific Limited

(Hong Kong & Thailand Branch) HK 78.88%NDS Asia Pacific Pty. Limited Aust 78.88%NDS Limited UK 78.88%NDS Marketing Israel Limited Israel 78.88%NDS Technologies Israel Limited Israel 78.88%News Datacom Limited UK 78.88%OpenBet Software Limited UK 78.88%Orbis Technologies Limited UK 78.88%

* These entities are consolidated as the Company has 61.4% votingrights.

** Companies of which firms other than Arthur Andersen or itsaffiliates have acted as auditors.

*** This entity is consolidated as outlined in Note 15.

BVI represents British Virgin Islands.USVI represents United States Virgin Islands.

54






Consolidated

2001 2000A$ million

Note 32 Controlled entities (continued)

Deed of cross guaranteeCompanies marked with # are parties to a deed of cross guarantee which has been lodged with and approved by the AustralianSecurities and Investment Commission (“ASIC”). Under the deed of cross guarantee each of the companies guarantees the debts ofthe other named companies. Additionally, as a result of the class order issued by ASIC these companies are relieved from therequirement to prepare and have audited separate accounts. The consolidated Financial Statements (after eliminating intercompanyinvestments and other intercompany transactions) of the above named companies as at 30 June, 2001 and 2000, are as follows:

Closed Group Statement of Financial Performancefor the year ended 30 June, 2001

Sales Revenue 4,599 3,102

Operating expenses (3,875) (1,971)Selling, general and administrative expenses (390) (441)Depreciation and amortisation (79) (80)

Operating income 255 610

Investment income 70 25Borrowing costs (105) (1)

Net profit before associates and tax 220 634

Net profit from associated entities 35 125

Net profit from ordinary activities before tax 255 759

Income tax benefit (expense) 14 (108)

Net profit attributable to members of the parent entity 269 651

Increase in asset revaluation reserve on revaluationof non current assets 37

Total change in equity other than those resulting from transactions with owners as owners 269 688

55




Consolidated

2001 2000A$ million

Note 32 Controlled entities (continued)

Closed Group Statement of Financial Positionas at 30 June, 2001

ASSETSCurrent AssetsCash 700 719Receivables 2,404 278Inventories 37 32Other 15 15

Total Current Assets 3,156 1,044

Non-Current AssetsReceivables 80 110Investments in associated entities 668 655Other investments 29,390 23,304Property, plant and equipment 1,048 1,131Publishing rights, titles and television licences 1,412 1,411Goodwill 10 10Tax assets 74 69Other 3 5

Total Non-Current Assets 32,685 26,695

Total Assets 35,841 27,739

LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent LiabilitiesPayables 213 1,042Provisions 225 198

Total Current Liabilities 438 1,240

Non-Current LiabilitiesPayables 2 45Tax liabilities 228 255Provisions 28 14

Total Non-Current Liabilities 258 314

Total Liabilities 696 1,554

Shareholders’ EquityContributed equity 21,644 12,663Reserves 229 145Retained profits 13,272 13,377

Total Shareholders’ Equity 35,145 26,185

Total Liabilities and Shareholders’ Equity 35,841 27,739

56




Consolidated

2001 2000A$ million

Note 33 Acquisitions and disposals

The following businesses were sold by the Company:

Date Name Principal Activities Voting SharesJanuary 2001 TM3 Fernsenen Television broadcasting and 100%

Gmbh & Co. KG programming

Controlled entities soldConsideration received

Cash 265 405Shares 427 95

Total consideration received 692 500

Assets and liabilities disposed:Current receivables 8 49Current inventories 3 91Current prepayments 5Non-current inventories 5Property, plant and equipment 1 70Non-current prepayments 2Investments 33Publishing rights, titles and television licences 791 345Goodwill 48Current trade creditors and provisions (19) (98)Non-current trade creditors and provisions (110) (25)

Net assets disposed 674 525

Net profit (loss) before tax on disposal (18) (25)

57




Consolidated

2001 2000A$ million

Note 33 Acquisitions and disposals (continued)

The following controlled entities were acquired by the Company:

Date Name Principal Activities Voting SharesJuly 2000 Fourth Estate Limited Book publishing 100%

November 2000 Media Support Services Outdoor advertising 61%Limited

December 2000 Orbis Technologies Interactive online 100%Limited betting

Controlled entities acquiredConsideration paid

Shares 2,379Cash 51 471

Total consideration paid 51 2,850

Assets and liabilities acquired:Current receivables 42 293Current prepayments 5 47Current inventories 3 31Non-current receivables 190Non-current inventories 352Property, plant and equipment 13 106Investments 2 761Publishing rights, titles and television licences 77 4,669Goodwill 154 5Current trade creditors and provisions (53) (825)Non-current borrowings (2,468)Non-current trade creditors and provisions (123) (307)Outside equity interest (69) (4)

51 2,850

58




Note 34 Subsequent events

The Company and Liberty Media Corporation (“Liberty”) at 30 June, 2001, each owned 50% of Fox Sports International. On 15July, 2001, under a pre-existing option, Liberty exercised its right to sell its 50% interest in Fox Sports International to the Companyin exchange for an aggregate 3,633,866 ADRs of the Company representing 14,535,464 preferred shares. Under the terms of thistransaction, the Company will transfer the acquired interest in Fox Sports International to Fox Entertainment Group, Inc. (“FEG”)for approximately 3,632,000 shares of FEG Class A common shares. The transaction is expected to close during the second quarterof fiscal 2002.

In July, 2001, the US Federal Communications Commission approved the Company’s acquisition of Chris-Craft Industries, Inc.,BHC Communications, Inc. and United Television, Inc.. Total consideration paid amounted to US$2.03 billion in cash and theissuance of 68,854,209 ADRs representing 275,416,836 preferred limited voting ordinary shares. The Company subsequentlytransferred the acquired business (excluding approximately US$1.7 billion in cash) to FEG which will operate the acquired stations.FEG issued the Company 122,244,272 Class A common shares of FEG. This increased the Company’s equity interest in FEG from82.76% to approximately 85.25% while its voting interest remained at 97.8%.

In March, 2001, certain investors in Speedvision Network LLC (“Speedvision”) and Outdoor Life Network LLC (“Outdoor Life”)exercised their rights to require certain subsidiaries of FEG to purchase all of the interests held by them in Speedvision and OutdoorLife. The aggregate ownership percentage of the investors was approximately 53.44% and 50.23% of Speedvision and OutdoorLife, respectively. Based on independent fair value determinations of these interests, on 25 July, 2001, FEG paid total considerationof approximately US$401 million and US$309 million to purchase the investors’ interests in Speedvision and Outdoor Life,respectively, which resulted in FEG owning approximately 85.46% of Speedvision and approximately 83.18% of Outdoor Life. Theremaining interests in Speedvision and Outdoor Life are owned by Comcast Corporation (“Comcast”). As a result of FEG’spurchase of the additional 53.44% of Speedvision as described above, the Company will consolidate the results of Speedvision.

Shortly after the exercise of the Speedvision and Outdoor Life purchase options described above, FEG entered into a PurchaseAgreement with Comcast pursuant to which FEG may sell its approximate 83.18% interest in Outdoor Life to Comcast. Pursuantto the Purchase Agreement, Comcast can elect to call FEG’s interest in Outdoor Life during the 30 day period which commenced on25 July, 2001 and ends on 23 August, 2001 for approximately US$512 million.

In July, 2001, the Company entered into an agreement with Vivendi Universal and certain of its subsidiaries (“Vivendi”) to merge theCompany’s interest in Stream, S.p.A. with Vivendi’s interest in Telepiu, S.p.A. subject to regulatory approval. Upon regulatoryapproval of the merger, the Company has agreed to purchase Telecom Italia’s interest in Stream such that the Company will own100% of Stream prior to merger. The merged entity will be 25% owned by the Company and 75% owned by Vivendi. TheCompany will have the right, exercisable at eighteen months from closing of the merger and again at thirty-six months from closingof the merger, to increase its stake in the merged entity to 50%.

In December, 2000, Haim Saban, Chairman and Chief Executive Officer of Fox Family Worldwide, Inc. (“FFW”), exercised his rightto require Fox Broadcasting Company to purchase all of the Class B Common Stock of FFW held by Mr Saban, other formerstockholders of Saban Entertainment, Inc. and their transferees (“the Saban Interest”). In January, 2001, a subsidiary of FoxBroadcasting Company exercised its option to purchase the Saban Interest. In July, 2001, the Company, Haim Saban and the otherstockholders of FFW reached a definitive agreement to sell FFW to The Walt Disney Company (“Disney”) for total consideration ofapproximately US$5.3 billion (including the assumption of certain debt). Fox Broadcasting Company has entered into programmingarrangements with Disney to allow the continued broadcast of certain FFW programming on Fox affiliates through the Fox KidsNetwork following closing of the FFW sale to Disney. This transaction is expected to close during the second quarter of fiscal 2002.

59




The Directors of The News Corporation Limited declare that:

a) the financial statements and associated notes comply with the accounting standards;

b) the financial statements and notes give a true and fair view of the financial position as at 30 June, 2001 and performance of theparent entity and consolidated entity for the year ended on that date;

c) in the Directors’ opinion;

(i) there are resonable grounds to believe that the consolidated entity will be able to pay its debts as and when they become dueand payable, and the companies and parent entity which are party to the deed described in Note 32 will as a group be able tomeet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee dated 19June, 1992; and

(ii) the financial statements and notes are in accordance with the Corporations Act (2001), including sections 296 and 297.

This declaration is made in accordance with a resolution of Directors.

K R Murdoch ACDirector

D F DeVoeDirector

16 August, 2001

60


Directors’ Declaration


INDEPENDENT AUDIT REPORT

To the Members of The News Corporation Limited:

ScopeWe have audited the full financial report of The News Corporation Limited (“ the parent entity”) for the financial year ended 30June, 2001 as set out on pages 2 to 60. The full financial report includes the consolidated financial statements of the consolidatedentity comprising the parent entity and the entities it controlled at the year’s end or from time to time during the financial year. The parent entity’s directors are responsible for the full financial report. We have conducted an independent audit of the fullfinancial report in order to express an opinion on it to the members of the parent entity.

Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the fullfinancial report is free of material misstatement. Our procedures included examination, on a test basis, of evidence supporting theamounts and other disclosures in the full financial report, and the evaluation of accounting policies and significant accountingestimates. These procedures have been undertaken to form an opinion whether, in all material respects, the full financial report ispresented fairly in accordance with Accounting Standards, other mandatory professional reporting requirements and statutoryrequirements in Australia, so as to present a view which is consistent with our understanding of the parent entity’s and theconsolidated entity’s financial position and performance as represented by the results of their operations and their cash flows.

The audit opinion expressed in this report has been formed on the above basis.

Audit OpinionIn our opinion, the full financial report of The News Corporation Limited is in accordance with:

(a) the Corporations Act (2001), including:

(i) giving a true and fair view of the parent entity’s and consolidated entity’s financial position as at 30 June, 2001 andof their performance for the year ended on that date; and

(ii) complying with Accounting Standards and the Corporations Regulations (2001); and

(b) other mandatory professional reporting requirements.

Arthur AndersenChartered Accountants

Martyn ScrivensPartner16 August, 2001

Liability limited by the Accountants Scheme, approved under the Professional Standards Act 1994 (NSW)

61

Corporate Ownership - Ordinary SharesNumber of ordinary shareholders 41,442Voting rights On show of hands - one vote for each memberOn poll - one vote for each share held

Distribution of shareholding1 - 1,000 27,1211,001 - 5,000 11,1555,001 - 10,000 1,56310,001 - 100,000 1,353100,001 and over 250


Top twenty shareholders as at 16 August, 2001Cruden Investments Pty. Limited and controlled entities 607,821,230Citicorp Nominees Pty. Limited 409,192,990Chase Manhattan Nominees Limited 227,898,049National Nominees Limited 168,204,330Westpac Custodian Nominees Limited 129,762,642ANZ Nominees Limited 77,129,127AMP Life Limited 37,623,252Queensland Investment Corporation 34,592,673Commonwealth Custodial Services Limited 32,096,540JP Morgan Custodial Services Pty. Limited 23,000,053HSBC Custody Nominees (Australia) Limited 20,759,429Cogent Nominees Pty. Limited 19,067,431Perpetual Trustees Victoria Limited 15,052,057MLC Limited 14,966,307RBC Global Services Australia Nominees Pty. Limited 13,653,024The National Mutual Life Association of Australasia Limited 11,133,492Perpetual Trustees Nominees Limited 10,304,864Perpetual Nominees Limited 9,788,969News Nominees Pty. Limited 9,151,882NRMA Nominees Pty. Limited 8,897,830

1,880,096,171

Percentage of issued ordinary shares held by twenty largest holders 89.88%

Substantial shareholdersCruden Investments Pty. Limited and controlled entities 607,821,230

62



At 16 August, 2001

Corporate Ownership - Preferred Limited Voting Ordinary SharesNumber of preferred limited voting ordinary shareholders 18,170

Voting rights - preferred limited voting ordinary shares do not have voting rights except:

(a) upon any proposed resolution to reduce the share capital of The News Corporation Limited, or to sanction the disposal of thewhole of the property, business and undertaking of The News Corporation Limited, or when any preferential dividend declaredon such share has been declared and due for payment, and remains unpaid for more than six months; or

(b) upon any proposed resolution which directly affects the rights or privileges of preferred limited voting ordinary shareholders,

in which case a preferred limited voting ordinary shareholder has the same voting rights as those conferred on ordinary shareholdersin respect of each ordinary share.

Distribution of shareholding1 - 1,000 10,9371,001 - 5,000 5,3355,001 - 10,000 88910,001 - 100,000 787100,001 and over 222


Top twenty shareholders as at 16 August, 2001Citicorp Nominees Pty. Limited 1,826,381,089Cruden Investments Pty. Limited and controlled entities 231,040,214Chase Manhattan Nominees Limited 215,184,345National Nominees Limited 118,550,348Westpac Custodian Nominees Limited 84,307,564Commonwealth Custodial Services Limited 37,527,727Queensland Investment Corporation 36,069,291AMP Life Limited 33,379,829MLC Limited 25,556,082Cogent Nominees Pty. Limited 20,217,286JP Morgan Custodial Services Pty. Limited 20,042,505Perpetual Trustees Nominees Limited 18,358,043ANZ Nominees Limited 16,513,852Perpetual Trustees Victoria Limited 15,005,475NRMA Nominees Pty. Limited 12,059,627RBC Global Services Australia Nominees Pty. Limited 11,087,665ING Life Limited 10,760,954Perpetual Nominees Limited 10,683,320The National Mutual Life Association of Australasia Limited 8,551,108Ogier Trustee Limited 7,859,712

2,759,136,036

Percentage of issued preferred limited voting ordinary shares held by twenty largest holders 93.94%

63



At 16 August, 2001

64


Board of Directors and Executive Management Committee

Directors

K. Rupert Murdoch, ACChairman and Chief Executive

Geoffrey C. Bible

Chase Carey

Peter Chernin

Kenneth E. Cowley, AO

David F. DeVoe

Roderick I. Eddington

Dr. Aatos J. Erkko, KBE

Andrew S.B. Knight

Graham Kraehe

James R. Murdoch

Lachlan K. Murdoch

Thomas J. Perkins

Bert C. Roberts, Jr.

Stanley S. Shuman

Arthur M. Siskind

K. Rupert MurdochChairman and Chief ExecutiveNews Corporation

Tony BallChief ExecutiveBritish Sky Broadcasting

Chase CareyPresident and Chief Executive OfficerSky Global Networks

Paul CarlucciChairman and Chief Executive OfficerNews America Marketing

Peter CherninPresident and Chief Operating OfficerNews Corporation

David F. DeVoeSenior Executive Vice Presidentand Chief Financial OfficerNews Corporation

Anthea DisneyExecutive Vice President, ContentNews Corporation

James N. GianopulosChairmanFox Filmed Entertainment

Gary GinsbergExecutive Vice President, Investor Relations and Corporate CommunicationsNews Corporation

Sandy GrushowPresidentFox Television Entertainment Group

David HillChairman and Chief Executive OfficerFox Sports Television Group

Les HintonExecutive ChairmanNews International plc

Brian MulliganChairmanFox Television

James R. MurdochChairman and Chief Executive OfficerSTAR Group

Lachlan K. MurdochDeputy Chief Operating OfficerNews Corporation

Abe PeledChief Executive OfficerNDS

Martin PompadurExecutive Vice PresidentNews Corporation

Thomas RothmanChairmanFox Filmed Entertainment

Jeff ShellPresident and Chief Executive OfficerFox Cable Networks

Arthur M. SiskindSenior Executive Vice Presidentand Group General CounselNews Corporation

Mitchell SternChairman and Chief Executive OfficerFox Television Stations

Executive Management Committee

news corporation - morningstar

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