British Sky Broadcasting Group plc

Consolidated Profit and Loss Account for the year ended June 30, 2001


                                       Before
                                     goodwill    Goodwill
                                          and         and        2001
                                  exceptional exceptional       Total
                                        items       items

                                          $m*         $m*         $m*
                             Notes (unaudited) (unaudited) (unaudited)

Turnover: Group and share of
joint ventures                        3,568.7           -     3,568.7

Less:  share of joint
ventures' turnover                    (316.1)           -     (316.1)
Group turnover                  2     3,252.6           -     3,252.6

Continuing operations                 3,131.5           -     3,131.5
Acquisitions                    1       121.1           -       121.1
Group turnover                        3,252.6           -     3,252.6

Operating expenses, net         3   (3,026.6)      (95.1)   (3,121.7)

EBITDA                         20       316.4      (22.7)       293.7
Depreciation                           (90.4)       (9.9)     (100.3)
Amortization                                -      (62.5)      (62.5)


Continuing operations                   241.8           -       241.8
Acquisitions                    1      (15.8)      (95.1)     (110.9)

Operating profit (loss)                 226.0      (95.1)       130.9

Share of operating results of
joint ventures                  5     (337.4)      (23.3)     (360.7)

Joint ventures' goodwill
amortization                                -     (142.6)     (142.6)
Loss on sale of fixed asset
investments                     4           -           -           -
Share of joint venture's loss
on sale of fixed asset
investment                      4           -      (98.0)      (98.0)

Amounts written off fixed
asset investments               4           -      (54.4)      (54.4)

Provision for loss on
disposal of subsidiary          4           -      (14.1)      (14.1)

Loss on ordinary activities           (111.4)     (427.5)     (538.9)
before interest and taxation

Interest receivable and
similar income                  6        25.7         3.8        29.5
Interest payable and similar
charges                         6     (216.2)           -     (216.2)
Loss on ordinary activities
before taxation                       (301.9)     (423.7)     (725.6)


Taxation (charge) credit        7      (32.9)       (1.1)      (34.0)
Loss on ordinary activities
after taxation                        (334.8)     (424.8)     (759.6)

Equity dividends - paid and
proposed                                                            -
Retained loss                  17                             (759.6)


Loss per share - basic and
diluted                         8     (18.2c)     (23.0c)     (41.2c)

Loss per ADR - basic and
diluted**                            (109.2c)    (138.0c)    (247.2c)


                                       Before
                                     goodwill    Goodwill
                                          and         and        2001
                                  exceptional exceptional       Total
                                        items       items

                                    (pound)m    (pound)m    (pound)m
                             Notes  (audited)   (audited)   (audited)

Turnover: Group and share of
joint ventures                        2,530.1           -     2,530.1

Less:  share of joint
ventures' turnover                    (224.1)           -     (224.1)
Group turnover                  2     2,306.0           -     2,306.0

Continuing operations                 2,220.1           -     2,220.1
Acquisitions                    1        85.9           -        85.9
Group turnover                        2,306.0           -     2,306.0

Operating expenses, net         3   (2,145.8)      (67.4)   (2,213.2)

EBITDA                         20       224.3      (16.1)       208.2
Depreciation                           (64.1)       (7.0)      (71.1)
Amortization                                -      (44.3)      (44.3)


Continuing operations                   171.4           -       171.4
Acquisitions                    1      (11.2)      (67.4)      (78.6)

Operating profit (loss)                 160.2      (67.4)        92.8

Share of operating results of
joint ventures                  5     (239.2)      (16.5)     (255.7)

Joint ventures' goodwill
amortization                                -     (101.1)     (101.1)
Loss on sale of fixed asset
investments                     4           -           -           -
Share of joint venture's loss
on sale of fixed asset
investment                      4           -      (69.5)      (69.5)

Amounts written off fixed
asset investments               4           -      (38.6)      (38.6)

Provision for loss on
disposal of subsidiary          4           -      (10.0)      (10.0)

Loss on ordinary activities            (79.0)     (303.1)     (382.1)
before interest and taxation

Interest receivable and
similar income                  6        18.2         2.7        20.9
Interest payable and similar
charges                         6     (153.3)           -     (153.3)
Loss on ordinary activities
before taxation                       (214.1)     (300.4)     (514.5)


Taxation (charge) credit        7      (23.3)       (0.8)      (24.1)
Loss on ordinary activities
after taxation                        (237.4)     (301.2)     (538.6)

Equity dividends - paid and
proposed                                                            -
Retained loss                  17                             (538.6)


Loss per share - basic and
diluted                         8     (12.9p)     (16.3p)     (29.2p)

Loss per ADR - basic and
diluted**                             (77.4p)     (97.8p)    (175.2p)


                                       Before
                                     goodwill    Goodwill
                                          and         and
                                  exceptional exceptional        2000
                                        items       items       Total
                                           as          as          as
                                     restated    restated    restated
                                    (pound)m    (pound)m    (pound)m
                             Notes  (audited)   (audited)   (audited)

Turnover: Group and share of
joint ventures                        1,934.7           -     1,934.7

Less:  share of joint
ventures' turnover                     (87.7)           -      (87.7)
Group turnover                  2     1,847.0           -     1,847.0

Continuing operations                 1,847.0           -     1,847.0
Acquisitions                    1           -           -           -
Group turnover                        1,847.0           -     1,847.0

Operating expenses, net         3   (1,761.7)     (105.0)   (1,866.7)

EBITDA                         20       134.2     (101.9)        32.3
Depreciation                           (48.9)       (3.1)      (52.0)
Amortization                                -           -           -


Continuing operations                    85.3     (105.0)      (19.7)
Acquisitions                    1           -           -           -

Operating profit (loss)                  85.3     (105.0)      (19.7)

Share of operating results of
joint ventures                  5     (121.3)           -     (121.3)

Joint ventures' goodwill
amortization                                -      (14.4)      (14.4)
Loss on sale of fixed asset
investments                     4           -       (1.4)       (1.4)
Share of joint venture's loss
on sale of fixed asset
investment                      4           -      (14.0)      (14.0)

Amounts written off fixed
asset investments               4           -           -           -

Provision for loss on
disposal of subsidiary          4           -           -           -

Loss on ordinary activities            (36.0)     (134.8)     (170.8)
before interest and taxation

Interest receivable and
similar income                  6        10.7           -        10.7
Interest payable and similar
charges                         6     (102.6)           -     (102.6)
Loss on ordinary activities
before taxation                       (127.9)     (134.8)     (262.7)


Taxation (charge) credit        7        33.5        31.5        65.0
Loss on ordinary activities
after taxation                         (94.4)     (103.3)     (197.7)

Equity dividends - paid and
proposed                                                            -
Retained loss                  17                             (197.7)


Loss per share - basic and
diluted                         8      (5.4p)      (5.9p)     (11.3p)

Loss per ADR - basic and
diluted**                             (32.4p)     (35.4p)     (67.8p)


Details of movements on reserves are shown in note 17.

The accompanying notes are an integral part of this consolidated
profit and loss account.

*   US dollar equivalents are provided for reader convenience at the
    June 29, 2001 exchange rate of (pound)1=$1.4105

**  Each ADR represents six ordinary shares



British Sky Broadcasting Group plc

Consolidated Profit and Loss Account for the three months ended June
30, 2001

Three
                                                                Three
                                       Before                  months
                                     goodwill    Goodwill       ended
                                          and         and     June 30
                                  exceptional exceptional        2001
                                        items       items       Total

                                         $m*         $m*         $m*
                                  (unaudited) (unaudited) (unaudited)

Group turnover                          895.5           -       895.5

Operating expenses, net               (806.6)      (56.2)     (862.8)

EBITDA                                  118.9      (22.7)        96.2
Depreciation                           (30.0)       (9.9)      (39.9)
Amortization                                -      (23.6)      (23.6)

Operating profit (loss)                  88.9      (56.2)        32.7

Share of operating results of          (90.5)      (23.3)     (113.8)
joint ventures
Joint ventures' goodwill                    -      (69.5)      (69.5)
amortization
Share of joint venture's loss on
sale of fixed asset investment              -           -           -

Amounts written off fixed asset             -         2.0         2.0
investments
Provision for loss on disposal of           -      (14.1)      (14.1)
subsidiary
Loss on ordinary activities before
interest and taxation                   (1.6)     (161.1)     (162.7)


Interest receivable and similar           5.2         3.8         9.0
income
Interest payable and similar           (56.7)           -      (56.7)
charges
Loss on ordinary activities before     (53.1)     (157.3)     (210.4)
taxation

Taxation (charge) credit               (30.7)       (1.2)      (31.9)
Loss on ordinary activities after      (83.8)     (158.5)     (242.3)
taxation

Loss per share - basic and diluted     (4.5c)      (8.6c)     (13.1c)

Loss per ADR - basic and diluted**    (27.0c)     (51.6c)     (78.6c)


                                                                Three
                                       Before                  months
                                     goodwill    Goodwill       ended
                                          and         and     June 30
                                  exceptional exceptional        2001
                                        items       items       Total
                                    (pound)m    (pound)m     (pound)m
                                  (unaudited) (unaudited) (unaudited)

Group turnover                          634.9         -        634.9

Operating expenses, net               (571.9)      (39.8)     (611.7)

EBITDA                                   84.3      (16.1)        68.2
Depreciation                           (21.3)       (7.0)      (28.3)
Amortization                                -      (16.7)      (16.7)

Operating profit (loss)                  63.0      (39.8)        23.2

Share of operating results of          (64.2)      (16.5)      (80.7)
joint ventures
Joint ventures' goodwill                    -      (49.3)      (49.3)
amortization
Share of joint venture's loss on
sale of fixed asset investment              -           -           -

Amounts written off fixed asset             -         1.4         1.4
investments
Provision for loss on disposal of           -      (10.0)      (10.0)
subsidiary
Loss on ordinary activities before
interest and taxation                   (1.2)     (114.2)     (115.4)


Interest receivable and similar           3.7         2.7         6.4
income
Interest payable and similar           (40.2)          -       (40.2)
charges
Loss on ordinary activities before     (37.7)     (111.5)     (149.2)
taxation

Taxation (charge) credit               (21.8)       (0.8)      (22.6)
Loss on ordinary activities after      (59.5)     (112.3)     (171.8)
taxation

Loss per share - basic and diluted     (3.2p)      (6.1p)      (9.3p)

Loss per ADR - basic and diluted**    (19.2p)     (36.6p)     (55.8p)


                                                                Three
                                                               months
                                       Before    Goodwill       ended
                                     goodwill         and     June 30
                                          and exceptional        2000
                                  exceptional       items       Total
                                        items          as          as
                                           as    restated    restated
                                     restated
                                    (pound)m    (pound)m    (pound)m
                                  (unaudited) (unaudited) (unaudited)

Group turnover                          530.1           -       530.1

Operating expenses, net               (495.9)     (105.0)     (600.9)

EBITDA                                   48.8     (101.9)      (53.1)
Depreciation                           (14.6)       (3.1)      (17.7)
Amortization                                -           -           -

Operating profit (loss)                  34.2     (105.0)      (70.8)

Share of operating results of          (38.8)           -      (38.8)
joint ventures
Joint ventures' goodwill                    -      (14.4)      (14.4)
amortization
Share of joint venture's loss on
sale of fixed asset investment              -      (14.0)      (14.0)

Amounts written off fixed asset             -           -           -
investments
Provision for loss on disposal of           -           -           -
subsidiary
Loss on ordinary activities before
interest and taxation                   (4.6)     (133.4)     (138.0)


Interest receivable and similar           2.0           -         2.0
income
Interest payable and similar           (36.8)           -      (36.8)
charges
Loss on ordinary activities before     (39.4)     (133.4)     (172.8)
taxation

Taxation (charge) credit                 14.6        31.5        46.1
Loss on ordinary activities after      (24.8)     (101.9)     (126.7)
taxation

Loss per share - basic and diluted     (1.4p)      (5.6p)      (7.0p)

Loss per ADR - basic and diluted**     (8.4p)     (33.6p)     (42.0p)


*   US dollar equivalents are provided for reader convenience at the
    June 29, 2001 exchange rate of (pound)1=$1.4105

**  Each ADR represents six ordinary shares



British Sky Broadcasting Group plc

Consolidated Statement of Total Recognized Gains and Losses for the
year ended June 30, 2001

                                            2001       2001       2000
                                             $m*   (pound)m   (pound)m
                               Notes (unaudited)  (audited)  (audited)

Loss for the financial year              (759.7)    (538.6)    (271.5)

Net loss on deemed disposals     17       (29.2)     (20.7)        -
Translation differences on
 foreign currency net investment 17        (3.0)      (2.1)       4.1
Total recognized gains and
 losses relating to the year             (791.9)    (561.4)    (267.4)

Prior year adjustment                     212.3      150.5
Total recognized gains and
losses recognized since last
 annual report                           (579.6)    (410.9)

The accompanying notes are an integral part of this consolidated
statement of total recognized gains and losses.

*   US dollar equivalents are provided for reader convenience at the
    June 29, 2001 exchange rate of (pound)1=$1.4105



British Sky Broadcasting Group plc

Consolidated Balance Sheet as at June 30, 2001


                                    2001         2001            2000
                                                          as restated
                       Notes          $m*     (pound)m       (pound)m
                               (unaudited)    (audited)      (audited)

Fixed assets
Intangible assets         9       1,113.3          789.3         -
Tangible assets          10         444.9          315.4       224.9
Investments              11       1,842.0        1,305.9     1,660.6
                                  3,400.2        2,410.6     1,885.5


Current assets
Stocks                   12         598.2          424.1       358.2
Debtors: Amounts falling
 due within one year     13         695.9          493.4       333.5
Debtors: Amounts falling
 due after more
 than one year           13         457.8          324.6       421.1
Cash at bank
 and in hand                        315.4          223.6       281.2
                                  2,067.3        1,465.7     1,394.0

Creditors:  Amounts falling
 due within one year
- short-term borrowings  14         (3.0)           (2.1)     (13.8)
- other creditors        14     (1,394.5)         (988.7)    (808.9)
                         14     (1,397.5)         (990.8)    (822.7)

Net current assets                 669.8           474.9      571.3

Total assets less
 current liabilities             4,070.0         2,885.5    2,456.8


Creditors:  Amounts falling
 due after more than one year
- long-term borrowings   15     (2,493.8)      (1,768.0)   (1,412.4)
- other creditors        15        (19.6)         (13.9)      (22.0)
                         15     (2,513.4)      (1,781.9)   (1,434.4)

Provisions for liabilities
 and charges             16        (60.6)         (43.0)     (225.5)
                                 1,496.0        1,060.6       796.9

Capital and reserves
  - equity
Called-up share capital  17      1,332.1          944.4       912.9
Share premium            17      3,353.6        2,377.6     2,209.9
Shares to be issued      17        362.3          256.9           -
Merger reserve           17        480.8          340.8           -
Profit and loss account  17     (4,032.8)      (2,859.1)   (2,325.9)
Total shareholders'
 funds                   17      1,496.0        1,060.6       796.9


   The accompanying notes are an integral part of this consolidated
balance sheet.

*   US dollar equivalents are provided for reader convenience at the
    June 29, 2001 exchange rate of (pound)1=$1.4105



British Sky Broadcasting Group plc

Consolidated Cash Flow Statement for the year ended June 30, 2001

                                    2001          2001          2000
                                     $m*      (pound)m      (pound)m
                       Notes  (unaudited)     (audited)     (audited)

Net cash inflow
 (outflow) from
 operating activities    18a        54.9          38.9       (232.5)

Returns on investments
 and servicing of finance
Interest received and
 similar income                      6.5           4.6          9.8
Interest paid and similar
 charges on external financing    (167.3)       (118.6)       (73.9)
Interest element of
 finance lease payments             (2.4)         (1.7)        (0.8)
Net cash outflow from
 returns on investments
 and servicing of finance         (163.2)       (115.7)       (64.9)


Taxation
Consortium relief paid             (22.9)        (16.2)       (23.6)
Net cash outflow from taxation     (22.9)        (16.2)       (23.6)


Capital expenditure and
 financial investment
Payments to acquire
 tangible fixed assets            (188.0)       (133.3)        (57.9)
Payments to acquire
 fixed asset investments           (36.0)        (25.5)        (48.0)
Receipt from sales of fixed
 asset investments
 and intangible assets               0.3           0.2           5.3
Receipt of government grants          -             -            0.6
Net cash outflow from capital
 expenditure and
 financial investment             (223.7)       (158.6)       (100.0)


Acquisitions and disposals
Purchase of subsidiary
 undertakings                      (38.5)        (27.3)           -
Net cash acquired with
 subsidiary undertakings            16.5          11.7            -
Funding to joint ventures         (193.7)       (137.3)        (79.9)
Repayments of funding
 from joint ventures                  -             -            1.7
Net payments made in the
 acquisition of joint ventures        -             -         (333.0)
Net cash outflow from
 acquisitions and disposals       (215.7)       (152.9)       (411.2)


Net cash outflow before
 management of liquid
 resources and financing          (570.6)       (404.5)       (832.2)


Management of liquid resources
Decrease (increase) in
  short-term deposits    18c        119.9          85.0       (155.0)


Financing
Proceeds from issue of
 ordinary shares                      9.2           6.5         359.8
Payments made on the
 issue of ordinary shares            (4.9)         (3.5)         (7.7)
Net increase in
 total debt              18c        504.4         357.6         697.4
Net cash inflow from
 financing                          508.7         360.6       1,049.5


Increase in cash         18c         58.0          41.1          62.3


Increase in net debt     18c        (566.3)      (401.5)      (480.1)


   The accompanying notes are an integral part of this consolidated
cash flow statement.

*   US dollar equivalents are provided for reader convenience at the
    June 29, 2001 exchange rate of (pound)1=$1.4105



British Sky Broadcasting Group plc

Notes

1.  Acquisitions

British Interactive Broadcasting Holdings Limited ("BiB")

   During 2001, the Group acquired 67.5% of the issued share capital
of BiB, 47.6% on May 9, 2001 and 19.9% on June 28, 2001, increasing
the Group's interest to 100% (2000: 32.5%). The amount of provisional
goodwill arising as a result of the acquisition is (pound)564.9
million, which is being amortized over a 7 year period on a
straight-line basis.
   Deferred consideration, estimated at (pound)75 million, (pound)56
million and (pound)122 million will be payable to HSBC, Matsushita and
BT respectively, 18 months after completion, through the issue of new
BSkyB Ordinary Shares.
   If the valuation of BiB, based on agreed criteria, is (pound)3
billion or greater, either at 30 or 36 months from the date of the
purchase agreement, a further estimated (pound)75 million, (pound)56
million and (pound)122 million will be payable to HSBC, Matsushita and
BT respectively through the issue of new BSkyB Ordinary Shares or loan
notes.

Sports Internet Group plc ("SIG")

   100% of the issued share capital of SIG was acquired on July 12,
2000. The amount of goodwill arising as a result of the acquisition is
(pound)272.4 million, which is being amortized over a 7 year period on
a straight-line basis. SIG has now changed its name to Sports Internet
Group Limited.

WAP TV Limited ("WAP TV")

   On May 29, 2001 the Group acquired a 5% minority interest in WAP
TV for total consideration of (pound)5.0 million, increasing the
Group's interest to 100%. The consideration comprises 169,375 new
BSkyB Ordinary Shares issued on May 29, 2001, and contingent
consideration to be satisfied by the issue of a further 169,375 new
BSkyB Ordinary Shares on June 30, 2002, and the issue of 338,755 new
BSkyB Ordinary Shares on September 30, 2003. The consideration is
contingent upon the vendors remaining continuously in the employment
of the Group from completion until the date the deferred consideration
is due. This has been recognized as it is considered probable that
these criteria will be fulfilled. Provisional goodwill of (pound)5.2
million arose on the acquisition, which is being amortized over a 7
year period on a straight-line basis.


2.  Turnover
                                           2001                 2000
                                       (pound)m              (pound)m
                                       (audited)             (audited)

Direct-to-home subscribers              1,536.7               1,189.0
Cable and DTT subscribers                 299.1                 303.0
Advertising                               270.5                 242.3
Interactive*                               93.0                   4.6
Other                                     106.7                 108.1
                                        2,306.0               1,847.0


*   Interactive income includes income from gaming, online
    advertising, internet, e-commerce, interconnect, text services and
    Sky Interactive set-top box subsidy recovery.


3.  Operating expenses, net

                                Before
                          goodwill and   Goodwill and
                           exceptional   exceptional        2001
                                items         items        Total
                             (pound)m       (pound)m     (pound)m
                            (audited)      (audited)     (audited)

Programming(i)               1,133.8          -           1,133.8
Transmission and
 related functions(i)          128.6          -             128.6
Marketing                      378.1          -             378.1
Subscriber management          243.4          -             243.4
Administration                 186.6         67.4           254.0
Gaming                          75.3          -              75.3
                             2,145.8         67.4         2,213.2



                              Before
                            exceptional     Exceptional     2000
                              items           items         Total
                            (pound)m        (pound)m     (pound)m
                            (audited)       (audited)    (audited)

Programming(i)                945.6             -          945.6
Transmission and
 related functions(i)         105.2           41.0         146.2
Marketing                     381.3           58.3         439.6
Subscriber management         199.9            5.7         205.6
Administration                129.7             -          129.7
Gaming                           -              -            -
                            1,761.7          105.0       1,866.7


(i) The amounts shown are net of(pound)55.1 million (2000:(pound)51.3
    million) receivable from the disposal of programming rights not
    acquired for use by the Group, and(pound)53.9 million
    (2000:(pound)61.3 million) in respect of the provision to third
    party broadcasters of spare transponder capacity.

   In addition to the (pound)75.3 million gaming costs, (pound)47.8
million of other `Sky Interactive' operating costs are allocated
within the relevant operating expenses lines.



British Sky Broadcasting Group plc

Notes

4.  Exceptional items


                                                                2001
                                   Before      Taxation        After
                                 taxation        charge     taxation
                                 (pound)m      (pound)m     (pound)m
                                (audited)     (audited)    (audited)

Estimated cost of reorganization
 of Sky Interactive                  23.1         -           23.1
Estimated cost of termination
 of analogue operations                -          -            -
Estimated cost of transitioning
 analogue customers to                 -          -            -
 digital service
Estimated cost of Sky In Home
 Service Limited reorganization        -          -            -
Exceptional operating items          23.1         -           23.1


Loss on sale of fixed
 asset investments                     -          -            -
Share of joint venture's
 operating exceptional item          16.5         -           16.5
Share of joint venture's
 loss on sale of fixed asset         69.5         -           69.5
 investment
Amounts written off
 fixed asset investments             38.6         -           38.6
Provision for loss on
 disposal of subsidiary (see note 9) 10.0         -           10.0
Finance credit (see note 6)          (2.7)        0.8         (1.9)
                                    155.0         0.8        155.8


                                                Taxation   2000 After
                                    Before       credit     taxation
                                   taxation   as restated  as restated
                                   (pound)m     (pound)m     (pound)m
                                  (audited)    (audited)    (audited)


Estimated cost of reorganization       -           -            -
 of Sky Interactive
Estimated cost of termination        41.0       (12.3)         28.7
 of analogue operations
Estimated cost of transitioning      58.3       (17.5)         40.8
 analogue customers to
 digital service
Estimated cost of Sky In Home         5.7        (1.7)          4.0
 Service Limited reorganization
Exceptional operating items         105.0       (31.5)         73.5


Loss on sale of fixed                 1.4           -          1.4
 asset investments
Share of joint venture's                -           -            -
 operating exceptional item
Share of joint venture's             14.0           -         14.0
 loss on sale of fixed asset
 investment
Amounts written off                     -           -            -
 fixed asset investments
Provision for loss on                   -           -            -
 disposal of subsidiary (see note 9)
Finance credit (see note 6)             -           -            -
                                    120.4       (31.5)         88.9


2001

Reorganization of Sky Interactive

   In May 2001, the Group announced the consolidation of all of its
interactive and online activities within the 'Sky Interactive'
division. This division brings together BiB with the Group's
interactive properties including SIG. The costs of reorganization
within Sky Interactive are estimated at (pound)23.1 million and
principally comprise the cost of termination of certain contracts, the
closure of duplicate sites and a reduction in headcount. Of these
costs, (pound)7.0 million are included within fixed assets, (pound)4.0
million are included within other creditors and the remainder within
provisions.

Share of joint venture's operating exceptional item

   In April 2001, BiB incurred exceptional operating costs of
(pound)16.5 million, principally comprising the cost of the write down
of the current platform. Of these costs, (pound)13.1 million are
included within fixed assets and the remainder within provisions.

Share of joint venture's loss on sale of fixed asset investment

   On August 31, 2000, KirchPayTV GmbH & Co KGaA ("KirchPayTV")
disposed of their remaining 58 million holding of BSkyB shares. The
Group's share of the loss on disposal was (pound)69.5 million. The
loss is calculated as BSkyB's share of the difference between the
balance sheet value of the 58 million shares at (pound)15.21 per share
(based on the value of the shares at the date of acquisition of 24% of
KirchPayTV by BSkyB) and the net proceeds realised by KirchPayTV of
(pound)10.05 per share.

Amounts written off fixed asset investments

   At June 30, 2001, (pound)38.6 million has been provided against
BSkyB's minority investments in new media companies. This consists of
(pound)40.0 million originally provided, reduced by (pound)1.4 million
to reflect the post year end disposal of the Group's investment in
Static 2358 Limited (see note 19). Of the (pound)38.6 million
provision, (pound)0.5 million relates to investments held by BiB.

Provision for loss on disposal of subsidiary

   On July 11, 2001, BSkyB and Ladbrokes, the betting and gaming
division of Hilton Group plc, reached agreement to form a 50:50 joint
venture to develop and operate a fixed-odds and pools betting business
linked to Sky channels on Sky digital. BSkyB will contribute its
wholly-owned bookmaker, Surrey Sports, to the joint venture. When
Surrey Sports is transferred to the joint venture, BSkyB will adjust
existing goodwill on its balance sheet and a provision for this has
been made in the year to June 30, 2001.

Finance credit

   An exceptional accrual was made in June 1999 in respect of the
mark to market of a floating-to-fixed interest rate swap over
(pound)100 million of the (pound)1,000 million revolving credit
facility ("RCF") which was no longer required when the RCF was
cancelled and replaced with a (pound)750 million RCF. The swap was
closed out in September 2000, and the remaining accrual of (pound)2.7
million was released.

2000

Termination of analogue operations

   In May 2000, the Group committed to terminating its current
analogue service in June 2001, earlier than the previously announced
date of December 31, 2002. The costs of the termination were estimated
at (pound)41.0 million and principally comprise the cost of early
termination of analogue transponder leases and other costs to be
incurred to terminate the Group's analogue operations.

Transitioning analogue customers to digital service

   On May 5, 1999, the Group announced a marketing promotion under
which it committed to transitioning its existing analogue subscribers
onto its digital service. The net costs associated with this process
were estimated at (pound)450 million, before taking account of tax
relief of (pound)135 million. This did not include subsidy costs
provided by BiB, 32.5% of whose funding was met by the Group.
Following the acquisition by the Group of a further 67.5% shareholding
in BiB and the consequent agreement for the Group to provide 100% of
BiB's funding, it became appropriate to increase the provision by
(pound)58.3 million in June 2000, principally to provide for the costs
of subsidizing the set-top boxes for the remaining analogue
subscribers.


British Sky Broadcasting Group plc

Notes

4. Exceptional items (continued)

Sky In Home Service Limited reorganization

   In May 2000, the Group announced the reorganization of the Sky In
Home Service Limited distribution network at a cost of (pound)5.7
million. These costs principally comprise the costs of staff
redundancies, termination of building leases and fixed asset write
downs.

Loss on sale of fixed asset investments

   During the prior year the Group reduced its holdings in Manchester
United PLC and Manchester City PLC so as to bring the holdings below
the 10% holding limit stipulated by the rules of the Premier League.
These disposals resulted in a total loss of (pound)1.4 million.

Share of joint venture's loss on sale of fixed asset investment

   On June 7, 2000, KirchPayTV sold 20 million of its holding of
BSkyB shares. The Group's share of the loss on disposal was
(pound)14.0 million. The loss was calculated as 24% of the difference
between the balance sheet value of the 20 million shares at
(pound)15.21 per share (based on the value of the shares at the date
of acquisition of 24% of KirchPayTV by BSkyB) and the net proceeds
realized by KirchPayTV of (pound)12.30 per share.

Taxation credit

   The exceptional tax credit of (pound)31.5 million is due to the
recognition of (pound)105.0 million of previously unrecognized
deferred tax asset, as a result of the adoption of FRS 19.


5.  Share of operating results of joint ventures

                      Before
                   exceptional   Exceptional       2001         2000
                      items         items         Total        Total
                     (pound)m      (pound)m      (pound)m     (pound)m
                    (audited)     (audited)     (audited)    (audited)
Joint ventures:
KirchPayTV
 (see note 11)        116.0             -         116.0         11.0
BiB (see note 11)     118.9          16.5         135.4         99.1
Programming joint
 ventures, net          4.3             -           4.3         11.2
                      239.2          16.5         255.7        121.3


   This relates to the Group's equity share of the operating results
of the Group's joint ventures.

   The Group recognized 32.5% of the results of BiB up until November
2000. From this date, to May 9, 2001, 100% of BiB's losses were
recognized due to the arrangement dated July 17, 2000, under which the
Group agreed to provide 100% of BiB's funding after existing funding
had been utilized. From May 9, 2001, the Group fully consolidated BiB
as a subsidiary (see note 1).


   6. a) Interest receivable and similar income

                                                    2001         2000
                                                (pound)m     (pound)m
                                                (audited)    (audited)

Interest receivable on short-term deposits           3.8          7.3
Share of joint ventures' interest receivable         3.5          0.9
Interest receivable on funding to joint ventures    10.4          2.0
Other interest receivable                            0.5          0.5
                                                    18.2         10.7


Exceptional finance credit (see note 4)              2.7            -
                                                    20.9         10.7



British Sky Broadcasting Group plc

Notes

6.  b)  Interest payable and similar charges

                                                   2001         2000
                                                (pound)m     (pound)m
                                                (audited)    (audited)

On bank loans, overdrafts and
 other loans repayable within five
 years, not by installments:
- (pound)300 million revolving credit facility     0.8            -
- (pound)750 million revolving credit facility    38.5         11.0
- (pound)1,000 million revolving credit facility    -           0.2
US$650 million of 8.200% Guaranteed Notes
  repayable in 2009                               31.6         31.1
(pound)100 million of 7.750% Guaranteed Notes
  repayable in 2009                                7.8          7.7
US$600 million of 6.875% Guaranteed Notes
  repayable in 2009                               30.1         27.2
US$300 million of 7.300% Guaranteed Notes
  repayable in 2006                               15.5         15.8
Finance lease interest                             0.9          0.9
Share of joint ventures' interest payable         27.8          8.3
Other interest payable and similar charges         0.3          0.4
                                                 153.3        102.6

7.  Taxation

                                                               2000
                                                 2001    as restated
                                              (pound)m     (pound)m
                                              (audited)    (audited)
Tax charge (credit) on profit
 before exceptional items:
Consortium relief payable                          -         25.7
Adjustment in respect of prior years               -         (6.0)
Share of joint ventures' tax credit                -        (27.3)
Deferred tax                                    23.3        (25.9)
                                                23.3        (33.5)


Tax charge (credit) on exceptional items:

  Deferred tax (see note 4)                      0.8        (31.5)
                                                24.1        (65.0)



   The Group has adopted FRS 19, Deferred tax, and has restated prior
year figures accordingly.

   Adoption has resulted in the recognition of deferred tax assets in
respect of losses and other timing differences incurred in prior
years, and corresponding restatement of the prior year results.


8.  Loss per share



                                Before
                              goodwill and
                               exceptional             Exceptional
                                 items     Goodwill      Items
                               (audited)  (audited)    (audited)

Loss on ordinary activities (pound)237.4m (pound)145.4m (pound)155.8m
 after taxation
Loss per share - basic and       12.9p       7.9p          8.4p
 diluted

                                 2001
                                 After        Before
                             goodwill and  goodwill and
                              exceptional   exceptional   Goodwill
                                items         items     as restated
                                           as restated
                              (audited)     (audited)    (audited)
Loss on ordinary activities
 after taxation             (pound)538.6m  (pound)94.4m  (pound)14.4m
Loss per share - basic and
 diluted                        29.2p          5.4p          0.8p


                                                     2000 After
                                                      goodwill
                                     Exceptional    and exceptional
                                       Items           Items
                                     as restated    as restated
                                      (audited)      (audited)
Loss on ordinary activities
 after taxation                      (pound)88.9m   (pound)197.7m
Loss per share - basic and
 diluted                                 5.1p          11.3p



   Basic and diluted loss per share represents the loss attributable
to the equity shareholders in each year divided by the weighted
average number of Ordinary Shares in issue during the year of
1,847,057,433 (2000: 1,744,379,069).
   Loss per share is shown calculated by reference to losses both
before and after goodwill and exceptional items and related tax, since
the Directors consider that this gives a useful additional indication
of underlying performance.



British Sky Broadcasting Group plc

Notes

9.  Intangible fixed assets

   The movement in the year was as follows:

                                   Goodwill        Other        Total
                                   (pound)m      (pound)m     (pound)m
                                   (audited)     (audited)   (audited)


Net book value at the
 beginning of the year                -               -            -
Additions and acquisitions, net      842.6           1.0        843.6
Amortization                         (44.2)         (0.1)       (44.3)
Provision for loss on
 disposal of subsidiary              (10.0)           -         (10.0)
Net book value at the end of year    788.4           0.9        789.3


   Goodwill of (pound)272.4 million arising on the acquisition of SIG
(see note 1) is being amortized over a period of 7 years on a
straight-line basis. Provisional goodwill of (pound)564.9 million
arising on the acquisition of BiB (see note 1) is being amortized over
a period of 7 years on a straight-line basis. Provisional goodwill of
(pound)5.2 million arising on the acquisition of WAP TV (see note 1)
is being amortized over a 7 year period on a straight-line basis.
   The provision for loss on disposal of a subsidiary comprises the
estimated net loss on disposal of the Group's interest in Surrey
Sports Group, which has been provided for as at June 30, 2001 (see
note 4).


10.  Tangible fixed assets

   The movement in the year was as follows:

                    Freehold land  Short leasehold Equipment,  2001
                    and buildings   improvements   fixtures    Total
                                                 and fittings
                     (pound)m        (pound)m      (pound)m   (pound)m
                     (audited)       (audited)    (audited)  (audited)

Net book value at the
 beginning of the year  22.9            39.5         162.5     224.9
Additions and
 acquisitions, net       3.0             5.0         153.6     161.6
Depreciation            (1.0)           (3.7)        (66.4)    (71.1)
Net book value at the
 end of year            24.9            40.8         249.7     315.4


11.  Investments

                                              2001             2000
                                           (pound)m         (pound)m
                                           (audited)        (audited)

Joint ventures:
- KirchPayTV                                1,142.1          1,479.9
- BiB                                          -                17.7
- Programming joint ventures                   21.6             14.7
Own shares                                     19.1             27.5
Other investments                             123.1            120.8
                                            1,305.9          1,660.6


   Goodwill of (pound)1,386.5 million on the investment in KirchPayTV
is being amortized over a period of 7 years on a straight-line basis.
The goodwill was reduced by (pound)110.3 million in September 2000
following the deemed disposal resulting from additional third party
investment in KirchPayTV.
   The goodwill has, up to March 31, 2001, been amortized over a
useful economic life of 20 years. During the year, the Group acquired
SIG and BiB (see note 1), and, for both of these acquisitions, a life
of 7 years was chosen as the relevant amortization period. As at April
1, 2001, it was considered appropriate to revise KirchPayTV's useful
economic life to 7 years in line with the lives of those entities.
   KirchPayTV's results included in the Group's results for the year
to 30 June 2001 have not met expectations, and KirchPayTV's management
have formulated plans to improve the performance of the business, both
through increasing revenues and through reducing operating costs.
KirchPayTV's management are currently assessing the impact of the
implementation of these changes; when reviewed under FRS 11, the
initial assessment shows that the Group's investment is not impaired
as at 30 June 2001.


British Sky Broadcasting Group plc

Notes

12.  Stocks

                                                2001            2000
                                             (pound)m        (pound)m
                                             (audited)       (audited)

Television program rights                      364.6            313.1
Digital set-top boxes                           55.4             42.9
Raw materials and consumables                    4.1              2.2
                                               424.1            358.2

   At least 71% (2000: 77%) of the existing television program rights
at June 30, 2001 will be amortized within one year.


13.  Debtors

                                               2001           2000
                                                         as restated
                                              (pound)m     (pound)m
                                              (audited)    (audited)

Debtors:  Amounts falling
 due within one year
Trade debtors                                   231.7        125.0
Amounts owed by joint ventures                   11.2         30.9
Amounts owed by other related parties             1.9          2.3
Other debtors                                    29.0          5.9
Prepaid program rights                           51.4         41.3
Prepaid transponder rentals                      25.1         30.8
Deferred tax                                     68.9         32.0
Prepaid media rights                              3.0          3.4
Other prepayments and accrued income             71.2         61.9
                                                493.4        333.5

Debtors:  Amounts falling
 due after more than one year
Amounts owed by joint ventures                      -          6.7
Prepaid program rights                           78.2         86.4
Prepaid transponder rentals                      61.8         71.2
Advance corporation tax                          85.3         85.3
Deferred tax                                     75.0        136.0
Prepaid media rights                             11.9          9.4
Other payments and accrued income                12.4         26.1
                                                324.6        421.1

14.  Creditors:  Amounts falling due within one year

                                                 2001         2000
                                                (pound)m     (pound)m
                                               (audited)    (audited)
Short-term borrowings                              -          13.7
Bank overdrafts                                   2.1          0.1
Obligations under finance leases                  2.1         13.8

Other
Trade creditors                                 457.4        349.2
Amounts due to joint ventures                      -          25.0
Amounts due to related parties                   18.3         39.3
UK corporation tax                                4.7          4.7
VAT                                              62.3         36.8
Social security and PAYE                          6.2          5.4
Other creditors                                   8.4         22.6
Accruals and deferred income                    431.3        325.8
Government grants                                 0.1          0.1
                                                988.7        808.9

                                                990.8        822.7

   Included within trade creditors are(pound)291.9 million
(2000:(pound)227.5 million) of US dollar-denominated program
creditors. At least 90% (2000: 90%) of these were covered by forward
rate currency contracts. British Sky Broadcasting Group plc

Notes

15.  Creditors:  Amounts falling due after more than one year


                                            2001              2000
                                         (pound)m          (pound)m
                                         (audited)         (audited)

Long-term borrowings
(pound)750 million revolving
 credit facility                           690.0             335.0
AUS$1 million facility                       -                 0.4
US$650 million of 8.200% Guaranteed Notes
 repayable in 2009                         412.5             412.5
(pound)100 million of 7.750%
 Guaranteed Notes repayable in 2009        100.0             100.0
US$600 million of 6.875% Guaranteed Notes
 repayable in 2009                         367.2             367.2
US$300 million of 7.300% Guaranteed Notes
 repayable in 2006                         189.2             189.2
Obligations under finance leases             8.9               8.1
Other borrowings                             0.2                 -
                                         1,768.0           1,412.4

Other
Accruals and deferred income                13.1              21.1
Government grants                            0.8               0.9
                                            13.9              22.0

                                         1,781.9           1,434.4


   In March 2001, a new (pound)300 million revolving credit facility
("RCF") was entered into, which is in addition to the existing
(pound)750 million RCF. The (pound)300 million facility is repayable
in full on June 29, 2004 and bears interest at rates between 0.50% and
1.75% per annum above LIBOR, depending on the Group's credit rating.
This facility was undrawn at June 30, 2001.



16.  Provisions for liabilities and charges

                                         Sky In Home
                Analogue               Service Limited Sky Interactive
              termination  Transition   reorganization  reorganization
                provision   provision    provision      provision
                (pound)m    (pound)m     (pound)m        (pound)m
                (audited)   (audited)    (audited)      (audited)

At beginning
 of year            30.7       192.9        1.9             -
Charged to profit
 and loss account     -         -            -            12.1
Subsidiary acquired   -         -            -             3.4
Utilized in year    (22.5)     (174.3)     (1.5)            -
At end of year        8.2       18.6        0.4           15.5


                                 Provision for
                                  closure of
                                  Sky Pictures        2001
                                                      Total
                                  (pound)m          (pound)m
                                  (audited)         (audited)

At beginning of year                  -              225.5
Charged to profit
 and loss account                    0.3              12.4
Subsidiary acquired                   -                3.4
Utilized in year                      -             (198.3)
At end of year                       0.3              43.0



   The analogue termination provision principally comprises the cost
of early termination of analogue transponder leases and various other
costs to be incurred to terminate the Group's analogue operations (see
note 4).
   The transition provision utilized during the year of (pound)174.3
million (2000: (pound)270.8 million) is net of (pound)21.2 million
(2000: (pound)50.1 million) of installation income received from
subscribers. The transition provision comprises the cost of the
set-top box, installation costs, BiB subsidy costs and various other
costs to be incurred to enable a subscriber to use the digital
service, less any upfront income received from the subscriber. As at
June 30, 2001 the Group believes that the transition provision
reflects the estimated cost of transitioning the remaining analogue
subscribers.
   The Sky In Home Service Limited reorganization provision
principally comprised the costs of staff redundancies.
   The Sky Interactive reorganization provision relates to costs
associated with the reorganization and consolidation of all
interactive and online activities within the division `Sky
Interactive.' The post acquisition provision principally comprises the
cost of termination of certain contracts, the closure of duplicate
sites and a reduction in head count.
   The Sky Pictures provision principally comprises the cost of a
reduction in headcount.


British Sky Broadcasting Group plc

Notes

17.  Reconciliation of movement in shareholders' funds

   Movement in shareholders' funds includes all movements in
reserves.


                               Share         Share       Shares to
                             capital       premium       be issued
                            (pound)m      (pound)m       (pound)m
                           (audited)      (audited)      (audited)

As at July 1, 1999
 - as restated                863.0         703.0            -
Issue of share capital         49.9       1,514.6            -
Share issue costs                -          (7.7)            -
Loss for the financial year
 - as restated                   -             -             -
Translation differences
 on foreign currency             -             -             -
 net investment
As at July 1, 2000            912.9       2,209.9            -

Issue of share capital         31.5          171.2           -
Shares to be issued             -             -          256.9
Share issue costs               -            (3.5)           -
Loss for the financial year     -             -              -
Net loss on deemed disposals    -             -              -
Transfer to merger reserve      -             -              -
Translation differences
 on foreign currency            -             -              -
 net investment
As at June 30, 2001          944.4        2,377.6        256.9


                                         Profit and      Total equity
                                            loss        shareholders'
                               Merger      account          funds
                              reserve   as restated      as restated
                             (pound)m     (pound)m         (pound)m
                            (audited)    (audited)         (audited)

As at July 1, 1999
 - as restated                    -      (2,114.2)          (548.2)
Issue of share capital            -         (18.1)          1,546.4
Share issue costs                 -           -               (7.7)
Loss for the financial year
 - as restated                    -        (197.7)          (197.7)
Translation differences
 on foreign currency              -           4.1               4.1
 net investment
As at July 1, 2000                -      (2,325.9)            796.9

Issue of share capital        378.1          (9.1)            571.7
Shares to be issued               -            -              256.9
Share issue costs                 -            -              (3.5)
Loss for the financial year       -        (538.6)          (538.6)
Net loss on deemed disposals      -         (20.7)           (20.7)
Transfer to merger reserve   (37.3)          37.3               -
Translation differences
 on foreign currency             -           (2.1)            (2.1)
net investment
As at June 30, 2001           340.8      (2,859.1)          1,060.6



   At June 30, 2001, the cumulative goodwill written off directly to
reserves amounted to(pound)523.8 million (2000:(pound)523.8 million).
The cumulative amortized goodwill included in reserves amounted
to(pound)159.8 million (2000:(pound)14.4 million).
   A merger reserve has been created in relation to 21.6 million
shares, issued during the period as consideration for the acquisition
of 100% of SIG and in relation to 19.1 million shares issued during
the period as part consideration for the acquisition of the remaining
19.9% of BiB (see note 1).
   In May and June 2001, the Company issued a total of 39,674,765
shares, with a total value of (pound)290.9 million, which were used as
consideration for respect of the acquisition of the remaining 67.5%
interest in BiB (see note 1). Shares with a total value of
(pound)253.2 million will be issued as deferred consideration.
   In May 2001, the Company issued 169,375 shares which were used as
consideration in respect of the acquisition of the remaining 5%
minority interest in WAP TV Limited (see note 1). A further 169,375
and 338,755 new BSkyB Ordinary Shares comprise the contingent
consideration of (pound)3.7 million, to be issued on June 30, 2002 and
September 30, 2003 respectively.
   During the year the Company issued shares with a market value of
(pound)15.6 million (2000: (pound)29.9 million) in respect of the
exercise of options awarded under various share option plans, with
(pound)6.5 million (2000: (pound)11.8 million) received from
employees.


18.  a) Reconciliation of operating profit to operating cash flows


                                 Before
                                 goodwill and   Goodwill and
                                 exceptional    exceptional    2001
                                 items            items       Total
                                 (pound)m       (pound)m    (pound)m
                                 (audited)      (audited)   (audited)

Operating profit (loss)            160.2          (67.4)      92.8
Depreciation (see note 10)          64.1            7.0       71.1
Goodwill amortization (see note 9)    -            44.3       44.3
Amortization of government grants   (0.1)            -        (0.1)
Deferred revenue released           (4.2)            -        (4.2)
(Increase) decrease in debtors     (23.4)            -       (23.4)
Increase in creditors               64.1             -        64.1
(Increase) decrease in stock       (43.1)            -       (43.1)
Provision provided (utilized), net   0.3         (162.9)    (162.6)
Net cash inflow (outflow)
 from operating activities         217.9         (179.0)      38.9



                                    Before
                                   exceptional    Exceptional  2000
                                     items          items      Total
                                   (pound)m       (pound)m   (pound)m
                                   (audited)      (audited)  (audited)

Operating profit (loss)               85.3        (105.0)      (19.7)
Depreciation (see note 10)            48.9           3.1        52.0
Goodwill amortization (see note 9)       -            -           -
Amortization of government grants     (1.3)           -         (1.3)
Deferred revenue released             (2.2)           -         (2.2)
(Increase) decrease in debtors      (177.7)          6.4      (171.3)
Increase in creditors                159.3            -        159.3
(Increase) decrease in stock         (73.3)          3.9       (69.4)
Provision provided (utilized), net      -         (179.9)     (179.9)
Net cash inflow (outflow)
 from operating activities            39.0        (271.5)     (232.5)



British Sky Broadcasting Group plc

Notes

18.  b) Analysis of changes in net debt


                      As at July 1                    As at June 30
                        2000           Cashflow            2001
                      (pound)m         (pound)m          (pound)m
                      (audited)        (audited)         (audited)

Overnight deposits      47.1              44.8              91.9
Other cash              79.1             (17.4)             61.7
Bank overdrafts        (13.7)             13.7                -
                       112.5              41.1             153.6

Short-term deposits    155.0             (85.0)              70.0
Cash at bank and in
 hand less bank
 overdrafts            267.5             (43.9)             223.6


Debt due after more
 than one year      (1,404.3)            (354.8)         (1,759.1)
Finance leases          (8.2)              (2.8)            (11.0)
Total debt          (1,412.5)            (357.6)         (1,770.1)


Total net debt      (1,145.0)            (401.5)         (1,546.5)



c) Reconciliation of net cash flow to movement in net debt


                                              2001             2000
                                          (pound)m          (pound)m
                               Note       (audited)         (audited)

Increase in cash and
 bank overdrafts                            41.1              62.3
(Decrease) increase in
 short-term deposits                       (85.0)             155.0
Cash inflow resulting from
 increase in debt and
 lease financing                          (357.6)           (697.4)
Increase in net debt                      (401.5)           (480.1)

Net debt at beginning of year           (1,145.0)           (664.9)
Net debt at end of year        18b      (1,546.5)         (1,145.0)