*However, losses have narrowed at The Times and The Sunday Times, the other UK newspapers owned by media magnate Rupert Murdoch and incorporated as Times Newspapers.
News Group results filed at Companies House show revenues for the year were £623.3m, down 3% from £643.3m in the previous year.
Post-tax profits stood at £61.9m, compared with £248.5m the previous year when they had been inflated by a gain of £163.5m on the sale of the company's stake in Newscorp Netherlands Antilles.
Operating profits, which provide a clearer picture of the company's core business, came in at £10.8m, down 9% from £11.8m in the previous year.
During the year The Sun ran an aggressive cover price promotion in Scotland, but the period predates the paper's similar initiative in London and the South East launched in September.
In the directors' report, the company stated it was being challenged by the internet and encountering a difficult advertising market.
"In common with other newspaper groups, the company faces challenging advertising markets in the short term, and a wider competitive set, particularly from the internet, in the longer term.
"The company is investing significant resources in the development of its own internet presence in order to capitalise on the new opportunities that this impending marketing shift will present.
"The company is addressing ongoing circulation challenges through regional pricing initiatives and continuous product improvement to maintain market leader status on both titles."
News Group reduced its selling and marketing costs by 30% to £44m.
Staff costs were reduced slightly from £36.9m to £36.6m, with editorial headcount down by one to 575.
Times Newspapers reduced its post-tax losses to £44m from £81.5m the previous year and its operating loss to £34.9m from £47.8m.
Revenues grew by 2.5% to £447.2m, while editorial staff numbers were down from 684 to 675 and the wage bill up from £42.6m to £43.1m.
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