For Sale. Television.

I N V E S T M E N T S T A T E M E N T

19.11.97Investment Statement prepared as at 19 November 1997 S K Y N E T W O R K T E L E V I S I O N L I M I T E D

Global Coordinator G O L D M A N S A C H S I N T E R N A T I O N A L

New Zealand Lead Manager and Underwriter O R D M I N N E T T S E C U R I T I E S - N Z - L I M I T E D

1S K Y N E T W O R K T E L E V I S I O N

New Zealand’s pre-eminent pay television company

is for sale. Here is your opportunity to take an

ownership in one of this country’s major television

service providers – SKY. Already watched in

around 21% of New Zealand households, the

Company is currently implementing a series of

advances in quantity, quality & innovation

which it believes will provide substantial

opportunities for growth.

This is one investment

that you

can watch.

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Important Dates

Highlights

Chairman's Letter

Summary of the Offer

Answers to Important

Questions

Directors

Senior Management

Business Description

Company History

Shareholders

Profile

Strategy and Prospects

Summary Financial

Information

Other Information

Glossary

How to Apply

Application Form

Application Terms

Directory

news

2 S K Y N E T W O R K T E L E V I S I O N

importantinformat

1.(The information inthis section isrequired under theSecurities Act 1978)Investment decisionsare very important.They often have long-term consequences.Read all documentscarefully. Askquestions. Seekadvice beforecommitting yourself.

2.Choosing aninvestmentWhen decidingwhether to invest,consider carefullythe answers to thefollowing questionsthat can be foundon the pagesnoted below:What sort ofinvestment is this? 8Who is involved inproviding it for me? 8How much do I pay? 9What are thecharges? 10What returns willI get? 9What are my risks? 10Can the investmentbe altered? 12How do I cash in myinvestment? 12Who do I contact withenquiries about myinvestment? 13Is there anyone towhom I can complainif I have problems withthe investment? 13What otherinformation can Iobtain about thisinvestment? 13In addition to theinformation in thisdocument, importantinformation can be

found in the currentregistered prospectusfor the investment.You are entitled to acopy of thatprospectus onrequest. Details ofwhere investors mayobtain a copy of theregistered prospectusare set out on page13 in the sectiontitled “What otherinformation can Iobtain about thisinvestment?”

3.Choosing aninvestmentadviserYou have the right torequest from anyinvestment adviser awritten disclosurestatement statinghis or her experienceand qualificationsto give advice.That document willtell you:(i) whether theadviser gives adviceonly about particulartypes of investments;and(ii) whether theadvice is limited tothe investmentsoffered by 1 or moreparticular financialorganisations; and(iii) whether theadviser will receivea commission orother benefit fromadvising you.You are stronglyencouraged to requestthat statement. Aninvestment advisercommits an offence ifhe or she does notprovide you with awritten disclosure

statement within 5working days of yourrequest. You mustmake the request atthe time the adviceis given or within onemonth of receivingthe advice.In addition:(i) if an investmentadviser has anyconviction fordishonesty or hasbeen adjudgedbankrupt, he or shemust tell you this inwriting; and(ii) if an investmentadviser receives anymoney or assets onyour behalf, he orshe must tell youin writing themethods employed forthis purpose.Tell the adviser whatthe purpose of yourinvestment is. This isimportant becausedifferent investmentsare suitable fordifferent purposes.

ImportantDatesNZ retail offer opens19 November 1997

NZ institutionaloffer opens19 November 1997

NZ retail offer closes5 December 1997

NZ institutionaloffer closes8 December 1997

Final offer priceexpected to be set9 December 1997(New Zealand time)

Investors notifiedof allocations theday after the finaloffer price is set.Expected to be

10 December 1997(New Zealand time)

Trading commenceson NZSE the day afterthe final offer price isset. Expected to be10 December 1997(New Zealand time)

Certificates mailednot later than fourbusiness days afterthe final offer price isset. Expected to be15 December 1997(New Zealand time)

NZSE WaiversThe Company hasbeen granted a seriesof waivers from therequirements of theNZSE Listing Rulesrelating toprogrammingtransactions, majorasset transactionsand other materialtransactions withrelated parties.Particulars of thesewaivers are set out inthe section titled“Other Information”on page 30 and in theregistered prospectusdated 19 November1997 in the sectiontitled “RegulatoryApprovals”.

ImportantNoticeThis is an InvestmentStatement for thepurposes of theSecurities Regulations1983. The purpose ofthis InvestmentStatement is toprovide certain keyinformation that islikely to assist aprudent but non-expert person todecide whether or not

to subscribe forordinary shares in SkyNetwork TelevisionLimited and to bringto the attention ofprospective investorsthe fact that otherimportant informationabout the ordinaryshares in Sky NetworkTelevision Limited isavailable in otherdocuments.In addition to theinformation in thisdocument, importantinformation can befound in the currentregistered prospectusfor the investment.If you have anyquestions or requirefurther informationyou should obtain acopy of the registeredprospectus. Copiesmay be obtained, freeof charge, from OrdMinnett Securities-NZ-Limited or anymember of theNew Zealand StockExchange.This InvestmentStatement is intendedfor use only inconnection with theoffer of ordinaryshares in New Zealandand is not to be sentor given to any personoutside New Zealandin any otherjurisdiction incircumstances inwhich the offer ofordinary shares oruse of this InvestmentStatement would beunlawful. ThisInvestment Statementmay not be sentinto or distributedin the United Statesof America.

3S K Y N E T W O R K T E L E V I S I O N

ion

4 S K Y N E T W O R K T E L E V I S I O N

Sky Network Television Limited (“Sky” or the “Company”) is New Zealand’s pre-eminent pay

television company. Sky has established a significant subscriber base with approximately

284,000 residential subscribers (representing approximately 21% of total New Zealand households)

and 3,155 commercial subscribers, as at 31 October 1997. The Company’s UHF signal reaches

over 73% of New Zealand’s estimated 1.3 million households. Its newly launched analogue direct

broadcast satellite (“DBS”) service means that virtually all of New Zealand’s remaining 356,000

households can now receive the SKY Sport and Orange Channels. Sky currently broadcasts

five channels, namely: SKY Sport; Sky Movies; Sky News; Orange; and Discovery. SKY Sport

is New Zealand’s premium all sport channel with an extensive line-up of popular local and

international sporting events. Sky Movies is New Zealand’s premium all movie channel,

premiering around 29 movies each month. Sky has an extensive and predominately exclusive

programming line-up. Sky’s programming contracts include a long term contract for the New

Zealand television rights for all provincial, “Super 12” and international rugby union played in

New Zealand, Australia and South Africa (excluding the Rugby World Cup). It also has distribution

contracts with most of the major Hollywood studios ensuring a unique line-up of megahits. The

Company believes that the pay television industry in New Zealand offers opportunities for growth

and expansion of its subscriber base. This should allow it to enhance its position as New Zealand’s

leading pay television service and increase its total share of the New Zealand television market

(both pay and free-to-air). Sky’s digital DBS service, expected to be launched during the second

half of 1998, will allow it to provide subscribers with enhanced programming packages on a greater

number of channels, improved picture quality, digital stereo sound and interactive services (when

these become available). A newly established relationship with Independent Newspapers Limited

(“INL”) and its major shareholder the News Corporation Limited (“News Corp”), through INL’s

shareholding1 in Sky, should provide the Company with access to the global media resources of

these groups. Sky operates solely in New Zealand and is majority New Zealand owned. This

offer is a unique opportunity to invest directly in a listed pay television company in New Zealand.

5S K Y N E T W O R K T E L E V I S I O N

1 INL’s shareholding is held through three wholly owned subsidiaries.

6 S K Y N E T W O R K T E L E V I S I O N

Chairman’s LetterChairman’s LetterChairman’s Letter

Dear Investor,On behalf of the Board of Directors, it gives me great pleasure to invite

you to become a shareholder in Sky Network Television Limited.

Sky is New Zealand’s leading pay television company with over 287,000

subscribers as at 31 October 1997. The Company was established in 1987

to investigate pay television opportunities in New Zealand and began

broadcasting a three channel subscription service in the Auckland,

Hamilton and Tauranga regions in May 1990. Since then the Company

has expanded its broadcasting coverage and by the end of 1996 over

73% of New Zealand’s estimated 1.3 million households were able to

receive Sky’s services.

In April of this year Sky began transmitting New Zealand’s first and only

analogue DBS service. This allowed almost all of the 356,000 households

which had previously been unable to receive Sky’s services to receive

these for the first time. Initially Sky’s analogue DBS service is limited to

only two channels. However, the Company intends to convert to a digital

DBS service during the second half of 1998, at which time it will be able

to offer subscribers up to 20 channels. The number of channels Sky is

able to broadcast could increase to up to 30 by mid-1999 when additional

satellite capacity becomes available. The conversion to digital

transmission will also improve the quality of picture broadcast, allow Sky

to broadcast full channel stereo sound and allow the introduction of

interactive services, as these become available.

Sky believes that one of the key elements of its success to date in

becoming New Zealand’s leading pay television company has been its

ability to offer its subscribers a strong programming line-up. The Company

has had considerable success in securing exclusive rights to broadcast

many of the most popular sports and movies in New Zealand, including the

long-term exclusive rights to broadcast most top level rugby (including the

All Blacks) played in New Zealand, Australia and South Africa.

Sky believes that the New Zealand pay television market continues to offer

opportunities for the Company. In particular, the development of digital

DBS television and interactive services is exciting and offers Sky

opportunities for growth and expansion of its subscriber base. However,

because the technology is relatively new it is difficult to predict the exact

form these opportunities may take.

Sky plans to use its position as the only nationwide provider of pay

television services in New Zealand to increase shareholder value by

increasing both subscriber numbers and cash flow per subscriber. Sky’s

strategy is to expand its UHF service while launching a complementary

DBS service, provide compelling programming, pursue value-added service

opportunities and capitalise on its relationship with INL and News Corp.

The issue of new shares will allow Sky to repay a substantial proportion of

its bank debt which will result in the Company being more favourably

geared. This should provide Sky with the financial capacity to take

advantage of any new opportunities and developments that may arise in

digital television.

The Directors believe that the ordinary share offer is a unique opportunity

to participate in the future growth and development of a New Zealand

company operating in a dynamic industry. On behalf of the Directors, I

recommend this offer to our subscribers and the investing public.

Yours sincerely

Craig Heatley, Chairman

Dear Investor,On behalf of the Board of Directors, it gives me great pleasure to invite

you to become a shareholder in Sky Network Television Limited.

Sky is New Zealand’s leading pay television company with over 287,000

subscribers as at 31 October 1997. The Company was established in 1987

to investigate pay television opportunities in New Zealand and began

broadcasting a three channel subscription service in the Auckland,

Hamilton and Tauranga regions in May 1990. Since then the Company

has expanded its broadcasting coverage and by the end of 1996 over

73% of New Zealand’s estimated 1.3 million households were able to

receive Sky’s services.

In April of this year Sky began transmitting New Zealand’s first and only

analogue DBS service. This allowed almost all of the 356,000 households

which had previously been unable to receive Sky’s services to receive

these for the first time. Initially Sky’s analogue DBS service is limited to

only two channels. However, the Company intends to convert to a digital

DBS service during the second half of 1998, at which time it will be able

to offer subscribers up to 20 channels. The number of channels Sky is

able to broadcast could increase to up to 30 by mid-1999 when additional

satellite capacity becomes available. The conversion to digital

transmission will also improve the quality of picture broadcast, allow Sky

to broadcast full channel stereo sound and allow the introduction of

interactive services, as these become available.

Sky believes that one of the key elements of its success to date in

becoming New Zealand’s leading pay television company has been its

ability to offer its subscribers a strong programming line-up. The Company

has had considerable success in securing exclusive rights to broadcast

many of the most popular sports and movies in New Zealand, including the

long-term exclusive rights to broadcast most top level rugby (including the

All Blacks) played in New Zealand, Australia and South Africa.

Sky believes that the New Zealand pay television market continues to offer

opportunities for the Company. In particular, the development of digital

DBS television and interactive services is exciting and offers Sky

opportunities for growth and expansion of its subscriber base. However,

because the technology is relatively new it is difficult to predict the exact

form these opportunities may take.

Sky plans to use its position as the only nationwide provider of pay

television services in New Zealand to increase shareholder value by

increasing both subscriber numbers and cash flow per subscriber. Sky’s

strategy is to expand its UHF service while launching a complementary

DBS service, provide compelling programming, pursue value-added service

opportunities and capitalise on its relationship with INL and News Corp.

The issue of new shares will allow Sky to repay a substantial proportion of

its bank debt which will result in the Company being more favourably

geared. This should provide Sky with the financial capacity to take

advantage of any new opportunities and developments that may arise in

digital television.

The Directors believe that the ordinary share offer is a unique opportunity

to participate in the future growth and development of a New Zealand

company operating in a dynamic industry. On behalf of the Directors, I

recommend this offer to our subscribers and the investing public.

Yours sincerely

Craig Heatley, Chairman

7S K Y N E T W O R K T E L E V I S I O N

· Sky is offering for subscription

49,000,000 new ordinary shares

and TVNZ Investments Limited

(the “Selling Shareholder”) is

offering 7,500,000 existing

ordinary shares in a combined

offering of 56,500,000 ordinary

shares (the “Global Offering”)

in New Zealand (the “NZ

Offering”), the United States

(the “US Offering”) and

countries other than New Zealand

and the United States (the

“International Offering”).

· Ordinary shares are being offered

in the NZ Offering.

· It is intended that the NZ

Offering will be fully underwritten

by Ord Minnett Securities-NZ-

Limited.

· It is intended that the US

Offering and the International

Offering will be fully underwritten

by syndicates of investment banks

lead by Goldman, Sachs & Co.

and Goldman Sachs International

respectively.

· The final offer price for each

share will be set on or about

Tuesday, 9 December 1997 (New

Zealand time) within the range of

$2.20 to $2.40 per ordinary share.

The initial price range has been,

and the final offer price will be,

determined by the Company in

consultation with the Selling

Shareholder and in association

with Goldman Sachs International

(“Global Coordinator” and

“International Lead Manager”),

after consultation with Goldman,

Sachs & Co. as representative of

the US underwriters (the “US

Representative”) and Ord Minnett

Securities-NZ-Limited (the “New

Zealand Lead Manager”).

· The ordinary shares offered in

the Global Offering will represent

approximately 15.8% of the issued

capital of Sky (assuming that

syndicates lead by Goldman Sachs

International, Goldman, Sachs &

Co. and Ord Minnett Securities-

NZ-Limited (the “Underwriters”)

do not exercise their over-

allotment options, referred to

below, and the Company issues

2,800,000 new ordinary shares to

a trust for purchase by certain

directors and employees of Sky1).

· After the Global Offering Sky

will have 358,245,785 ordinary

shares on issue (assuming the

Underwriters do not exercise their

over-allotment options, referred to

below, and the Company issues

2,800,000 new ordinary shares to

a trust for purchase by certain

directors and employees of Sky1).

· The number of shares allocated

to investors in New Zealand under

the NZ Offering will depend on

demand in each of the offerings.

To the extent that demand exists,

certain ordinary shares have been

reserved for firm allocation to

clients of members of the

New Zealand Stock Exchange

(“NZSE”).

· Current employees of Sky

are being offered 1,000 ordinary

shares each at a discount of $0.10

per share to the final offer price.

· In addition to the ordinary shares

being offered in the Global

Offering, the Company has

granted the Underwriters options

to purchase up to an additional

8,475,000 ordinary shares

(representing 15% of the number

of ordinary shares being offered in

the Global Offering) for the sole

purpose of covering over-

allotments. These options are

exercisable at any time within

30 days of the final offer price

being set. If any of the options are

exercised, the additional ordinary

shares may be re-allocated among

the offerings.

· During the period between the

final offer price being set and the

completion of the issue and sale of

the ordinary shares (as contem-

plated by the Underwriting

Agreements, which is expected to

be three days) Sky’s ordinary shares

will be traded on the NZSE on

a “conditional delayed delivery

basis” (see the section titled

“Other Information” on page 30).

SUMMARY OF THE OFFERSUMMARY OF THE OFFERSUMMARY OF THE OFFER

1 The Company has also resolved to grant options to two senior executives for a total of 4.2 million ordinary shares. These options cannot be exercised for two years.

8 S K Y N E T W O R K T E L E V I S I O N

Investors are being offered ordinary shares in Sky. Each ordinary share

gives the holder the right to:

(a) one vote on a poll at a meeting of the Company on any resolution

including, but not limited to, a resolution to:

– appoint or remove a director or auditor;

– adopt or alter the Company’s constitution;

– approve a major transaction;

– approve the amalgamation of the Company under Section 221 of the

Companies Act 1993; and

– put the Company into liquidation;

(b) an equal share with other ordinary shares in

any dividends authorised by the Board of

Directors; and

(c) an equal share with other ordinary shares in the

distribution of surplus assets of the Company.

All terms of the offer and all terms of the ordinary

shares being offered are set out in the registered

prospectus dated 19 November 1997, except

those rights and obligations implied by law or

set out in the constitution that is to be registered

at the Companies Office and available for public

inspection at the Companies Office (Commercial

Affairs Division, Ministry of Commerce, Level 5,

3 Kingston Street, Auckland) or Sky’s registered office

(10 Panorama Road, Mt Wellington, Auckland).

The Global Offering isbeing made by SkyNetwork TelevisionLimited, having itsregistered address at10 Panorama Road,Mt Wellington,Auckland and TVNZInvestments Limited,having its registeredaddress at 100 VictoriaStreet, Auckland. Bothcompanies are re-registered under theCompanies Act 1993.Sky was established in1987 and beganbroadcasting in 1990.The Company is NewZealand’s leading paytelevision operator withapproximately 284,000residential subscribersand 3,155 commercialsubscribers as at31 October 1997.It currently broadcastsfive channels on itsnationwide analogueUHF network and twochannels on itsnationwide analogueDBS network. Furtherdetails about Sky’sbusiness, managementand principal activitiesare set out on pages18 to 27 and inthe registeredprospectus dated19 November 1997.TVNZ InvestmentsLimited is a whollyowned subsidiary ofTelevision New ZealandLimited, theGovernment ownedbroadcaster ofTelevision One and TV2.

2WHO IS INVOLVED IN

PROVIDING IT FOR ME?

Sky Network Television

Limited (“Sky” or the

“Company”) is New

Zealand’s pre-eminent pay

television company.

It has established a

significant subscriber base

with over 284,000

residential subscribers as

at 31 October 1997,

representing

approximately 21% of

New Zealand households.

A N S W E R SA N S W E R SA N S W E R Sto important quest ions

Important

Information.

Investment decisions

are very important.

They often have long

term consequences. Read

all documents carefully.

Ask questions. Seek advice

before committing yourself.

1.What sort of investment is this?1.What sort of investment is this?1.What sort of investment is this?

9S K Y N E T W O R K T E L E V I S I O N

(iii) Institutional Investors (which includesany applications for more than 100,000ordinary shares) – may submit bids for ordinaryshares at any price from $2.20 to $2.40 pershare at any time prior to 3.00 pm (NewZealand time) on Monday, 8 December 1997.Each bid should indicate:· the identity of the institutional investor;· if the institutional investor is acting as anintermediary, the name of the principal(s)taking beneficial ownership; and· the number of ordinary shares that the

Between the date of registration of the prospectus andpricing of the Global Offering, demand for the ordinaryshares will be assessed by the Global Coordinator, the USRepresentative and the New Zealand Lead Manager whowill solicit bids from institutional and retail investors. Thefinal offer price will be set after taking account of factorswhich include demand, prevailing market conditions, theCompany’s historic performance, estimates of the businesspotential and earnings prospects of the Company, anassessment of the Company’s management and the marketvaluation of companies in related businesses.

Applications for the ordinary shares offered in theNZ Offering, which must be made on the ApplicationForm which is part of this Investment Statement, must beaccompanied by payment in full for the ordinary shares forwhich application is made. The application process inrespect of the NZ Offering is as follows:(i) Retail Investors – applications for 100,000 ordinaryshares or less will be classified as retail applications. Retailinvestors must apply for a minimum of 1,000 shares andthereafter in multiples of 200 shares. Retail applicationsmust be accompanied by payment in full for the ordinaryshares applied for at a price of $2.40 per ordinary share.If the final offer price for the NZ Offering is set at lessthan $2.40 per ordinary share then the excess applicationmonies will be refunded without interest, as soon aspractical after the closing date of the NZ Offering.Unsuccessful applications will be returned, along with allapplicable application monies without interest, as soon aspractical after the closing date of the NZ Offering.Applications must be sent so as to be received by the ShareRegistrar by no later than 5.00 pm (New Zealand time) onFriday, 5 December 1997;(ii) Employees – current employees of the Company mayapply for 1,000 ordinary shares at a $0.10 per ordinaryshare discount to the final offer price. Applications fromcurrent employees must be accompanied by payment infull for the ordinary shares applied for at a price of $2.30per ordinary share (i.e. $2.40 less $0.10 per ordinaryshare). If the final offer price for the NZ Offering is set atless than $2.40 per ordinary share then the excessapplication monies will be refunded without interest, assoon as practical after the closing date of the NZ Offering.Applications from current employees must be sent so as tobe received by the Share Registrar by no later than 5.00pm (New Zealand time) on Friday, 5 December 1997; or

W H A T R E T U R N S W I L L I G E T ?W H A T R E T U R N S W I L L I G E T ?W H A T R E T U R N S W I L L I G E T ?

Question Number Four. •

The returns investors will receive on their investment in Sky will be as a result of any share price appreciation

and/or from any dividends paid by the Company, although no dividends are expected to be paid in the foresee-

able future (see below). Any returns investors receive from any share price appreciation will be dependent on

the price performance of Sky’s ordinary shares on the relevant exchange. Sky’s share price performance is in

turn dependent on a number of complex and interrelated factors including, but not limited to:

• the Company’s future earnings and cash flows;• the Company’s ability to successfully offer a digital

DBS service (including continuing access tosuitable satellite capacity and the timely supply ofdigital equipment);

• the Company’s ability to attract sufficientsubscribers to its digital DBS service to cover thecosts of providing these services;

• the rate of growth in the number of subscribers;• the Company’s ability to acquire popular

programming at competitive prices;• any loss of key management;• changes in technology affecting pay television,

including interactive services;• the level of competition in pay television in

New Zealand;• the ability of the Company to protect its signals

from piracy;• the performance of stock markets, including the

NZSE market in New Zealand and NASDAQNational Market in the United States;

• the general performance of the New Zealandeconomy and any changes to regulations affectingthe Company’s business;

• fluctuations in the exchange rate of the NewZealand dollar relative to other currencies,

principally the US dollar and Australian dollar; and

• movements in New Zealand interest rates.

Further information on factors which may affect

Sky’s share price performance is set out in the

registered prospectus dated 19 November 1997 in

the section titled “Risk and Special Trade Factors”.

It is unlikely that the Company will pay any

dividends on its ordinary shares in the foreseeable

future because of the expected capital expenditure

requirements associated with Sky’s planned launch

of a digital DBS service. The Company will

periodically review its dividend policy to determine

whether it remains appropriate given Sky’s

circumstances at that time.

The return investors will receive is NOT fixed or

guaranteed. There is NO guarantee that investors

will be able to recoup the issue or purchase price of

any shares they subscribe for or purchase.

Whilst generally any profits or losses arising from

the sale of shares are not subject to New Zealand

tax, under certain circumstances such profits or

losses could be subject to New Zealand tax.

Potential investors should therefore seek advice in

respect of their individual tax circumstances.

Dividends (if any) may be subject to tax.

3. How much do I pay?3. How much do I pay?3. How much do I pay?The final offer price for each share will be set on or about Tuesday, 9 December 1997 (New Zealand time) within the range of $2.20 to $2.40 per ordinary

share. The initial price range has been, and the final offer price will be, determined by the Company in consultation with the Selling Shareholder and in

association with the Global Coordinator, after consultation with the International Lead Manager, the US Representative and the New Zealand Lead Manager.

10 S K Y N E T W O R K T E L E V I S I O N

The principal risk to

investors in Sky is that

they are unable to recoup

their original investment. This

could happen for a number of

reasons including:

(i) the price at which investors are

able to sell their shares in Sky is

less than the final offer price;

(ii) investors are unable to sell their

shares in Sky because there is no

market; or

(iii) the Company is placed in

receivership or liquidation.

Each of these risk factors is briefly

discussed below.

If Sky’s operational and

financial performance is worse than

investors expect, the price that

purchasers of Sky’s ordinary shares

are prepared to pay in the future

may be less than the final offer

price for the Global Offering.

Investors who purchase ordinary

shares in the Global Offering may

therefore not be able to recover the

full value of their original

investment. The factors which may

affect the Company’s

share price performance,

and hence represent risks

to investors in Sky, are

summarised in the section titled

“What returns will I get?” on

the previous page and further

information on factors which may

affect Sky’s share price performance

are contained in the registered

prospectus dated 19 November

1997 in the section titled “Risk

and Special Trade Factors”.

There is currently no active

trading market in Sky’s ordinary

shares. In the event an active

institutional investor wishes to purchase at different prices within therange $2.20 to $2.40 per ordinary share.

Bids must be submitted to Ord Minnett Securities-NZ-Limitedin writing. Those institutional investors which lodge successful bidswill be required to lodge completed application forms for the numberof ordinary shares allocated to them, together with payment in fullbased on the final offer price for each ordinary share, prior to closingunder the Underwriting Agreements.

Further details on how to apply for shares are set out in thesection titled “How to Apply” on page 32.

An application will constitute an irrevocable offer by theapplicant to acquire the number of ordinary shares specified in theApplication Form (or such lesser number of ordinary shares as theGlobal Coordinator and New Zealand Lead Manager may determine)on the terms and conditions set out in this Investment Statement, onthe Application Form and in the registered prospectus dated19 November 1997. The Company reserves the right to decline anyapplication in whole or in part, without giving any reason. All refunds

will be posted within threebusiness days afterallotment. Interest willnot be paid on refundedapplication monies.In the event that the offeris over-subscribed, retailand institutionalapplications may bescaled down.

Applications from retail investors will be subject to allocationand scaling on a basis to be determined by the Company inconsultation with the New Zealand Lead Manager. Scaling ofapplications may not be on a pro-rata basis and some applicationsmay be refused. The Company intends, to the extent possible, toprovide its subscribers with preferential treatment in the event thatballoting is required. To be eligible for preferential treatment,subscribers must complete the relevant section of the ApplicationForm when applying for ordinary shares.

For institutional investors which bid at or above the final offer

price, the allocation policy will reflect a number of factors, including thedesire to establish a solid base of shareholder support for Sky and thequality of bids received. The New Zealand Lead Manager may take into

account a number of factors when assessing the quality of bids received,including looking favourably upon institutional investors which:(i) bid at higher prices;(ii) provide leadership by indicating demand at an early stage;(iii) are perceived to be likely buyers or holders, rather than sellers,

of ordinary shares in the immediate secondary market; and(iv) are perceived to have appropriate creditworthiness.

The final offer price and details of the level and method of

any scaling will be announced to the NZSE and publishedin major daily newspapers promptly after the final offerprice has been set (expected to be set on or about Tuesday,9 December 1997 (New Zealand time)).

There are no chargespayable by investors toSky, the New ZealandLead Manager or anyof their associatedpersons arising fromthe purchase ofordinary shares in Skyin the NZ Offering.Investors buying orselling shares on theNZSE, after the GlobalOffering is completed,may be liable forbrokerage fees.

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11S K Y N E T W O R K T E L E V I S I O N

12 S K Y N E T W O R K T E L E V I S I O N

trading market does not develop, shareholders in Sky

may not be able to sell their ordinary shares and may be

unable to recoup the value of their original investment.

Whilst the Company expects an active trading market to

develop, there can be no guarantee that an active trading

market will develop.

If Sky was unable to generate sufficient free cash

flow to support its operations (including payment of

interest and principal on its external sources of finance),

to obtain external sources of finance and/or the

Company’s shareholders were unwilling to provide

additional capital to the Company when requested and

as a result Sky was unable to meet its financial

obligations or was otherwise in breach of any financing

arrangements, Sky’s directors or its creditors could place

the Company in liquidation or its secured creditors

could place the Company in receivership (if Sky was

placed in receivership this may not necessarily result in

the Company being placed in

liquidation). In these circumstances,

a holder of ordinary shares in Sky

would not receive any return of

capital until the Company had paid

all its other creditors, both secured

and unsecured, including the costs

of liquidation or receivership.

Depending on the value of Sky’s assets it may, after

paying all its creditors and expenses, not have sufficient

funds to repay its ordinary shareholders in full. In these

circumstances Sky’s investors may not recover some, or

all, of their original investment in Sky. Ordinary

shareholders will not be liable to anyone for any

payment in the event of the Company’s insolvency.

Investors should note that Sky’s banking facility

imposes a number of restrictions on the Company’s

ability to access other external sources of finance and

contains certain change in ownership conditions (see the

section titled “Other Information” on page 30) and that

Sky has a history of operating losses (see the section

titled “Summary Financial Information” on page 29).

The ordinary shares being offered in the NZ

Offering will be fully paid at the time of allocation and

ordinary shareholders will have no liability to the

Company for any further payments in respect of the

ordinary shares.

All of the ordinaryshares of the Companyare freely tradeablesubject only tocompliance with theCompany’s constitution,

applicable securities laws andregulations and thedevelopment of an activetrading market.Application has been made tothe NZSE for permission to listSky’s ordinary shares and allrequirements of the NZSErelating thereto that can becomplied with on or before thedate of the registeredprospectus have been duly

complied with. However, theNZSE accepts no responsibilityfor any statement in thisInvestment Statement or theregistered prospectus dated19 November 1997. Investorsshould therefore be able to sellordinary shares on the NZSE.Application has been made tolist securities linked to theordinary shares (AmericanDepository Shares (“ADSs”))on the NASDAQ National Marketin the United States. Assumingthe ADSs are approved for suchlisting, investors shouldtherefore be able to sell ADSson the NASDAQ National

Market. See the section headed“What are my risks?” on page10 for further informationregarding the tradeability ofSky’s ordinary shares. See thesection titled “What are thecharges?” on page 10 forinformation on charges payableon the sale of ordinary shares.

7The rights conferred on holders of ordinary shares are outlined on page 8 in thesection titled “What sort of investment is this?”. These rights may be negated,

altered or added to by amendment to the Company’s constitution or in certaincircumstances by court order. Section 117 of the Companies Act 1993 restricts acompany from taking any action which affects the rights attached to shares unlessthat action has been approved by a special resolution of shareholders whose rightsare affected by the action. A special resolution must be approved by a majority of75% of eligible shareholders voting on the resolution.Under certain circumstances a shareholder whose rights are affected by a special resolution may require the company to purchase its shares.Details of how the final offer price will be determined and how applications may bescaled down in the event of the offer being oversubscribed are set out in the sectiontitled “How much do I pay?” on page 9.

Canthe investmentbe altered?

Canthe investmentbe altered?

Canthe investmentbe altered?

88How do I cash in my investment?How do I cash in my investment?How do I cash in my investment?

9.Who do Icontact withenquiriesabout myinvestment?

Enquiries shouldbe directed to:Ord MinnettSecurities-NZ-Limited,Level 10, TheNational BankCentre,205 Queen Street,PO Box 5092,Wellesley Street,AucklandTelephone:0-9-356 1300Freephone:0800-653 600Facsimile:0-9-356 1310

10.Is thereanyone towhom I cancomplainif I have problemswith the investment?

The InvestorRelationsDepartmentSky NetworkTelevision Limited,10 PanoramaRoad,Mt Wellington,Auckland0-9-579 9999SecuritiesCommission12th Floor,Reserve BankBuilding,

2 The Terrace,Wellington0-4-472 9830.CommerceCommissionLandcorp House,101 Lambton Quay,Wellington0-4-498 0911.

11.What otherinformationcan I obtainabout thisinvestment?

RegisteredProspectusFull details of theterms of the NZOffering and addi-tional importantinformation(includingfinancial infor-mation) on theCompany arecontained in theregisteredprospectus dated19 November1997, a copy ofwhich, signed byor on behalf of theDirectors of Skyand the SellingShareholder, andhaving endorsedthereon orattached theretothe consents,documents,information,certificates andother mattersrequired to be soendorsed orattached bysection 41 of theSecurities Act1978, has beendelivered to theRegistrar ofCompanies atAuckland forregistration underSection 42 of theSecurities Act

1978 (the“RegisteredProspectus”) andis available forpublic inspection(Companies Office,Commercial AffairsDivision, Ministryof Commerce,Level 5,3 Kingston Street,Auckland).Investors mayobtain a copy ofthe RegisteredProspectus, freeof charge, from OrdMinnett Securities-NZ-Limited orany Member ofthe NZSE.

Reports toShareholdersSky will mail to allregistered holdersof its ordinaryshares on therelevant recorddate such reportsas are required tobe distributed toshareholders inaccordance withthe Companies Act1993 and therules of the NZSE,including but notlimited to, annualauditedconsolidatedfinancialstatements andunauditedconsolidatedfinancialstatements for thefirst six months ofeach financialyear prepared inaccordance withNew Zealandgenerally acceptedaccountingprinciples.

On RequestInformationCopies of Sky’smost recentfinancial state-ments required tobe registeredunder theFinancialReporting Act1993, togetherwith all documentsthat are requiredto be registeredwith thosefinancial state-ments, may beobtained free ofcharge on writtenrequest to theInvestor RelationsDepartment,Sky NetworkTelevision Limited,10 PanoramaRoad,Mt Wellington,Auckland.

Other InformationCopies of thematerial contractsreferred to onpage 30 inthe sectiontitled “OtherInformation” areavailable forpublic inspection(Companies Office,Commercial AffairsDivision, Ministryof Commerce,Level 5,3 Kingston Street,Auckland).Certain confidentialdetails of thesecontracts havebeen deletedpursuant to anexemption grantedby the SecuritiesCommission.

13S K Y N E T W O R K T E L E V I S I O N

DIRECTWas appointed a director of the Company in 1997. He

is a member of the Audit Committee. He joined the INL

group in 1987 and was appointed Chief Operating

Officer in 1997. He was appointed to INL’s Board of

Directors in 1996. Mr Neville completed the Advanced

Management Program, Harvard Business School in 1995.

Has been a director of the Company since 1987 and

was appointed Chairman in 1997. He is a member

of the Related Parties, Initial Public Offering Due

Diligence and Initial Public Offering Committees of

the Board of Directors. Mr Heatley is also a director

of Heatley Jarvis Investments Limited.

Was appointed a director and Deputy Chairman of the Company

in 1997. He is a member of the Initial Public Offering Due

Diligence and Executive Compensation Committees of the Board

of Directors. He joined the INL group in 1975 and was appointed

Managing Director and Chief Executive Officer of INL in 1983.

Mr Robson is also a director of Kensington Swan, a director of

Rangatira Limited, a director of Newspaper House Limited, a

member of the New Zealand Securities Commission, a member of

the Newspaper Publishers Association of New Zealand Inc., a

member of the New Zealand Press Association and Governor of

the New Zealand Sports Foundation.

Has been a director of the Company since 1991. He was

Chairman from 1991 to 1997. He is also a member of the Audit,

Initial Public Offering Due Diligence and Initial Public Offering

Committees of the Board of Directors. Mr Downey is also a

director or Chairman of several other companies and Chairman

of Standards New Zealand.

14 S K Y N E T W O R K T E L E V I S I O N

Craig Heatley BCA

J Michael Robson BA, AMPA Barrie Downey CBE, FACA, FNZIF

Richard Neville

ORSHas been a director of the Company since

1990. He is a member of the Executive

Compensation and Audit Committees of the

Board of Directors. He is also a director of

Power New Zealand Limited, WEL Energy Group

Limited, Utilicorp NZ Inc., Clear Communications

Limited, AAPT Limited, Todd Communications

Limited and various other subsidiaries of the

Todd Corporation Limited.

Was appointed a director of the Company in 1997. She is also

Chairman of Television New Zealand Limited, Chairman of the

Advisory Board of AMP Society (New Zealand), a director of

Clear Communications Limited, a director of Mercury Energy

Limited, a director of Ports of Auckland Limited, a director of

Retail Holdings Limited, President of the Auckland

Philharmonia Orchestra, a Trustee of the University of

Auckland School of Medicine Foundation, a representative on

the APEC Business Advisory Council and a member of the New

Zealand Business Round Table.

15S K Y N E T W O R K T E L E V I S I O N

Has been a director of the Company since 1989. He is a

member of the Initial Public Offering Due Diligence,

Initial Public Offering and Executive Compensation

Committees of the Board of Directors. Mr Farmer is also

a director of Tappenden Construction Limited.

Was appointed a director of the Company in 1997. He is

also the Coach of the All Blacks and an international rugby

selector. He was employed by Fletcher Challenge Limited

from 1966 to 1995 in a variety of positions including

Employee Relations Director. Mr Hart resigned from Fletcher

Challenge in 1995 to pursue rugby and coaching interests

full-time.

Trevor FarmerJohn Hart ONZM

Rosanne Meo

Robert Bryden

Was appointed a director of the Company in 1997.

He was Chief Executive Officer of BSkyB plc in the

United Kingdom from 1990 until his retirement in

1997. Prior to joining the predecessor company of

BSkyB, he was the Managing Director and Chief

Executive of the company now known as Nine

Network Australia Limited. Mr Chisholm is an

Executive Director of News Corp and a director

of Star Television Limited.

Samuel Chisholm

16 S K Y N E T W O R K T E L E V I S I O N

SENIORHas been the Director of Engineering and MIS of the

Company since 1987 (the year the Company was

established). He has more than 25 years experience in

the Electronics and Television industry, including

management positions with AWANZ Ltd and GEC Ltd in

the United Kingdom and the New Zealand licensee of

Channel Master Division of Avnet Inc. USA. Since

joining the Company, Mr Green has been responsible

for the studios, the UHF transmission network, Sky’s

geographical and channel expansion, the design and

application of subscriber hardware and encryption

system and the recent construction and commissioning

of Sky’s satellite up-link facility.

Has been Chief Executive Officer of the Company

since 1991. He has 19 years pay television

experience with Time Warner Inc., including ten

years as a member of Time Warner Cable’s senior

management. Mr Smith is a member of the New

Zealand Business Round Table.

Has been Chief Operating Officer of the Company since 1991.

He has 18 years experience in the pay television industry,

including ten years with Tele-Communications Inc. During this

time he held various positions including Financial Controller,

System Manager, Regional Manager and Divisional Manager for

Storer Broadcasting, United Cable and Televents.

Joined Sky in 1990 as Head of Sport and was appointed

Director of Sport in 1993. He has over 30 years experience in

sports and television including 25 years with Television New

Zealand Limited most recently as Executive Producer, Sport and

Executive Producer, Host Broadcaster for the 1990 Auckland

Commonwealth Games.

Nate Smith BA

John Fellet BAKevin Cameron

Brian Green AMIEE, NZCE

17S K Y N E T W O R K T E L E V I S I O N

R MANAGEMENT

Joined Sky in 1990 and was appointed Manager

Strategic Planning in 1993. He was appointed

Regional Manager – Central Region in 1994 and

Director of Marketing in 1995.

Has been the Director of Sky Movie Channel since 1994 and

was appointed Director of the Orange Channel in 1997. Prior

to joining the Company, he spent over five years in advertising,

most recently as a Senior Copywriter at Ogilvy & Mather.

Has been the Director of Programming and Marketing of

the Company since 1996. John spent the two years prior

to joining Sky consulting on television programming and

marketing to Network 10 Australia, SBS Europe and Sky.

Prior to this he held various positions including Director

of Programming at Television New Zealand Limited with

responsibility for program management and marketing

of TV1 and Channel 2. His other positions have included

General Manager of radio station 89FM, Managing

Director of Radio Hauraki and Managing Director of

CBS Records.

Has been the Chief Financial Officer and Company Secretary

since 1989. Prior to joining the Company, he worked for two

years as a consultant specialising in company

acquisitions/disposals, corporatisation and company

rationalisation. Mr Smart also worked for over 10 years in

senior financial management roles including as Chief

Financial Officer and Company Secretary and Executive

Director of Visionhire Holdings.

John McCreadyPaul Smart BBS, CA, CMA

Travis Dunbar

Rob Hellriegel BCom, MBA

18 S K Y N E T W O R K T E L E V I S I O N

businessdescripti

Sky was established in 1987 to investigate pay television

opportunities in New Zealand. Following the deregulation of

broadcasting in New Zealand, the New Zealand Government

tendered a number of channels in the UHF spectrum.

Recognising that, at that time, UHF was the most economic way

to broadcast pay television in New Zealand, given the country’s

low population density and mountainous terrain, Sky tendered

for a range of nationwide UHF networks. It was successful with

a number of its tenders and began broadcasting a three-channel

subscription service in the Auckland, Hamilton and Tauranga

regions in May 1990.

In 1991, Sky expanded its geographic coverage with the addition

of the Rotorua, Wellington and Canterbury regions. During

1994, the Company launched two further channels (the

Discovery and Orange Channels) and expanded its service to the

Hawkes Bay, Manawatu, Southland and Otago regions. In 1995,

the Company began broadcasting to the Wairarapa, Taupo and

Wanganui regions and further increased its geographic coverage

in 1996 with the addition of the Taranaki, Whangarei and

Eastern Bay of Plenty regions. By the end of 1996 over 73% of

New Zealand’s estimated 1.3 million households were able to

receive Sky’s services. In April 1997 Sky began analogue DBS

broadcasts which allowed almost all New Zealand homes to

receive the SKY Sport and Orange Channels. This increased the

number of potential customers by approximately 356,000.

ShareholdersSky’s founding shareholderswere Craig Heatley andTerry Jarvis. In 1988, ESPNInc., an international sportsbroadcaster, became ashareholder following thesigning of a programmingagreement with Sky. In1989, TVNZ InvestmentsLimited (a wholly ownedsubsidiary of Television NewZealand Limited, NewZealand’s leading free-to-airbroadcaster), ToddCommunications Limited(a wholly owned subsidiaryof the Todd CorporationLimited) and TappendenConstruction Limited(associated with Alan Gibbsand Trevor Farmer) becameshareholders. Two yearslater, subsidiaries of fourAmerican companies,Ameritech Corporation, BellAtlantic Corporation, TimeWarner and TCIDevelopment Corporation(collectively the “HKPPartners”) acquired a51.1% shareholding in Sky.In September 1997,HKP Partners sold itsshareholding to INL2, NewZealand’s leading printmedia company and 49.4%owned by a wholly ownedsubsidiary of News Corp.Immediately upon thecompletion of INL’spurchase, TVNZInvestments, ToddCommunications, TappendenConstruction and HeatleyJarvis Investmentspurchased pro-rata ESPNInc.’s 0.4% shareholding

and a 3.1% shareholdingfrom INL. Interestsassociated with HeatleyJarvis Investments recentlyagreed to sell, as at21 November 1997,beneficial ownership of a2.6% shareholding in theCompany to TappendenConstruction. Details ofSky’s shareholdingstructure following theGlobal Offering and theCompany issuing 2,800,000new ordinary shares to atrust for purchase bycertain directors andemployees of the Companyare set out below.

Shareholding Structurefollowing the Global Offering1

Company HistoryCompany HistoryCompany History

19S K Y N E T W O R K T E L E V I S I O N

• Independent NewspapersLimited (41.1%)2

• TVNZ Investments Limited(12.9%)3

• Heatley Jarvis InvestmentsLimited (14.5%)

• Todd CommunicationsLimited (8.1%)

• Tappenden ConstructionLimited (6.9%)

• Executive Officers andDirectors (0.8%)4

• Other (15.8%)

Further details are set out in the

registered prospectus dated

19 November 1997 in sections titled

“Principal Shareholders and Selling

Shareholder” and “Statement as to

Substantial Security Holders.”1 Assuming the Underwriters do not

exercise their over-allotment options.

The Company has also resolved to

grant options to two senior

executives for a total of 4.2 million

ordinary shares. These options

cannot be exercised for two years.2 INL’s shareholding is held through

three wholly owned subsidiaries.3 Wholly owned by Television

New Zealand Limited.4 Represents ordinary shares held in

trust for the benefit of certain

executive officers and directors.

Founding Shareholders:

Terry Jarvis and Craig Heatley

Sky Television UHF Coverageof New Zealand

Sky Television UHF Coverageof New Zealand

on

20 S K Y N E T W O R K T E L E V I S I O N

ProgrammingSky believes that one

of the key elements in

its success to date

has been its ability to

offer its subscribers a

strong programming

line-up. The Company

has had considerable

success in securing

exclusive rights to

broadcast many of

the most popular

sports and movies

in New Zealand.

Sky currently offers

five specialist

channels to its

analogue UHF

subscribers and two

channels (SKY Sport

and Orange) to its

analogue DBS

subscribers. The

Company’s current

channels are

described below.

SKY SportChannelNew Zealand’s

premium all sport

channel. It offers a

line-up of popular

local and international

sporting events 24

hours a day, seven

days a week. Sky has

long-term exclusive

New Zealand

distribution rights for

New Zealand’s most

popular sport, rugby

union (see the section

titled “Sub-licensing

Agreements” on page

25). This distribution

contract allows Sky

to broadcast live

(more than 100

games in 1997):

(i) the annual

“Tri-Nations” series

between New Zealand,

Australia and South

Africa;

(ii) the “Super 12”

competition featuring

provincial teams

from New Zealand,

Australia and

South Africa;

(iii) all international

matches played in

New Zealand,

Australia and South

Africa (excluding the

Rugby World Cup);

and

(iv) all major

provincial games

played in

New Zealand.

Sky also has an

exclusive contract to

broadcast Super

League (approximately

90 games during

1997), rugby league

from England and

certain other

Australian rugby

league games (see the

section titled “Sub-

licensing Agreements”

on page 25). The

Company’s sporting

line-up is further

strengthened via its

exclusive agreement

(expiring in August

2002) with

international sports

programmer, ESPN Inc.

Under this agreement

Sky is able to

broadcast ESPN Inc.’s

sports programming

which includes tennis,

basketball, soccer,

motor sports, golf,

American football, ice

hockey and baseball.

Sky has recently

obtained the rights to

exclusively broadcast

ESPN Inc.’s new

channel ESPN2. This

exclusive right is

conditional on Sky

launching a separate

ESPN branded channel

by May 1999. In

addition to its long

term contracts, Sky

further strengthens its

sports programming

line-up by purchasing

broadcasting rights to

major sporting events

such as the Grand

Slam tennis

ProfileProfileProfileSince its launch in 1990 Sky has built a successful analogue UHF pay

television business and as at 31 October 1997 the Company had over 274,000

residential UHF subscribers and over 2,700 commercial UHF subscribers. For

the twelve months to 31 December 1996 Sky’s revenue was $144.7 million and

it had a positive cash flow from operating activities of $26.2 million.

In April of this year, Sky launched New Zealand’s first and only DBS

service. Initially this service broadcasts a limited number of analogue channels.

However, as part of the Company’s strategy this service is expected to be

converted during the second half of 1998 to a digital DBS service, able to

initially offer up to 20 channels.

The following sections briefly set out Sky’s current operations.

A discussion of the Company’s strategy and prospects is set out in the section

titled “Strategy and Prospects” on page 28.

21S K Y N E T W O R K T E L E V I S I O N

22 S K Y N E T W O R K T E L E V I S I O N

tournaments and the

All Blacks tour of the

UK. The Company

believes that the

strength of its sports

line-up is a key factor

in attracting and

retaining subscribers.

Sky MovieChannelNew Zealand’s

premium all movie

channel. The Sky

Movie Channel

broadcasts uncut and

advertising free

current, classic and

made-for-television

movies and related

programming. It

broadcasts 24 hours

a day, seven days a

week. Sky has

contracts, some

exclusive, with most

of the major

Hollywood studios

(e.g. Fox, Columbia-

Tristar, Warner

Brothers, Paramount,

Universal and MGM).

It also has

arrangements with a

number of

independent US and

Australian

distributors, including

Roadshow. In 1996

the Sky Movie

Channel broadcast

over 340 different

movies and premiered

an average of 29

movies per month.

Sky NewsChannelThe Company receives

a 24 hour direct

satellite feed from

CNN International

providing Sky with

live coverage of world

news. In addition to

comprehensive

coverage of important

global events, CNN

offers feature

programmes on news

and general interest

topics such as

medicine, travel,

food, fashion,

science, technology

and sports. Sky

supplements CNN’s

live feed with live

broadcasts of BSkyB’s

news bulletins,

replays of TVNZ’s

6.00 pm news

programme and

New Zealand

produced current

affairs programmes.

OrangeChannelThe Orange Channel

broadcasts from 6.00

am to around midnight

seven days a week.

From 6.00 am

to 4.00 pm the

Company broadcasts

The Cartoon Network

featuring popular

cartoon programmes

such as “Bugs Bunny

and Daffy Duck”,

“Scooby Doo”,

“The Flintstones”,

and “Popeye”.

After 4.00 pm Sky

broadcasts general

entertainment, movies

(including made-for-

television movies

and mini-series from

“Hallmark”), classic

television, original

series, live sports

and late night

programmes.

DiscoveryChannelThe Discovery

Channel broadcasts

a range of

documentaries on

topics such as

history, nature,

science and

technology up to 24

hours a day, seven

days a week.

Pursuant to an

agreement with the

Totalisator Agency

Board (the “TAB”)

the Company

broadcasts the TAB’s

horse and dog racing

programmes, the

Trackside Channel,

approximately 40

hours per week. Sky

broadcasts Discovery

programming

whenever the

Trackside Channel is

not being broadcast.

Sky currently offers analogue UHF subscribers the choice of

four principal programming packages.

Programming Package Content Monthly Subscription Price (excluding GST)

Triple Value SKY Sport Channel $30.77

Sky News Channel

Orange Channel

Sky Stars SKY Sport Channel $39.67

Sky Movies Channel

Orange Channel

Variety SKY Sport Channel $42.33

Sky Movies Channel

Orange Channel

Sky News Channel

Gold SKY Sport Channel $48.15

Sky Movies Channel

Orange Channel

Sky News Channel

Discovery Channel

Sky’s headquarters and production facilities are located on

a two hectare (five acre) site at Mt Wellington in Auckland.

This site, which is owned by Sky, contains buildings with

a gross floor area of nearly 7,000 m2 (75,000 sq ft). The

Company’s production facilities include three camera

production facilities, four analogue video edit suites, one

fully digital linear post-production suite, a graphics and

audio post-production suite, a central videotape area, a

master control area and five dedicated presentation suites.

These facilities allow the Company to receive, edit,

compile, insert advertising and produce programmes for

its five channels.

23S K Y N E T W O R K T E L E V I S I O N

In addition to broadcasting, Sky is involved in a

number of other activities including:

SkyWatchEach month Sky publishes SkyWatch, a full-colour

magazine which provides detailed programme listings

including information on the current month’s movies

and sporting events, features on popular local and

international movie, television and sports

personalities, and information on upcoming events on

the Sky network. Approximately 80% of the

Company’s subscribers choose to receive SkyWatch at

a cost of $2.00 per issue (including GST), making it

the fifth most read magazine in New Zealand1;

MovielinkSky owns a 50% interest in, and is the operator of, a

joint venture company, Movielink (New Zealand)

Limited (“Movielink”). Movielink offers an in-room

movie service on a pay-per-view basis at a cost of

$12.00 to $15.00 (excluding GST) per movie per view.

Eleven hotels in New Zealand currently use the

Movielink service; and

NTN New ZealandThe Company owns a 50% interest in a joint venture

with NTN Australasia Pty Limited to provide

interactive trivia games to the hospitality industry in

New Zealand including taverns, restaurants and clubs.

Sky plans to broadcast text, graphics and animation to

a dedicated personal computer at each commercial

customers’ premises. These images are then displayed

on television monitors and players can respond via a

wireless remote control. Players will compete against

other players at locations throughout New Zealand.

Eight locations have entered into contracts to acquire

the necessary equipment and installation began in

October 1997.

Given the relative recent introduction of Movielink

and NTN New Zealand these joint ventures do not

currently make a significant contribution to the

Company’s operating results.

Subscriber GrowthSince it began broadcasting in 1990 Sky has been successful in

growing the number of residential and commercial subscribers to its

services. The following table and graph show the growth in subscriber

numbers since 1993.

As at 31 December As at As at

30 June 31 October

1993 1994 1995 1996 1997 1997

UHF Subscribers

Residential 116,448 163,695 191,061 238,908 266,932 274,015

Commercial 1,003 1,478 1,648 2,490 2,685 2,720

Total UHF 117,451 165,173 192,709 241,398 269,617 276,735

DBS Subscribers

Residential – – – – 6,547 10,620

Commercial – – – – 315 435

Total DBS – – – – 6,862 11,055

Total Subscribers 117,451 165,173 192,709 241,398 276,479 287,790

Oth

er a

ctiv

itie

sO

th

er a

ctiv

itie

sO

th

er a

ctiv

itie

s

1 Based on the results of a readership survey undertaken by AC Nielsen McNair for

the period July 1996 to June 1997.

Subscriber base and growthSubscriber base and growthSubscriber base and growth

The number of subscribers to Sky has increased by over 170,000 or over

145% in the period from 31 December 1993 to 31 October 1997.

The management of Sky believes that the introduction of a digital DBS

service, allowing the Company to offer enhanced programming packages

on up to 20 channels and the potential to introduce interactive services,

should allow Sky to continue to expand its subscriber base in the future.

PenetrationPenetration is a measure of the proportion of households which are able

to receive the service, that actually subscribe. Whilst it is a useful

Dec 93 Dec 94 Dec 95 Dec 96 Jun 97 Oct 97

117,

451

165,

173

192,

709

241,

398

276,

479

287,

790

Total SubscribersTotal Subscribers

Dec 93 Dec 94 Dec 95 Dec 96 Jun 97 Oct 97

117,

451

165,

173

192,

709

241,

398

276,

479

287,

790

measure of Sky’s success in growing not only its coverage but also its

subscriber base, it is important to note that as coverage expands

penetration may, at least initially, decline. The following table shows

the growth in Sky’s penetration rates.

The strength of the

Company’s historic

subscriber growth is

clearly demonstrated by

Sky’s ability to

continually increase its

geographic coverage of

New Zealand, thereby

increasing the number of

potential subscribers,

while at the same time

increasing the proportion

of households which

subscribe to its services.

To achieve this, the growth rate in subscriber numbers must exceed the

rate of growth in the number of households able to receive Sky’s services.

Whilst the introduction of a DBS service has resulted in Sky’s

penetration rate declining for the first time, the Company’s services now

reach nearly 356,000 households which previously could not receive

Sky’s services. This represents an exciting opportunity for Sky to

introduce its services to a previously untapped market.

ChurnChurn is a measure of the proportion of subscribers disconnecting over

a given period (excluding subscribers who move address). Sky’s annual

churn since 1993 is as follows:

Year ended 31 December Twelve months ended 31 October

1993 1994 1995 1996 1997

25.8% 28.7% 40.1% 33.8% 28.9%

The Company believes that the principal reason for the increase in its

churn rate in 1995 was a price increase for its three channel service

following the introduction of the Discovery and Orange Channels.

Since then Sky’s churn rate has continued to reduce to what the

Company believes are more appropriate levels.

Sky believes that improving the quality and variety of its programming

and offering subscribers a greater number of channels and

programming packages should assist in further reducing churn in the

future (see the “Strategy and Prospects” section on page 28).

As at 31 December As at 30 June

1993 1994 1995 1996 1997

Total number of Households1 1,287,200 1,307,000 1,326,800 1,346,600 1,346,600

Number of households within

reach of Sky services 679,680 855,878 905,979 986,500 1,346,600

Geographic coverage 52.8% 65.5% 68.3% 73.3% 100.0%2

Proportion of households

subscribing

UHF 17.1% 19.1% 21.1% 24.2% 27.0%

DBS – – – – 0.5%

Total 17.1% 19.1% 21.1% 24.2% 20.5%3

24 S K Y N E T W O R K T E L E V I S I O N

1 Based upon New Zealand Government census data as of March 1996, and

assuming that the population in each metropolitan area increased by the same

amount per month over the periods indicated from the previous census as of 1991.

2 Sky’s DBS signal is able to be received by virtually all New Zealand households.

3 The number of households reached increased as a result of the launch of Sky’s

DBS service in early 1997. This resulted in a drop in total penetration.

25S K Y N E T W O R K T E L E V I S I O N

UHFSky currently distributes its channels via four

analogue UHF networks which it holds licences

for and a fifth UHF network which it leases from

the TAB. The Company’s analogue UHF

frequencies are currently available to over 73% of

New Zealand’s estimated 1.3 million households.

This UHF infrastructure is considerably less

expensive than a cable system capable of reaching

an equivalent number of subscribers.

Transmission of the Company’s UHF signals is

contracted to Broadcast Communications

Limited (“BCL”), a wholly owned subsidiary of

TVNZ. These contracts, which expire on 30

April 2001, require BCL to transmit Sky’s

signal via its nationwide transmission network.

Linking from Sky’s Auckland facilities to BCL’s

transmission sites is via Telecom’s microwave,

“off air” or fibre optic facilities.

Sky broadcasts an encrypted signal to combat

piracy. The picture can only be unencrypted by

authorised subscribers who have a decoder and

viewing card device, known as a “smartcard”.

Subscribers also require a UHF antenna. Sky

supplies and installs this equipment at the time

a subscriber signs up to one of Sky’s services.

The Company charges an installation fee which

is generally between $25 and $50 per

installation and retains ownership of all of the

equipment installed in a subscriber’s premises.

SatelliteSky has entered into a long-term lease which

grants it the right to use three of the eight

transponders capable of transmitting to

New Zealand on a satellite owned and operated

by Optus. Currently all eight of these

transponders are leased. Transponder leases

typically require a lessee to select a priority level

with higher priority customers given greater

certainty of access to transponders in the event

of any transponders

failing. For example, if any

transponder is unavailable

and there are no unused

transponders on that

satellite then the lowest

priority transponder user is

the first user to have its

access to the satellite suspended. The higher the

priority level, the higher the annual

transponder rental cost. Whilst Sky’s current

priority is the lowest level available it may be

able to upgrade its priority level in the future,

if this was deemed appropriate, by increasing its

annual transponder rental payments. Sky does

not currently consider that this is necessary

given the level of redundancy built into

satellites and the fact that Optus has not

experienced any loss of transponder service

since it commenced satellite operations in

1985. Disruption to the Company’s

transmissions from the Optus satellite could,

depending on the nature and the duration of

the disruption and the availability of alternative

transponders, have a material adverse effect on

the Company.

Sky’s first transponder commenced service in

April 1997. The second and third transponders

become available in May 1998 and June 1999

respectively. Each transponder has the capacity

to broadcast up to two analogue channels or up

to ten digital channels.

For subscribers to receive Sky’s satellite

transmissions they require a small satellite dish

Broadcasting and DistributionBroadcasting and DistributionBroadcasting and Distribution

Sub-Licensing AgreementsSky has entered into sub-licensing

agreements with TVNZ and TV3. The

Company’s sub-licensing agreement with

TVNZ allows TVNZ to broadcast on a

delayed basis and, in certain

circumstances, to broadcast live certain

rugby games played in New Zealand,

Australia and South Africa including all

“test” matches involving the All Blacks.

Sky’s sub-licensing agreement with TV3

allows TV3 to broadcast on a delayed basis

and, in certain circumstances, to

broadcast live certain SuperLeague games.

In addition to the above arrangements

the Company sub-licenses the right to

broadcast the Discovery Channel, the

TNT and Cartoon Network to a number of

New Zealand cable television operators.

Sky has also sub-licensed the right to

broadcast the Sky Movie Channel, SKY

Sport Channel and Orange Channel to

three small regional cable television

operators which operate in areas which

were, prior to the launch of Sky’s analogue

DBS service, unable to receive the

Company’s signal. The last of the sub-

licensing arrangements covering the Sky

Movie Channel, SKY Sport Channel and

Orange Channel expires in March 1998.

27S K Y N E T W O R K T E L E V I S I O N

(ranging from 45 cm to 80 cm in

diameter), a decoder and smart

card. The decoder needed to

receive Sky’s current analogue

DBS signal is the same as that

used by UHF subscribers.

However, when Sky begins digital

DBS broadcasts, currently

planned for the second half of

1998, subscribers will need a

digital decoder. This decoder will

offer a range of features not

currently available such as digital

quality pictures, full channel

stereo sound on each programme

channel, electronic programme

guide, pay-per-view options, up

to 10 radio channels, a barker

channel showing current

programming on all channels

simultaneously and a built-in

modem/data connection. The

satellite dish can be installed in

any area with a clear view of the

sky at a 45 degree elevation such

as walls, roofs, lawns or garden

areas. DBS subscribers wishing to

install satellite dishes on their

properties must comply with their

own local district plans created

under the Resource Management

Act 1991. To date the Company

has received confirmation from

61 of New Zealand’s 74 local

district councils that installation

of satellite dishes of the size the

Company is currently installing

are permitted under their district

plans. Ten local district councils

have not responded to the

Company’s enquiries and three

have indicated that land use

consents are required.

CompetitionSky’s principal existing and future

competitors include free-to-air

and pay television broadcasters.

Sky’s two principal pay television

competitors in New Zealand are

“First Media”, which is owned by

Telecom New Zealand Limited,

and Saturn Communications

Limited, a cable television service

in the Wellington area owned by

United International Holdings

Inc. and Saskatchewan

Telecommunications Holding

Corporation. Both “First Media”

and Saturn have continuing cable

installation programmes1.

However, to date neither has

developed a significant subscriber

base. Recent press reports

estimate that the cable industry

in New Zealand has a total of

about 6,000 subscribers.

Sky believes that its primary

competition is from free-to-air

broadcasters in the acquisition

of programming rights. Where

Sky, TVNZ and TV3 compete

directly for programming, Sky

seeks to acquire first broadcasting

rights. In many areas Sky does

not compete directly with free-to-

air for programming particularly

for current movies, where the pay

broadcast rights are generally

available prior to free-to-air

broadcast rights.

Sky is continuously seeking to

improve the range, quality and

variety of the programming it

offers as well as offering exclusive

access to desirable broadcasts

such as premiering megahit

movies and live broadcasts of

major New Zealand rugby

matches to ensure that

subscribers view Sky’s services

as value for money.

PREVIEWPREVIEWPREVIEWComing up in 98 exclusively on

CasinoWhen the great movies of the 1990s get

shortlisted this one is going to make the

Top 10 lists. Martin Scorcese’s tense

masterpiece stars Robert de Niro as proud hustler “Ace” Rothstein who with his best

friend, cheap hitman Nicky Santoro (Joe Pesci) runs the mob casinos like a well-oiled

machine, trying to beat the odds in a changing Las Vegas where the act is getting

cleaned up. Obsessed with chip-hustler Ginger McKenna

(Sharon Stone) the powerful Rothstein and his casinos begin

to spin dangerously out of control.

Live All Blacks InternationalThe world of Rugby just got bigger and better. Sky Sport

hosts a hot series of rugby matches - the best from the

Northern Hemisphere winter season. Rugby fans can feast on a smorgasbord. How about

the flair of the French Barbarians against a

re-grouped South African team? Or the Welsh

stacked up against Italy? These fast-moving

games screen exclusively on Sky – the only

channel to watch.

Mission ImpossibleDirector Brian de Palma gives us an

explosive cocktail that mixes the star power

of Tom Cruise, the intrigue of the classic

TV series and the best soundtrack to hit

Hollywood in years. The twisting international plot is famously complex but the action

sequences will take viewers into bona-fide white-knuckle territory. As it races –

by helicopter - into the English French tunnel this movie

gives action-film fans a wild ride.

The BirdcageRobin Williams is in peak form alongside one of Broadway’s

hottest new names – Nathan Lane, as a contemporary gay

couple who mince headlong into the world of conservative

Senator Keeley (played by two-time Oscar winner Gene

Hackman) who is desperate to win re-election and avoid

scandal.

1 Telecom New Zealand has recently announced it does not intend to continue with its expansion of “First Media.”

Sky believes that the New Zealand pay television market offers

opportunities for growth.

Sky is New Zealand’s leading pay television company with over

287,000 subscribers as at 31 October 1997. It plans to use its position

as the only nationwide provider of pay television services in New

Zealand to expand and enhance its programming and services in order

to increase both subscriber numbers and cash flow per subscriber.

The Company’s strategy is to:

(i) continue to expand its UHF service while launching a

complementary digital DBS service;

(ii) provide compelling programming;

(iii) pursue value-added service opportunities; and

(iv) capitalise on its relationship with INL and News Corp.

Each of these elements of Sky’s strategy is briefly discussed below.

Continue to Expand UHF Service While Launching aComplementary Digital DBS ServiceSky’s existing UHF service provides it with the critical mass necessary

to support the development of its digital DBS service. Sky sees its

digital DBS service as being complementary to its analogue UHF

service and believes that it can continue to increase its UHF

penetration rates and grow its subscriber base further by offering high

quality popular programming at reasonable prices.

Sky’s existing UHF service has wide appeal. The Company believes that

it is important to continue to offer a UHF service while it develops its

digital DBS service as the ability to offer both UHF and digital DBS

services should appeal to a broader range of potential subscribers than

each offering on its own and should lead to additional growth in

subscriber numbers.

Following the second transponder on the Optus satellite becoming

available, during the second half of 1998, Sky intends to begin offering

a nationwide digital DBS service. It will initially broadcast both

analogue and digital DBS whilst Sky installs digital decoders in current

analogue DBS subscribers’ premises. Once this is completed Sky will

cease analogue DBS broadcasts, at which time Sky intends to offer up

to 20 digital channels including additional sports and movie channels.

As part of launching its DBS service the Company intends to re-tier its

programme offering.

Once Sky’s digital DBS service is established the Company will seek to

migrate its UHF subscribers to its digital DBS service where it believes

per subscriber contributions may be higher.

Provide Compelling ProgrammingSky believes that a key element in its current success has been the

strength of its programming line-up and its ability to offer exclusive

access to many of the most popular sports and movies in New Zealand.

The Company intends to continue to seek to increase the range and

quality of programming it offers to:

(i) retain its existing subscribers;

(ii) migrate existing UHF subscribers to its digital DBS service; and

(iii) attract additional UHF and digital DBS subscribers.

Sky believes its ability to offer up to 30 channels when the third

satellite transponder becomes available in 1999 presents significant

opportunities to enhance its programming packages and re-tier prices

for its services. To achieve this the Company will need to secure access

to additional programming.

Pursue Value-Added Service OpportunitiesThrough its digital DBS network, Sky will be able to offer valued-

added services to its subscribers as they develop. Although the timing

and exact nature of the services Sky may offer is not yet certain, value-

added services may include home shopping, near video-on-demand,

pay-per-view, interactive television and internet access.

Sky believes that offering these sorts of additional services to its

subscribers is likely to increase the perceived value of subscribing to

Sky and should assist in increasing customer loyalty.

Capitalise on Relationship with INL and News CorpINL recently purchased a 48% shareholding in Sky. Notwithstanding

the fact that INL’s shareholding will be reduced to approximately 40%

following the Global Offering, INL will still be Sky’s single largest

shareholder. INL’s position as New Zealand’s largest print media

company may create opportunities for Sky, particularly in the

production and distribution of SkyWatch magazine.

INL is 49.4% (approximately) owned by a wholly owned subsidiary of

News Corp. News Corp has significant investments in a number of

media and pay television companies including BSkyB, Foxtel and Star

TV. Sky expects to benefit from this global pay television expertise,

particularly in enhancing its programming offering and the

development of its digital DBS service.

28 S K Y N E T W O R K T E L E V I S I O N

Strategy and ProspectsStrategy and ProspectsStrategy and Prospects

1 Includes $10.6 million write down of analogue equipment and aerials

The following financial information is summary information only. The financial data has been extracted from the audited and unaudited

consolidated financial statements of the Company as appropriate. These financial statements, along with the accompanying notes are set out in

detail in the Registered Prospectus.

If you require further financial information on Sky you should obtain a copy of the Registered Prospectus. Details on where to get copies of the

Registered Prospectus are set out on page 13 under the heading “What other information can I obtain about this investment?”

Year Ended December 31 Six Months Ended June 30

1994 1995 1996 1996 1997$000 $000 $000 $000 $000

Consolidated Income Statement Data (unaudited)

RevenuesSubscriptions 72,273 102,267 127,027 58,258 71,658Other 7,584 6,460 17,682 7,807 13,435

Total revenues 79,857 108,727 144,709 66,065 85,093

Operating expensesCost of services

Programming 35,081 42,557 61,610 30,462 36,993Subscriber management 4,814 4,586 5,619 3,100 3,704Transmission 9,535 10,834 13,615 6,286 7,250

Selling, general and administrative 16,750 18,013 22,052 10,887 13,180

Earnings before interest and depreciation 13,677 32,737 41,813 15,330 23,966

Depreciation and Amortisation 22,796 29,387 45,7941 16,516 13,683

Operating profit (loss) (9,119) 3,350 (3,981) (1,186) 10,283Interest expense (9,598) (13,158) (16,625) (7,864) (8,024)

Net profit (loss) before taxation (18,717) (9,808) (20,606) (9,050) 2,259Taxation expense – – – – –

Net profit (loss) after taxation (18,717) (9,808) (20,606) (9,050) 2,259

Share of profit (loss)Associate company before tax – (7) 37 17 –Associate company income tax – – – – –

Net profit (loss) after taxation (18,717) (9,815) (20,569) (9,033) 2,259

Net cash inflow from operating activities $13,583 $30,563 $26,156 $5,327 $20,048

As at December 31 As at June 30

1995 1996 1997Consolidated Balance Sheet Data $000 $000 $000

Total deficit in shareholders' equity (52,575) (73,144) (70,885)Borrowings including current portion 146,854 168,469 172,941TOTAL ASSETS $148,515 $158,212 $168,848

Summary Financial InformationSummary Financial InformationSummary Financial Information

S K Y N E T W O R K T E L E V I S I O N 29

30 S K Y N E T W O R K T E L E V I S I O N

1. Material ContractsThe material contracts entered into by anymember of the Company otherwise than inthe ordinary course of business within thetwo years immediately preceding the date ofthe Registered Prospectus are:

OptusA customer service agreement between theCompany and Optus Networks Pty Limiteddated 6 December 1996 for the lease oftransponders on the B.1 Optus satellite forthe period from 1 April 1997 and ending atthe end of the geostationary life of thatsatellite or 5 December 2006, whichever isearlier.

Bank Facility and Debenture DeedIn March 1997, Sky entered into a $250million revolving credit facility with asyndicate of five international banks (the“Bank Facility”). The Bank Facility requiresthe amounts outstanding to be reduced to$240 million by March 2001, $225 millionby March 2002, $210 million by March2003 and the remaining balance to berepaid in full by March 2004.The Bank Facility limits Sky’s dividends andother distributions to 50% of the Company’sconsolidated free cash flow from continuingoperations for the previous fiscal year andprohibits the Company paying dividends ormaking other distributions unless:(i) the Company has reduced the totalfacility limit under the Bank Facility by anamount at least equal to the total dividendsand distributions paid during the relevantfiscal year; and(ii) no event of default under the BankFacility has occurred or is likely to occur.The Bank Facility has a number of othercovenants and restrictions including:(i) restricting the Company or any whollyowned subsidiary from incurring anyindebtedness other than under:– the Bank Facility;– overdraft facilities where the aggregatebalance is less than $1.0 million;– letters of credit where the aggregatebalance is less than $15.0 million;– finance leases where the aggregatebalance is less than $5.4 million; or– with the written consent of lenders whosecommitments represent 60% of the BankFacility limit;(ii) limiting Sky’s ability to dispose of assetsother than in limited circumstances such asdisposals in the ordinary course of business;(iii) limiting the Company’s ability to enterinto transactions with related parties;(iv) prohibiting Sky from investing orcommencing business outside New Zealand;(v) prohibiting the Company from acquiringmaterial capital assets outside its corebusiness;(vi) prohibiting Sky from materially changingits licensing, programming and exclusivityrights; and(vii) restricting the Company from creatingor allowing to exist a security interest overany assets other than security interestsgranted pursuant to the Bank Facility, or afinance lease (limited to $5.4 million).The Bank Facility also requires that:(i) News Corp continues to hold at least 35%of Sky’s outstanding ordinary shares;

(ii) no other party (acting alone or inconcert) own more ordinary Sky shares thanNews Corp; and(iii) News Corp retain effective control overthe affairs, policies and governing body ofthe Company.For the purpose of this clause, News Corpincludes INL so long as:(i) News Corp continues to hold at least 40%of INL’s outstanding ordinary shares;(ii) no other party (acting alone or inconcert) own more ordinary INL shares thanNews Corp; and(iii) no other party (acting alone or inconcert) exercises any greater effectivecontrol than News Corp over the affairs,policies and governing body of INL.In connection with the Bank Facility, theCompany entered into a Debenture Deed inMarch 1997.

2. Other ContractsRugbyA sublicensing agreement between theCompany and News Corp dated 25 June1996 which grants the Company certainlong term exclusive rights in relation to all(subject to some exceptions, including theRugby World Cup) top level rugby unionmatches played in New Zealand, SouthAfrica or Australia.

UnderwritingIt is intended that the Global Offering will befully underwritten. The actual number ofordinary shares underwritten in each of theNew Zealand, United States andInternational Offerings will depend on thenumber of ordinary shares (if any) allocatedat pricing to each of those Offerings by theCompany, in association with the GlobalCoordinator, after consultation with the USRepresentative and the New Zealand LeadManager. Following allocation, the Companyand the Selling Shareholder will enter intoUnderwriting Agreements in respect of theordinary shares allocated to each offering.

3. Market StabilisationIn connection with the Global Offering,the Underwriters may over-allot or effecttransactions that stabilise or maintainthe market price of Sky’s ordinary shares orother securities linked to the sharesat levels which are higher than mightotherwise prevail in the open market.Such transactions may be effected on theNZSE, NASDAQ National Market or otherwiseand, if commenced, may be discontinued atany time.

4. Other InformationNew Zealand Stock Exchange WaiversThe Company has applied for waivers fromNZSE Listing Rules 5.2.4, 7.11.1 and 11.2.4to permit conditional trading of the ordinaryshares on the NZSE pending completion ofthe issue of the ordinary shares, and theissue of share certificates, as contemplatedin the Registered Prospectus. The Company has also applied for and beengranted waivers from Listing Rules 9.1.1 (b)and 9.2 on the following basis:(a) Programming Arrangements:

(i) Rule 9.1.1 (b) has been waived inrelation to the acquisition and sale ofprogramming rights.

(ii)Rule 9.2 has been waived in respectof all related party programmingtransactions on the condition that theNZSE must have from all Sky directorsand any shareholder whoserelationship or status would otherwiseattract application of Listing Rule 9.2(presently assumed to be INL andTVNZ) enforceable writtenundertakings to the NZSE, for thebenefit of the NZSE and Skyshareholders other than those whowould be affected Related Parties ifListing Rule 9.2 had not been waived(a “relevant Related Party”) that:

– they would not seek to recover costsagainst any shareholder which seeksremedies under any of sections 169,171, 172 or 174 of the Companies Act1993 in respect of any Related Partyprogramming transaction which wouldhave been affected by Listing Rule 9.2if it had not been waived (a “RelatedParty programming transaction”)where action or application to theCourt is not vexatious or frivolous andhas followed consultation with Sky’sChairman or, if the Chairman considersit necessary, other directors who arenot associated with the relevantRelated Party;

– they submit to the jurisdiction of theNew Zealand Courts in respect ofthose remedies; and

– they will not oppose an application bya shareholder under section 173 ofthe Companies Act 1993 to bring arepresentative action in pursuit of anyof the remedies contemplated by thoseprovisions.

For the purposes of those undertakings:(i) section 169(2) of the Companies Act

1993 would be reversed in effect, toacknowledge that an action could bebrought in the circumstancesdescribed in that subsection; and

(ii)the duties described in paragraphs(d), (e), (h) and (i) of section 169(3)of the Companies Act 1993 are owedto shareholders as well as to theCompany.

(b) Other Transactions: Listing Rules9.1.1(b) and 9.2 are waived in relation totransactions other than Related Partyprogramming transactions on the basis thatthe threshold test in both Rules 9.1.1(b) and9.2 is based not on shareholders’ funds ofSky but on the average market capitalisationof Sky over all the Business Days (as definedin the Listing Rules) in the month endingbefore the month in which the transactionbecomes a commitment (whether conditionalor not) of Sky.As conditions of the waivers of Listing Rule9.2 granted in Sky’s favour, and to assist inprompt investigation and resolution ofcomplaints or allegations about transactionsexempted by the waivers and to protect thereputation for integrity of the NZSE, andlisted companies, notwithstanding thewaivers:• The persons giving the undertakings

referred to in paragraph (a)(ii) above willfacilitate and pay for the appointmentand work of an independent personselected by the NZSE’s Panel to be anappraiser (as if appointed under ListingRule 1.2), to report to the NZSE’s Panelin respect of any such transactions theNZSE’s Panel considers should be so

investigated following its receipt of anybona fide complaint or allegation aboutsuch transaction.

• The NZSE’s Panel will, before procuringany such appointment consult, with Sky’sChairman or other directors as proposedabove.

• The appraisal of the transactions shall,unless the appraiser advises that itwould be unnecessary or undesirablefrom the point of view of the NZSE’sPanel or complainants have regard to themeasures of “transfer pricing” used orwhich may be used by the InlandRevenue Department to analysetransactions within transnational groupsof companies. The persons giving theundertakings for this purpose mustundertake to use their best endeavoursto procure for the appraiser allinformation relevant to the inquiry.

It is also a condition of the waivers fromRules 9.1.1 (b) and 9.2 that the RegisteredProspectus fairly describes together in atleast one place:• the arrangements regarding Related

Party programme acquisitions;• the potential significance of Related

Party transactions to Sky;• any means by which shareholders may

assess, or derive assurance of the arms-length nature of the pattern of risks andreturns under these arrangements;

• the waivers and conditions; andthe attention of readers must be drawn tothis disclosure and the non-standard natureof Sky in a prominent place at the front ofthe Registered Prospectus.Upon a breach of conditions, unless theNZSE, with actual notice of the breach,confirms the waivers, they will lapse and Skywould become subject to the Listing Rules inthe ordinary way. A breach would not on itsown terminate listing unless that wasexpressly decided by the NZSE.

ExplanationIn relation to the waivers of Rules 9.1.1 (b)and 9.2 described above it should benoted that:• it is probable that Sky will frequently

enter into transactions, some significant,with Related Parties, since it is likelythat Telecom, TVNZ, INL and News Corp(and possibly other companies withinterests in broadcasting andtelecommunications) will retain someassociation with Sky either throughcommon directors or through some crossshareholding.

• based on the current shareholdings inSky and the director appointment rightsunder the Company’s constitution, no oneshareholder has the ability to appoint amajority of Sky’s directors. As a result, inrelation to any significant transactionbetween Sky and a Related Party, therewill always be directors who have notbeen appointed by the Related Party inquestion who can consider the matter(based on the current shareholdings andfollowing the Global Offering). Directorsappointed by the Related Party or whoare otherwise interested in thetransaction with the Related Party cannotvote on that transaction.

• while the conditions which apply to allwaivers are complied with, the waiverswill remain in force and are not able tobe revoked.

Restriction on Sale of SharesThe Company, the Selling Shareholder andthe other existing shareholders have agreed,and directors and executive officers of theCompany granted options or allocatedordinary shares under the Company’s equityparticipation plan are required to agree as acondition to the exercise of those options orthe acquisition of those ordinary shares,that during the period beginning from thedate on which the final offer price is set andcontinuing to and including the date 180days after the date on which the final offerprice is set not to offer, sell, contract to sellor otherwise dispose of any securities of theCompany which are substantially similar tothe ADSs or the ordinary shares offeredhereby or securities convertible into orexchangeable into, securities which aresubstantially similar to the ADSs or theordinary shares offered hereby (other than,in the case of the Company, issuance ofordinary shares by the Company uponexercise of outstanding options or to thetrust pursuant to its equity participationplan) without the prior written consent ofthe Global Coordinator, except for the ADSsand ordinary shares offered in connectionwith the concurrent US, NZ and InternationalOfferings; provided, however, that anexisting shareholder may sell ordinaryshares to another existing shareholderprovided that as a result of that sale, nochange in control of the Company occurs.

“Conditional” and “Delayed Delivery”DesignationsInitial quotation on the NZSE is anticipatedto occur on Wednesday, 10 December 1997(New Zealand time) (being the day after thefinal offer price is set). Therefore trading inthe ordinary shares may take place on theNZSE during the period between the finaloffer price being set and completion of theissue and sale of ordinary shares ascontemplated by the UnderwritingAgreements. If the Underwriting Agreementsare terminated during this period then theGlobal Offering will be cancelled andallocations of ordinary shares will becancelled and of no effect.The NZSE will recognise that trading on theNZSE is being effected on a conditionalbasis in the period until closing occursunder the Underwriting Agreements by thedesignation “conditional delayed delivery”and the shares will trade with the symbol“CDD”. If the Global Offering is cancelledduring the “conditional delayed delivery”period, members of the NZSE will berequired to refund all purchase monies tothose clients, customers and other persons.The “conditional delayed delivery” or “CDD”designation will cease at the time the NewZealand Lead Manager notifies the NZSEthat the purchase monies for the ordinaryshares and ADSs have been paid to theCompany and the Company has issuedordinary shares and ADSs on closing inaccordance with the UnderwritingAgreements. Following that notification,the ordinary shares will be quoted on a“delayed delivery” basis until the date threedays after the New Zealand Lead Managernotifies the NZSE that share certificateshave been dispatched to successfulapplicants (expected to be no later than16 December 1997).

Other informationOther informationOther information

“analogue” broadcasttechnologythe technology by whichinformation (i.e. picture, soundand data) is transmitted bymeans of a continually variablewave form. The signals are lessefficient in the use ofbandwidth than digitaltechnology.“Banking Facility”refers to a $250 millionrevolving credit facility witha syndicate of fiveinternational banks.“BCL”Broadcast CommunicationsLimited, a wholly ownedsubsidiary of TVNZ.“BSkyB”British Sky Broadcasting Groupplc and, where applicable, itssubsidiary and associatedcompanies.“churn”refers to the number ofresidential subscribers thathave terminated theirsubscriptions, net of anyexisting subscribers whotransfer their service toanother residence, during aspecified period, as aproportion of the average ofthe number of subscribers atthe beginning of the specifiedperiod and the end of thespecified period.“decoder”a domestic or commercial unitused to decrypt an encryptedbroadcast signal.“digital” broadcast technologyis the method by whichinformation (i.e. picture, soundand data) is transmitted byconverting it to a digital datastream and compressing it byremoving redundantinformation. By removingrepeated information, digitalbroadcast technology is muchmore efficient than analoguebroadcast technology so thatseveral channels can be

broadcast in the bandwidth orspace normally needed tobroadcast one analoguechannel.“DBS (direct broadcastsatellite)”refers to television broadcastby satellite intended for directreception by the viewer throughuse of a small satellite dish.“free-to-air television”television channels broadcastin an unencrypted form therebyallowing anyone with a tradi-tional television set to receiveand view the broadcast signal.“Global Coordinator” Goldman Sachs International.“Global Offering”the offer of 56,500,000ordinary shares in a combinedoffering in New Zealand, theUnited States of America andcountries other than NewZealand and the United Statesof America (which may beincreased by up to 15% if theUnderwriters exercise theirover-allotment options).“HKP Partners”refers to a partnership betweensubsidiaries of AmeritechCorporation, Bell AtlanticCorporation, Time Warner andTCI Development Corporation.“INL”refers to Independent News-papers Limited and itssubsidiary and associatedcompanies.“International Lead Manager”Goldman Sachs International.“International Offering”the offer of ADSs and/orordinary shares to be madeoutside New Zealand and theUnited States of America bythe Company and the SellingShareholder.“near video-on-demand”a form of PPV which involvesstaggered broadcasts of thesame programme at frequentintervals on different channels,thereby giving the viewera choice of when to viewa programme.

“News Corp”refers to the News CorporationLimited and, where applicable,its subsidiaries and associatedcompanies.“New Zealand Lead Manager”Ord Minnett Securities-NZ-Limited.“NZ Offering”the offer of ordinary shares tobe made in New Zealand by theCompany and the SellingShareholder.“NZSE”refers to the New ZealandStock Exchange.“pay television”a generic term used todescribe television servicesfor which a customer pays afee (excluding licence feeslevied by governments).Fees may take many formssuch as periodic subscriptionfees or PPV.“penetration”refers to the percentage ofhouseholds which are able toreceive Sky's services thatactually subscribe for thoseservices.“PPV” or “pay-per-view”a generic term used todescribe a pay televisionsystem that allows viewersto pay to watch a specificprogramme at a pre-determined time.“Registered Prospectus”refers to the prospectus dated19 November 1997, a copy ofwhich, signed by or on behalfof the Directors of Sky and theSelling Shareholder and havingendorsed thereon or attachedthereto the consents,documents, information,certificates and other mattersrequired to be so endorsedor attached by Section 41of the Securities Act 1978,has been delivered to theRegistrar of Companies atAuckland for registration underSection 42 of the SecuritiesAct 1978.“Selling Shareholder”TVNZ Investments Limited

(a wholly owned subsidiaryof TVNZ).“Sky” or the “Company”refers to Sky NetworkTelevision Limited and, whereapplicable, all its subsidiaryand associated companies.“smart card”a credit card sizedelectronic key used with adecoder to decrypt anencrypted television signal.“TAB”refers to the Totalisator AgencyBoard.“TVNZ”refers to Television NewZealand Limited and, whereapplicable, its subsidiary andassociated companies.“UHF (ultra high frequency)”refers to the electromagneticwave frequency intermediatelybetween audio frequencies andinfrared frequenciesparticularly used in thetransmission of television andradio broadcast signals withthe range of 300 to 3,000megahertz. UHF signals decayrapidly after a distance ofapproximately 160 km andrequire line of sight (i.e. areblocked by physicalobstructions).“Underwriting Agreements”the underwriting agreementsin respect of the NZ Offering,US Offering and InternationalOffering.“Underwriters”refers to syndicates lead byGoldman Sachs International,Goldman, Sachs & Co. and OrdMinnett Securities-NZ-Limited.“US Representative”Goldman, Sachs & Co.“US Offering”the offer of ADSs and/orordinary shares to be made inthe United States of America bythe Company and the SellingShareholder.

31S K Y N E T W O R K T E L E V I S I O N

GlossaryGlossaryGlossary

32 S K Y N E T W O R K T E L E V I S I O N

1.Insert details• Insert full name(s),

address and telephone

number.

• Insert number of ordinary

shares applied for. Note

that the minimum number

of ordinary shares that

can be applied for is

1,000 and thereafter in

multiples of 200 ordinary

shares.

• Insert $ amount.

• Insert IRD Number.

• Tick relevant box for

Resident Withholding Tax

Exemption Notice.

• Insert bank account

number (and attach bank

deposit form) or tick box

if dividends (if any) are to

be paid by cheque.

• Date the form.

• Sky's subscribers should

insert their subscriber

number. Subscribers can

find their subscriber

number on the top right

hand corner of their

monthly Sky account or for

those subscribers using

direct debit by calling Sky

on 0800 759 759.

2.Signing• Natural persons must

sign themselves or by an

Attorney (see below).

• Companies or other

bodies corporate must

sign in the same way as

they would sign a formal

deed or other formal legal

document.

• All trustees must sign a

trust application.

• All partners and joint

applicants must sign a

partnership or joint

application.

Attorneys must complete

the Certificate of Non-

Revocation on the

Application Form and

an original or certified

copy of the Power of

Attorney must accompany

the Application Form.

Originals will be returned.

3.Payment

• Payment must accompany

the Application Form.

• Payment must be in

New Zealand dollars for

immediate value – post

dated cheques will not be

accepted.

• Cheques must be made

out in favour of “Sky

Network Television

Limited – Trust Account”

and crossed “Not

Transferable”.

• Institutional Investors

must pay in immediately

available cleared funds,

unless otherwise agreed in

writing by the New Zealand

Lead Manager.

4.Closing Dates

New Zealand Retail

Investors

5.00 pm Friday,

5 December 1997

(New Zealand time)

Institutional Investors

3.00 pm Monday,

8 December 1997

(New Zealand time)

5.Delivery

• Applications cannot be

revoked or withdrawn.

Application Forms may be

mailed or delivered (with

payment) to the following

addresses:

Sky Network Television

Limited

C/- Registry Managers

(New Zealand) Limited,

Level 3, 277 Broadway,

(Private Bag 92-119),

Newmarket,

Auckland

Ord Minnett Securities-NZ-

Limited

Level 10, Arthur Andersen

Tower, National Bank

Centre,

205 Queen Street,

(PO Box 5092, Wellesley

Street), Auckland

Freephone: 0800 653 600

The office of any member

of the New Zealand Stock

Exchange.

Application Forms which

are not lodged with the

Registrar must be lodged

in time to enable them to

be forwarded to the

Registrar before the

relevant closing time.

Applications under the

NZ Offering which are

received by the Registrar

after the relevant closing

time will not be accepted.

How to ApplyHow to ApplyHow to Apply

This Application Form is for ordinary shares in Sky Network

Television Limited offered under the Investment Statement dated

19 November 1997 accompanying this form. Ordinary shares are

offered at a price of between $2.20 and $2.40 per ordinary share.

For further details, including Application Instructions, see page 32

of the Investment Statement and the reverse of this form.

FOR INSTRUCTIONS ON HOW TO COMPLETE AND DELIVER THIS FORM SEE THE APPLICATION INSTRUCTIONS ON PAGE 32 OF THE INVESTMENT STATEMENT.

1. Investor Details (Block Letters Please)

Mr/Mrs/Miss/Ms Surname or Corporate Name First Names

Mr/Mrs/Miss/Ms Surname or Corporate Name First Names

Postal Address Postcode

Telephone Numbers Home Business

2. (A) Investment DetailsMinimum investment for 1,000 ordinary shares, and thereafter in multiples of 200 ordinary shares.

Ordinary shares applied for: Number x Price $2.40 = Amount $

* Make cheques payable to “Sky Network Television Limited – Trust Account” and cross “Not Transferable”

(B) Sky SubscribersThe Company intends that, in the event of over-subscription of the Global Offering, its subscribers will, to the extent possible, receive preferential treat-

ment if balloting is required. To be eligible for preferential treatment, subscribers must insert their Sky subscriber number below. Subscribers can find their

subscriber number on the top right hand corner of their monthly Sky account or for those subscribers using direct debit by calling Sky on 0800 759 759.

(C) IRD Number

(D) Registry Managers’ Shareholder Number (if known)

(E) Are You Currently Holding a RWT Exemption Certificate? Yes No

If yes, please attach a copy.

3. Method of Payment of Dividends (if any) ✓

Direct credit to my bank account number Bank Branch

Please attach a bank deposit form.

OR Pay by cheque to my postal address as stated above.

4. I/We hereby offer to subscribe for the number of ordinary shares shown above at a price of up to $2.40 for each ordinary share upon the terms

and conditions set out in the Investment Statement, Registered Prospectus and the reverse of this Application Form and acknowledge that I/we are

legally bound by any decision of the Company to allocate to me/us the ordinary shares applied for or any lesser number and I/we agree to be bound

by the Company’s constitution.

Signature(s) of applicant(s) (Companies must execute as for a deed. Attorneys: Please complete and sign the certificate on the back of this form).

Signature Signature Date

Signature

THIS APPLICATION FORM MUST NOT BE ISSUED, CIRCULATED OR DISTRIBUTED UNLESS ACCOMPANIED BY THE INVESTMENT STATEMENT.

Application ApplicationApplication FormFormForm

33S K Y N E T W O R K T E L E V I S I O N

Broker’sStamp

1. By signing this ApplicationForm, the applicantacknowledges that this formwas distributed with theInvestment Statement dated19 November 1997 and theapplicant offers to subscribefor ordinary shares upon andsubject to the terms andconditions set out in theInvestment Statement,Registered Prospectus andApplication Form. The applicantalso acknowledges that theywere aware that the InvestmentStatement contains summaryinformation in respect of theoffering of ordinary shares inSky Network Television Limited,that further information wasavailable in the RegisteredProspectus and that theapplicant was entitled to and,if sought, obtained a copy ofthe Registered Prospectus.2. An application cannot bewithdrawn or revoked.3. Upon receipt, applicationmonies will be banked pendingallocation of ordinary shares.The banking of such moniesshall not constitute allocationof any of the ordinary shares.The Company will allocateordinary shares as soon aspracticable after the lastClosing Date of the GlobalOffering. An applicant does nothave any interest in, or right orentitlement to, any ordinaryshares unless and until, andthen only to the extent that,ordinary shares are allocatedto that applicant by theCompany.4. If the aggregate number ofordinary shares applied forexceeds the number of thoseoffered under the NZ Offering,then applicants may beallocated fewer ordinary sharesthan the number applied for.The number of ordinary sharesallocated to an applicant willbe determined by the Companyin consultation with the NewZealand Lead Manager and theGlobal Coordinator and without

giving any reason.5. Sky Network TelevisionLimited also reserves the rightto reject or accept anyapplication in whole or in partwithout giving any reason.6. Ordinary share certificateswill be despatched as soon asis practicable after allocation,but in any event not later than5 working days after closing inaccordance with theUnderwriting Agreements.7. All interest earned onapplication monies held shallbe for the benefit of theCompany, subject to theSecurities Act 1978.8. Applications must conformwith the ApplicationInstructions on page 32 of theInvestment Statement.9. In the case of jointapplicants only the address ofthe first named of the jointapplicants will be recorded bythe Registrar and all dividendpayments, notices, etc., will besent to that address.10. Expressions defined in theInvestment Statement and/orRegistered Prospectus have thesame meanings in thisApplication Form.This Application Formis governed by NewZealand law.11. Applications under the NZOffering which are received bythe Registrar after the relevantclosing time will not beaccepted.

Certificate ofNon-Revocation ofAttorney

I, (Name of Attorney)

of(Address and Occupation of Attorney)

hereby certify that:

1. By a Power of Attorney

dated the day

of 19

(Name, Occupation and Address of person forwhom Attorney is signing)

(“the Donor”) appointed mehis/her/its Attorney on theterms and conditions set out inthe Power of Attorney;2. I have executed theapplication for ordinary sharesprinted on the face of this formas Attorney pursuant to thepowers conferred on me by thatPower of Attorney.3. At the date of thiscertificate I have not receivedany notice or information of therevocation of that Power ofAttorney by the death ordissolution of the Donor orotherwise.

Signed at

this day

of 1997

Signature of Attorney

IMPORTANT: An original orcertified copy of the relevantPower of Attorney must belodged with this ApplicationForm. Originals will bereturned.

Application TermsApplication TermsApplication Terms

34 S K Y N E T W O R K T E L E V I S I O N

This Application Form is for ordinary shares in Sky Network

Television Limited offered under the Investment Statement dated

19 November 1997 accompanying this form. Ordinary shares are

offered at a price of between $2.20 and $2.40 per ordinary share.

For further details, including Application Instructions, see page 32

of the Investment Statement and the reverse of this form.

FOR INSTRUCTIONS ON HOW TO COMPLETE AND DELIVER THIS FORM SEE THE APPLICATION INSTRUCTIONS ON PAGE 32 OF THE INVESTMENT STATEMENT.

1. Investor Details (Block Letters Please)

Mr/Mrs/Miss/Ms Surname or Corporate Name First Names

Mr/Mrs/Miss/Ms Surname or Corporate Name First Names

Postal Address Postcode

Telephone Numbers Home Business

2. (A) Investment DetailsMinimum investment for 1,000 ordinary shares, and thereafter in multiples of 200 ordinary shares.

Ordinary shares applied for: Number x Price $2.40 = Amount $

* Make cheques payable to “Sky Network Television Limited – Trust Account” and cross “Not Transferable”

(B) Sky SubscribersThe Company intends that, in the event of over-subscription of the Global Offering, its subscribers will, to the extent possible, receive preferential treat-

ment if balloting is required. To be eligible for preferential treatment, subscribers must insert their Sky subscriber number below. Subscribers can find their

subscriber number on the top right hand corner of their monthly Sky account or for those subscribers using direct debit by calling Sky on 0800 759 759.

(C) IRD Number

(D) Registry Managers’ Shareholder Number (if known)

(E) Are You Currently Holding a RWT Exemption Certificate? Yes No

If yes, please attach a copy.

3. Method of Payment of Dividends (if any) ✓

Direct credit to my bank account number Bank Branch

Please attach a bank deposit form.

OR Pay by cheque to my postal address as stated above.

4. I/We hereby offer to subscribe for the number of ordinary shares shown above at a price of up to $2.40 for each ordinary share upon the terms

and conditions set out in the Investment Statement, Registered Prospectus and the reverse of this Application Form and acknowledge that I/we are

legally bound by any decision of the Company to allocate to me/us the ordinary shares applied for or any lesser number and I/we agree to be bound

by the Company’s constitution.

Signature(s) of applicant(s) (Companies must execute as for a deed. Attorneys: Please complete and sign the certificate on the back of this form).

Signature Signature Date

Signature

THIS APPLICATION FORM MUST NOT BE ISSUED, CIRCULATED OR DISTRIBUTED UNLESS ACCOMPANIED BY THE INVESTMENT STATEMENT.

Application ApplicationApplication FormFormForm

35S K Y N E T W O R K T E L E V I S I O N

Broker’sStamp

1. By signing this ApplicationForm, the applicantacknowledges that this formwas distributed with theInvestment Statement dated19 November 1997 and theapplicant offers to subscribefor ordinary shares upon andsubject to the terms andconditions set out in theInvestment Statement,Registered Prospectus andApplication Form. The applicantalso acknowledges that theywere aware that the InvestmentStatement contains summaryinformation in respect of theoffering of ordinary shares inSky Network Television Limited,that further information wasavailable in the RegisteredProspectus and that theapplicant was entitled to and,if sought, obtained a copy ofthe Registered Prospectus.2. An application cannot bewithdrawn or revoked.3. Upon receipt, applicationmonies will be banked pendingallocation of ordinary shares.The banking of such moniesshall not constitute allocationof any of the ordinary shares.The Company will allocateordinary shares as soon aspracticable after the lastClosing Date of the GlobalOffering. An applicant does nothave any interest in, or right orentitlement to, any ordinaryshares unless and until, andthen only to the extent that,ordinary shares are allocatedto that applicant by theCompany.4. If the aggregate number ofordinary shares applied forexceeds the number of thoseoffered under the NZ Offering,then applicants may beallocated fewer ordinary sharesthan the number applied for.The number of ordinary sharesallocated to an applicant willbe determined by the Companyin consultation with the NewZealand Lead Manager and theGlobal Coordinator and without

giving any reason.5. Sky Network TelevisionLimited also reserves the rightto reject or accept anyapplication in whole or in partwithout giving any reason.6. Ordinary share certificateswill be despatched as soon asis practicable after allocation,but in any event not later than5 working days after closing inaccordance with theUnderwriting Agreements.7. All interest earned onapplication monies held shallbe for the benefit of theCompany, subject to theSecurities Act 1978.8. Applications must conformwith the ApplicationInstructions on page 32 of theInvestment Statement.9. In the case of jointapplicants only the address ofthe first named of the jointapplicants will be recorded bythe Registrar and all dividendpayments, notices, etc., will besent to that address.10. Expressions defined in theInvestment Statement and/orRegistered Prospectus have thesame meanings in thisApplication Form.This Application Formis governed by NewZealand law.11. Applications under the NZOffering which are received bythe Registrar after the relevantclosing time will not beaccepted.

Certificate ofNon-Revocation ofAttorney

I, (Name of Attorney)

of(Address and Occupation of Attorney)

hereby certify that:

1. By a Power of Attorney

dated the day

of 19

(Name, Occupation and Address of person forwhom Attorney is signing)

(“the Donor”) appointed mehis/her/its Attorney on theterms and conditions set out inthe Power of Attorney;2. I have executed theapplication for ordinary sharesprinted on the face of this formas Attorney pursuant to thepowers conferred on me by thatPower of Attorney.3. At the date of thiscertificate I have not receivedany notice or information of therevocation of that Power ofAttorney by the death ordissolution of the Donor orotherwise.

Signed at

this day

of 1997

Signature of Attorney

IMPORTANT: An original orcertified copy of the relevantPower of Attorney must belodged with this ApplicationForm. Originals will bereturned.

Application TermsApplication TermsApplication Terms

36 S K Y N E T W O R K T E L E V I S I O N

D I R E C T O R S

CL Heatley (Chairman)

19 O'Neills Avenue

Takapuna

Auckland

AB Downey, CBE

11 Hopkins Crescent

Kohimarama

Auckland

JM Robson

71 Messines Road

Karori

Wellington

RS Neville

12 McFarlane Street

Mt Victoria

Wellington

SH Chisholm

21 Hyde Park Square

London W2

United Kingdom

JB Hart, ONZM

3 Lammermoor Drive

St Heliers

Auckland

RW Bryden

20 Chatsworth Road

Silverstream

Wellington

TM Farmer

76 Paritai Drive

Orakei

Auckland

RP Meo

108 Orakei Road

Remuera

Auckland

R E G I S T E R E D O F F I C E

10 Panorama Road

Mt Wellington

Auckland

N E W Z E A L A N D L E A D M A N A G E R

Ord Minnett Securities-NZ-Limited

Freephone: 0800 653 600

Auckland

Level 10, The National Bank Centre

205 Queen Street

PO Box 5092, Wellesley Street

Wellington

Level 14, City Tower

95 Customhouse Quay

PO Box 290

Christchurch

Level 17, 754 Colombo Street

PO Box 13186, Armagh Street

G L O B A L C O O R D I N A T O R

Goldman Sachs International

Peterborough Court

133 Fleet Street

London, EC4A 2BB

England

S H A R E R E G I S T R A R

Registry Managers (New Zealand)

Limited

Level 3, 277 Broadway

Private Bag 92-119

Newmarket

Auckland

A U D I T O R T O T H E C O M P A N Y

Price Waterhouse

Price Waterhouse Building

66 Wyndham Street

Auckland

S O L I C I T O R S T O T H E C O M P A N Y

Buddle Findlay

Stock Exchange Centre

191-201 Queen Street

Auckland

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