SKY Network Television : 2016 Appendix 4E Release to ASX

Appendix 4E Release to ASX under rule 4.3A Full Year Information for Sky Network Television Limited for the year ended 30 June 2016 CONTENTS

Results for announcement to the market

Results commentary

Consolidated financial statements

Independent audit opinion

Directors declaration

Other information

Results for announcement to market Sky Network Television Limited Year ended on 30 June 2016 (In NZD)

Total operating revenues of $928,200,000 have increased $675,000 from the previous year, which is a 0.1% increase.

Net profit of $147,123,000 has decreased $24,641,000 from the previous year, which is a 14.4% decrease.

Net profit after tax attributable to equity holders of $146,718,000 has decreased $24,863,000 from the previous year, which is a 14.5% decrease.

The results include one off costs of $13,400,000 incurred in relation to the planned acquisition of Vodafone NZ. Excluding these one off costs, SKY's underlying net profit was $157,027,000, a 8.6% decrease from the previous year.

Dividends	Amount per security	Franked amount per Security
Final Dividend (payable September 2016) Interim Dividend (paid March 2016)	15.0 cents 15.0 cents	N/A N/A
Final Dividend (paid September 2015)	15.0 cents	N/A
Previous corresponding period - Interim Dividend (paid March 2015)	15.0 cents	N/A
Previous corresponding period - Final Dividend (paid September 2014)	15.0 cents	N/A
Record date for determining entitlements to the Final Dividend	9 September 2016

Brief explanation of any figures reported above, refer attached results commentary.

SKY NETWORK TELEVISION LIMITED

SUMMARISED ANNUAL REPORT 2016

2

CHIEF EXECUTIVE'S LETTER WE NEED TO ENSURE THAT SKY CONTINUES TO BE IN THE RIGHT PLACE AT THE RIGHT TIME.

Dear shareholders

This is the 15th CEO letter that has been my pleasure to send to you. My goal, as always, is to write this letter as if it was going to an overseas shareholder whose only knowledge about the company was gleaned from this annual report.

The financial information contained in this report is quite detailed but still only gives you a financial snapshot of the business. In this letter I try to keep you up to date with the financial and

non-financial trends I am seeing.

SKY is a multi-platform entertainment company. We deliver a wide range of content every day to our customers, including movies, television series, music, sports, documentaries, news and much more.

INDUSTRY DISRUPTION

The opening topic in each of my last two letters has centered on the

ongoing change in the media industry. When I joined SKY in 1991 the three nationwide Free to Air channels (FTA) did not start their programing day until 3pm. Video stores renting out "videos" were everywhere and jam packed on Friday and Saturday nights. Now we

have numerous nationwide and regional FTA channels which schedule content 24 hours a day, and any number of online options. I cannot remember the last time I saw a Blockbuster store or a VCR machine for sale. Back in 1991, SKY was in the right place at the right time as New Zealanders looked for more options than what normal FTAs could offer.

We need to ensure that SKY continues to be in the right place at the right time. Two years ago if you asked me how SKY was doing I would have said we have the right content mix for New Zealand and the best delivery platform for the majority of New Zealand. My biggest concerns would have been the new business models that the roll out of the Ultra-Fast Broadband (UFB) would bring. In fact with 4G we started seeing a younger generation consuming more video on their mobile devices and telecommunications companies entering the content game. These

firms were offering "triple play options" of voice, internet and video content. And more worrisome some telecommunication firms were acquiring content and giving it

away to drive data usage of their broadband customers.

PENDING MERGER

After much debate at Board level we determined the best option for SKY's future was an amalgamation with Vodafone New Zealand. I am pleased many of you felt the same way with 99% of voting shareholders agreeing to the decision. The shareholders agreed to increase SKY's outstanding shares from 397 million to 798 million and using these additional shares as well as cash to buy Vodafone New Zealand from Vodafone Group Plc. The result will have Vodafone Group Plc being a 51% owner of the merged companies of SKY and Vodafone New Zealand.

There are still two hurdles to clear. We need to get clearance from the Commerce Commission and the

Overseas Investment Authority, a date for a Commerce Commission decision has been set for 11 November this year.

I think it is our best option. As I will discuss later, in the last few years the roll out of UFB and changing demographics have generated the launch of numerous new business models. These changes have challenged all incumbent media players both in New Zealand and the rest of the world. This merger will give