APN announces new CEO and Board changes

APN NEWS & MEDIA LIMITED ANNOUNCES

APPOINTMENT OF NEW CEO AND BOARD CHANGES

Ticker: (Bloomberg) INM.ID/ INM.LN and (Reuters) INME.I/ INME.L

Dublin/London 14 October 2010: APN News & Media Limited ['APN'], in which Independent News & Media PLC ['INM' or the 'Group'] has a 31.6% shareholding, today announced the appointment of a new Chief Executive Officer and certain other Board changes. These changes fulfil a commitment given by APN at its Annual General Meeting in April 2010 that the APN Board would evolve and develop in a manner that more appropriately reflects all APN shareholders.

New Chief Executive Officer of APN

Mr. Brett Chenoweth, aged 41, has been appointed as the new Chief Executive Officer of APN, replacing Brendan Hopkins, who will retire on 31 December 2010. Brett, whose appointment is effective on January 1, 2011, has had a distinguished, varied and successful career with a proven track record in media, communications and technology. The appointment will serve to drive APN's expansion of its multi-media and integrated audiences in both existing and new markets. Brett is currently Managing Director and Head of Asia-Pacific for The Silverfern Group, a New York-based specialist merchant bank. Brett has also held senior strategy, business development and operational roles at Telecom New Zealand, ecorp, ninemsn and Village Roadshow Pictures. He is also a director and founder of Gizmo Corporation, a leading Australian IT services company.

Commenting on this appointment, APN Chairman Gavin O'Reilly said:

"Brett's experience in growing content-based businesses will enable APN to accelerate efforts to serve its high value audiences with an expanded range of content and services. He will also be focused on deploying technology enablers that drive improved returns for marketers eager to reach APN's audiences on all platforms.

"We believe Brett has the right blend of operational and strategic experience required to lead APN's expansion of its multi-media and integrated audiences, in both new and existing markets. He also brings the high degree of intellect, energy and vigour we believe necessary to ensure APN is in a position to prosper in a dynamic media environment."

APN Directorate Changes

APN also announced the appointment of Mr. John Harvey as an independent, non-executive Director, whose appointment will take effect from 1 January 2011. John, aged 58, is the former senior partner, managing partner Auckland and member of the governance board of PricewaterhouseCoopers New Zealand.

Separately, in addition to the retirement of Brendan Hopkins from the Board as and from 31 December 2010, APN announced that Donal Buggy and Cameron O'Reilly will retire from the APN Board on the same date.

Commenting on these changes, APN Chairman Gavin O'Reilly said:

"These Board changes ensure that APN has a smaller Board comprising a majority of independent non-executive directors with a strong blend of media and other business experience to support Brett's strategy for APN in a constantly evolving media environment."

Once these appointments and retirements are effected, the APN Board will consist of the following nine directors - Gavin O'Reilly (Chairman), Ted Harris (Vice-Chairman), Brett Chenoweth, Pierce Cody, Peter Cosgrove, Vincent Crowley, John Harvey, Kevin Luscombe and John Massland.

Impact on INM

The changes to the APN Board will have no impact on INM's shareholding in APN, which will remain at 31.6%, but will, as further explained below, require changes in the accounting treatment of INM's shareholding in APN, such that APN will no longer be consolidated in INM's Group financial statements, with effect from 31 December 2010. INM's exposure to Australasia and the diversification that it brings will be unaffected and this accounting change will have no impact on INM's bank covenants.

INM has a successful association with APN extending back over 20 years and continues to value the exposure to the Australasian economy that its investment in APN gives it. INM views its shareholding in APN as a strategic and valuable holding and it intends remaining as a key shareholder in APN, committed to growing the APN businesses in a manner that adds value for all APN shareholders.

Future Accounting Implications

Under accounting rules (IAS 27R & IAS 28), while INM's share of APN's Net Profit will remain the same, INM will no longer account for APN as a subsidiary undertaking after 31 December 2010 because, following the APN Board changes, at that date, directors who are representatives of INM will no longer be the majority on the Board of APN. Therefore, APN will be accounted for as an associate undertaking in the INM Group financial statements from 1 January 2011. This change in accounting treatment will result in some line item classification changes in INM's Group financial statements in respect of the way INM reports the results of its investment in APN (as explained further below). However, importantly, as these changes have no net impact, INM's share of APN's Net Profit will remain the same both before and after these accounting changes.

The line item classification changes to INM's Group Income Statement (which will only impact from 2011 onwards) resulting from the change in accounting for APN from a subsidiary to an associate will be to reduce INM's reported Revenue, Operating Profit and Profit Before and After Tax. However, excluding exceptionals (which will include a fair value and cumulative translation adjustment for INM's holding in APN), the Profit Attributable to Equity Holders of the Parent (i.e. Net Profit) and Earnings Per Share will be the same, under either subsidiary accounting or associate accounting, because there is no change to INM's shareholding and economic interest in APN.

There will also be line item classification changes to the INM Group Balance Sheet (as at 31 December 2010) and Group Cash Flow Statement. These changes will reflect the deconsolidation of APN's reported figures (as adjusted by consolidation adjustments required by INM's accounting policies under IFRS as adopted by the European Union) and the deconsolidation of INM's non-controlling interest relating to APN, as well as the reporting of APN as an associate. Importantly, INM's Net Debt will be significantly reduced (for example, Net Debt at INM's last reported date of 30 June 2010 would have been €543.2 million, if APN had been deconsolidated), which reflects the continuing position that APN's debt has no legal recourse to INM.

Following the APN Board changes and INM's change in accounting treatment of APN, INM will still be a 31.6% shareholder in APN, with its economic exposure to Australasia and the diversification that it brings unaffected. With APN deconsolidated, INM's structure and reporting will be simplified and more transparent. INM's reported Net Debt will be significantly reduced to only recourse debt, while at the same time, INM's cash return from APN continues to be in the form of dividends received on INM's shareholding in APN, which remains unchanged.

By way of an example, Appendix I to this announcement contains an extract from INM's Group Income Statement for the 6 months ended 30 June 2010, with illustrative adjustments to show what the Group Income Statement would look like if APN had been treated as an associate undertaking from 1 January 2010.

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Note Regarding Appendix 1

As explained in this market announcement changes to the APN Board will not take effect until 31 December 2010. However, in Appendix I to this announcement, the 2010 unaudited Group Income Statement for the 6 months ended 30 June 2010, which was prepared under IFRS, has been adjusted on the basis of the notes set out in Appendix 1 to illustrate how the deconsolidation of APN would have affected it had the deconsolidation been effective from 1 January 2010.

This unaudited illustrative financial information has been prepared for illustrative purposes only and does not constitute statutory consolidated financial statements of the Group. Because of its nature, the unaudited illustrative financial information addresses a hypothetical situation, and therefore does not represent what the Group's actual results will be following completion of the deconsolidation of APN.

APPENDIX 1

EXTRACTED ILLUSTRATIVE GROUP INCOME STATEMENT FOR SIX MONTHS ENDED 30 JUNE 2010 (unaudited)

Notes:

1 Adjustments relate to the extraction of APN's reported results previously accounted for by INM as a subsidiary and the inclusion of INM's share of APN's results accounted for as an associate and the related consolidation adjustments required by INM's accounting policies under IFRS as adopted by the European Union.

2 Revenue and Operating Profit of APN per note 3 of INM's 2010 Interim Announcement.

3 Exceptional items do not reflect any fair value and cumulative translation adjustment that will be required to be booked on the remeasurement of our investment in APN to fair value on the date APN moves from being a subsidiary to being an associate.