AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 29, 2005
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 20-F

|_|      REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g)
         OF THE SECURITIES EXCHANGE ACT OF 1934
                                       OR
|X|      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
         OF THE SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004
                                       OR
|_|      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
         THE SECURITIES EXCHANGE ACT OF 1934
         For the transition period from _________ to ___________

                         Commission file number 1-14396

                                 ASIA SATELLITE
                       TELECOMMUNICATIONS HOLDINGS LIMITED
             (Exact Name of Registrant as Specified in Its Charter)

         N/A                                                  Bermuda
(Translation of Registrant's                     (Jurisdiction of Incorporation
     Name Into English)                                   or Organization)
                           17th Floor, The Lee Gardens
                                 33 Hysan Avenue
                                  Causeway Bay
                                    Hong Kong
                                  852-2500 0888
          (Address and Telephone Number of Principal Executive Offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

                                                    Name of Each Exchange
           Title of Each Class                       on Which Registered
           -------------------                       -------------------
   American Depositary Shares                    The New York Stock Exchange
   Common Stock, par value HK$0.10 per share     The New York Stock Exchange*

*  Not for trading, but only in connection with the registration of American
   Depositary Shares. The Common Stock is also listed and traded on The Stock
   Exchange of Hong Kong Limited.

Securities registered or to be registered pursuant to Section 12(g) of the Act:

                                      None
                                (Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act:

                                      None
                                (Title of Class)

Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report.

     As of December 31, 2004, 390,265,500 shares of Common Stock, par value
HK$0.10 per share, were issued and outstanding.

     Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such filing requirements for the
past 90 days. Yes  [X]   No [_]

     Indicate by check mark which financial statement item the registrant has
elected to follow. Item 17 [_]   Item 18 [X]

================================================================================

<PAGE>

                                TABLE OF CONTENTS

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

                                                                            PAGE

   PART I......................................................................1
      Item 1.    Identity of Directors, Senior Management and Advisors.........1
      Item 2.    Offer Statistics and Expected Timetable.......................2
      Item 3.    Key Information...............................................2
      Item 4.    Information on the Company...................................11
      Item 5.    Operating and Financial Review and Prospects.................32
      Item 6.    Directors, Senior Management and Employees...................46
      Item 7.    Major Shareholders and Related Party Transactions............55
      Item 8.    Financial Information........................................57
      Item 9.    Stock Price History..........................................58
      Item 10.   Additional Information.......................................59
      Item 11.   Quantitative and Qualitative Disclosures About Market Risk...61
      Item 12.   Description of Securities Other than Equity Securities.......61

   PART II....................................................................62

      Item 13.   Defaults, Dividend Arrearages and Delinquencies..............62
      Item 14.   Material Modifications to the Rights of Security Holders
                 and Use of Proceeds..........................................62

   PART III...................................................................62

      Item 15.   Controls and Procedures......................................62
      Item 16.   Other Information............................................62

   PART IV....................................................................64

      Item 17.   Financial Statements.........................................64
      Item 18.   Financial Statements.........................................64
      Item 19.   Financial Statements and Exhibits............................64



<PAGE>

                   SUPPLEMENTAL INFORMATION AND EXCHANGE RATES

    All references to the "Company" herein are references to Asia Satellite
Telecommunications Holdings Limited, a Bermuda company incorporated on May 10,
1996, and, unless the context otherwise requires, its subsidiaries. All
references to "AsiaSat" herein are to Asia Satellite Telecommunications Company
Limited, a Hong Kong company and a wholly-owned indirect subsidiary of the
Company and, unless the context otherwise requires, its subsidiaries. Any
discrepancies in any table between totals and sums of the amounts listed are due
to rounding.

    The Company and AsiaSat prepare their financial statements in Hong Kong
Dollars. In this Annual Report references to "US Dollars," "US$" or "$" are to
United States Dollars and references to "Hong Kong Dollars," "HK Dollars" or
"HK$" are to Hong Kong Dollars. Solely for the convenience of the reader, this
Annual Report contains translations of certain Hong Kong Dollar amounts into US
Dollars at specified rates. These translations should not be construed as
representations that the Hong Kong Dollar amounts actually represent such US
Dollar amounts or could be converted into US Dollars at the rates indicated or
at all. Unless otherwise stated, the translations of Hong Kong Dollars into US
Dollars have been made at the rate of HK$7.80 to US$1.00, the approximate rate
of exchange on December 31, 2004. The noon buying rate in New York City for
cable transfers in Hong Kong Dollars as certified for customs purposes by the
Federal Reserve Bank of New York (the "Noon Buying Rate") was HK$7.7723 to
US$1.00 on December 31, 2004. The Noon Buying Rate on May 31, 2005 was HK$7.7788
to US$1.00.

              CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

    This Annual Report on Form 20-F contains certain forward-looking statements.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for certain forward-looking statements. When used in this Annual Report on Form
20-F, the words "estimate," "project," "anticipate," "expect," "intend,"
"believe" and similar expressions are intended to identify forward-looking
statements and information. The Company identifies the following important
factors which could cause its actual results to differ materially from any
results which might be projected, forecast, estimated or budgeted by the Company
in forward-looking information. All of such factors are difficult to predict and
many are beyond the control of the Company. Accordingly, while the Company
believes that the assumptions underlying the forward-looking information are
reasonable, there can be no assurance that such assumptions will approximate
actual experience, and in such event, actual results could differ materially
from the predictions contained in this Annual Report on Form 20-F. These
important factors include, but are not limited to: (i) the continued operation
of the existing in-orbit satellites, (ii) future economic and competitive
conditions in the Asian regional satellite market in which AsiaSat competes,
(iii) the Company's success in obtaining necessary regulatory approvals and
licenses, and (iv) the continued ability of the Company to meet its debt
obligations and fund its capital expenditure programs.

                                     PART I

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS.

    Not applicable.


                                       1
<PAGE>

ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE.

    Not applicable.

ITEM 3.  KEY INFORMATION

                         SELECTED FINANCIAL INFORMATION

    The summary income statement data of the Company for the years ended
December 31, 2002, 2003 and 2004 and the summary balance sheet data of the
Company as of December 31, 2003 and 2004 set forth below are derived from, and
are qualified in their entirety by reference to, the audited consolidated
financial statements of the Company, including the notes thereto, included
elsewhere herein and in "Operating and Financial Review and Prospects." The
summary income statement data for the years ended December 31, 2000 and 2001 and
the summary balance sheet data as of December 31, 2000, 2001 and 2002 set forth
below are derived from audited consolidated financial statements of the Company
not included herein. The consolidated financial statements of the Company are
prepared and presented in accordance with accounting principles generally
accepted in Hong Kong, or Hong Kong GAAP, which differ in certain material
respects from accounting principles generally accepted in the United States, or
U.S. GAAP. Note 31 to the Company's consolidated financial statements contains
descriptions of the significant differences between Hong Kong GAAP and U.S.
GAAP, a reconciliation of net income from Hong Kong GAAP to U.S. GAAP for the
years ended December 31, 2002, 2003 and 2004, and a reconciliation of
shareholders' equity from Hong Kong GAAP to U.S. GAAP as of December 31, 2003
and 2004. In addition, Note 31 to the Company's consolidated financial
statements contains additional disclosures required under U.S. GAAP, which are
not disclosed elsewhere in the notes to the Company's consolidated financial
statements.

<TABLE>
<CAPTION>
                                        -----------------------------------------------------------------------------------
                                           2000           2001           2002           2003          2004            2004
                                           ----           ----           ----           ----          ----            ----
                                            HK$            HK$            HK$            HK$           HK$             US$
                                                  (in millions, except for percentages and per share amounts)
<S>                                      <C>              <C>            <C>            <C>          <C>              <C>
INCOME STATEMENT DATA:
Hong Kong GAAP:
   Revenues ..........................   1,002.9          969.5          950.8          896.2        1,005.0          128.8
   Cost of services ..................    (245.8)        (240.0)        (243.1)        (313.3)        (420.5)         (53.9)
   Administrative expenses ...........     (61.6)         (58.6)         (76.7)         (56.1)        (102.5)         (13.1)
   Profit from operations ............     745.5          687.2          637.4          532.6          504.0           64.6

   Share of results of associates
        (including goodwill
        amortization) ................     (43.9)         (47.5)         (13.7)         (15.6)         (12.4)          (1.6)

   Impairment loss recognized in
        respect of goodwill of
        associates ...................        --           (0.6)            --           (1.9)            --             --

   Profit before taxation ............     656.2          633.6          623.8          512.1          491.6           63.0
   Minority Interests ................        --             --             --             --           (0.1)            --
   Taxation ..........................     (79.9)         (70.6)         (69.1)         (87.6)         (60.5)          (7.8)

   Profit for the year ...............     576.3          563.0          554.7          424.5          431.1           55.3
   Earnings per share
</TABLE>

                                       2
<PAGE>

<TABLE>
<CAPTION>
                                        -----------------------------------------------------------------------------------
                                           2000           2001           2002           2003          2004            2004
                                           ----           ----           ----           ----          ----            ----
                                            HK$            HK$            HK$            HK$           HK$             US$
                                                  (in millions, except for percentages and per share amounts)
<S>                                      <C>              <C>            <C>            <C>          <C>              <C>
      Basic ..........................      1.48           1.44           1.42           1.09           1.10           0.14
      Diluted ........................      1.47           1.44           1.42           1.09           1.10           0.14
   Earnings per ADS
      Basic ..........................     14.77          14.40          14.21          10.88          11.05           1.42
      Diluted ........................     14.73          14.40          14.21          10.88          11.05           1.42
Dividend declared per share:
   Ordinary ..........................      0.20           0.20           0.25           0.32           0.35           0.04
Number of shares outstanding (in
     thousands) ......................   390,266        390,266        390,266        390,266        390,266        390,266
U.S. GAAP:
   Profit for the year ...............     568.1          562.5          538.1          408.3          424.1           54.4
   Earnings per share
      Basic ..........................      1.46           1.44           1.38           1.05           1.09           0.14
      Diluted ........................      1.45           1.44           1.38           1.05           1.09           0.14
   Earnings per ADS
      Basic ..........................     14.56          14.41          13.79          10.46          10.86           1.39
      Diluted ........................     14.52          14.41          13.79          10.46          10.86           1.39
BALANCE SHEET DATA:
Hong Kong GAAP:
   Working capital ...................    (70.3)          86.8          239.0          529.9        1,023.1          131.2
   Property, plant and
        equipment ....................   2,521.2        2,942.3        3,232.4        3,165.4        2,919.2          374.3
Total assets .........................   2,902.5        3,384.7        3,936.4        4,157.2        4,549.2          583.2

   Long-term liabilities (1) .........     217.9          288.8          326.0          336.5          317.1           40.7
   Total liabilities (excluding
        minority interests) ..........     516.9          514.2          589.1          588.5          668.3           85.7
   Capital stock .....................      39.0           39.0           39.0           39.0           39.0            5.0
   Total shareholders' equity
        (net assets) .................   2,385.2        2,870.1        3,346.7        3,568.3        3,874.6          496.7
U.S. GAAP:

   Property, plant and equipment .....   2,512.3        3,035.7        3,302.6        3,223.9        2,969.7          380.7

   Total assets ......................   2,996.4        3,478.1        4,011.2        4,215.7        4,599.9          589.7

   Long-term liabilities (1) .........     229.2          300.1          335.4          345.8          325.6           41.7
   Total liabilities (excluding
        minority interests) ..........     528.2          525.4          598.5          597.7          676.8           86.8
   Total shareholders' equity
        (net assets) .................   2,467.8        2,952.2        3,412.2        3,617.5        3,916.7          502.1
</TABLE>
----------------------------

(1) Excludes current portion of long-term liabilities.

    HISTORICAL EXCHANGE RATE INFORMATION

    The Hong Kong Dollar is freely convertible into other currencies, including
the US Dollar. Since October 17, 1983, the Hong Kong Dollar has been linked to
the US Dollar at the rate of HK$7.80 to US$1.00. The central element in the
arrangements that gives effect to the link is an agreement between the Hong Kong
Government and the three Hong Kong banknote-issuing banks, The Hongkong and
Shanghai Banking Corporation Limited, Standard

                                       3
<PAGE>

Chartered Bank and, since May 1, 1994, Bank of China. Under this agreement, the
Hong Kong Government Exchange Fund issues certificates of its indebtedness to
the banknote-issuing banks against payment in US Dollars at the fixed exchange
rate of HK$7.80 to US$1.00. The banknote-issuing banks hold the certificates of
indebtedness to cover the issuances of banknotes. When the banknotes are
withdrawn from circulation, the banknote-issuing banks surrender the
certificates of indebtedness to the Hong Kong Government Exchange Fund and are
paid the equivalent US Dollars at the fixed exchange rate. Exchange transactions
in the Hong Kong Dollar against the US Dollar continue in the foreign exchange
market.

    The following table sets forth the average, high, low and period end Noon
Buying Rate between Hong Kong Dollars and US Dollars (in Hong Kong Dollars per
US Dollar) for the periods indicated. No representation is made that the Hong
Kong Dollar or US Dollar amounts referred to in this annual report have been,
could have been or could be converted into US Dollars or Hong Kong Dollars, as
the case may be, at the rates indicated below or at any other rate.

<TABLE>
<CAPTION>
                                                       HONG KONG DOLLAR/US DOLLAR
                                                            NOON BUYING RATE
                                --------------------------------------------------------------------------
                                   AVERAGE (1)           HIGH                LOW            PERIOD END
                                       HK$                HK$                HK$                HK$
                                ------------------    ------------      --------------    ----------------
<S>                                  <C>                <C>                <C>                <C>
2000 ......................          7.7924             7.8008             7.7767             7.7999

2001 ......................          7.7997             7.8004             7.7970             7.7980

2002 ......................          7.7997             7.8095              7.7970            7.7988

2003 ......................          7.7875             7.8001              7.7085            7.7640

2004 ......................          7.7891             7.8010              7.7632            7.7723

December 2004 .............          7.7760             7.7821             7.7698             7.7723

January 2005 ..............          7.7948             7.7994             7.7775             7.7993

February 2005..............          7.7994             7.7999             7.7984             7.7992

March 2005 ................          7.7994             7.7998             7.7987             7.7990

April 2005 ................          7.7984             7.7995             7.7946             7.7946

May 2005 ..................          7.7914             7.7995             7.77267            7.7788
</TABLE>

(1) The average of the Noon Buying Rates on the last day of each month during
    the period.

                                  RISK FACTORS

    RISK OF LAUNCH AND IN-ORBIT FAILURE, LOSS, REDUCED PERFORMANCE AND SATELLITE
DEFECTS

    Satellites are subject to significant risks, including launch and in-orbit
failure, satellite defects, destruction and damage that may result in total or
partial loss or incorrect orbital placement or may prevent proper commercial
operation. Approximately 12% of all commercial geosynchronous satellites have
experienced a total or constructive total loss. The failure rate varies by
launch vehicle, launch services provider and satellite manufacturer. A total or
constructive total loss of any of our satellites would adversely affect the
Company. In addition, any defects in AsiaSat 2, AsiaSat 3S or AsiaSat 4 may also
adversely affect the Company. See "Information on the Company -- Satellites --
AsiaSat 2."


                                       4
<PAGE>

    RISK OF NOT SUCCESSFULLY RENEWING EXISTING TRANSPONDER CAPACITY AGREEMENTS
OR NOT RENEWING THEM ON TERMS SIMILAR TO THEIR CURRENT TERMS

    The Company's existing transponder capacity agreements, also known as
transponder utilization agreements, have scheduled termination dates. If the
Company is unsuccessful in obtaining their renewal on similar commercial terms,
including price levels, and for similar duration, or in identifying alternate
users for returned capacity, the Company's revenues will be adversely affected.

    LIMITED LIFE OF SATELLITES

    A number of factors affect the estimated useful life of a satellite,
including the quality of their construction, the durability of their component
parts, the amount of fuel on-board, the launch vehicle used and the skill with
which the satellite is monitored and operated. There can be no assurance as to
the specific longevity of AsiaSat 2, AsiaSat 3S or AsiaSat 4. The Company's
results of operations would be adversely affected in the event the useful life
of AsiaSat 2, AsiaSat 3S or AsiaSat 4 were significantly shorter than the
estimates stated in "Information on the Company -- Satellites." See "Information
on the Company -- Insurance."

    RISK OF LOSING SATELLITE SERVICE REVENUES IF OTHER SATELLITES OR SIGNALS
INTERFERE WITH THE COMPANY'S TRANSMISSIONS

    Satellites operating from orbital slots that are adjacent to, and using the
same band of frequencies as, the Company's satellites could interfere with the
transmissions made by its satellites. Such interference could lead to the loss
of satellite service revenues if customers migrate to competitors who operate
satellites without such interference. The Company has entered into frequency
coordination agreements with certain other operators to avoid any material
interference and pursuant to which the Company has agreed to certain operating
constraints. The Company's ability to use its orbital slots could be further
constrained in order to avoid material interference with other satellites and
the Company could enter into disputes over interference in the future. In
addition, unintentional or intentional signals could interfere with the
transmissions of the Company's customers and could severely damage the
reputation of the Company. If not remedied, such signals could lead to a loss of
satellite service revenues if customers migrate to competitors. See "Information
on the Company -- Additional Orbital Slots and Use of Frequencies" and
"Information on the Company - Satellites - AsiaSat 3S."

    RISK OF LOSS OR DAMAGE TO SATELLITES, GROUND BASED SATELLITE CONTROL
EQUIPMENT OR SATELLITE STATIONS FROM ACTS OF WAR, TERRORISM, ELECTROSTATIC
STORM, SPACE DEBRIS AND OTHER NATURAL DISASTERS

    The loss, damage or destruction of AsiaSat 2, AsiaSat 3S or AsiaSat 4, or
damage or destruction to AsiaSat's ground based satellite control equipment and
satellite stations, as a result of military actions or acts of war, terrorism,
anti-satellite devices, electrostatic storm, collision with space debris, other
natural disasters or other causes would have an adverse effect on the Company.
AsiaSat's insurance policies include standard commercial satellite insurance
provisions and customary exclusions from losses resulting from (i) military or
similar actions, (ii) terrorism, (iii) laser, directed energy or nuclear
anti-satellite devices, (iv) insurrection and similar acts or governmental
action to prevent such acts, (v) governmental confiscation, (vi) nuclear
reaction or radiation contamination or (vii) willful


                                       5
<PAGE>

or intentional acts of AsiaSat or its contractors. See "Information on the
Company -- Insurance."

    RELIANCE UPON SIGNIFICANT CUSTOMER

    The Company's largest customer is STAR Group Limited ("STAR"), which is a
Hong Kong-based international satellite television broadcasting company that
broadcasts over the greater Asian region and is wholly-owned by News
Corporation, a leading international media group. STAR accounted for
approximately 23.5%, 24.9% and 22.4% of AsiaSat's revenues in the years ended
December 31, 2002, 2003 and 2004, respectively. See "Information on the Company
- Services and Customers."

    The Company could be adversely affected by the loss of STAR as a customer or
if STAR failed to perform its obligations in accordance with the terms of its
transponder utilization agreements. There can be no assurance that STAR will
enter into additional transponder utilization agreements with the Company upon
the expiration of existing transponder utilization agreements.

    RISK OF TECHNOLOGICAL CHANGES

    Technology in the satellite broadcasting and telecommunications industry is
in a rapid and continuing state of change. Technological developments may have
an adverse impact on the Company. First, because the Company's satellites have
an estimated useful life of approximately 15 years, the technology used in the
Company's satellites may not be the most advanced at some future date. As a
consequence, customers could migrate to satellite operators offering new
generations of competing satellite systems that incorporate more advanced
technologies, or more suitable satellite capabilities or configurations, after
the expiration of the Company's initial contract term, which would result in a
loss of revenues. In addition, the Company might be required to replace
satellites earlier than expected to address these developments. Second,
increased transponder efficiency resulting from advances in compression
technology, if not offset by increased applications for satellite capacity, may
cause an overall decrease in demand for such capacity.

    RISK OF LIMITED MARKET DEMAND AND INCREASING COMPETITION

    The business in which the Company operates is highly competitive. The
satellite services provided by the Company are used by its customers for point
to multipoint communication (principally television broadcasting, private
communication networks, Internet and multimedia services). The Company's
principal competitors are regional and domestic satellite companies operating in
the Asian region. Many of these competitors have long-standing customer
relationships and are substantially larger, and have financial resources that
are substantially greater, than those of the Company. See "Information on the
Company - Competition."

    TRANSPONDER OVERSUPPLY. It is expected that in 2005, the supply of
transponders will continue to exceed the demand for transponders. The Company
believes that this imbalance cannot be quickly corrected until global economic
conditions improve and new applications and services take up existing capacity.
See "Information on the Company - Competition - Transponder Oversupply."


                                       6
<PAGE>

    COMPETING SYSTEMS AND SATELLITES. AsiaSat competes with a number of regional
and domestic satellites and satellite systems such as APSTAR, Chinasat, INSAT,
Intelsat, JSAT, Koreasat, MEASAT, New Skies Satellites, Indosat, PanAmSat,
Singtel Optus, SINOSAT, Superbird, Thaicom and others. The Company believes that
most of the domestic systems are planning to add at least some regional
transponders to their next generation of satellites. The increased competition
could adversely affect the Company's business prospects. See "Information on the
Company - Competition - Competition Restriction from Domestic Systems."

    FIBER OPTIC SYSTEMS. Fiber optic systems have been widely installed within
the region for point to point trans-oceanic communications. In addition, point
to point fiber optic connections between major cities in Asia are common. As
fiber optic coverage increases, the competitiveness of satellites for point to
point communication will diminish. In addition, the transmission of television
programming via ADSL and DSL technologies is also an alternative for
transmission of television programming via direct broadcasting satellite and
cable.

    RISKS RELATING TO FUTURE SATELLITES

    The construction, launch and operation of any future satellites by the
Company would be subject to substantially the same risks as those set forth
herein relating to AsiaSat 2, AsiaSat 3S and AsiaSat 4. In addition, AsiaSat's
ability to make capital expenditures in connection with the construction and
launch of future satellites could be subject to conditions of future financing
arrangements. See "Operating and Financial Review and Prospects -- Liquidity and
Capital Resources -- Planned Capital Expenditures."

    THE COMPANY IS SUBJECT TO REGULATION BY A NUMBER OF DIFFERENT BODIES

    The business in which the Company operates is highly regulated. Satellite,
broadcasting and telecommunications services are subject to international and
national law.

    HONG KONG. As an operator of privately owned satellites, AsiaSat is subject
to the regulatory authority of Hong Kong, the Office of the Telecommunications
Authority of Hong Kong, which in turn is subject to the control and supervision
of the People's Republic of China ("China"). The business prospects of the
Company could be adversely affected by the adoption of new laws, policies or
regulations, or changes in the administration, interpretation or application of
existing laws, policies and regulations that modify the present regulatory
environment in Hong Kong.

    Licenses granted to AsiaSat are subject to conditions specified therein. The
conditions may include basic orbital parameters (and requirements to obtain
advance approval for any intended deviations and to notify any unintentional
deviation), requirements to avoid interference with the activities of other
users of outer space and requirements not to cause actions which may give rise
to liabilities on the part of China or Hong Kong. Breach of any such conditions
can give rise to a right of revocation of the relevant license.

    The Company's operation of earth stations is subject to the
Telecommunications Ordinance (Chapter 106 of the Laws of Hong Kong) (the
"Telecommunications Ordinance"). The Telecommunications Ordinance contains
provisions for the taking of possession by the Hong Kong Government of
telecommunications stations if the Chief Executive in Council is of the opinion
that an emergency has arisen in which it is expedient for the public service
that

                                       7
<PAGE>

the Hong Kong Government should have control over telecommunications stations.
See "Information on the Company - Regulation - Hong Kong Regulation."

    OTHER NATIONAL REGULATORY SCHEMES. The customers of the Company are subject
to the regulatory authority in the countries in which they operate. Many of the
Company's customers must have authorization from the countries in which such
customers are located in order to uplink to and communicate by means of the
Company's satellites. Although the Company does not believe these regulatory
schemes will prevent the Company from pursuing its business, there can be no
assurance that such licenses and approvals are or will remain sufficient in the
view of national regulatory authorities and that these authorities will not
discourage or prevent potential customers from utilizing transponders on the
Company's satellites.

    The laws of certain countries require television broadcasters and satellite
telecommunication users providing services in such countries generally to use
state-owned or locally-owned satellites. These legal requirements prevent the
Company and other satellite companies from competing to provide transponder
capacity to these potential customers. There can be no assurance that other
countries in the Asian region, including countries in which the Company already
has customers, will not impose similar requirements to use state-owned or
locally-owned satellites in the future. The imposition of such requirements
could adversely affect the Company's results of operations. See "Information on
the Company - Competition."

    The Company could be adversely affected by changes in laws and regulations,
or in the interpretation and application of existing laws and regulations,
relating to taxation or licensing fees in countries that may assert jurisdiction
over the Company's activities, including countries where customers of the
Company are located or where signals transmitted by the Company's satellites are
received. See "Operating and Financial Review and Prospects - Taxation."

    INTERNATIONAL TELECOMMUNICATION UNION. AsiaSat's use of orbital slots and
radio frequency is subject to the regulations of the International
Telecommunication Union. Nations are required by treaty to make a filing of
their proposed use of satellite orbital slots for geostationary satellites with
the Radiocommunication Bureau of the International Telecommunication Union. When
a conflict or potential conflict is noted, nations are obligated to negotiate in
an effort to coordinate the proposed uses and resolve any interference concerns.
The Radiocommunication Bureau, however, has no formal dispute resolution
mechanism, and if nations cannot agree on a resolution, a satellite system will
not be entitled to the full interference protection afforded under international
law. See "Information on the Company - Regulation - International
Telecommunication Union."

    POLITICAL, ECONOMIC AND OTHER REGIONAL RISKS

    AsiaSat is a Hong Kong company. Substantially all of AsiaSat's revenues are
derived from its operations conducted in the Asian region. In 2002, 2003 and
2004, approximately 58.2%, 59.8% and 51.8%, respectively, of AsiaSat's revenues,
were derived from customers from Greater China, which includes mainland China,
Hong Kong, Macau and Taiwan. Furthermore, during 2002, 2003 and 2004,
approximately, 23.5%, 24.9% and 22.4%, respectively, of AsiaSat's revenues were
attributable to transponder utilization agreements with STAR, a Hong Kong
company. As a result, the Company's financial condition and


                                       8
<PAGE>

results of operations may be influenced by the political situation in the Asian
region and by the general state of the economies in such region.

    CHINA. General economic conditions in China could have a significant impact
on the financial prospects of the Company. The economy of China has been
changing dramatically with a gradual reduction in the role of state economic
plans in the allocation of resources, pricing and management of assets and an
increased reliance on market forces. Any slowdown in economic growth or return
to non-market policies could adversely affect business in China.

    The Company may also be adversely affected by changes in the political and
social conditions in China, and by changes in governmental policies, with
respect to laws and regulations, inflationary measures, currency conversion or
the rates and methods of taxation, among other things. While the Chinese
government is expected to continue its economic reform policies, many of the
reforms are new or experimental and may be refined or changed.

    Almost all payments under AsiaSat's transponder utilization agreements are
made in US Dollars. Since China has extensive foreign exchange controls, the
ability of Chinese companies to convert Renminbi (the currency of China) into
foreign currency and to purchase foreign currency is subject to various Chinese
laws and regulations. China's current or future foreign exchange controls could
adversely affect the ability of the Company's customers in China to make
payments to the Company in US Dollars.

    HONG KONG. From July 1, 1997, Hong Kong ceased to be a Crown Colony of the
United Kingdom, and became a Special Administrative Region of China. Although
the Basic Law, which governs China's relationship with Hong Kong, provides that
Hong Kong will have a high degree of legislative, judicial and economic
autonomy, there can be no assurance that the Company's financial condition and
results of operations will not be adversely affected as a consequence of the
exercise of China's sovereignty over Hong Kong. In addition, political and
social developments in China have from time to time adversely affected the Hong
Kong economy.

    SARS OR SIMILAR OCCURRENCE. The Company's business could be adversely
affected by the re-emergence of Severe Acute Respiratory Syndrome (or SARS) or a
similar type of regional occurrence. Restrictions on travel resulting from the
re-emergence of SARS or a similar type of regional occurrence could adversely
affect the Company's ability to market and service new and existing customers
throughout the Asian region. In addition, sick employees or other employees who
fear contracting such illness could decide to not report for duty. The Company's
results of operations could be adversely affected to the extent that SARS or a
similar type of regional occurrence harms the economy in, or otherwise
negatively affects, China or the Asian region generally.

    LIMITATIONS ON WARRANTIES AND INSURANCE

    Pursuant to AsiaSat's satellite construction contracts with Boeing Satellite
Systems, International, Inc. (formerly known as Hughes Space and Communications
International, Inc.) ("Boeing") and Lockheed Martin, AsiaSat is the beneficiary
of certain limited performance-based, operational warranties on its satellites.
However, the limited contractual warranties do not cover a substantial portion
of the risk inherent in satellite launches or satellite operations. Furthermore,
there has been a general rise in the cost of insurance following a series of
satellite failures. In addition, while the cost of insurance has increased,
insurance coverage


                                       9
<PAGE>

has decreased as a result of the increase in satellite in-orbit failures and the
terrorist events on and after September 11, 2001.

    AsiaSat has in-orbit insurance coverage for AsiaSat 2, AsiaSat 3S and
AsiaSat 4. AsiaSat's in-orbit insurance must be renewed annually.

    There are circumstances in which AsiaSat's insurance will not fully
reimburse AsiaSat for its expenditures with respect to launching a replacement
satellite (for example, if the cost of replacement exceeds the sum insured), and
the insurance will not compensate AsiaSat for business interruption and similar
losses (including, among other things, loss of market share, loss of revenue and
incidental and consequential damages) which might arise from the failure of a
satellite launch and launch of a replacement satellite or a failure of a
satellite to perform to specifications. For a description of the amounts and
coverage of AsiaSat's launch, in-orbit and liability insurance, see "Information
on the Company -- Insurance."

    RISKS RELATED TO U.S. EXPORT CONTROLS

    The United States tightly restricts the export of commercial communications
satellites and satellite-related components and technology. U.S. export control
policy toward Hong Kong and the Company is affected by U.S.-Sino relations,
which can vary substantially from time to time. AsiaSat has sourced all its
satellites in the United States. There can be no assurance that U.S. policy will
not change in ways that will have a negative effect on the export of future
satellites, including the timing of such export, nor can there be any assurance
that future U.S. sourcing by the Company will be unimpeded by U.S. export
restrictions.

    RISK OF LOSS OF ORBITAL SLOTS

    In addition to the three primary positions of 100.5 degrees East, 105.5
degrees East, and 122.2 degrees East, in which the Company's satellites
currently operate, China has filed requests with the International
Telecommunication Union on behalf of AsiaSat for a number of other operational
locations. There is no assurance that AsiaSat will maintain its right to operate
satellites in its primary positions. There is also no assurance that AsiaSat
will obtain rights to launch satellites into the additional orbital slots or
that if it does obtain such rights, that it will be able to fully use the
allocated frequencies because of the limitations imposed by coordination
agreements with other satellite systems. See "Information on the Company -
Satellites - Additional Orbital Slots and Use of Frequencies" and "Information
on the Company - Satellites - AsiaSat 4."

    SUBSTANTIAL LEVERAGE

    AsiaSat may have borrowings under a future loan facility. Such a loan
facility could contain certain covenants, including debt to equity covenants,
which if the Company were to draw down on such loan facility could prevent the
Company from undertaking certain acquisitions and purchases that may be
necessary to its growth. See "Operating and Financial Review and Prospects -
Liquidity and Capital Resources."

    RISK OF NOT BEING ABLE TO HIRE AND RETAIN HIGH TECHNOLOGY EMPLOYEES IN THE
SATELLITE INDUSTRY

    The Company's continued success depends substantially on its ability to
hire, retain and motivate highly skilled technology specialists. Because the
number of people with such skills


                                       10
<PAGE>

is limited, satellite operators compete vigorously for their services. The
potential consequences of the Company's loss of, or its inability to attract,
key workers could include delays or inability to launch, monitor or control
satellites, with a consequent reduction in sales and profits. Alternatively, the
Company may have to offer more attractive remuneration packages than its
competitors, which would increase the Company's personnel expenses and could
reduce its margins.

ITEM 4.  INFORMATION ON THE COMPANY.

    HISTORY AND DEVELOPMENT OF THE COMPANY

    The Company is an exempted company organized under the Companies Act 1981 of
Bermuda (as amended) (the "Companies Act"). The Company was incorporated on May
10, 1996. The Company's registered office is located at Canon's Court, 22
Victoria Street, Hamilton, HM12, Bermuda (phone: 441-295-2244) and its principal
place of business is located at 17th Floor, The Lee Gardens, 33 Hysan Avenue,
Causeway Bay , Hong Kong.

    ORGANIZATIONAL STRUCTURE

    The Company is the parent company of AsiaSat. AsiaSat holds a 47.3% interest
in SpeedCast Holdings Limited, a 49.0% interest in Beijing Asia Sky
Telecommunications Technology Company Limited and a 80.0% interest in Skywave TV
Company Limited. See Notes 12 and 13 to the Company's consolidated financial
statements.

    ACQUISITIONS, INVESTMENTS AND JOINT VENTURES

o        In March 2002, the Company entered into an agreement to acquire an
         additional 8.8% interest in SpeedCast Holdings Limited, which wholly
         owns SpeedCast Limited ("SpeedCast") by making an aggregate
         contribution of HK$31.2 million (US$4.0 million), of which HK$19.5
         million (US$2.5 million) was in cash and HK$11.7 million (US$1.5
         million) was by means of extending the usage of one C-band transponder
         by SpeedCast Holdings Limited for a further period of 219 days from
         February 4, 2003. In 2003, the Company extended payment terms to
         SpeedCast allowing a deferment with interest of up to HK$8.6 million
         (US$1.1 million) in transponder payments until the end of April 2004.
         In May 2004, the Company entered into a further agreement to acquire an
         additional 2% interest in SpeedCast Holdings Limited by making a
         contribution of HK$11.7 million (US$1.5 million) in cash. See "-
         Services and Customers - Expanded Services and Other Businesses."

o        In March 2001, AsiaSat entered into an agreement with respect to the
         lease of the Tai Po Site. For details with respect to the lease of the
         Tai Po Site, see "Additional Information - Material Contracts", "-
         Business Overview" and "- Property, Plants and Equipment - Land
         Facilities." In March 2002, AsiaSat entered into a construction
         agreement with Leighton Contractors Asia Limited with respect to the
         construction of a satellite control center on the Tai Po Site. In
         December 2002, AsiaSat entered into an agreement with Globecomm Systems
         Europe Limited for the procurement of the TT&C RF System to be
         installed at the satellite control center at the Tai Po Site. In
         January 2004, AsiaSat entered into an agreement with Integral Systems
         for satellite control software. As at December 31, 2004, HK$235.2
         million (US$30.2 million) had been spent on the Tai Po Site. See
         "Additional Information - Material Contracts."

                                       11
<PAGE>

o        In March 2004, the Company entered into a joint venture arrangement and
         formed Beijing Asia Sky Telecommunications Technology Company Limited
         ("Beijing Asia") to provide corporate data networks and services in
         China using VSAT technology. In exchange for a 49% interest in Beijing
         Asia, the Company contributed HK$12.5 million (US$1.6 million) in cash
         to Beijing Asia and has committed to provide Beijing Asia with
         transponder capacity in an amount of up to HK$13.0 million (US$1.7
         million) payable on a deferred basis over the next three to five years.
         See "-- Services and Customers - Expanded Services and Other
         Businesses" and "Additional Information - Material Contracts."

o        In November 2004, the Company entered into an agreement with two
         strategic partners pursuant to which the Company agreed to contribute
         HK$24.0 million (US$3.1 million) in return for an 80% interest in
         Skywave TV Company Limited ("Skywave") and each of the strategic
         partners agreed to make an in-kind contribution equal to HK$3.0 million
         (US$0.4 million) in return for a 10% interest each in Skywave. See "--
         Services and Customers - Expanded Services and Other Businesses" and
         "Additional Information - Material Contracts."

    BUSINESS OVERVIEW

    The Company, through its wholly-owned subsidiary, AsiaSat, is a leading
provider of high quality satellite transponder capacity in Asia. The Company's
satellites are positioned over the Asian landmass and offer its customers
comprehensive coverage of approximately 65% of the world's population. The
Company operates three satellites -- AsiaSat 2, AsiaSat 3S and AsiaSat 4.

    AsiaSat 2 was launched in 1995 and began commercial service in January 1996.
AsiaSat 3S was launched from the Baikonur Cosmodrome in the Republic of
Kazakhstan and began commercial service in 1999. AsiaSat 3S has a similar
footprint coverage to AsiaSat 2. Together, these two satellites provide coverage
to more than 50 countries, with approximately 3.3 billion people, from Siberia
to Australia and from Japan to the Middle East.

    AsiaSat 4, launched from Cape Canaveral, United States in April, 2003, is
located at the 122.2 degrees East orbital slot and began commercial service on
July 1, 2003. AsiaSat 4 is a high power satellite having C-band coverage and
power substantially similar to AsiaSat 2 and AsiaSat 3S. Because AsiaSat 4 has a
more easterly location, its C-band coverage favors the Pacific-Rim, Australia
and New Zealand to a greater degree than previous AsiaSat satellites. The
Ku-band coverage of AsiaSat 4 is designed to meet the requirements of both
broadcast satellite services frequencies and fixed satellite services
frequencies for maximum flexibility. In June 2000, the Company received a
Telecommunication License from the Office of the Telecommunications Authority of
Hong Kong allowing AsiaSat to operate the broadcast satellite services
frequencies and the fixed satellite services frequencies on AsiaSat 4. See "--
Services and Customers - Expanded Services and Other Businesses." Because
AsiaSat 4 is a newly established satellite without an existing customer base and
viewership, AsiaSat can currently offer its customers the option to utilize
AsiaSat 4's high powered transponder capacity at a lower cost than the rate
demanded for capacity on AsiaSat 2 and AsiaSat 3S. AsiaSat 3S demands a higher
rate for its transponder capacity because it has the largest viewership base of
any commercial satellite in the Asian region.

                                       12
<PAGE>

    The Company has leased a site in Tai Po Industrial Estates, New Territories,
Hong Kong (the "Tai Po Site"), to support the growth of the Company's business.
The Tai Po Site houses a new satellite control center (the "Tai Po Satellite
Earth Station") that allows AsiaSat to offer its customers additional and
improved services. These services include uplink, technical support and other
value added services. For a general discussion on earth stations, see
"--Regulation - Hong Kong Regulation." Construction of the Tai Po Satellite
Earth Station was completed, and the final occupation permit was received in
January 2004 from the Hong Kong Building Authority. See "Additional Information
- Material Contracts."

    As of December 31, 2004, the utilization rate for each of AsiaSat 2, AsiaSat
3S and AsiaSat 4 was approximately 36.4%, 73.3% and 26.8%, respectively, under
transponder utilization agreements and transponder purchase agreements.

    The Company provides transponder capacity primarily to the broadcasting,
telecommunications (including private communication networks), Internet and
multimedia markets. AsiaSat has entered into separate transponder utilization
agreements with over 100 customers from various countries and regions, including
Australia, British West Indies, China, Germany, Hong Kong, Korea, Kuwait,
Pakistan, Singapore, Taiwan, the United Arab Emirates, the United Kingdom, the
United States and Vietnam.

    In 2002, 2003 and 2004, approximately 58.2%, 59.8% and 51.8%, respectively,
of the Company's revenues were derived from customers from Greater China, which
includes mainland China, Hong Kong, Macau and Taiwan.

    The Company believes that AsiaSat 3S is the leading satellite for regional
television programming distribution in Asia based on the number of viewers
watching programming distributed on AsiaSat 3S. The Company's largest customer,
STAR, is a Hong Kong-based international satellite television broadcasting
company that broadcasts over the Asian region.

    SERVICES AND CUSTOMERS

    During the last three years, the Company's revenues were derived from the
following markets:

                                         2002            2003            2004
                                        -----           -----           -----

Broadcasting (video)........            68.3%           70.4%           70.6%

Telecommunications, Internet
   and Multimedia...........            31.7%           29.6%           29.4%

    Total revenue from the Company's five largest customers in each of the years
ended December 31, 2002, 2003 and 2004 was HK$410.9 million, HK$376.6 million
and HK$462.5 million, respectively, which represented 43.2%, 42.0% and 46.0%
respectively, of total revenue. Revenues from the Company's largest customer
represented 23.5%, 24.9% and 22.4% of total revenue for the years ended December
31, 2002, 2003 and 2004, respectively.

    BROADCASTING

    Local, national and international broadcasters use satellite transponder
capacity for television programming distribution, contribution operations (i.e.,
the transmission of video feeds from one location to another) and ad hoc
services such as the transmission of special


                                       13
<PAGE>

events and live news reports from the scene of the event. The largest market for
broadcasting services is the full-time leasing of transponder capacity by
programmers to distribute programming to television stations, local cable
operators, master antenna systems and directly to homes.

    STAR offers a bouquet of digital services, including both subscription and
free-to-air television that, according to STAR, reaches more than 300 million
viewers across the Asian region.

    In 1998, STAR entered into capacity agreements for seven transponders on
AsiaSat 3S, six of which continue for the entire life of AsiaSat 3S and one of
which will expire in January 2008. In 1999, STAR entered into three year
capacity agreements for two additional transponders on AsiaSat 3S that commenced
in 1999 when AsiaSat 3S began commercial operations. These two short-term
agreements were terminated in March and June 2000, respectively, and were
replaced by two long-term capacity agreements with terms equaling the period of
AsiaSat 3S's remaining useful life. The capacity agreements entered into by STAR
for capacity on AsiaSat 3S are for a smaller number of transponders than under
the previous arrangements because of the consolidation of all its services onto
AsiaSat 3S, the footprint coverage of AsiaSat 3S as well as the application of
transmission technologies, such as digital compression, which enhance the
capacity of each transponder. In February 2004, the Company entered into an
agreement with STAR to provide facilities at the Tai Po Site to house STAR's
back up play out, broadcast and radio frequency equipment for downlinking and
uplinking to AsiaSat 3S, and other related services.

    The Company's results of operations could be adversely affected by the loss
of STAR as a customer or if STAR failed to perform its obligations in accordance
with the terms of its transponder utilization agreements. There can be no
assurance that STAR will enter into additional transponder utilization
agreements with the Company, either for AsiaSat 3S or other satellites, upon the
expiration of existing transponder utilization agreements. See "Key Information
- Risk Factors - Reliance Upon Significant Customer."

    AsiaSat currently is not subject to any exclusivity arrangement with any of
its customers. Other broadcasters on its satellite fleet using its transponders
include Pakistan TV, Associated Press Television News, the Ministry of
Information of Kuwait, UAE Radio & TV, BBC World Service Radio, Voice of
America, Worldnet, Deutsche Welle of Germany, TV5, RAI of Italy, RTVE of Spain,
RTPi of Portugal, Fashion TV, TVB Satellite Broadcasting of Hong Kong, SAB TV,
the European Broadcasting Union, Sahara TV, Turner Broadcasting System, Sun TV,
Bloomberg TV, NOW TV, Smile TV, Indus Vision, Muslim TV, MATV, Channel NewsAsia
and Reuters TV.

    In addition, governmental bodies seek to use satellites to expand their
coverage to remote and underdeveloped regions of their countries that would
otherwise be unserved. The signals are received at rebroadcast centers and
retransmitted to viewers. The State Administration of Radio, Film and Television
of China (formerly, the Ministry of Radio, Film and Television) uses capacity on
AsiaSat 3S to distribute domestic and international television programming. A
number of television channels from various provinces and regions in China are
broadcasting on AsiaSat's C-band and Ku-band transponders.

    TELECOMMUNICATIONS

                                       14
<PAGE>

    The Company's telecommunications services include the provision of
transponder capacity for private communications networks for data and voice
communications and for communications service providers in Asia. The Company
believes that there will continue to be opportunities in Asia to market
transponder capacity to certain end users that, due to poor telecommunications
infrastructure or high costs of local public networks, desire to operate their
own private network for data and voice transmission. These are often large
multinational companies or agencies such as financial news providers,
newspapers, banks, paging companies, airlines, oil companies and stock
exchanges.

    China represents one of the world's largest potential markets for satellite
communications. Private communications networks in China are numerous and
growing. Organizations in China in such businesses as banking, securities,
publishing and oil have established private networks utilizing AsiaSat's
satellites to link remote sites with their headquarters.

    AsiaSat's Chinese telecommunications customers include the People's Bank of
China, the Shanghai Stock Exchange, the People's Daily, CITIC Guoan Information
Industry Company Limited and China Petrochemical Corporation. In addition,
Chinese ministries and agencies have entered into transponder purchase
agreements to use transponders on AsiaSat's satellites.

    AsiaSat's telecommunications customers also include Vietnam Telecom
International, Reach, BtN Access, Associated Press, Reuters, the International
Air Transport Association, Korea Telecom, Teleport Access Services and Pakistan
Telecom.

    MULTIMEDIA AND INTERNET

    Customers including Telstra Corporation, Pacific Century Matrix and BtN
Access use AsiaSat's satellites to offer broadband (which refers to the
provision of multiple channels of data over a single communications channel),
Internet and multimedia services. In addition, Connexion by Boeing has entered
into an agreement for the use of Ku-band capacity on AsiaSat 3S to provide
in-flight broadband communication services on the Asia-to-Europe flight
corridor, which commenced in the first quarter of 2004.

    EXPANDED SERVICES AND OTHER BUSINESSES

    AsiaSat has launched a digital broadcast platform on AsiaSat 2 that offers
one stop shop services including satellite capacity, signal turnaround
facilities and analog/digital conversion to broadcast customers from Europe and
the Middle East for their services to Asia and Australia. The turnaround
facilities are supplied pursuant to an agreement with IRIS Gateway Satellite
Services Limited through its Makarios earth station in Cyprus. The earth station
is able to receive signals from European and Middle East satellites and uplink
the signals to AsiaSat 2.

    The Office of the Telecommunications Authority of Hong Kong granted AsiaSat
a Fixed Carrier Services ("FC") license in May 2004. A FC license allows license
holders to uplink broadcasting programs and to provide public telecommunication
services linking Hong Kong and other countries either on their own business
initiatives, or for and on behalf of their customers via satellites. Obtaining a
FC license will enable AsiaSat to provide a one-stop service to its customers,
including the provision of transponder capacity and uplinking or downlinking
broadcasting programs, and telecommunication services to audiences or operators
outside Hong Kong. At the moment, AsiaSat's broadcasting or telecommunications

                                       15
<PAGE>

customers have to uplink their programs and services by either establishing
their own uplinking facilities or employing the uplinking services of other
licensed operators. This service would complement AsiaSat's core business of
providing high-quality satellite transponder capacity by offering one-stop shop
services.

    SpeedCast has installed a multimedia platform that enables distribution of
Internet services and other multimedia content. Customers may use this format
when distributing content on the AsiaSat satellite system. AsiaSat now holds a
47.3% interest in SpeedCast Holdings Limited, which was formed in 1999 to
principally provide high speed Internet, multimedia content delivery, and
corporate broadcast services such as data packages delivery and Internet
streaming. SpeedCast, in addition to providing the principal services, also
launched on-line music distribution, on-line multimedia services and streaming
encryption system. In 2003, SpeedCast also launched a new service for two-way
operation, which provides more efficient connection for content delivery.

    On June 27, 2000, the Company was granted a telecommunication license (the
"Telecommunication License") from the Office of the Telecommunications Authority
of Hong Kong allowing the broadcast satellite services frequencies to be
incorporated into the payload of AsiaSat 4 at the 122.2 degrees East orbital
position. Broadcast satellite services frequencies were assigned to Hong Kong by
the 1997 World Radiocommunication Conference ("WRC '97") of the International
Telecommunication Union. The 2000 World Radiocommunication Conference
("WRC-2000") later revised these assignments and further assigned more
frequencies to Hong Kong. These frequencies are designated for satellite
broadcasting uses and are receivable in Hong Kong and surrounding areas with
very small antennas. They can be used to provide Direct-to-Home satellite
broadcasting services, which refers to a satellite service that delivers
television programming directly to consumer homes using a small antenna and
related equipment. Adding the broadcast satellite services frequencies onto
AsiaSat 4 enables AsiaSat to offer high power and wide coverage for broadcasting
services in Hong Kong and the surrounding areas. The main difference between the
broadcast satellite service and the fixed satellite service in AsiaSat's case is
that broadcast satellite service gives access to additional spectrum for the
Company. Moreover, while the fixed satellite service frequency bands are used
for a multitude of services, the broadcast satellite service frequency bands are
normally used only for TV applications and with much more standardized
parameters. In April 2004, the Company's subsidiary Skywave applied for a
non-domestic television program service license, which was granted for 12 years
by the Broadcasting Authority of Hong Kong in May 2004, in order to use the
broadcast satellite services frequencies on AsiaSat 4 to provide Direct-to-Home
satellite broadcasting services.

    In November 2004, the Company entered into an agreement with two strategic
partners pursuant to which each of these strategic partners made an in-kind
contribution equal to HK$3.0 million in return for a 10% interest in Skywave.
See "-- Acquisitions, Investments and Joint Ventures" and "Additional
Information - Material Contracts." Skywave has set up a low cost regional DTH
service, providing selected programming to the markets of Macau, Hong Kong,
Taiwan and to subscribers in Southern China licensed to receive foreign
television services. This DTH service commenced trial services in December 2004
and uses the four BSS transponders on AsiaSat 4. By installing a very small
dish, viewers can enjoy a whole new range of programming.

    In March 2004, the Company formed joint venture Beijing Asia to provide
corporate data networks and services in China using VSAT technology. Beijing
Asia commenced


                                       16
<PAGE>

operation in October 2004 and is providing technical services and equipment
installation for the construction and operation of a trial network to connect
remotes sites in rural China using VSAT technology. See "--Acquisitions,
Investments and Joint Ventures" and "Additional Information - Material
Contracts."

    SATELLITES

    The global communications market has historically been shared among three
major transmission technologies - fiber optic and coaxial cable, microwave
systems and satellites. Satellites have been, and continue to be, used for
global communications applications. Each of these transmission technologies has
advantages over the other two in specific market segments.

    Although satellites initially were used for point to point long distance
telephone and television transmissions and continue to be used for these
applications, fiber optic cables have proven to be a more cost effective
transmission method for high volume point to point applications. Today, most
trans-oceanic transmissions are delivered via submarine fiber optic and coaxial
cables, which are ideally suited to carry large amounts of traffic between two
points. In developing countries, satellites carry a significant portion of point
to point traffic due to the lack of terrestrial fiber optic and coaxial network.
However, as more fiber optic and coaxial networks are established, less of this
traffic will be delivered via satellite. In many countries, satellites are also
used to supplement terrestrial transmission networks for the distribution of
television and radio programming.

    Geostationary satellites are located in-orbit approximately 22,300 miles
above the Equator. When positioned in geostationary or geosynchronous orbit, a
satellite appears to hover over the same spot on the earth because it is moving
at a rate that matches the speed of the earth's rotation on its axis. These high
powered satellites have the ability to cover up to approximately 42% of the
earth's surface at one time. With broad coverage capabilities, these satellites
are well suited for point-to-multi-point applications (principally television
broadcasting, private communication network, Internet and multimedia services).
Satellites are commonly used for distribution of video and audio signals to
cable operators and local television and radio stations for redistribution. In
Direct-to-Home applications, a high powered geostationary satellite allows video
transmissions to be received directly from the satellite to homes using very
small dishes.

    A satellite can be accessed by an uplink for the transmission of a satellite
circuit extending from the earth to the satellite from virtually anywhere within
its coverage area. This flexibility makes satellites ideal for private
communications networks. Due to the high cost of local telecommunications
services or the lack of an adequate local telecommunications infrastructure, an
organization may wish to operate its own network. A very small aperture terminal
network, connecting a large number of widely dispersed locations via satellite,
is an efficient and cost effective method for many organizations to maintain
communications with a network of offices that spread over a large geographic
area.

    Satellite transponders receive signals from the uplink earth stations and
then convert, amplify and transmit the signals to the downlink earth stations.
Transponder subsystems include low-noise receivers, frequency converters,
channel amplifiers, high power amplifiers, input/output multipliers, various
switches and other electronic components. Frequency

                                       17
<PAGE>

represents the measure of how frequently a periodic (repetitious) wave form or
signal regenerates itself at a given amplitude.

    Communications satellites are of varying quality and usefulness depending on
(i) footprint, or coverage area, (ii) orbital location, (iii) transponder power
(EIRP), (iv) transponder bandwidth, (v) frequency band and (vi) other features,
such as beam switching and linearizers.

    A beam represents one of the coverage patterns offered by a satellite. The
footprint of a satellite refers to the geographic area covered by a satellite,
the outer edge of which defines area beyond where the quality of communication
degrades below an acceptable commercial level due to the spacecraft antenna
pattern, power of the signal and curvature of the earth. The primary transponder
characteristic is downlink power, which is expressed in terms of EIRP. EIRP
means equivalent isotropic radiated power and is a measure of radio frequency
power of each transponder. Transponder bandwidth, expressed in terms of
megahertz or MHz, a unit of frequency equal to one million cycles per second, is
a range of frequencies that can pass over a given transmission channel. The
greater the bandwidth, the more information that can be sent through the circuit
in a given amount of time.

    C-band and Ku-band are portions of the radio frequency spectrum assigned for
satellite transmission, and are approximately in the three to seven and 11 to 15
gigahertz (or GHz) ranges, respectively. Gigahertz is a measure of frequency
equal to one billion cycles per second. While Ku-band frequencies suffer from
some interference caused by rain, they are more suitable for small antenna
applications than C-band frequencies. Ku-band is generally used for the same
purposes as C-band as well as for satellite news-gathering (truck-mounted
antennas) and in some very small aperture terminal applications. Ku-band is
especially useful in areas with dense ground-based microwave systems. To
compensate for rain interference, Ku-band transmitters are generally
higher-powered than C-band transmitters and the footprints are smaller. This
combination of high-power and small antennas also makes Ku-band suitable for
Direct-to-Home television.

    The following table sets forth certain satellite specifications in relation
to AsiaSat 2, AsiaSat 3S and AsiaSat 4. For a discussion on certain risks
related to satellites, see "Key Information -- Risk Factors -- Risk of Launch
and In-orbit Failure, Loss, Reduced Performance and Satellite Defects", "Key
Information -- Risk Factors -- Limited Life of Satellites" and "Key Information
-- Risk Factors -- Risk of Loss or Damage to Satellites, Ground Based Satellite
Control Equipment or Satellite Stations from Acts of War, Terrorism,
Electrostatic Storm, Space Debris and Other Natural Disasters."

<TABLE>
<CAPTION>
                                           SUMMARY SATELLITE DATA

                      ASIASAT 2               ASIASAT 3S                    ASIASAT 4
                      ---------               ----------                    ---------
<S>                   <C>                     <C>                           <C>
Region
  covered:
   C-band             Asia, Middle East,      Asia, Middle East, CIS and    Asia, Middle East, CIS,
                      CIS and Australia       Australia                     Australia and
                                                                            New Zealand
   Ku-band            China, Japan, Hong      East Asia Beam (from Japan    China Beam, Australia Beam
                      Kong, Taiwan and Korea  to Kazakhstan), South Asia    (Australia and New Zealand),
                                              Beam (from Bangladesh to      Hong Kong broadcast satellite
                                              the Middle East), Steerable   services Beam
                                              Beam(1)

Launch date           November 28, 1995       March 21, 1999                April 11, 2003

Manufacturer          Lockheed Martin         Boeing                        Boeing
</TABLE>

                                       18
<PAGE>

<TABLE>
<CAPTION>
                                           SUMMARY SATELLITE DATA

                      ASIASAT 2               ASIASAT 3S                    ASIASAT 4
                      ---------               ----------                    ---------
<S>                   <C>                     <C>                           <C>
Model                 Series 7000             BSS601HP                      BSS601HP

Stabilization         Three Axis Stabilized   Three Axis Stabilized         Three Axis Stabilized

Number of
  Transponders        33                      44                            48

  C-band              20 @ 36 MHZ             28 @ 36 MHZ                   28 @ 36 MHZ
                      4 @ 72 MHZ

  Ku-band             9 @ 54 MHZ              16 @ 54 MHZ                   10 @ 54 MHz (fixed satellite
                                                                            services)
                                                                            6 @ 33 MHz (fixed satellite
                                                                            services)
                                                                            4 @ 33 MHz (broadcast satellite
                                                                            services)

Maximum               40 dBW (C-band)         41 dBW (C-band)               41 dBW (C-band)
  EIRP                53 dBW (Ku-band) ((2))  53 dBW (Ku-band)              53 dBW (Ku-band)
                                                                            56 dBW (BSS Ku-band)

Payload               fixed satellite         fixed satellite services      broadcast satellite services /
                      services                                              fixed satellite services

Power output          55 W_TWTAs (C-band)     55 W_TWTAs (C-band)           55 W_TWTAs (C-band)

                      115 W_ TWTAs            140 W _TWTAs (Ku-band)        140 W _TWTAs (Ku-band)
                      (Ku-band)

Estimated
  Useful
  Life                13 years                16 years                      15 years

Estimated end
  of useful life      2008                    2015                          2018

Approximate
 Percentage of
 world population
 covered by that      65%                     65%                           62%
 satellite
</TABLE>
-----------
(1)  AsiaSat 3S has 16 Ku-band transponders divided into two fixed beams and a
     steerable beam.
(2)  AsiaSat 2 has experienced power reductions in its Ku-band transponders in
     relation to their design specifications. See "-- AsiaSat 2."

    ASIASAT 2

    AsiaSat 2 is located in the geostationary orbit at 100.5 degrees East. It
was designed and produced by Lockheed Martin and is a series 7000 model
satellite. It was launched on November 28, 1995 by a Long March 2E launch
vehicle under a contract with China Great Wall Industry Corporation. AsiaSat 2
commenced commercial service in January 1996.

    AsiaSat 2 is equipped with twenty 36 MHz C-band and four 72 MHz C-band
transponders with a maximum signal power of 40 dBW. It is also equipped with
nine 54 MHz Ku-band transponders with a maximum signal power of 53 dBW. However,
at the time of the launch, AsiaSat 2 experienced a Ku-band power reduction at
certain points of its coverage area. Since 2002, the back-up command receiver on
AsiaSat 2 (a component used to communicate with and control the satellite) has
experienced intermittent outages. AsiaSat 2 can operate normally on its primary
command receiver. The satellite uses linear polarized beams, with the C-band and
Ku-band having distinct coverage areas. For the C-band transponders, there are
four spare amplifiers for each polarization of 12 C-band transponders in two
separate 12 for 16 (12 working/16 total) redundancy ring configurations. For the
Ku-band transponders, there are three spare amplifiers connected in a 9 for 12
(9 working/12 total) single redundancy

                                       19
<PAGE>

ring configuration. In December 2003, AsiaSat 2 experienced two related short
duration service outages. These outages caused no permanent damage to AsiaSat 2
and AsiaSat's engineers took the appropriate action to restore AsiaSat 2's
service. As a result of these outages, some customers moved to other AsiaSat
satellites, while three customers utilizing capacity representing in the
aggregate less than one C-band transponder moved to a competitor's satellite.
These outages were the first break in service of an AsiaSat satellite in the
history of the Company. In February 2005, one of the two bus power transformers
on AsiaSat 2 (which provides low voltage to the satellite) changed to "off"
status. While this change of status does not necessarily indicate a failure of
the transformer, it is impossible for the Company to verify the integrity of
this transformer. AsiaSat 2 can operate normally with only one bus power
transformer. See "Key Information -- Risk Factors -- Risk of Launch and In-orbit
Failure, Loss, Reduced Performance and Satellite Defects."

    AsiaSat 2 has C-band coverage over virtually the entire Asian region, with a
footprint stretching from Russia to Australia and from Japan to the Middle East
and parts of Africa. The footprint of AsiaSat 2 covers approximately 65% of the
world's population. AsiaSat 2's C-band footprint provides coverage over a large
area with a single beam. The nine Ku-band transponders provide coverage over
China, the Korean peninsula and Japan.

    AsiaSat 2 has an estimated useful life of 13 years, indicating that the
estimated end of its useful life will be in 2008.

    In June 2000, Lockheed Martin obtained a Technical Assistance Agreement from
the U.S. Department of State to provide technical data and services for in-orbit
anomaly support for AsiaSat 2 until December 31, 2009. See " -- Regulation --
Export Regulations."

    ASIASAT 3S

    In 1997, AsiaSat launched AsiaSat 3 from the Baikonur Cosmodrome in the
Republic of Kazakhstan. AsiaSat 3 failed as it did not reach its orbital slot
and was replaced, following the successful launch in March 1999, by AsiaSat 3S.

    AsiaSat 3S is located in the geostationary orbit at 105.5 degrees East.
AsiaSat 3S was constructed by Boeing and is a BSS-601HP model satellite. AsiaSat
3S was launched from the Baikonur Cosmodrome in the Republic of Kazakhstan and
commenced commercial service in 1999.

    AsiaSat 3S has multiple beam coverage and is equipped with twenty-eight 36
MHz C-band transponders with a maximum signal power of 41 dBW. It is also
equipped with sixteen 54 MHz Ku-band transponders with a maximum signal power of
53 dBW. AsiaSat 3S has transponder power output of 55 Watts for C-band and 140
Watts for Ku-band. It has an estimated useful life of 16 years, indicating that
the estimated end of its useful life will be in 2015.

    The footprint for AsiaSat 3S is similar to the footprint of AsiaSat 2 with
two additional Ku-band beams designed to meet market demands. The C-band
footprint stretches from Japan to the Middle East and from Russia to Australia.
The footprint provides high powered service to the growing market areas in the
Greater China region, Japan and Korea and Southeast Asia. It covers about 65% of
the world's population.

                                       20
<PAGE>

    The 16 Ku-band transponder capacity is divided into two fixed beams and a
steerable beam. The first beam is an East Asia beam that includes coverage from
Japan to Kazakhstan. The second beam is a South Asia beam that has coverage from
Bangladesh to the Middle East. In order to compensate for rain fade, which may
occur in certain countries in this region, AsiaSat has designed the coverage to
direct higher power in heavy rain areas. The steerable Ku-band beam allows a
smaller, highly concentrated beam to be moved to any market region in the
coverage area. This beam could, for example, be placed over Australia or over a
specific region in Asia. Of the 16 Ku-band transponders on AsiaSat 3S, eight
transponders are fixed on East Asia and eight are switchable among the three
beams so that up to 16 transponders may be used for the East Asia beam, up to
eight transponders may be used for the South Asia beam and up to four
transponders may be used for the steerable beam.

    In February 2001, Boeing obtained a Technical Assistance Agreement from the
U.S. Department of State to provide technical data and services for in-orbit
anomaly support for AsiaSat 3S until December 31, 2009. See "--Regulation -
Export Regulation."

    In both November 2004 and March 2005, a transponder on AsiaSat 3S was
deliberately interrupted by signals carrying Falun Gong-related content. As a
result, the Company was forced to shut down the respective transponder's
transmission for a short period of time on November 26, 2004 and March 14, 2005.
These breaks in service affected normal programming of certain customers'
satellite television channels. The Company views these deliberate interruptions
as "harmful interference" as such term is defined in the constitution of the
International Telecommunication Union, and accordingly, the Company has
requested that the Office of the Telecommunications Authority of Hong Kong
report these incidents to the Radiocommunications Sector of the International
Telecommunication Union through the relevant authority in China. For a general
discussion on the International Telecommunication Union, see " -- Regulation --
International Telecommunication Union." Also, see "Risk Factors -- Risk of
Losing Satellite Service Revenues if Other Satellites or Signals Interfere with
the Company's Transmissions."

    ASIASAT 4

    AsiaSat 4 was launched on an Atlas IIIB launch vehicle on April 11, 2003 in
Cape Canaveral, Florida. AsiaSat 4 commenced commercial service on July 1, 2003
and is operational at 122.2 degrees East.

     AsiaSat 4 was constructed by Boeing and is a BSS-601HP model satellite.
AsiaSat 4 is the most powerful member of AsiaSat's satellite fleet carrying 28
C-band and 20-Ku-band transponders. AsiaSat 4's pan-Asian C-band footprint
covers more than 40 countries and regions spanning from New Zealand to the
Middle East. Its Ku-band coverage consists of two high-power focused beams for
East Asia and Australasia, as well as a new broadcast satellite service beam for
Direct-to-Home services in Hong Kong and the adjacent South China region.
AsiaSat 4 is designed to provide advanced satellite services including
Direct-to-Home television, broadband and IP solutions, and telecommunications
services such as private networks for business and rural telephony (which refers
to the construction and operation of telephones and telephonic systems). It has
an estimated useful life of 15 years, indicating that the estimated end of its
useful life will be in 2018.

    Under the AsiaSat 4 construction contract with Boeing, Boeing agreed to
provide off-site support services for the life of the satellite. Boeing has
obtained a Technical Assistance Agreement from the U.S. Department of State to
provide technical data and service for in-

                                       21
<PAGE>

orbit anomaly support for AsiaSat 4. See "-- Business Overview" and
"--Regulation - Export Regulation."

    AsiaSat previously had a dispute with Shin Satellite in relation to
AsiaSat's right to operate a satellite from 122 degree East. As part of a
comprehensive agreement to limit potential mutual interference between AsiaSat 4
and the iPStar satellite operated by Shin Satellite, the responsible
administrations of China, the Office of the Telecommunications Authority of Hong
Kong and the Administration of the Kingdom of Thailand (regulator and
International Telecommunication Union notifying administration for Shin
Satellite) agreed to increase the orbital separation of iPStar and AsiaSat 4.
Both satellites are required to change orbital locations, with AsiaSat 4
shifting from 122 degrees East to 122.2 degrees East. For a general discussion
on regulations, see "--Regulation - Hong Kong Regulation" and "--Regulation -
International Telecommunication Union."

    ADDITIONAL ORBITAL SLOTS AND USE OF FREQUENCIES

    China has filed on behalf of AsiaSat applications with the International
Telecommunication Union for additional orbital slots. See "- Regulation." These
slots have significant frequency and geographic coverage constraints resulting
from the coordination process which limit their value. These slots, however,
could be used by satellites specifically designed to meet the coordination
requirements for these orbital positions. No assurance can be given that these
additional orbital slots will be occupied by AsiaSat prior to the expiration of
their filings.

    AsiaSat has the option to co-locate additional satellites in the orbital
slots located at 100.5 degrees East, 105.5 degrees East and 122.2 degrees East
in order to provide additional capacity in these locations and to support the
existing satellites with redundant capacity. See "Key Information - Risk Factors
- Risk of Loss of Orbital Slot" and "-- AsiaSat 4."

    TRANSPONDER CAPACITY OR UTILIZATION AGREEMENTS

    A typical transponder capacity agreement, also known as transponder
utilization agreement, for AsiaSat 2, AsiaSat 3S and AsiaSat 4 has a term of
three years or more, requires utilization fees to be paid quarterly or
semi-annually in advance and provides for renewal options. Generally, AsiaSat's
transponder utilization agreements require payment in US Dollars. Typically, the
customer may terminate the transponder utilization agreement at any time during
the term of the agreement without further obligation if AsiaSat fails to provide
a fully operational transponder or by giving not less than 12 months' notice to
AsiaSat. Upon termination (other than for cause), the customer is obligated to
pay AsiaSat termination fees based on the remaining contract period and the
specific contractual terms. In addition, the transponder utilization agreements
generally provide for a specified reduction in the utilization fees if
transponder service is interrupted for reasons not caused by the customer or by
outages due to the effects of the sun or other reasons beyond the control of
AsiaSat. If such service interruptions continue without correction and AsiaSat
is unable to provide suitable alternative capacity, the customer is entitled to
terminate the transponder utilization agreement without further obligation to
AsiaSat. Under the terms of the transponder utilization agreements, AsiaSat
generally is not liable for the lost profits or other indirect or consequential
damages of any customers.

                                       22
<PAGE>

    AsiaSat entered into transponder purchase agreements with ministries or
agencies of China under which the customer obtains the right to use Ku-band
capacity on AsiaSat 2, AsiaSat 3S and AsiaSat 4 for the life of the transponder.
The terms of these transponder purchase agreements are substantially the same as
those found in transponder utilization agreements, except for certain
differences such as the term of a transponder purchase agreement is for the
entire useful life of a satellite and payment for the entire period of use is
typically completed by the commencement of the second year of the term of the
agreement.

    CUSTOMER TECHNICAL QUALIFICATIONS AND SUPPORT

    Before uplink communication with its satellite is permitted, AsiaSat's
customers are required to meet AsiaSat's strict engineering performance and
operations specifications. The purpose of these requirements is to confirm that
the customer's equipment operates within AsiaSat's specifications in order to
minimize interference with other customers on the same satellite or users on
neighboring satellites. AsiaSat's engineers advise the customer with respect to
the adjustments required to be made to the customer's equipment in order to
minimize interference.

    AsiaSat provides technical support to its customers. AsiaSat helps customers
determine and evaluate their equipment configuration, carrier modulation,
bandwidth and power requirements, design their networks and calculate link
budgets.

    AsiaSat's Carrier Monitoring System ("CMS") was designed and implemented by
AsiaSat to monitor and measure communications parameters from AsiaSat's Tai Po
Satellite Earth Station. The CMS is also used to assist in customer earth
station qualification and analysis of anomalies. The CMS measures power,
frequency, bandwidth, carrier-to-noise ratio and other communications
performance characteristics.

    INSURANCE

    AsiaSat has satellite in-orbit insurance for AsiaSat 2, AsiaSat 3S and
AsiaSat 4. AsiaSat also has obtained third-party liability insurance for AsiaSat
2, AsiaSat 3S and AsiaSat 4. There can be no assurance that AsiaSat will be able
to obtain insurance in the future on terms satisfactory to AsiaSat. See "Key
Information -- Risk Factors -- Limitations on Warranties and Insurance."

    There are circumstances in which AsiaSat's insurance will not fully
reimburse AsiaSat for its expenditures with respect to launching a replacement
satellite, such as when the cost of the construction and launch of a replacement
satellite exceeds the aggregate amount of coverage provided by AsiaSat's
insurance policy. The amount of AsiaSat's insurance also will not compensate it
for business interruption and similar losses (including, among other things,
loss of market share, loss of revenue and incidental and consequential damages)
which might arise from a full or partial launch failure or a failure of a
satellite to perform to specifications. In addition, AsiaSat's insurance
policies include standard commercial satellite insurance provisions and
customary exclusions including, among other things, exclusions from losses
resulting from (i) military or similar actions, (ii) terrorism, (iii) laser,
directed energy, or nuclear anti-satellite devices, (iv) insurrection and
similar acts or governmental action to prevent such acts, (v) governmental
confiscation, (vi) nuclear reaction or radiation contamination or (vii) willful
or intentional acts of AsiaSat or its contractors.

                                       23
<PAGE>

    Satellite in-orbit insurance covering a specified period after launch of a
satellite is typically purchased together with launch insurance. Subsequent
satellite in-orbit insurance is typically purchased on an annual basis.
Satellite in-orbit insurance, which has historically cost less than three
percent of the insured value of a satellite on an annual basis, provides
protection against partial or total loss of a satellite's communications
capability, including loss of transponders, power or ability to control the
positioning of the satellite and reduction in the useful life of the satellite.

    AsiaSat renewed the in-orbit insurance for AsiaSat 2 in the amount of
HK$327.6 million (US$42.0 million) at an annual cost of approximately HK$13.6
million (US$1.7 million) for the 12 month period beginning from November 28,
2004. AsiaSat obtained satellite in-orbit insurance for AsiaSat 3S covering the
launch and the first five years in-orbit of AsiaSat 3S in the amount of
HK$1,521.0 million (US$195.0 million), which provided coverage for (i) a total
failure of the launch of the satellite and (ii) the failure of the satellite to
obtain proper orbit or to perform in accordance with certain specifications once
in-orbit. AsiaSat renewed in-orbit insurance for AsiaSat 3S in the amount of
HK$858.0 million (US$110.0 million) at a cost of approximately HK$24.6 million
(US$3.2 million) for the twelve month period beginning from March 20, 2005. This
policy is subject to a review period ending in August 2005 with respect to a
potential exclusion of losses that could affect up to 14% of the insured amount
in the event of a failure in the propulsion devices (or thrusters), but the
exclusion, if exercised, would only apply if the failure is of the same nature
that has been experienced by thrusters of the same design as those used by
AsiaSat 3S. AsiaSat obtained launch and the first year in-orbit insurance
coverage for AsiaSat 4 prior to its launch. The insurance amount was HK$1,443.0
million (US$185.0 million) covering the total and partial loss of the satellite,
and HK$286.3 million (US$36.7 million) covering the cost of insurance premium in
the event of a total loss. This policy contained standard commercial satellite
insurance provisions and customary exclusions, as well as an exclusion of losses
in the event of a failure of XIPS (Xeon Ion Propulsion System) on the satellite.
A failure of XIPS could result in a reduction of the satellite's life to less
than 15 years. During the time when insurance for XIPS is unavailable, AsiaSat
has an alternative arrangement in place to cover the event of a XIPS failure.
Such arrangement will allow AsiaSat to purchase a replacement satellite for
AsiaSat 4 if XIPS fails at a pre-agreed price scaled relative to the time of
failure. The replacement satellite would be delivered in-orbit before the end of
life of AsiaSat 4. "See "Key Information - Risk Factors - Limited Life of
Satellites." AsiaSat renewed in-orbit insurance for AsiaSat 4 in the amount
HK$1,482.0 million (US$190.0 million) at a cost of approximately HK$42.5 million
(US$5.4 million) for the twelve month period beginning from March 20, 2005.
AsiaSat has obtained satellite in-orbit third-party liability insurance for
AsiaSat 2, AsiaSat 3S and AsiaSat 4 in an aggregate amount of HK$390.0 million
(US$50.0 million) for the twelve month period beginning from June 2, 2005.

    SALES AND MARKETING

    The Company's sales and marketing department, which had 31 employees
(including two general managers) as of December 31, 2004, is divided into two
groups, one of which serves China and the other serves the remainder of the
world. The senior executive officers of the Company, including the Chief
Executive Officer and Deputy Chief Executive Officer, are directly involved in
marketing to key broadcasting and telecommunications customers. Marketing
activities include customer visits, selected trade advertising and presentations
at industry conferences.

                                       24
<PAGE>

    EMPLOYEES

    As of December 31, 2004, the Company had 89 permanent employees, of which
eight employees were in management, 36 employees were in engineering and
operations and 29 employees were in sales and marketing. The remaining 16
employees were engaged in administrative, accounting, legal, regulatory and
clerical activities. The Company has 76 employees in Hong Kong and 13 employees
in Beijing. The Company believes its relations with its employees are good. See
"Directors, Senior Management and Employees - Employees."

    COMPETITION

    AsiaSat was founded in the late 1980s to serve the Asian regional satellite
communications market. While global satellite communications demand was
satisfied by Intelsat, Ltd. (the company formed in connection with the
privatization of the former International Telecommunications Satellite
Organization, an intergovernmental cooperative of more than 140 member nations
that owned and operated a global communications satellite system) and several
Asian countries that had developed domestic satellite communications, there was
no supplier of Asian region-wide satellite communications. Since the launch of
AsiaSat's first satellite in 1990, a number of international, regional and
domestic satellite operators have entered the Asian regional market. The
Company's primary market is Asian intra-regional broadcasting and
telecommunications.

    INTERNATIONAL, REGIONAL AND DOMESTIC SYSTEMS

    The business in which the Company operates is highly competitive. The
satellite services provided by the Company are used by its customers primarily
for point to multipoint communication (principally television broadcasting,
private communication network, Internet and multimedia). The Company competes
with several international, regional and domestic satellite companies operating
in the Asian region. Many of these competitors have long-standing customer
relationships and are substantially larger, and have financial resources that
are substantially greater, than those of the Company. The Company believes that
its ability to compete with these organizations depends on its existing customer
relationships and the quality of its customer service, its reputation as a
reliable operator of commercial satellites and the technical advantages of its
satellites.

    COMPETITION RESTRICTION FROM DOMESTIC SYSTEMS

    In many cases customers are required by the laws of their countries to use a
state-owned or locally-owned satellite system for domestic communications. These
legal requirements prevent the Company and other satellite companies from
competing to provide transponder capacity to these potential customers. In
addition, AsiaSat currently has entered into transponder utilization agreements
for full transponders or partial transponders with various purely domestic users
in several countries. These customers could be lost if monopolies were granted
to state-owned or locally-owned satellite systems. All, or almost all, of the
domestic systems are planning to add at least some regional transponders to
their next generation of satellites. See "Key Information - Risk Factors - Risk
of Limited Market Demand and Increasing Competition - Competing Systems and
Satellites."

                                       25
<PAGE>

    OTHER SATELLITE SYSTEMS

    Other existing and proposed organizations are competing or might consider
competing in the Asian regional market. Some existing competitors offer
low-cost, high performance transponders which compete directly with AsiaSat's
satellites, while other potential competitors offer low-cost, low-performance
transponders which do not compete directly with AsiaSat's high-performance
transponders. New organizations face significant entry barriers including
scarcity of orbital slots and high cost of entry.

    FIBER OPTIC SYSTEMS

    Fiber optic systems have been widely installed within the region for point
to point trans-oceanic communications. In addition, point to point fiber optic
connections between major cities in Asia are common. As fiber optic coverage
increases, the competitiveness of satellites for point to point communications
will diminish.

    TRANSPONDER OVERSUPPLY

    It is expected that in 2005, the supply of transponders in the region will
continue to exceed the demand for transponders. The Company believes that this
imbalance cannot be quickly corrected until global economic conditions improve
and new applications and services take up existing capacity. See "Key
Information - Risk Factors - Risk of Limited Market Demand and Increasing
Competition."

    REGULATION

    The international telecommunications industry is highly regulated. Satellite
services are subject to international space law while broadcasting and
telecommunications services are subject to international and national law. The
principal international law relating to the use of outer space is the Outer
Space Treaty. Countries that are party to the Outer Space Treaty or to other
treaties or conventions regulating outer space activities are responsible for
fulfilling their own obligations under these treaties or conventions. This often
results in the adoption by member countries of domestic laws to regulate the
activities of their own subjects in order to enable the country concerned to
comply with its international obligations.

    HONG KONG REGULATION

    As an operator of privately owned satellites, AsiaSat is subject to the
regulatory authority of Hong Kong through AsiaSat's principal regulator, the
Office of the Telecommunications Authority of Hong Kong.

    AsiaSat's satellite operations are principally regulated by the Outer Space
Ordinance (Chapter 523 of the Laws of Hong Kong) (the "Outer Space Ordinance").
The Outer Space Ordinance applies to all Hong Kong nationals and entities
incorporated under the laws of Hong Kong, including AsiaSat. This prohibits any
such person from, among other things, launching or procuring the launch of a
satellite, or operating a satellite, without obtaining an appropriate license.
The Outer Space Ordinance stipulates that any such license shall describe the
activities authorized by it and also provides that licenses may be granted
subject to conditions specified therein. The conditions may include, among other
things, basic orbital parameters (which include requirements to obtain advance
approval for any intended deviations and to notify any unintentional deviation),
requirements to avoid interference with

                                       26
<PAGE>

the activities of other users of outer space and requirements not to cause
actions which may give rise to liabilities on the part of China and Hong Kong.
Breach of any such conditions can give rise to a right of revocation of the
relevant license.

    In Hong Kong, the ultimate authority to grant licenses and otherwise to
administer the Outer Space Ordinance is vested in the Chief Executive of Hong
Kong, acting in coordination with the Executive Council of Hong Kong. In
practice, all relevant matters are dealt with on a day-to-day basis by and
through the Office of the Telecommunications Authority of Hong Kong. AsiaSat has
the benefit of existing licenses covering current and future operation of each
of AsiaSat 2, AsiaSat 3S and AsiaSat 4, subject to the conditions of the
respective licenses. Each of these licenses was formally granted shortly before
or after launch of the satellite concerned following a period of consultation
between AsiaSat and the Office of the Telecommunications Authority of Hong Kong.

    In addition to the regulatory regime to which the Company's outer space
operations are subject, the Company's earth station operations involve the
operation and use of telecommunication apparatus at and from its earth stations
at Stanley and Tai Po, Hong Kong. An earth station includes the antennas,
receivers, transmitters and other equipment needed on the ground to transmit and
receive satellite communications signals. Establishment, possession and use of
such telecommunication apparatus from the Company's earth stations in Hong Kong
are regulated by the Telecommunications Ordinance. AsiaSat has the benefit of
licenses granted under the Telecommunications Ordinance covering all its TT&C
(telemetry, tracking and control) operations (which refers to a land based
facility that monitors and controls the position of the satellite in-orbit), as
well as monitoring and testing functions, for each of AsiaSat 2, AsiaSat 3S and
AsiaSat 4, subject to the terms and conditions of the respective licenses. The
licenses require AsiaSat, among other things, to avoid harmful interference to
other telecommunication apparatus operating within or outside Hong Kong and to
ensure compliance with all relevant requirements of the International
Telecommunication Convention (and any other international telecommunication
agreements which may from time to time be acceded to by or on behalf of, or
applied to, Hong Kong) as well as the agreement relating to Intelsat, Ltd. Such
licenses for AsiaSat 2 and AsiaSat 3S were formally granted contemporaneously
with the grant of the licenses under the Outer Space Ordinance. In contrast,
because the Company successfully won a bid for a Telecommunication License from
the Office of the Telecommunications Authority of Hong Kong allowing broadcast
satellite services frequencies to be incorporated into the payload of AsiaSat 4,
the license for AsiaSat 4 under the Telecommunications Ordinance was granted
prior to the completion of AsiaSat 4. See "--AsiaSat 4." For a further
discussion on the Telecommunication License, the FC license and the non-domestic
television program service license, see "--Services and Customers - Expanded
Services and Other Businesses."

    The Telecommunications Ordinance also contains provisions for the taking of
possession by the Hong Kong Government of telecommunications stations if the
Chief Executive in Council is of the opinion that an emergency has arisen in
which it is expedient for the public service that the Hong Kong Government
should have control over telecommunications stations. In addition, the
Telecommunications Ordinance contains provisions for the payment of compensation
should such taking of possession occur.

                                       27
<PAGE>

    OVERSEAS NATIONAL TELECOMMUNICATIONS AUTHORITIES

    The Company's customers in many of the countries covered by the Company's
satellites must have authorization from the countries in which they or their
uplink facilities are located in order to use the Company's satellites. The laws
and regulatory requirements regulating access to satellite systems vary from
country to country. Some countries have substantially deregulated satellite
communications, making customer access to the Company's satellites a relatively
simple procedure, while other countries have maintained strict monopolistic
regimes. The application procedure for access to satellite systems can be
time-consuming and costly and the terms of the licenses vary among different
countries. Although AsiaSat believes its customers presently hold the requisite
licenses and approvals in all relevant countries, there may be instances of
non-compliance of which AsiaSat is not aware. Although AsiaSat does not believe
these regulatory schemes will prevent it from pursuing its business, there can
be no assurance that such licenses and approvals are or will remain sufficient
in the view of foreign regulatory authorities and that these authorities will
not discourage or prevent potential customers from utilizing transponders on
AsiaSat's satellites.

    The laws of certain countries require television broadcasters and satellite
telecommunication users providing services in such countries generally to use
state-owned or locally-owned satellites. For example, in Japan, domestic
broadcast using a foreign satellite is not permitted. In India, if suitable
capacity is available from a local satellite operator, operations using a
foreign satellite will not be permitted. The use of a foreign satellite is
subject to the authorization of the Department of Justice of India.

    There are no specific restrictions on satellite operators providing services
in Australia. A radio communications license may be issued to a satellite
operator specifically to authorize transmissions (a Space License) or one may be
issued specifically to authorize reception of transmissions (a Space Receive
License). The satellite itself must be either an Australian or foreign space
object as determined by the Australian Communications Authority. AsiaSat's
satellites are determined as foreign space objects by the Australian
Communications Authority. When the space stations are licensed via the space
segment, the operation of ubiquitous earth stations that are communicating with
them may be authorized by another class license. AsiaSat has appointed an
authorized nominated carrier for its Ku-band Australian transponders in
Australia.

    In Thailand, Shin Satellite's 8-year monopoly (which is part of a 30 year
concession from the country's government) ended in 1999. There are no specific
laws to regulate the activities and operations of satellites in Thailand. At
present, satellite activities in Thailand are authorized and controlled by the
National Telecom Commission of Thailand.

    China requires that all foreign satellite television broadcasters that have
been licensed to be downlinked in China be uplinked to a state-owned satellite
and multiplexed and downlinked to designated recipients and cable headends from
that state-owned satellite. No such requirement applies to Chinese domestic
satellite television broadcasters. Foreign satellite operators are required to
provide transponder capacity to domestic companies that have been licensed to
operate transponder capacity provision businesses or users approved by the
Ministry of Information Industry. Foreign satellite operators are not allowed to
provide transponder capacity to domestic users directly without the approval of
the Ministry of Information Industry.

                                       28
<PAGE>

    With respect to telecommunications, Chinese regulations stipulate that all
matters relating to the lease or the procurement of the use of foreign satellite
transponders are under the Ministry of Information Industry's jurisdiction.
Domestic users must apply to the Ministry of Information Industry to lease or
procure the use of such transponders.

    These legal requirements may prevent the Company and other satellite
companies from competing to provide transponder capacity to these potential
customers. There can be no assurance that other countries in the Asian region,
including countries in which the Company already has customers, will not impose
similar requirements to use state- or locally-owned satellites in the future.
The imposition of such requirements could adversely affect the Company's results
of operations.

    INTERNATIONAL TELECOMMUNICATION UNION

    The International Telecommunication Union was established in 1865 and became
a specialized agency of the United Nations in 1947. The International
Telecommunication Union is an organization of sovereign member states that aims
at maintaining and extending international cooperation among all its member
states for the improvement and rational use of telecommunications of all kinds.
For this purpose, the International Telecommunication Union has developed and
maintains international procedures and requirements for use of
telecommunications as well as technical standards and recommendations. As of
today, practically all countries in the world are members of the International
Telecommunication Union.

    The International Telecommunication Union is organized in three sectors: the
Telecommunication Standardization Sector, the Radiocommunication Sector and the
Telecommunication Development Sector. For satellite communications, most of the
activities and regulations of relevance take place within the Radiocommunication
Sector.

    The objectives of the Radiocommunication Sector are to ensure rational,
equitable, efficient and economical use of, and access to, the radio-frequency
spectrum by all radio communication services and all countries. The main
instrument of the Radiocommunication Sector is the Radio Regulations, which
establishes procedures for member states. The Radio Regulations are updated
regularly by World Administrative Radio Conferences. In between the sessions of
the World Administrative Radio Conferences, the Radio Regulations Board, a group
of elected members, develop Rules of Procedure on the application of the Radio
Regulations and also consider other matters that cannot be resolved through a
Rule of Procedure. The Radiocommunication Sector also carries out technical
studies and develops recommendations on radio communication matters to assist
member states and users of the radio-frequency spectrum. The Radiocommunication
Bureau was established to facilitate the work of the Radiocommunication Sector,
in particular, to facilitate the technical studies, meetings and conferences and
the application of the procedures contained in the Radio Regulations. The
Radiocommunication Bureau has a group of permanent staff with its headquarters
in Geneva, Switzerland.

    The Radio Regulations allocates certain frequency bands for various kinds of
satellite communication. It also contains procedures to be followed by its
member states to ensure that in bringing into use radio communication systems,
other users operating in accordance with these procedures are given the required
protection.

                                       29
<PAGE>

    Details of the International Telecommunication Union, its instruments and
working methods can be found in the Constitution and Convention of the
International Telecommunication Union, while radio communication matters are
dealt with in the Radio Regulations.

    Nations are required by treaty to make a filing of their proposed use of
satellite orbital slots for geostationary satellites with the Radiocommunication
Bureau. After filing an orbital slot request with the Radiocommunication Bureau,
other nations are afforded the opportunity to inform the Radiocommunication
Bureau of any potential conflicts with their present or planned use of orbital
slots. When a conflict or potential conflict is noted, nations are obligated to
negotiate in an effort to coordinate the proposed uses and resolve any
interference concerns. The Radiocommunication Bureau, however, has no formal
enforcement mechanism, and if nations cannot agree on a resolution, a satellite
system will not be entitled to the full interference protection afforded under
international law.

    The Hong Kong Special Administrative Region is mandated by China to file and
coordinate applications made by Hong Kong companies for orbital slots with the
Radiocommunication Bureau and to resolve interference concerns. The Chief
Executive of Hong Kong has delegated these responsibilities to the Office of the
Telecommunications Authority of Hong Kong. Use of the orbital slots remains
subject to the continuing oversight of the Office of the Telecommunications
Authority of Hong Kong and to a variety of regulations generally applicable to
all satellite and radio licensees. The Office of the Telecommunications
Authority of Hong Kong has fulfilled its obligation to notify the
Radiocommunication Bureau of the proposed use of the orbital slots for all of
AsiaSat's filings, which include filings for AsiaSat 2, AsiaSat 3S and AsiaSat
4. After AsiaSat 2, AsiaSat 3S and AsiaSat 4 reached their orbital positions and
commenced operations, AsiaSat notified the Office of the Telecommunications
Authority of Hong Kong, and the Office of the Telecommunications Authority of
Hong Kong in turn notified the International Telecommunication Union, that
AsiaSat 2, AsiaSat 3S and AsiaSat 4, as applicable, were on station and
operating as filed with the Radiocommunication Bureau, as coordinated and as
authorized by the Office of the Telecommunications Authority of Hong Kong. The
orbital locations of all of AsiaSat's satellites have been entered into or are
waiting to be entered into the Master Register of the International
Telecommunication Union. This concludes the process for the coordination of the
orbital slots for AsiaSat 2, AsiaSat 3S and AsiaSat 4. Moreover, to add more
flexibility for the utilization of the payloads of the current and future
AsiaSat satellites in positions at 100.5 degrees East, 105.5 degrees East and
122.2 degrees East, additional filings have been submitted to, and are currently
being coordinated with, the International Telecommunication Union.

    In addition to the three primary positions of 100.5 degrees East, 105.5
degrees East and 122.2 degrees East, China has filed on behalf of AsiaSat for
other orbital slots. In contrast to the three primary slots discussed above, the
additional slots have significant frequency and geographic coverage constraints
resulting from coordination and negotiation. AsiaSat is concentrating on the
development of its three primary slots first but the Company believes that the
encumbered and/or constrained slots may prove valuable in the future for
specific applications.

                                       30
<PAGE>

    EXPORT REGULATION

    In February 2001, Boeing obtained a Technical Assistance Agreement to
provide off-site support services for the life of AsiaSat 3S. On October 23,
2001, Boeing obtained a Technical Assistance Agreement to provide necessary
technical data and services to AsiaSat in connection with the AsiaSat 4 program.
In addition, Boeing has obtained a Technical Assistance Agreement from the U.S.
Department of State to provide technical data and service for in-orbit anomaly
support for AsiaSat 4. See "-- Satellites --AsiaSat 4."

    In June 2000, Lockheed Martin obtained a Technical Assistance Agreement from
the U.S. Department of State to provide technical data and services for in-orbit
anomaly support for AsiaSat 2 until December 31, 2009.

    PROPERTY, PLANTS AND EQUIPMENT

    LAND FACILITIES

    The Company's executive offices are located in Causeway Bay, Hong Kong. The
lease covering the Company's executive office space commenced in March 2005 for
a term of three years. The rental amount (excluding rates, air-conditioning and
management charges) under this lease is approximately HK$2.7 million per year.
The Company finances this cost from internal resources. See "Additional
Information - Material Contracts."

    In March 2000, the Company opened a representative office in Beijing, China.
The Company's Beijing office entered into a new lease for a period of four years
beginning in June 2004. The lease amount is approximately HK$0.7 million per
year.

    The Company has leased the Tai Po Site in Hong Kong to support the growth of
the Company's business. The Tai Po Site houses the Tai Po Satellite Earth
Station, which is the center for coordination of all technical customer-related
communication on the Company's satellite, including station testing, outage and
trouble shooting and real time scheduling of ad hoc broadcasting services
traffic. These services also include uplink, technical support and other value
added services. The Tai Po Satellite Earth Station became fully operational in
December 2003, and the complex received its final occupation permit from the
Hong Kong Building Authority in January 2004. The five full performance antennas
required for TT&C operations have been installed and are operational. See
"Additional Information - Material Contracts."

    The Company is not currently the subject of any actions or proceedings for
environmental liabilities. As AsiaSat's satellites reach their "end of life" and
are de-orbited, it is conceivable that the Company could be subject in the
future to actions for environmental or other liabilities resulting from damages
caused by these satellites.

    SATELLITE CONTROL FACILITIES

    The Tai Po Satellite Earth Station has been fully operational for more than
one year and is now the Company's primary TT&C facility. The Tai Po Satellite
Earth Station is connected by dual, diversely routed leased lines to the TT&C
facility at the Reach Network (Hong Kong) Limited's ("Reach") teleport located
at Stanley on the south side of Hong Kong Island (the "Stanley TT&C Facility").
The integrity of the delivery of the Company's services is achieved through
duplicating at the Tai Po Earth Station, the Company's circuits and facilities

                                       31
<PAGE>

provided at the Stanley TT&C Facility. A new satellite control and monitor
software program has been installed and is undergoing system testing.

    AsiaSat's technical personnel staff the Tai Po Satellite Earth Station 24
hours a day. There are no full-time employees of AsiaSat located at the Stanley
TT&C Facility. Reach teleport technicians are responsible for the routine
maintenance of the antennas and other equipment located at this facility.

    Once a satellite is placed at its orbital location, it is controlled by the
Tai Po Satellite Earth Station until the end of its in-orbit life. The TT&C
subsystem for each satellite makes it possible for ground control to monitor the
position of the satellite in-orbit. AsiaSat's engineers at the Tai Po Satellite
Earth Station periodically correct a satellite's attitude and conduct east-west
and north-south stationkeeping maneuvers, thus ensuring that AsiaSat's
satellites maintain their proper orientation and orbital position. In addition,
commands from the Tai Po Satellite Earth Station can switch transponders in and
out of service, position a steerable beam, control the charging and discharging
of the batteries, activate back-up equipment and engage other control functions.

         ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS.

    The following discussion and analysis should be read in conjunction with the
consolidated financial statements of the Company and related notes thereto
included elsewhere herein.

    OVERVIEW

    OUR SATELLITES. The Company, through its wholly-owned subsidiary, AsiaSat,
is a leading provider of high quality satellite transponder capacity in the
Asian region. As of May 31, 2005, the Company had three satellites in operation:

--------------------------------------------------------------------------------
                       POSITION                   UTILIZATION RATES(1)  % CHANGE
                       --------                   -----------------      -------
--------------------------------------------------------------------------------
                                           2002      2003       2004
                                           ----      ----       ----

AsiaSat 2           100.5(degree) East     65.6%     54.3%      36.4%     -33.0%

AsiaSat 3S          105.5(degree) East     62.2%     59.0%      73.3%      24.2%

AsiaSat 4           122.2(degree) East      N/A      10.3%      26.8%     160.2%

System Utilization                         63.6%     39.0%      45.7%      17.2%

    (1)  There were 49 transponders utilizedn all AsiaSat satellites at each of
the year-end 2002 and 2003, and there were 57 transponders utilized on all
AsiaSat satellites at year-end 2004. See "--- Results of Operations -
Utilization Rates."


    Our revenue by industry "segments" consist of video broadcasting and
telecommunications. The factors that drive demand for AsiaSat's satellite
services across the Asian region include video distribution, and the provision
of telecommunications networks to users who need last mile connectivity over
wide geographic coverage at a fixed cost. Satellites can provide this coverage
where cable cannot, particularly across the widespread and disparate Asian
region. Global trends show that, despite continually falling cable prices,
demand for satellite capacity used for private multi-point networks continues to
rise, and the Company believes that this will be the case in the Asian region.

                                       32
<PAGE>

    OUTLOOK. The decline in the Company's revenue in previous years has been a
result of factors including a decline in the global telecommunications market
beginning in 2000, the prevailing general economic slowdown, competition from
new satellite operators and the introduction of additional satellites into
operation by existing satellite operators, and the increased digitization of
broadcast channels which have decreased the overall demand for transponder
capacity. See "--- Results of Operations."

    Due to the factors described above and that the Company does not see
material signs of improvement among regional broadcast and telecommunications
operators, nor new developments in the market that would enable the Company to
deliver stronger results in 2005, the Company does not expect to achieve
improvement in the near term. See "Key Information -- Risk Factors - Political,
Economic and Other Regional Risks" and "Key Information -- Risk Factors - Risk
of Limited Market Demand and Increasing Competition." In addition to this slow
growth in new demand, business contraction of some existing customers and
continuing price pressure on new transponder utilization agreements have limited
the Company's growth. See "Information on the Company - Business Overview."
However, the Company's business is long-term in nature, and the positive factors
that drive demand remain in place. These factors include television distribution
(and increasingly in more developed markets, High Definition Television), and
telecommunications networks that need connectivity over wide geographic
coverage, at a fixed cost. In addition, the Company has a strong existing
customer base with contracts representing approximately 71.3% of the Company's
2004 revenue remaining under contract for 2005. Furthermore, the Company has an
outstanding technical and customer service team as well as a premium client
base. Thus, operationally, 2005 will be another challenging year requiring
intense customer focus to maintain and expand existing businesses where possible
and to concentrate on identifying new opportunities for growth. The Company will
continue to investigate strategic opportunities that would support and enhance
the Company's core satellite business in order to position itself to capitalize
upon the economic recovery of the commercial satellite industry in the Asian
region.

    REVENUE

    SOURCES. Substantially all of the Company's revenues during the years 2000
through 2004 were derived from payments made in respect of transponder
utilization agreements and transponder purchase agreements for AsiaSat 2,
AsiaSat 3S and AsiaSat 4 and were almost entirely payable in US Dollars.
AsiaSat's transponder utilization agreements and transponder purchase agreements
in effect as of May 31, 2005 provided for total committed revenue (including a
portion of the deposits received by the Company in prior periods and that will
be recognized as revenue in the applicable future period) of HK$3,099.7 million
(US$397.4 million). The Company expects that most of such committed revenue will
be recognized over the remaining terms of the relevant agreements up to 2014,
assuming that the agreements are not terminated earlier. See "Information on the
Company - Transponder Utilization Agreements." In 2004, approximately 2.0% of
the Company's revenue from the provision of transponder capacity was derived
from transponder purchase agreements, and the remaining portion was derived from
transponder utilization agreements.

    Payments under transponder utilization agreements are negotiated with each
individual customer and generally are influenced by various factors, including
market conditions that drive demand, satellite performance capabilities and the
reputation of AsiaSat as a reliable service provider. See "Information on the
Company - Business Overview." Generally, in the

                                       33
<PAGE>

satellite transponder market,
transponders with greater coverage, wider bandwidth, more viewers and higher
power have commanded a premium price. These factors will impact our ability to
increase charges for transponder capacity in future periods with respect to new
and existing agreements.

    SEGMENTS. The Company's primary industry "segments" consist of video
broadcasting and telecommunications. The majority of the Company's revenue is
attributable to video broadcasting. Due to the contracted nature of the
Company's revenue stream, year-to-year fluctuations are driven by customer
contract renewals and customer movements. See "Information on the Company -
Business Overview," "Information on the Company -Services and Customers -
Broadcasting", "Information on the Company - Services and Customers -
Telecommunications", "Information on the Company - Services and Customers -
Multimedia and Internet" and "Information on the Company - Services and
Customers - Expanded Services and Other Businesses." The following table shows a
breakdown of revenue by segment:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                 YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------------------------------------------------
                                                        2002                     2003                    2004
                                                 -------------------    ---------------------     --------------------
                                                 AMOUNT                 AMOUNT                    AMOUNT
                                                 ------   % OF          ------     % OF           ------      % OF
                                                          TOTAL                    TOTAL                     TOTAL
                                                 HK$M     REVENUE        HK$M      REVENUE        HK$M       REVENUE
                                                          -------                  -------                   -------
<S>                                              <C>      <C>            <C>       <C>            <C>        <C>
Broadcasting (video)                             649.0     68.3%         631.2     70.4%            709.4      70.6%

Telecommunications,                              301.8     31.7%         265.0     29.6%            295.6      29.4%
                                                 -----     -----         -----     -----            -----      -----
Internet and
Multimedia

Total Revenue                                    950.8    100.0%         896.2     100.0%         1,005.0(1)  100.0%
                                                 =====    ======         =====     ======         =======     ======
</TABLE>
    (1) See "-- Results of Operations - Revenues."

    The following table shows the location of the Company's customers. However,
due to the nature of the Company's business, the location of its customers are
not reflective of their market activities as broadcasting and telecommunication
consumers may be located outside the coverage area of AsiaSat's satellites.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                        2002                    2003                     2004
                                                 -------------------    --------------------     ---------------------
                                                 AMOUNT                 AMOUNT                    AMOUNT
                                                 ------   % OF          ------     % OF           ------      % OF
                                                          TOTAL                    TOTAL                     TOTAL
                                                 HK$M     REVENUE        HK$M      REVENUE        HK$M       REVENUE
                                                          -------                  -------                   -------
<S>                                              <C>       <C>          <C>          <C>            <C>        <C>
Hong Kong                                        341.2     35.9%        323.2        36.1%          323.1      32.1%

Greater China, including Macau and Taiwan        212.1     22.3%        212.8        23.7%          197.9      19.7%

United States of America                          73.3      7.7%         71.2         7.9%          183.8(1)   18.3%

British Virgin Islands                            40.4      4.2%         40.4         4.5%           40.9       4.1%

United Kingdom                                    43.4      4.6%         23.9         2.7%           46.1       4.6%

Others                                           240.4     25.3%        224.8        25.1%          213.2      21.2%
                                                 -----     -----        -----       ------          -----      -----

Total Revenue                                    950.8    100.0%        896.2       100.0%        1,005.0(1)  100.0%
                                                 =====    ======        =====       ======        =======     ======
</TABLE>
    (1) See "-- Results of Operations - Revenues."

                                       34
<PAGE>

    REVENUE RECOGNITION. The Company recognizes revenues from all transponder
utilization agreements on a straight line basis over the term of the agreements.
As a result of the utilization fee escalation clauses in the transponder
utilization agreements, in the early years of the term of any such agreement
revenues are recognized in respect of payments that are not yet due, and in the
latter portion of the term of such agreement revenues recognized will be less
than payments due under the contract terms. In the aggregate in 2002, 2003 and
2004, there was recognition of revenues under the transponder utilization
agreements in excess of payments due under those agreements in the amounts of
HK$34.8 million, HK$16.6 million and HK$9.3 million (US$1.2 million),
respectively.

    The Company recognizes revenue on the sale of transponder capacity under
transponder purchase agreements on a straight-line basis from the date of
delivery of the capacity until the end of the design life of the satellite.

    RELIANCE UPON A SIGNIFICANT CUSTOMER. In the years ended December 31, 2002,
2003 and 2004, approximately 23.5%, 24.9% and 22.4%, respectively, of the
Company's revenues were attributable to transponder utilization agreements with
STAR. See "Information on the Company - Services and Customers" and "Key
Information -- Risk Factors --Reliance upon Significant Customer."

    EXPENSES

    The components of operating expenses are cost of services, selling, general
and administrative expenses and depreciation. Significant components of cost of
services include in-orbit insurance, staff costs, satellite operations and
turnaround service charges. Significant components of selling, general and
administrative expenses include staff costs, office rental expenses, provision
for doubtful debts, marketing and promotion expenses, business travel expenses,
dual listing expenses, professional fees and amortization of goodwill arising
from an acquisition of affiliates.

    Staff costs (and associated travel expenses) and office rental expenses are
allocated by the Company between cost of services and selling, general and
administrative expenses depending on the function of such staff and use of the
office space. The cost of services category of operating expenses includes all
operating expenses incurred for engineering and the operation of the Company's
satellites, including the proportionate amount of office rental expense for the
office space used by the Company's engineers and the operations department. All
staff, travel and office space expenses not included in cost of services are
allocated to selling, general and administrative expenses.

                                       35
<PAGE>

    INTEREST IN ASSOCIATES

    The Company has accounted for its share of profit or loss arising from
associates on an equity accounting basis. In the case of a loss, the Company
will reflect its share in its income statement with a corresponding write down
of its investment in an affiliate. Once the investment has been written down to
zero the Company will not account for any further loss beyond its investment. In
2002, 2003 and 2004, the Company recorded a HK$13.7 million, HK$17.5 million and
HK$12.4 million (US$1.6 million) loss, respectively, with respect to its
investment in associates, which includes amortization of goodwill and impairment
loss. In the case of a profit, the Company will reflect its share of the profit
in its income statement. In 2002, 2003 and 2004, the Company recorded a positive
contribution to the Company's income statement in the amount of HK$6.5 million,
HK$3.3 million and HK$6.4 million (US$0.8 million), respectively.

    TAXATION

    The Company is subject to Hong Kong Profits Tax on its operations deemed to
be located in Hong Kong. It is also subject to overseas tax on its operations in
certain of the overseas jurisdictions. See Note 8 to the Company's consolidated
financial statements. The Hong Kong profits tax rate was increased to 17.5% per
annum with effect from April 2003. Hong Kong profits tax was previously charged
at the rate of 16% per annum.

    Under Indian tax regulations, the Company may be subject to Indian income
tax on revenues received by the Company in respect of income from the provision
of satellite transponder capacity to the Company's customers for purposes of
those customers carrying on business in India or earning income from any source
in India.

    The Indian tax authorities have assessed the Company for income tax as
follows:

<TABLE>
<CAPTION>
                            ASSESSMENTS (HK$ IN MILLIONS) (APPROXIMATELY)
    ---------------------------------------------------------------------------------
    Assessment   1997-98   1998-99   1999-00  2000-01   2001-02   2002-03      Total
    Year
    <S>          <C>       <C>       <C>      <C>       <C>       <C>          <C>
                  20.0      23.0      22.0      14.0     29.0      38.0        146.0
                  ----      ----      ----      ----     ----      ----        =====
    ---------------------------------------------------------------------------------
</TABLE>

    The Company has filed appeals for each of the assessment years 1997-98 to
2002-03. No assessment has yet been made for the 2003-04 or 2004-05 assessment
years.

    The Income Tax Appellate Tribunal (the "Tribunal") in an earlier appeal
filed against the original assessment for the assessment year 1997-98 held that
the Company is liable for Indian income tax under certain circumstances. The
Company does not believe that it is liable for the Indian income tax as held by
the Tribunal and has filed an appeal against the Tribunal's decision. The tax
authorities have also filed an appeal against the Tribunal's decision. Both
appeals have been admitted by the High Court.

    In order to obtain a stay of recovery proceedings, the Company has made
payments as follows and has recorded these payments as an asset on the
assumption that the amounts are recoverable:

                                       36
<PAGE>

<TABLE>
<CAPTION>
                   PAYMENT TO STAY RECOVERY PROCEEDINGS (HK$ IN MILLIONS) (APPROXIMATELY)
    -----------------------------------------------------------------------------------------------------
    Assessment       1997-98     1998-99     1999-00       2000-01      2001-02    2002-03         Total
    Year
    <S>              <C>         <C>         <C>           <C>          <C>        <C>             <C>
                       13.0        15.0        10.0          9.0          20.0     27.0             94.0
                       ----        ----        ----          ---          ----     ----            =====
    -----------------------------------------------------------------------------------------------------
</TABLE>

    In addition, based on the general principles set forth by the Tribunal, the
amount of income taxable in India depends on the payments made by the Company's
customers to the Company for the purpose of those customers carrying on business
in India or earning income from any source in India. As such information is
proprietary in nature and has not been provided by the Company's customers, the
Company cannot reasonably estimate the taxable income and therefore also cannot
estimate the amount of income tax to which the Company may be assessed.
Accordingly, no provision has been recognized for Indian income tax in the
Company's financial statements. Furthermore, as stated above, the Company has
filed an appeal against the Tribunal's decision. The appeal has been admitted by
the High Court and is pending before the High Court.

    RESULTS OF OPERATIONS

    The Company's revenues for 2004 amounted to HK$1,005.0 million (US$128.8
million), which included a one-time lump sum receipt of HK$123.0 million
(US$15.8 million) for early termination of a transponder utilization agreement.
After reversing that portion of the income from the contract accounted for on a
straight-line basis in prior years, the one-time contribution to revenues in the
results of 2004 amounted to HK$107.0 million (US$13.7 million). Excluding this
HK$107.0 million (US$13.7 million), revenue for 2004 amounted to HK$898.0
million (US$115.1 million), a slight increase from 2003.

    Profit from operations decreased in 2004 as a result of the full year effect
on depreciation and in-orbit insurance of AsiaSat 4. Profit from operations in
2004 decreased 5.4% to HK$504.0 million (US$64.6 million from HK$532.6 million
in 2003, which in turn decreased 16.4% from HK$637.4 million in 2003. Profit
from operations as a result of revenues decreased in 2004 to 50.1% from 59.4% in
2003, which in turn decreased from 67.0% in 2002.

    The following table sets forth, for the periods indicated, the percentage of
revenues represented by certain income and expense items in the Company's
Consolidated Statement of Operations.

<TABLE>
<CAPTION>
                                                             YEAR ENDED DECEMBER 31,
                                                --------------------------------------------
                                                    2002            2003            2004
                                                --------------    ----------     -----------
<S>                                              <C>              <C>            <C>
Revenues                                             100%           100%            100%

Cost of services                                    (25.6)         (35.0)          (41.9)
                                                --------------    ----------     -----------

                                                     74.4           65.0            58.1

Other operating income                                 --            0.1              --

Interest income                                       0.7            0.6             2.2

Administrative expenses                              (8.1)          (6.3)          (10.2)
                                                --------------    ----------     -----------

Profit from operations                               67.0           59.4            50.1
</TABLE>

                                       37
<PAGE>

<TABLE>
<CAPTION>
                                                             YEAR ENDED DECEMBER 31,
                                                --------------------------------------------
                                                    2002            2003            2004
                                                --------------    ----------     -----------
<S>                                                  <C>            <C>             <C>
Finance costs                                          --           (0.3)             --

Share of results of associates (including            (1.4)          (1.7)           (1.2)
   goodwill amortization)

Impairment loss recognized in respect of               --           (0.2)             --
   goodwill of associates
                                                --------------    ----------     -----------

Profit before taxation                               65.6           57.2            48.9

Taxation                                             (7.3)          (9.8)           (6.0)
                                                --------------    ----------     -----------

Profit for the year                                  58.3           47.4            42.9
                                                ==============    ==========     ===========
</TABLE>

    REVENUES

    Revenues in 2004 increased 12.1% to HK$1,005.0 million (US$128.8 million)
from HK$896.2 million in 2003, which in turn decreased from HK$950.8 million in
2002. During 2004, the Company entered into transponder utilization agreements
for a total of approximately twelve transponders at lower rates for some new
customers and lost approximately seven transponders on non-renewal of some
contracts upon expiration. The increase in revenue in 2004 was primarily due to
a one-time contribution to revenues resulting from the early termination of a
transponder utilization agreement. The decrease in revenue in 2003 compared to
2002 was primarily due to the non-renewal of some contracts upon expiration.

    UTILIZATION RATE. As of December 31, 2004, the overall total utilization
rate of AsiaSat 2, AsiaSat 3S and AsiaSat 4 increased 17.2% over the prior year
from 39.0% to 45.7%, which in turn decreased from the overall total utilization
rate of 63.6% as of December 31, 2002. See "--Overview." There were 49, 49 and
57 transponders utilized on all AsiaSat's satellites at the year-end 2002, 2003
and 2004, respectively. The decrease in the overall utilization rate in 2003
from the previous year was the result of the introduction of AsiaSat 4 to
AsiaSat's satellite fleet and the contraction of the business of certain of
AsiaSat's customers. However, while utilization rates decreased in 2003 from the
previous year, the total number of transponders utilized as at December 31, 2002
and December 31, 2003 remained unchanged at 49. The increase in 2004 from the
previous year was the result of the leasing of additional transponders to new
and existing customers. See "Key Information - Risk Factors - Risk of
Technological Changes" and "Key Information - Risk Factors - Risk of Limited
Market Demand and Increasing Competition."

    Utilization rates and the fees derived from its satellites are determined by
the terms of the Company's transponder agreements rather than the transponder
capacity actually used by the Company's customers at any given time. The fees
derived from the Company's satellites with respect to video broadcasting
services varies depending, in part, on whether the satellite has an established
viewer base. See "Information on the Company - Business Overview."

    COST OF SERVICES. Cost of services in 2004 increased 34.2% to HK$420.5
million (US$53.9 million) from HK$313.3 million which in turn increased 28.9%
from HK$243.1 million in 2002. HK$23.7 million of the increase in 2003 was due
to an increase in the cost of first-year in-orbit satellite insurance directly
associated with the launch of

                                       38
<PAGE>

AsiaSat 4 and HK$4.7 million of the increase was due to increases in the cost of
satellite and other insurance which was a result, in part, of increases in D&O
insurance resulting from previous corporate scandals in the United States, the
terrorist events of September 11, 2001, and in-orbit failures affecting other
global satellites in the industry. HK$65.7 million of the increase in 2004 was
due to depreciation and HK$26.4 million of the increase was due to insurance.
First-year in-orbit satellite insurance is recorded by the Company as a cost of
services after commissioning of the satellite. See "Key Information - Risk
Factors - Risk of Loss or Damage to Satellites, Ground Based Satellite Control
Equipment or Satellite Stations from Acts of War, Terrorism, Electrostatic
Storm, Space Debris and Other Natural Disasters and Limitations on Warranties
and Insurance." Depreciation expenses, which are included in cost of services,
increased in 2004 to HK$288.0 million from HK$222.3 million in 2003. HK$55.6
million of the increase in depreciation expenses in 2004 was attributable to the
full year depreciation of AsiaSat 4 and HK$55.6 million of the increase was
attributable to the Tai Po Earth Station.

    ADMINISTRATIVE EXPENSES. Administrative expenses in 2004 increased 82.6% to
HK$102.5 million (US$13.1 million) from HK$56.1 million in 2003, which in turn
decreased 26.9% from HK$76.7 million in 2002. The decrease in administrative
expenses in 2003 was largely attributable to the recovery of bad debt for late
payments by customers in which a provision for bad and doubtful debts was
recorded in a previous year. The increase in administrative expenses in 2004 was
largely attributable to the provision of doubtful debts and performance bonus.

    INTEREST INCOME. Interest income in 2004 increased 344.9% to HK$21.8 million
(US$2.8 million) from HK$4.9 million in 2003, which decreased 23.4% from HK$6.4
million in 2002. The decrease in interest income in 2002 and 2003 was primarily
due to lower interest rates on banks deposits. The increase in interest income
in 2004 was primarily due to larger cash balances and higher interest from
structured deposits.

    PROFIT BEFORE TAXATION

    Profit before taxation in 2004 decreased 4.0% to HK$491.6 million (US$63.0
million) from HK$512.1 million in 2003, which in turn decreased 17.9% from
HK$623.8 million in 2002. The decrease in income before taxes in 2003 resulted
from lower revenues combined with higher operating expenses. The decrease in
income before taxes in 2004 resulted from higher cost of services and
administrative expenses.

    TAXATION

    Taxation in 2004 decreased 30.9% to HK$60.5 million (US$7.8 million) from
HK$87.6 million in 2003, which in turn increased 26.8% from HK$69.1 million in
2002. The increase in income tax in 2003 resulted primarily from an additional
provision of HK$17.4 million for deferred tax for prior years as a result of the
change in the corporate tax rate in Hong Kong. The decrease in 2004 resulted
primarily from lower assessable profit. For the years 2004, 2003 and 2002, the
effective tax rates were 12.3%, 17.1% and 11.1%, respectively. The higher
effective rate in 2003 was mainly due to the additional provision for deferred
tax for prior years and current year profit tax due to the increase of the
profits tax rate in Hong Kong by 1.5%.

                                       39
<PAGE>

    PROFIT FOR THE YEAR

    Profit for the year in 2004 increased 1.6% to HK$431.2 million (US$55.3
million) from HK$424.5 million in 2003, which decreased 23.5% from HK$554.7
million in 2002.

    LIQUIDITY AND CAPITAL RESOURCES

    SOURCES OF FINANCING

    The Company's principal use of capital in 2002 and 2003 was capital
expenditures related to the construction and launch of AsiaSat 4 and the
construction of the Tai Po Satellite Earth Station. The Company's principal use
of capital in 2004 was capital expenditures associated with the Tai Po Satellite
Earth Station. Cash applied for the acquisition of property, plant and equipment
was HK$440.2 million in 2002 and decreased to HK$162.2 million in 2003, which in
turn decreased to HK$47.7 million (US$6.1 million) in 2004. Cash applied for the
acquisition of property, plant and equipment has been financed through cash
flows generated from operations.

    As of December 31, 2004, the Company had no outstanding debt and HK$3,874.6
million of shareholders' equity.

    The satellite business is highly capital intensive. The Company's ability to
meet its future debt obligations, if any, will be dependent on a number of
factors, including its cash flow from operations, its ability to secure future
financing, if needed, and the useful lives of the Company's satellites. See "--
Planned Capital Expenditures."

    PLANNED CAPITAL EXPENDITURES

    The Company anticipates the need for additional capital to fund a
replacement satellite for AsiaSat 2. The following table sets forth the
Company's planned major capital expenditures for the periods indicated. Actual
capital expenditures may differ from the amounts indicated below.


                                       40
<PAGE>

<TABLE>
<CAPTION>
                                     PLANNED CAPITAL EXPENDITURES (IN MILLIONS)
-----------------------------------------------------------------------------------------------------
                       2005        2006         2007       2008       2009         TOTAL        TOTAL
                        HK$         HK$          HK$        HK$        HK$          HK$          US$

<S>                    <C>         <C>          <C>        <C>        <C>           <C>         <C>
    AsiaSat 2            --       743.7        902.9       69.4         --       1,716.0       220.0
   Replacement
    Satellite

Ground Facilities        --        10.2          2.4        0.6         --          13.2          1.7
     for the
   Replacement
    Satellite

     Others            27.0        12.2         13.8       15.2       14.7          82.9        10.6
                       ----        ----         ----       ----       ----          ----        ----
     Total             27.0       766.1        919.1       85.2       14.7       1,812.1        232.2
                       ====       =====        =====       ====       ====       =======        =====
</TABLE>

    A replacement satellite for AsiaSat 2 will need to be constructed for launch
in 2007 in order to provide adequate opportunity to replace AsiaSat 2 at the end
of its useful life. The total costs for the construction and launch of a
replacement satellite for AsiaSat 2 is estimated to be approximately HK$1,716.0
million (US$220.0 million). The Company expects that it can finance a
replacement satellite for AsiaSat 2 through cash flows generated from
operations. However, there can be no assurance that any required additional
financing, if any, for additional satellites or an additional loan facility will
be available or that, if available, it will be available on terms satisfactory
to the Company. The planned capital expenditures indicated as "Others" in the
table above consist of those planned for furniture and fixture, office
equipment, equipment and building upgrade at the Tai Po site, motor vehicles,
new business and test equipment and tools.

    CONTRACTUAL OBLIGATIONS

    As of December 31, 2004, the Company had various contractual obligations
which are more fully disclosed in Notes 25 and 26 to the consolidated financial
statements of the Company. The following table aggregates the contractual
obligations of the Company as of December 31, 2004:


                                       41
<PAGE>

<TABLE>
<CAPTION>
                                           PAYMENTS (OR OTHER OBLIGATIONS WHICH MAY BECOME DUE) BY PERIOD
                                                                      (HK$ IN MILLIONS)
                                          ---------------------------------------------------------------

                                           TOTAL      LESS THAN      1-3 YEARS    4-5 YEARS     AFTER 5
                                                        1 YEAR                                    YEARS
<S>                                        <C>        <C>            <C>          <C>           <C>
Commitment of Expenditure for Operations
and Maintenance Capital Expenditures....    21.3          21.3            --          --           --

Operating Lease Obligations.............    17.1           6.5          10.6          --           --
                                           -----      ---------      ---------    ---------     -------

Total Contractual Obligations               38.4          27.8          10.6          --           --
                                           =====      =========      =========    =========     =======

Deferred Revenue
  Disclosed on the Company's
  Balance Sheet(1)......................   286.9         175.0          41.8        26.6         43.5
</TABLE>

    (1) Only reflects deferred revenue associated with the sale of transponder
capacity requiring the provision of on-going transponder capacity through the
relevant period of the transponder purchase agreement.


    AsiaSat leases its premises under non-cancelable operating leases. At
December 31, 2004, commitments for future minimum lease payments which fall due
in 2005, 2006 and subsequent years are HK$0.6 million and HK$1.2 million,
respectively.

     In the ordinary course of its business, AsiaSat enters into commercial
commitments for various aspects of operations, such as repair and maintenance.
However, the Company believes that those commitments will not have a material
effect on the Company's financial condition, results of operations or cash
flows.

    CASH FLOWS

    The Company has generally financed its short-term working capital
requirements from cash provided by operations. The Company has not borrowed any
amounts for the last three years. The Company had cash and cash equivalents of
HK$406.2 million, HK$659.3 million and HK$1,234.4 million (US$158.3 million) as
of December 31, 2002, 2003 and 2004, respectively.

    Net cash generated from operating activities was HK$809.6 million, HK$627.5
million and HK$750.8 million (US$96.3 million) in 2002, 2003 and 2004,
respectively. In 2003, the decreased level of net cash provided by operating
activities resulted primarily from lower turnover. In 2004, the increased level
of net cash provided by operating activities resulted primarily from lower
capital expenditures and lower amounts of dividends paid.

    Net cash used in investing activities was HK$453.4 million, HK$164.5 million
and HK$50.9 million (US$6.5 million) in 2002, 2003 and 2004, respectively.
Expenditures on the construction and launch of AsiaSat 3S and AsiaSat 4 were
HK$388.3 million and HK$58.0 million (US$7.4 million) in 2002 and 2003,
respectively. Expenditures on other property and equipment were HK$51.9 million,
HK$104.2 million and HK$47.7 million (US$6.1 million) in 2002, 2003 and 2004,
respectively.

                                       42
<PAGE>

    Net cash used in financing activities was HK$86.4 million, HK$209.9 million
and HK$124.9 million (US$16.0 million) in 2002, 2003 and 2004, respectively. In
2002 and 2003 and 2004, net cash used in financing activities primarily
consisted of dividend payments.

    The Company has sufficient working capital to cover its planned capital
expenditures and other operating needs. See "-- Planned Capital Expenditures."
The Company had a working capital of HK$239.0 million at December 31, 2002, a
working capital of HK$529.9 million at December 31, 2003 and a working capital
of HK$1,023.1 million (US$131.2 million) at December 31, 2004.

    OFF-BALANCE SHEET ARRANGEMENTS

    The Company does not have any off-balance sheet arrangements that have or
are reasonably likely to have a current or future effect on the Company's
financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or resources that are
material to investors.

    EXCHANGE RATES

    During the past three years almost all of the Company's revenues, premiums
for satellite insurance coverage and debt service and substantially all capital
expenditures were denominated in US Dollars. The Company's remaining expenses
were primarily denominated in HK Dollars during these periods. As of December
31, 2004, almost all of AsiaSat's transponder utilization agreements,
transponder purchase agreements and obligations to construct and launch
satellites and to purchase TT&C equipment were denominated in US Dollars.

    INFLATION

    Inflation has not materially affected the Company's operations during the
past three years.

    U.S. GAAP RECONCILIATION

    The Company's financial statements are prepared in accordance with Hong Kong
GAAP, which differs in certain material respects from U.S. GAAP. The following
table sets forth a comparison of the Company's net income and shareholders'
equity in accordance with Hong Kong GAAP and U.S. GAAP.

                                             2002       2003      2004      2004
                                              HK$        HK$       HK$       US$
Net income in accordance with:                         (in millions)

  Hong Kong GAAP........................    554.7      424.5     431.2      55.3

  U.S. GAAP.............................    538.1      408.3     424.1      54.4

Shareholders' equity in accordance with:

  Hong Kong GAAP........................  3,346.7    3,568.3   3,874.6     496.7

  U.S. GAAP.............................  3,412.2    3,617.6   3,916.7     502.1

    Note 31 to the Company's consolidated financial statements provides a
description of the principal differences between Hong Kong GAAP and U.S. GAAP as
they relate to the

                                       43
<PAGE>

Company and a reconciliation to U.S. GAAP of certain items, including net income
and shareholders' equity. Differences between Hong Kong GAAP and U.S. GAAP that
have a material effect on the Company's net income and shareholders' equity as
reported under Hong Kong GAAP relate to capitalization of interest, borrowing
costs and deferred taxation.

    CRITICAL ACCOUNTING POLICIES

    The Company's consolidated financial statements are prepared in accordance
with Hong Kong GAAP. The preparation of these consolidated financial statements
requires the Company to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses as well as the disclosure
of contingent assets and liabilities. The Company continually evaluates these
estimates and judgments, including those related to estimated useful lives of
satellites, impairment losses on satellites, allowance for doubtful accounts,
and contingent liabilities related to tax assessments from Indian tax
authorities. The Company bases these estimates and judgments on its historical
experience and other factors that it believes to be reasonable under the
circumstances. Actual results may differ from these estimates under different
assumptions or conditions. The Company has identified below the accounting
policies that are the most critical to its consolidated financial statements.

         USEFUL LIVES OF IN-ORBIT SATELLITES. The Company has significant
investments in satellites. The carrying value of the Company's in-orbit
satellites represented 39%, 72% and 59% of its total assets as of December 31,
2002, 2003 and 2004, respectively. The Company estimates the useful lives of
satellites in order to determine the amount of depreciation expense to be
recorded during the reported period. The useful lives are estimated at the time
satellites are put into orbit and are based on historical experience with other
satellites as well as the anticipated technological evolution or other
environmental changes. If technological changes were to occur more rapidly than
anticipated or in a different form than anticipated, the useful lives assigned
to these satellites may need to be shortened, resulting in the recognition of
increased depreciation in a future period. Similarly, if the actual lives of
satellites are longer than what the Company has estimated, the Company would
have a smaller depreciation expense. As a result, if the Company's estimates of
the useful lives of its satellites are not accurate or are required to be
changed in the future, the Company's net income in future periods would be
affected.

         REALIZABILITY OF THE CARRYING AMOUNTS OF LONG-LIVED ASSETS. The Company
is required to evaluate at each balance sheet date whether there is any
indication that the carrying amounts of long-lived assets (primarily its
satellites) may be impaired. The recoverable amount is the amount recoverable
over the remaining lives of the assets through undiscounted future expected cash
flows. If any such indication exists, the Company should estimate the
recoverable amount of the long-lived assets. An impairment loss is recognized
based on the excess of the carrying amount of such long-lived assets over their
recoverable amounts. The impairment charge is calculated using the discounted
present value of the cash flows expected to arise from the continuing use of
long-lived assets and cash arising from its disposal at the end of its useful
life. The estimates of the cash flows are based on the terms and period of
existing transponder utilization agreements ("Existing Agreements"). Likewise,
changes in estimated discount rates that result in lower recoverable amounts
would result in an impairment loss being recognized.

    Modifications to the terms of the Existing Agreements that results in
shorter utilization period than previously agreed and/or those that result in
the reduction in agreed rates will result in a lower recoverable amounts (if the
discount rate used is not changed); which may, in turn, result

                                       44
<PAGE>

in the carrying amounts exceeding the recoverable amounts, which in turn would
result in an impairment loss being recognized.

         INSURANCE. For each of its satellites, the Company obtains insurance
covering launch and first-year in-orbit loss at a blended rate. The launch
insurance is a one time charge and the in-orbit insurance is recurring
in-nature. The Company capitalizes a large portion of the insurance premium
relating to the launch as a cost of satellite and amortizes the cost over the
life of the satellite on a straight-line basis. The small portion of the
insurance premium relating to the first-year in-orbit is determined by reference
to an indicative rate obtained through an insurance broker in an open market for
satellites of similar type and configuration, and is recorded as part of cost of
services after commissioning of the satellite. The in-orbit insurance cost
usually represents 2.5% to 3.5% of the total amount insured for such satellite.

         ALLOWANCE FOR DOUBTFUL ACCOUNTS. The Company maintains allowance for
doubtful accounts for estimated losses that result from the inability of its
customers to make the required payments. The Company bases its allowances on the
likelihood of recoverability of account receivables based on past experience and
current collection trends that are expected to continue. The Company's
evaluation also includes the length of time the receivables are past due and the
general business environment.

    If changes in these factors occur, or the historical data the Company uses
to calculate the allowance for doubtful accounts as of December 31, 2004 does
not reflect the future ability to collect outstanding receivables, additional
provisions for doubtful accounts may be needed and the Company's future results
of operations could be adversely affected.

         CONTINGENCY RELATED TO INDIAN TAX ASSESSMENTS. As of May 31, 2005 the
Indian tax authorities have assessed the Company for income tax of approximately
HK$146.0 million (US$18.7 million). See "-- Taxation." The Company did not
recognize liabilities in connection with the foregoing assessments as the
Company believes that the criteria for recognition of a loss contingency under
the US Statement of Financial Accounting Standards No. 5, "Accounting for
Contingencies" ("SFAS 5") and Hong Kong Statement of Standard Accounting
Practice No. 28 "Provisions, Contingent Liabilities and Contingent Assets"
("SSAP 28") were not met. SFAS 5 requires that "an estimated loss from a loss
contingency shall be accrued by a charge to income if both of the following
conditions are met: (a) information available prior to issuance of the financial
statements indicates that it is probable that an asset had been impaired or a
liability had been incurred at the date of the financial statements; and (b) the
amount of loss can be reasonably estimated. SSAP 28 states that a contingent
liability is: (a) a possible obligation that arises from past events and whose
existence will be confirmed only by the occurrence or non-occurrence of one or
more uncertain future events not wholly within the control of the enterprise; or
(b) a present obligation that arises from past events but is not recognized
because: (i) it is not probable that an outflow of resources embodying economic
benefits will be required to settle the obligation: or (ii) the amount of the
obligation cannot be measured with sufficient reliability.

    The Company cannot reasonably estimate the loss that will arise from the
assessment since the information needed to calculate such loss (if any) is
proprietary to the Company's customers and was not provided to the Company.
Further, the Company believes it has a reasonable likelihood of success with
respect to its appeals against the Tribunal's decision. Therefore, the Company
believes that the criteria for recognition of a loss contingency under SSAP 28
or SFAS 5 were not met. If the Company is finally held liable for such Indian
tax, the Company's future results of operations could be adversely affected.

                                       45
<PAGE>

    NEW ACCOUNTING STANDARDS

    For a discussion on new accounting standards, see Note 2 to the Company's
consolidated financial statements.

    RESEARCH AND DEVELOPMENT

    The Company does not incur any significant research and development
expenditures.

    TREND INFORMATION AND PROSPECTS

    Due to the nature of the Company's business with long-term commitments being
made for the purchase of satellites and long-term contracts entered into by
AsiaSat's customers, there are no immediate changes from one period to the next
which impact AsiaSat's business. See "Information on the Company - Business
Overview." For a further discussion on trends and prospects, see " -- Overview."

         ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.

                         DIRECTORS AND SENIOR MANAGEMENT

    The directors of the Company as of May 31, 2005 are set forth below.

<TABLE>
<CAPTION>
                                                           DATE FIRST ELECTED OR
                                                           APPOINTED DIRECTOR OF
NAME                       AGE     POSITION                ASIASAT (OR THE COMPANY)  TERM  OF OFFICE
-----------------------    -----   ---------------------   ------------------------  ---------------
<S>                        <C>     <C>                     <C>                       <C>
Romain Bausch (2)          51      Chairman and Director   January 15, 1999          May 14, 2007

Zeng Xin Mi (1)            54      Deputy Chairman and     February 28, 2001         May 14, 2007
                                   Director

Robert Bednarek (2)        47      Director                March 14, 2002            May 13, 2008

Professor Edward Chen,     60      Director                May 10, 1996              May 16, 2006
C.B.E., J.P. (3)

Yu Cheng Ding (1)          39      Director                January 15, 1999          May 14, 2007

R. Donald Fullerton (3)    73      Director                May 10, 1996              May 13, 2008

Peter Jackson              56      Director                May 10, 1996              May 16, 2006

Wei Min Ju (1)             42      Director                October 12, 1998          May 14, 2007
</TABLE>

                                       46
<PAGE>

<TABLE>
<CAPTION>
                                                           DATE FIRST ELECTED OR
                                                           APPOINTED DIRECTOR OF
NAME                       AGE     POSITION                ASIASAT (OR THE COMPANY)  TERM  OF OFFICE
-----------------------    -----   ---------------------   ------------------------  ---------------
<S>                        <C>     <C>                     <C>                       <C>
Fai Wong Ko (1)            56      Director                March 11, 2004            May 14, 2007

Mark Rigolle (2)           39      Director                November 17, 2004         May 13, 2008

Robert Sze (3)             64      Director                May 10, 1996              May 13, 2008

William Wade               48      Director                May 10, 1996              May 16, 2006
</TABLE>
-----------------------
(1) Appointed by CITIC.
(2) Appointed by SES.
(3) Independent.


The executive officers of the Company as of May 31, 2005 are set forth below.

<TABLE>
<CAPTION>
                                                           DATE FIRST ELECTED OR
                                                           APPOINTED DIRECTOR OF
NAME                       AGE     POSITION                ASIASAT (OR THE COMPANY)  TERM  OF OFFICE
-----------------------    -----   ---------------------   ------------------------  ---------------
<S>                        <C>     <C>                     <C>                       <C>
Peter Jackson              56      Chief Executive         July 1, 1993              Indefinite
                                   Officer

William Wade               48      Deputy Chief            April 15, 1994            Indefinite
                                   Executive Officer

Catherine Chang            37      Legal Counsel           January 1, 2003           Indefinite

Liqun Chen                 54      General Manager, China  April 14, 1989            Indefinite

Ya Hui Chiu                55      General Manager,        February 13, 1989         Indefinite
                                   Operation

Sabrina Cubbon             43      General Manager,        December 1, 1993          Indefinite
                                   Marketing

Denis Lau                  65      Secretary and General   July 1, 1988              Indefinite
                                   Manager, Finance and
                                   Administration

Barry Turner               58      General Manager,        May 1, 1998               Indefinite
                                   Engineering
</TABLE>
--------------------

    The Board of Directors of the Company currently consists of 12 members.
Action can be taken by a majority of directors present at a meeting at which a
quorum is present. Attendance by six directors, or such other number as
determined by the directors from time to time, constitutes a quorum. The
Bye-laws of the Company provide that any director may call a board meeting. The
directors of the Company all hold office until the next annual meeting of
shareholders and until their successors are elected and have qualified.

                                       47
<PAGE>

    ROMAIN BAUSCH was appointed a Non-Executive Director of the Company on
January 15, 1999. Since then, he acted as Deputy Chairman (1999-2000), Chairman
(2001-2002) and Deputy Chairman (2003-2004) of the Board on a rotational basis
biennially. For the current term (2005-2006), he acts as Chairman. He is the
President and CEO of SES GLOBAL S.A ("SES GLOBAL"). He started his career in the
Luxembourg civil service. After subsequent promotions, he became General
Administrator of the Ministry of Finance. He occupied key positions in the
banking and media sectors and spent a five-year term as a Director and Vice
Chairman of SES GLOBAL. He graduated with a Master of Arts degree in economics
(specialization in business administration) from the University of Nancy
(France).

    ZENG XIN MI was appointed a Non-Executive Director of the Company on
February 28, 2001. Since then, he acted as Deputy Chairman (2001-2002) and
Chairman (2003-2004) of the Board on a rotational basis biennially. For the
current term (2005-2006), he acts as Deputy Chairman. He is an Executive
Director and Vice President of CITIC Group ("CITIC"). Prior to his appointment
to the present position, he held executive management positions with various
subsidiaries of CITIC and was the Chief Executive Officer of CITISTEEL in the
United States from 1992 to 1997. He is also Chairman of the Board of CITIC USA
Holdings and CITIC Australia Pty Limited, and an Executive Director of CITIC
Resources Holdings Limited in Hong Kong. He joined CITIC in 1985 and holds a
Master of Science degree.

    ROBERT BEDNAREK was appointed a Non-Executive Director of the Company on
March 14, 2002. He is an Executive Vice-President Corporate Development and a
Member of the Executive Committee of SES GLOBAL. Prior to joining SES GLOBAL, he
was the Executive Vice President and Chief Technology Officer of PanAmSat. He
graduated with a Bachelor of Science degree in Electronic Engineering from the
University of Florida.

    PROFESSOR EDWARD CHEN, C.B.E., C.B.E., J.P., has been an Independent
Non-Executive Director of the Company since May 1996. He was educated at Hong
Kong University (Bachelor of Arts, Master of Social Science) and Oxford
University (Doctor of Philosophy) and is currently President of Lingnan
University in Hong Kong. He was a member of the Executive Council of Hong Kong
from 1992 to 1997, and Chairman of the Consumer Council from 1991 to 1997. He is
now Chairman of the Press Council, a Director of the First Pacific Company
Limited, a Trustee of Eaton Vance Management Funds (Boston), a Director of The
Wharf (Holdings) Limited and also a Director of China Resources People Telephone
Company.

    YU CHENG DING was appointed a Non-Executive Director of the Company on
January 15, 1999. He was the Assistant President of CITIC Securities Company
Limited before resigning in 2004. CITIC Securities Company Limited is a
wholly-owned subsidiary of CITIC engaging in securities and investment banking
business. He holds a Master of Business Administration degree from the
University of Pittsburgh and is studying for his Doctor of Philosophy degree in
Economics in Tsinghua University.

    R. DONALD FULLERTON has been an Independent Non-Executive Director of the
Company since May 1996. He was the Chairman and Chief Executive Officer of
Canadian Imperial Bank of Commerce ("CIBC") until his retirement in 1992.
Subsequently, he was Chairman of the Executive Committee of the CIBC's Board of
Directors until 1999. He retired from the CIBC's Board in February 2004. During
his career, he was a director of many national and multi-national corporations
as well as medical, cultural and educational institutes. He

                                       48
<PAGE>

currently sits on the Board of George Weston Limited, Partner Communications
Company Limited and Husky Energy Inc.

    WEI MIN JU was appointed a Non-Executive Director of the Company on October
12, 1998. He is the Chief Financial Officer of CITIC. He is also a Director of
CITIC International Financial Holdings Limited and a Director of CITIC United
Asia Investments Limited, a wholly owned subsidiary of CITIC in Hong Kong
("CITIC UA"), which engages in investment, trading and joint ventures in China
and Hong Kong. CITIC United Asia Investments Limited is a wholly-owned
subsidiary of CITIC.

    ROBERT SZE has been an Independent Non-Executive Director of the Company
since May 1996. He is a fellow of the Institute of Chartered Accountants in
England and Wales and the Hong Kong Institute of Certified Public Accountants,
and was a partner in an international firm of accountants with which he
practiced for over 20 years. He is a non-executive director of a number of Hong
Kong listed companies. He is also a member of the Shanghai Committee of the
Chinese People's Political Consultative Conference.

    FAI WONG KO was appointed a Non-Executive Director of the Company on March
11, 2004. He is the Deputy General Manager of CITIC UA and has over 20 years'
experience in banking and finance before joining CITIC. He holds a Bachelor and
a Master Degree in Business Administration.

    MARK RIGOLLE was appointed a Non-Executive Director of the Company on
November 17, 2004. He is the Chief Financial Officer of SES GLOBAL. Prior to
joining SES GLOBAL, he held various positions in Belgacom in the financial and
strategic areas. He holds a degree in economic sciences from the Catholic
University of Leuven, Belgium.

    PETER JACKSON has been an Executive Director and the Chief Executive Officer
of the Company since May 1996, having served in that position with AsiaSat since
July 1993 prior to the listing of the Company. He has over 26 years' experience
in the telecommunications field. Prior to his appointment as the Chief Executive
Officer in 1996, he was employed by Cable & Wireless plc where he held
engineering, marketing and management positions and was responsible for several
satellite telecommunications ventures.

    WILLIAM WADE has been an Executive Director and the Deputy Chief Executive
Officer of the Company since May 1996, having served in that position with
AsiaSat since April 1994 prior to the listing of the Company. He has over 20
years' experience in the satellite and cable television industry. He speaks
Mandarin Chinese and holds a Bachelor of Arts (Honors) degree in Communications
from the University of Utah, and a Masters of International Management from
Thunderbird (the Garvin School of International Management).

    CATHERINE CHANG is Legal Counsel of the Company. She joined AsiaSat in 1994
and established the legal department to manage the legal affairs of the Company.
Prior to joining the Company, Ms. Chang was a solicitor at Ebsworth & Ebsworth,
an Australian law firm. Ms. Chang graduated from the University of New South
Wales, Australia with a Bachelor's degree in Laws and a Bachelor's degree in
Commerce, majoring in Accountancy.

    LIQUN CHEN is General Manager, China, of AsiaSat, in which capacity he is
responsible for marketing transponder capacity and managing customer relations
in the China market. Mr. Chen had been on secondment to AsiaSat from his
employer, CITIC, since 1989 and became

                                       49
<PAGE>

a permanent employee of AsiaSat in January 1997. Mr. Chen graduated with a
Master degree in Business Administration from the University of Leuven in
Belgium and a Bachelor of Science degree in Electronics and Industrial
Automation from Qinghua University, China. Prior to being seconded to the
Company, Mr. Chen worked for CITIC.

    DR. YA HUI CHIU is General Manager, Operations, of AsiaSat, in which
capacity he is responsible for maintaining and operating the Company's
satellites. Dr. Chiu has 24 years experience in telecommunications engineering
and operations, with the last 20 years being in the satellite communications
area. Dr. Chiu received his Bachelor of Science degree from National Taiwan
University and his M. Phil and Ph.D. degrees from Yale University, all in
Physics.

    SABRINA CUBBON is General Manager, Marketing, of AsiaSat, in which capacity
she is responsible for sales and marketing, business development, corporate
affairs and market research. Mrs. Cubbon has over 20 years of marketing
experience in the telecommunications industry. Prior to joining AsiaSat in
August 1992, Mrs. Cubbon was employed by Case Communications, a Hong Kong
company, between 1987 and 1992 as Regional Manager Asia-Pacific responsible for
the sales and marketing activities to multinational clients. Mrs. Cubbon
graduated from the University of Manchester, United Kingdom with a Masters
degree in Electronic and Electrical Engineering, with a specialization in
cryptography.

    DENIS LAU is General Manager, Finance and Administration and the Secretary
of the Company. Mr. Lau joined Hong Kong Telecom (now known as PCCW) in 1974 and
held a number of senior positions, including the Assistant Group Chief
Accountant, before being seconded to AsiaSat in 1988. He became a permanent
employee of AsiaSat in September 1996. Mr. Lau is a qualified accountant and
secretary by profession and has over 34 years experience in the fields of
accounting and finance. Mr. Lau holds a Diploma in Management Executive
Development from the Chinese University of Hong Kong, a Fellowship of The
Association of Chartered Certified Accountants in the United Kingdom and the
Hong Kong Institute of Certified Public Accountants and an Associateship of The
Chartered Institute of Secretaries and Administrators in the United Kingdom.
Prior to joining Hongkong Telecom, Mr. Lau worked for Esso, Union Carbide and
Shaw Brothers.

    BARRY TURNER is General Manager, Engineering of AsiaSat. Mr. Turner joined
AsiaSat in 1997 as Deputy General Manager of Engineering and was appointed to
his present position in May 1998. Mr. Turner has 30 years of experience in the
satellite communications industry and has held senior and executive management
positions in Engineering and in Sales and Marketing at Telesat Canada and in
Strategic Planning at TMI Communications Inc. Mr. Turner holds a Bachelor's
degree in Electrical Engineering from the Technical University of Nova Scotia,
Canada, and a Masters degree in Business Administration from the University of
Ottawa, Canada.

    There is no family relationship between any director or executive officer
and any other director or executive officer of the Company.

                                  COMPENSATION

    The aggregate compensation paid by AsiaSat to all directors and officers of
the Company for 2003 and 2004 was approximately HK$23.2 million and HK$35.8
million, respectively. This compensation included payments of HK$0.5 million
(2003: HK$0.5 million) and HK$0.5

                                       50
<PAGE>

million (2003: HK$0.5 million) to SES GLOBAL S.A. and a subsidiary of CITIC, the
major shareholders of the Company, respectively, for certain Non-Executive
Directors representing SES GLOBAL S.A. and CITIC. The increase was largely
attributable to the payment of performance bonus and an increase in headcount.
In 2003, there was no performance bonus as the Company's target was not
achieved.

    CERTAIN SERVICE AGREEMENTS

    PETER JACKSON. Mr. Jackson was seconded to the Company by Cable & Wireless
plc prior to June 1996, when he entered into a service agreement (the "Jackson
Service Agreement") with the Company pursuant to which he became its Chief
Executive Officer.

    The Jackson Service Agreement was for an initial fixed term of three years.
Following the initial fixed term, the Jackson Service Agreement may be
terminated by either party giving not less than 12 months' notice. Mr. Jackson
currently is entitled to a gross annual salary of HK$2.6 million per annum,
together with a housing allowance including utilities of up to HK$1.5 million
per annum, which is paid directly by the Company to the landlord. Mr. Jackson is
also entitled to an additional discretionary annual bonus based upon the
Company's performance. Mr. Jackson is eligible to participate in the Share
Option Scheme (as defined herein). He is also entitled to participate in the
Company's medical scheme and in the Company's provident fund or any other
AsiaSat pension scheme.

    Under the terms of the Jackson Service Agreement, Mr. Jackson is restricted
for a period of 12 months after the termination of his employment with the
Company from competing with the Company, attempting to deal with or solicit any
of the Company's customers with whom he had dealings during the last 12 months
of his employment or employing or attempting to entice away any senior employees
of the Company. Mr. Jackson will not act in any capacity for Cable & Wireless
plc under the terms of the Jackson Service Agreement.

    WILLIAM WADE. Mr. Wade was seconded to the Company by Hutchison Whampoa
prior to June 1996, when he entered into a service agreement (the "Wade Service
Agreement") with the Company pursuant to which he became its Deputy Chief
Executive Officer of the Company.

    The Wade Service Agreement was for an initial fixed term of two years.
Following the initial fixed term, the Wade Service Agreement may be terminated
by either party giving not less than six months' notice. Mr. Wade is entitled to
a gross annual salary of HK$2 million per annum, together with a housing
allowance including utilities of up to HK$1.1 million per annum, which is paid
directly by the Company to the landlord. Mr. Wade is also entitled to an
additional discretionary annual bonus based upon the Company's performance. Mr.
Wade is eligible to participate in the Share Option Scheme. He is also entitled
to participate in the Company's medical scheme and the Company's provident fund
or any other AsiaSat pension scheme.

    Under the terms of Mr. Wade's service agreement, he is restricted for a
period of six months after the termination of his employment with the Company
from competing with the Company, attempting to deal with or solicit any of the
Company's customers with whom he had dealings during the last six months of his
employment or employing or attempting to entice away any senior employees of the
Company. Mr. Wade will not act in any capacity for Hutchison Whampoa under the
terms of the Wade Service Agreement.

                                       51
<PAGE>

                                 BOARD PRACTICES

    The Board of Directors of the Company (the "Board") is vested with the
broadest powers to perform all acts in the interest of the Company. The Board
has adopted certain corporate governance guidelines (the "Guidelines") relating
to Board membership, Board conduct and Board committee issues.

    The Company has established an audit committee. The committee's primarily
objective is to assist the Board in fulfilling its oversight responsibility with
respect to (a) the accounting and financial reporting processes of the Company,
including the integrity of the financial statements and other financial
information provided by the Company to its stockholders, (b) the Company's
compliance with legal and regulatory requirements, (c) the independent auditors'
qualifications and independence, (d) the audit of the Company's financial
statements, and (e) the performance of the Company's internal audit function and
independent auditors. The audit committee shall (x) have the sole authority and
responsibility to select, evaluate and, where appropriate, replace the
independent auditors (or to nominate the independent auditors for stockholder
approval), (y) approve all audit engagement fees and terms and all non-audit
engagements with the independent auditors, and (z) perform such other duties and
responsibilities set forth under the Securities Exchange Act of 1934 and any
other applicable independence and regulatory requirements. The audit committee
shall also have the sole authority to review in advance, and grant any
appropriate pre-approvals, of (i) all auditing services to be provided by the
independent auditors and (ii) all non-audit services to be provided by the
independent auditors as permitted by Section 10A of the Securities Exchange Act
of 1934, and, in connection therewith, to approve all fees and other terms of
engagement. The audit committee shall also review and approve disclosures
required to be included in Securities and Exchange Commission periodic reports
filed under Section 13(a) of the Securities Exchange Act of 1934 with respect to
audit and non-audit services.

    The audit committee shall have three or more members who shall be
independent non-executive directors unless an applicable exemption is available
under the rules promulgated by the U.S. Securities and Exchange Commission. The
quorum for the committee shall be two voting members. The chairman of the
committee shall be appointed by the Board or, if it does not do so, the members
of the audit committee shall elect a chairman by a vote of the majority of the
voting members of the audit committee. The committee currently comprises of
Messrs. Robert Sze (Chairman), Edward Chen, R. Donald Fullerton, Wei Min Ju and
Mark Rigolle. Messrs. Wei Min Ju and Mark Rigolle have only observer status on
the audit committee and are non-voting members nominated by CITIC and SES GLOBAL
under an exemption to the independence requirement.

    The Company has also established a remuneration committee. The committee is
responsible for, among other things, considering and reviewing the remuneration
packages of the executive directors and the emoluments of the non-executive
directors prior to approval of award by the Board. The committee also reviews
the remuneration packages of the employees of the Company. The committee shall
have three members and the quorum for the committee shall be two. The chairman
of the committee shall be an independent non-executive director and appointed by
the Board. The committee currently comprises of Messrs. R. Donald Fullerton
(Chairman), Wei Min Ju and Mark Rigolle.

    The Company has also established a nomination committee. The committee is
responsible for, among other things, identifying individuals qualified to become
Board members,

                                       52
<PAGE>

overseeing the evaluation of the Board and management, and developing and
recommending to the Board a set of corporate governance guidelines applicable to
the Company. The committee also develops a Chief Executive Officer succession
plan. The committee shall have three members and the quorum shall be two. The
chairman of the committee shall be an independent non-executive director and
appointed by the Board. The committee currently comprises of Messrs. Edward Chen
(Chairman), Romain Bausch and Zeng Xin Mi.

    The Company has also established a business development committee. The
committee is responsible for reviewing all corporate plans, budgets and any new
and ongoing projects or ventures and make recommendations to the Board for
consideration and approval. The committee shall have no executive powers. The
committee shall have three members who shall be non-executive directors. The
committee currently comprises of Messrs. Robert Bednarek (Chairman), Yu Cheng
Ding and Fai Wong Ko.

    The execution of the policies and decisions of the Board and the daily
management of the Company are vested with the management that comprises of the
Chief Executive Officer, the Deputy Chief Executive Officer and the General
Managers in the functional areas of Engineering, Finance, Marketing and
Operations, respectively. Furthermore, the Board mandates the management with
the preparation and planning of overall policies and strategies of the Company
as well as decisions reaching beyond the daily management, for discussion and
decision by the Board. The management meets on a regular basis on daily business
and reports to the Board at every board meeting.

                                    EMPLOYEES

    As of December 31, 2004, the Company had 89 permanent employees, of which
eight employees were in management, 36 employees were in engineering and
operations and 29 employees were in sales and marketing. The remaining 16
employees were engaged in administrative, accounting, legal and regulatory
activities. The Company has 76 employees in Hong Kong and 13 employees in
Beijing.

    The Company does not employ a significant number of temporary employees. The
Company is not party to any collective bargaining agreement. The Company
believes its relations with its employees are good.

                                 SHARE OWNERSHIP

    Pursuant to the Company's new share option scheme adopted on January 25,
2002 (the "Share Option Scheme"), the Board of Directors of the Company may
grant options to any employees (including officers and directors) of the Company
or any of its subsidiaries to subscribe for shares in the Company. The
subscription price shall be such price as the Board of Directors of the Company
may in its absolute discretion determine at the time of grant but the
subscription price shall not be less than whichever is higher of (i) the closing
price of the shares as stated in The Hong Kong Stock Exchange Limited's (the
"Stock Exchange") daily quotations sheet on the date of grant; (ii) the average
closing price of the shares as stated in the Stock Exchange's daily quotation
sheets for the five business days immediately preceding the date of the grant;
and (iii) the nominal value of a share.

                                       53
<PAGE>

    At December 31, 2004, outstanding options granted under the Share Option
Scheme (including those previously granted under the old scheme) were as
follows:

       EXERCISE PERIOD                   OPTION PRICE       NUMBER OF SHARES
                                              HK$
---------------------------------------------------------   ----------------

Nov 26, 1999 to Nov 25, 2006                 17.48              1,691,500

Oct 1, 2002 to Sept 30, 2009                 17.48              1,753,000

Feb 4, 2004 to Feb 3, 2012                   14.35              3,481,500
                                                               ----------

                                                                6,926,000
                                                               ==========

    As of May 31, 2005, Romain Bausch, the Chairman and a Non-Executive Director
of the Company, has been granted 100,000 options, exercisable from February 4,
2004 to February 3, 2012.

    As of May 31, 2005, Zeng Xin Mi, the Deputy Chairman and a Non-Executive
Director of the Company, has been granted 100,000 options, exercisable from
February 4, 2004 to February 3, 2012.

    As of May 31, 2005, Edward Chen, an Independent Non-Executive Director of
the Company, has been granted 50,000 options, exercisable from February 4, 2004
to February 3, 2012.

    As of May 31, 2005, Yu Cheng Ding, a Non-Executive Director of the Company,
has been granted 50,000 options, exercisable from February 4, 2004 to February
3, 2012.

    As of May 31, 2005, R. Donald Fullerton, an Independent Non-Executive
Director of the Company, has been granted 75,000 options, exercisable from
February 4, 2004 to February 3, 2012.

    As of May 31, 2005, Wei Min Ju, a Non-Executive Director of the Company, has
been granted 50,000 options, exercisable from February 4, 2004 to February 3,
2012.

    As of May 31, 2005, Robert Sze, an Independent Non-Executive Director of the
Company, has been granted 75,000 options, exercisable from February 4, 2004 to
February 3, 2012.

    As of May 31, 2005, Peter Jackson, an Executive Director and the Chief
Executive Officer of the Company, has been granted 915,000 options, exercisable
from November 26, 1999 to February 3, 2012.

    As of May 31, 2005, William Wade, an Executive Director and the Deputy Chief
Executive Officer of the Company, has been granted 760,000 options, exercisable
from November 26, 1999 to February 3, 2012.

    As of May 31, 2005, Jurgen Schulte, a former Non-Executive Director of the
Company, has been granted 50,000 options, exercisable from February 4, 2004 to
November 16, 2005 (being the date immediately prior to one year following the
date of Mr. Schulte's retirement from the Board).

                                       54
<PAGE>

    Under SES company policy, the options granted to Messrs. Romain Bausch and
Jurgen Schulte are held for the benefit of SES.

         ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.

                               MAJOR SHAREHOLDERS

    The following table sets forth certain information regarding ownership of
the Company's voting securities as of May 31, 2005 by (i) all persons who are
known by the Company to be the beneficial owner of more than five percent (5%)
of any class of the Company's voting securities and (ii) the total number of any
class of the Company's voting securities owned by the officers and directors of
the Company as a group.

TITLE OF CLASS  IDENTITY OF PERSON OR GROUP      SHARES OWNED  PERCENT OF CLASS
--------------  -------------------------------  ------------  ----------------

Common Stock    Bowenvale Limited                268,905,000   68.90%

Common Stock    Aberdeen Asset Management Asia   21,188,000    5.43%
                Limited


Common Stock    Commonwealth Bank of Australia   20,665,600    5.30%
                and its subsidiaries

Common Stock    Directors and Officers           290,000       0.07%

    The Company is controlled by Bowenvale Limited, a limited liability company
incorporated in the British Virgin Islands ("Bowenvale Limited"), which owns
68.9% of the outstanding shares of Common Stock of the Company. Until January
15, 1999, Bowenvale Limited was owned by Cable & Wireless plc, Able Star
Limited, an indirect wholly-owned subsidiary of CITIC, and Dontech Limited, an
indirect wholly-owned subsidiary of Hutchison Whampoa Limited. On January 15,
1999, Cable & Wireless plc and Hutchison Whampoa Limited sold their holdings in
Bowenvale Limited to CITIC and SES. As a result of this transaction, CITIC
increased its ownership of the voting share capital of Bowenvale Limited from
41.67% to 49.5% and SES acquired the remaining 49.5%. Voting rights in Bowenvale
Limited are equally shared between CITIC and SES. CITIC also holds 1% of the
shares of Bowenvale Limited that are non-voting. CITIC is China's leading
state-owned investment corporation, with diversified holdings in banking,
securities, energy, telecommunications, real estate, manufacturing,
transportation and trading and extensive contact in China. The information
contained in this Item 7 does not include options granted to current or former
Directors appointed by SES which are beneficially owned by SES pursuant to SES
company policy. See "Directors and Senior Management - Share Ownership." SES is
based in Luxembourg and is the largest private satellite service provider in the
world. CITIC and SES are each referred to herein as a Shareholder and Cable &
Wireless plc and Hutchison Whampoa Limited are each referred to herein as a
former Shareholder.

                                       55
<PAGE>

    The Company is not aware of any arrangement that may at a subsequent date
result in a change of control of the Company.

                            RELATED PARTY TRANSACTION

    Certain members of the Board of Directors of the Company also serve as
directors and executive officers of the current Shareholders. These individuals
include Romain Bausch, Robert Bednarek, Yu Cheng Ding, Zeng Xin Mi, Wei Min Ju,
Mark Rigolle and Fai Wong Ko. See "Directors, Senior Management and Employees."

    The Company has entered into transactions from time to time with its current
and former Shareholders, their affiliates and other connected persons (as
defined in the Listing Rules of the Hong Kong Stock Exchange). It is the
Company's policy that such transactions be effected on terms which the Company
believes to be comparable to those available with unaffiliated parties. For so
long as the Company is listed on the Hong Kong Stock Exchange, all transactions
between the Company and its directors or any of their respective affiliates (as
defined in the Listing Rules of the Hong Kong Stock Exchange) will constitute
connected transactions of the Company under the Listing Rules and unless
exemptions are applicable or waivers are granted, will be subject to independent
shareholders' approval in a general meeting.

     AsiaSat has from time to time conducted transactions as described below
with the Shareholders, their affiliates and other connected persons. Unless
otherwise indicated, the following arrangements will continue to be conducted on
the same basis:

   (i) Since 1996, CITIC Guoan Information Industry Company Limited ("Guoan"), a
   subsidiary of CITIC, has entered into capacity agreements to utilize
   transponder capacity on the Company's satellites from time to time on normal
   commercial terms. The two current agreements have a term of one year starting
   from July 1, 2004 and January 1, 2005, respectively. The transponder capacity
   utilized under both agreements is used to provide domestic private network
   services within China. The total amount of revenue recognized by the Company
   during 2003 and 2004, respectively, under these agreements was approximately
   HK$3.8 million (US$0.5 million) and HK$3.1 million (US$0.4 million).

   (ii) In 2003 and 2004, respectively, the Company paid an agency fee of HK$0.7
   million and HK$0.7 million to CITIC Technology Company Limited, a subsidiary
   of CITIC, for collecting money from China customers on behalf of the Company.

   (iii) In 2003, a consultancy fee amounting to HK$0.4 million was paid to SES
   ASTRA S.A., a wholly-owned subsidiary of SES. In 2004, a software license fee
   amounting to HK$49,000 was paid to SES ASTRA S.A.

   (iv) The Company has granted or agreed to grant each of the Shareholders
   demand and piggyback registration rights, exercisable under certain
   circumstances and subject to certain conditions that require the Company to
   register under the Securities Act Common Stock held by Bowenvale Limited, the
   Shareholders and their affiliates. Under the registration rights agreement,
   the Company will pay all expenses in connection with registrations made at
   the request of the Shareholders and the Company will pay all expenses in
   connection with any registration by the Shareholders incidental to a
   registration by the Company. The exercise by the Shareholders of their
   registration rights could adversely affect the market price of the Shares and
   the ADSs and could impair the Company's future ability to raise capital
   through an offering of its equity securities.

                                       56
<PAGE>

   (v) In 2003 and 2004, the Company recognized rental income from leasing
   satellite transponder capacity amounting to approximately HK$20.8 million
   (US$2.7 million) and HK$18.8 million (US$2.4 million), respectively, and no
   maintenance and other services income from SpeedCast Holdings Limited. The
   total amount of such income recognized in 2002 was HK$20.2 million (US$2.6
   million).

   (vi) In 2003 and 2004, the Company made payments to SES GLOBAL and a
   subsidiary of CITIC amounting to HK$0.5 million (2003: HK$0.5 million; 2002:
   HK$0.4 million) and HK$0.5 million (2003: HK$0.5 million; 2002: HK$0.4
   million) respectively, for certain Non-Executive Directors representing SES
   GLOBAL and CITIC.

   (vii) In 2004, AsiaSat entered into an agreement with Beijing Asia pursuant
   to which AsiaSat agreed to provide Beijing Asia with up to HK$12.0 million
   (US$1.7 million) in transponder capacity payable on a deferred basis.

    Except for the arrangements referred to in paragraph (v), the transactions
mentioned above have been entered into in the ordinary course of business and on
normal commercial terms. Such transactions, which are of a continuing nature,
are expected to be continued in the future. Under the Listing Rules of the Hong
Kong Stock Exchange (the "HKSE Listing Rules"), such transactions are considered
to be "continuing connected transactions" and depending on their respective
value, may require full disclosure and/or prior independent shareholders'
approval on each occasion they arise. The Company has been granted a conditional
waiver by the Hong Kong Stock Exchange from these requirements in the past. As a
result of recent amendments to the HKSE Listing Rules which came into effect on
March 31, 2004, the Company is required to comply with the new disclosure and
shareholders' approval requirements (if applicable) on "continuing connected
transactions." The Company has applied to the Hong Kong Stock Exchange for
clarification and waivers with respect to the disclosure and shareholders'
approval requirements under the HKSE Listing Rules (as amended).

    In addition to the requirements under the HKSE Listing Rules relating to
"continuing connected transactions," the Companies Act subjects officers and
directors of the Company to certain fiduciary standards in the exercise of their
duties on behalf of the Company. Under the Companies Act, an officer of the
Company (which term includes directors of the Company) is subject to a duty of
care requiring him to act honestly and in good faith in the discharge of his
duties and to, among other things, give notice to the Board of Directors at the
first opportunity of any interest he has in any material contract or proposed
material contract with the Company or any of its subsidiaries. The Companies Act
also prohibits the Company from making loans to any Directors without obtaining
the consent of shareholders holding in the aggregate not less than nine-tenths
of the total voting rights of all the shareholders having the right to vote at
any shareholders meeting.

ITEM 8.  FINANCIAL INFORMATION.

    CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.

    Information responsive to this Item is included in response to Item 18.

DIVIDENDS AND DIVIDEND POLICY

    The Company has distributed annual cash dividends to shareholders for each
fiscal year since it commenced operations in 1996 and anticipates continuing to
do so in the future. The Board has adopted a dividend policy to distribute
approximately 30-40% of net income as

                                       57
<PAGE>

dividends. However, any future dividend payments are dependent on future
earnings, financial position, cash flow and levels of investments in the
satellite network and ground station equipment.

    The following table details the total amount of annual dividends and the
gross dividends paid, together with certain additional information, for 2002,
2003 and 2004.

<TABLE>
<CAPTION>
                                                                 FOR THE YEAR ENDED
                                                                     DECEMBER 31
                                                             2002       2003       2004
                                                             ----       ----       ----
<S>                                                           <C>        <C>        <C>
Net income (in HK Dollars in million)....................     555        424        431
Ordinary dividend paid (in HK Dollars in million)........      78        105        125
Ordinary dividend paid per Share (in HK cents)...........      20         27         32
Ordinary dividend proposed (in HK Dollars in million)....      74         94        105
Ordinary dividend proposed per Share (in HK cents)             19         24         27
Special dividend proposed (in HK Dollars in million).....      98         --         --
Special dividend proposed per Share (in HK cents)              25         --         --
Special dividend paid (in HK Dollars in million)               --         98         --
Special dividend paid per share (in HK cents)                  --         25         --
</TABLE>

    LEGAL AND REGULATORY PROCEEDINGS

    Other than as described below, the Company is not involved in any
significant legal or regulatory proceedings.

TAX DISPUTES

    The Indian tax authority has made assessments against the Company in respect
of certain capacity agreement payments for transponders used by the Company. See
"Operating and Financial Review and Prospects - Taxation."

OTHER DISPUTES

    In addition, the Company is subject to various claims and proceedings in the
ordinary course of business. None of these claims and proceedings will have a
material adverse effect on the financial condition or results of operations of
the Company.

    SIGNIFICANT CHANGES

    There have been no significant changes in the Company's business, operations
or financial condition since December 31, 2004.

ITEM 9.  STOCK PRICE HISTORY.

    SHARE PRICE HISTORY AND MARKETS

    The Company's American Depositary Shares ("ADS") representing its shares
(each ADS representing ten shares of the Company) are listed and traded on the
New York Stock Exchange (symbol: SAT) and the Company's shares are listed and
traded on the Hong Kong Stock Exchange (symbol: 1135.HK) since June 18, 1996 and
June 19, 1996, respectively. The table below details, for the periods indicated,
the high and low closing market prices for its depositary receipts on each of
the New York Stock Exchange and the Hong Kong Stock Exchange, as reported by the
New York Stock Exchange and the Hong Kong Stock Exchange

                                       58
<PAGE>

for the last five fiscal years and the most recent six months. See "Key
Information - Historical Exchange Rate Information" with respect to rates of
exchange between the US Dollar and the HK Dollar applicable during the periods
set forth below.

<TABLE>
<CAPTION>
                                            NEW YORK STOCK EXCHANGE        HONG KONG STOCK EXCHANGE
                                                (IN US DOLLARS)                 (IN HK DOLLARS)
                                             HIGH             LOW            HIGH            LOW
                                             ----             ---            ----            ---
<S>                                         <C>              <C>             <C>            <C>
2000 ...............................        45.00            18.25           35.10          13.80
2001 ...............................        26.25            11.00           20.25           8.35
2002 ...............................        18.90            10.95           15.00           8.90
2003 ...............................        19.43            11.66           14.90           9.25
Quarter Ending March 31, 2003.......        13.16            11.66           10.50           9.25
Quarter Ending June 30, 2003........        17.00            12.75           13.40          10.00
Quarter Ending September 30, 2003...        17.30            14.31           13.70          11.00
Quarter Ending December 31, 2003....        19.43            14.60           14.90          11.25
2004 ...............................        22.11            15.20           17.30          11.70
Quarter Ending March 31, 2004.......        22.11            17.00           17.30          13.40
Quarter Ending June 30, 2004........        18.35            15.20           14.25          11.70
Quarter Ending September 30, 2004...        19.50            16.40           15.10          12.75
Quarter Ending December 31, 2004....        19.78            18.27           15.60          14.50
December 2004 ......................        19.50            18.27           15.15          14.50
January 2005 .......................        18.84            18.26           15.00          14.50
February 2005 ......................        18.60            18.20           14.60          14.15
March 2005 .........................        19.09            18.20           15.10          14.20
Quarter Ending March 31, 2005.......        19.09            18.20           15.10          14.15
April 2005 .........................        19.38            18.45           15.15          14.30
May 2005............................        18.43            17.72           14.50          13.70
</TABLE>

    There has been no significant trading suspension in the past three years.


ITEM 10. ADDITIONAL INFORMATION.

    CHARTER DOCUMENTS.

    Information relating to the Company's charter documents is incorporated
herein by reference to the Company's Annual Report on Form 20-F for fiscal year
2000, File No.3334856.

    MATERIAL CONTRACTS.

    The following is a summary of the material contracts concluded outside of
the ordinary course of business to which the Company and other members of its
group were a party. Copies of these contracts are filed as exhibits to this Form
20-F. Directions on how to obtain copies of these contracts are provided under
"Item 10. -- Documents on Display."

    o  Lease Agreement, dated March 12, 2001, between AsiaSat and the Hong Kong
       Industrial Estates Corporation (the "Tai Po Lease Agreement"). Pursuant
       to the Tai Po Lease Agreement, the Hong Kong Industrial Estates
       Corporation agreed to grant to AsiaSat rights to the Tai Po Site, for a
       period of sixty (60) months, for the purpose of constructing a satellite
       earth station and other structures, and thereafter to lease to

                                       59
<PAGE>

       AsiaSat the Tai Po Site up to 2047. AsiaSat paid a lump sum of HK$25.9
       million for the lease of the Tai Po Site and agreed to pay an annual rent
       of 3% of the ratable value of the Tai Po Site as well as an annual sum of
       HK$36,824 for management and maintenance charges.

    o  Construction Contract Agreement (the "Construction Contract"), dated
       March 4, 2002, between AsiaSat and Leighton Contractors (Asia) Limited
       (the "Contractor"). Pursuant to the Construction Contract, the Contractor
       agreed to design and construct a new satellite earth station on the Tai
       Po Site. Costs related to the construction of the Tai Po Site (including
       consultancy fees but excluding amounts paid under the Lease Agreement)
       are estimated to be approximately HK$119.7 million (US$15.3 million).

    o  Lease Agreement, dated January 26, 2005, between AsiaSat and Perfect Win
       Properties Limited (the "Office Lease Agreement"). Pursuant to the Office
       Lease Agreement, Perfect Win Properties Limited agreed to lease to
       AsiaSat the office premises in Causeway Bay, Hong Kong for a period of 36
       months commencing March 1, 2005 for an annual rent of approximately
       HK$2.7 million (US$0.3 million).

    o  Joint Venture Agreement, dated March 29, 2004, between AsiaSat and Sky
       Networks Communications Group Company Limited (the "Beijing Asia Joint
       Venture Agreement"). Pursuant to the Beijing Asia Joint Venture
       Agreement, the two parties agreed to participate in the joint venture
       Beijing Asia, and AsiaSat agreed to contribute HK$12.5 million (US$1.6
       million) in cash to Beijing Asia and to provide transponder capacity
       payable on a deferred basis.

    o  Subscription Agreement, dated November 30, 2004, among AsiaSat, Macau
       Cable TV, Limited, Pacific Satellite International Limited and Skywave
       (the "Skywave Subscription Agreement"). Pursuant to the Skywave
       Subscription Agreement, AsiaSat agreed to make a HK$24.0 million (US$3.1
       million) contribution in return for an 80% interest in Skywave.

    o  Shareholders Agreement, dated November 30, 2004, among AsiaSat, Macau
       Cable TV, Limited and Pacific Satellite International Limited (the
       "Skywave Shareholders Agreement"). The Skywave Shareholders Agreement
       regulates the rights and obligations of each of the parties in relation
       to their ownership in Skywave, including the transfer of shares in
       Skywave and the management and operation of Skywave.

    EXCHANGE CONTROLS.

    There are, except in limited embargo circumstances, no legal restrictions in
Bermuda on international capital movements and foreign exchange transactions.
There can be no assurance that the government of Bermuda will maintain the
current foreign exchange policies.

    TAXATION.

    The Company is not required to make any tax withholding with respect to its
shareholders.

    For an additional discussion on taxation, see "Operating and Financial
Review and Prospects - Taxation."

                                       60
<PAGE>

    DOCUMENTS ON DISPLAY

    The Company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934 and will file reports and other information with
the Securities and Exchange Commission (SEC). You may examine the reports and
other information that the Company files, without charge, at the public
reference facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C., 20549. You may also receive copies of these materials by mail
from the SEC's Public Reference Branch at 450 Fifth Street, N.W., Washington,
D.C., 20549. For more information on the public reference rooms, call the SEC at
1-800-SEC-0330.

    SUBSIDIARY INFORMATION.

    Not applicable.

ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

    In the normal course of the Company's business, the Company's financial
position is routinely exposed to a variety of risks, including market risks
associated with interest rate movements on its outstanding debt, if any. The
Company does not have significant exposure to commodity price risks or other
market rate or price risks.

    CURRENCY FLUCTUATIONS

    A substantial portion of the Company's capital expenditure is denominated in
US Dollars and HK Dollars. Revenues are denominated principally in US Dollars. A
substantial portion of the cost of services and administrative expenses of the
Company is incurred in Hong Kong dollars and a significant portion is incurred
in Renminbi, the legal currency of the People's Republic of China. There has
been wide-spread speculation about the potential appreciation of the Renminbi
against the US Dollar in the near future and, given the close tie between Hong
Kong's economy and the People's Republic of China, the potential impact of such
appreciation on the link between the HK Dollar and US Dollar that has been in
place since 1983. See "Key Information - Historical Exchange Rates Information."
In the event of an appreciation of the Renminbi and, in particular, the HK
Dollar, against the US Dollar, the profits of the Company will likely be
adversely affected as the Company's revenues are principally denominated in US
Dollars.

    INTEREST RATE FLUCTUATIONS

    As of December 31, 2004, no borrowings consisted of floating rate
borrowings.

    The Company will be exposed to interest rate fluctuations in the event of
any borrowings under a future loan arrangement and any change in interest rate
could affect its results of operations and cash flows. As of December 31, 2004
the Company had no outstanding borrowings.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

    Not applicable.


61
<PAGE>

                                     PART II

ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.

    The Company has not had any material default in the payment of principal,
interest, or sinking purchase fund installments. The Company has not had any
material default not cured within 30 days relating to indebtedness of AsiaSat or
any of its significant subsidiaries that exceeds 5% of the Company's total
assets on a consolidated basis.

ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND
          USE OF PROCEEDS.

    Not Applicable.

                                    PART III

ITEM 15.  CONTROLS AND PROCEDURES

    DISCLOSURE CONTROLS AND PROCEDURES

    The Company's Chief Executive Officer and Chief Financial Officer have
reviewed the Company's disclosure controls and procedures as of the end of the
period covered by this Annual Report on Form 20-F. Based upon this review, these
officers believe that the Company's disclosure controls and procedures are
effective in ensuring that material information related to the Company is made
known to them by others within the Company.

    INTERNAL CONTROLS

    There were no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls during the period
covered by this Annual Report on Form 20-F or from the end of the fiscal period
to the date hereof, including any corrective actions with regard to significant
deficiencies and material weaknesses.

ITEM 16.  OTHER INFORMATION.

    AUDIT COMMITTEE FINANCIAL EXPERT

    The Board of Directors has determined that Mr. Robert Sze, a member of the
Company's audit committee, is a "financial expert" (as such term is used in Item
16 of Form 20-F) and is an "independent" director (as such term is defined under
the listing rules of the NYSE).

    CODE OF ETHICS

    The Company has adopted a code of ethics that requires all of its employees,
particularly senior officers and general managers, including the principal
financial officer, to maintain, at all times, the highest standards of integrity
and honesty in conducting the Company's affairs. This code of ethics is posted
on the Company's website, which is located at www.asiasat.com. The Company
intends to satisfy the disclosure requirement under Item 16 of Form 20-F
regarding an amendment to, or waiver from, a provision of this code of ethics by
posting such information on its website, at the address specified above.
Information contained in the Company's website, whether currently posted or
posted in the future, is not part of this document or the documents incorporated
herein by reference in this document.

                                       62
<PAGE>

    PRINCIPAL ACCOUNTANT FEES AND SERVICES

    Following the resignation of Deloitte Touche Tohmatsu ("DTT"),
PricewaterhouseCoopers ("PwC") was appointed in November 2004 as the Company's
principal accountant. As both DTT and PwC served as principal accountants of the
Company (the "Principal Accountants") during 2004, the fees incurred and
described below for 2004 were for both Principal Accountants.

    AUDIT FEES

    The aggregate fees incurred by the Company in each of 2003 and 2004 was
HK$0.7 million and HK$0.7 million, respectively, for professional services
rendered by the Principal Accountants, for the audit of the Company's annual
financial statements or services that are normally provided by the accountant(s)
in connection with statutory and regulatory filings or engagements for such
fiscal years.

    AUDIT-RELATED FEES

    The aggregate fees incurred by the Company in each of 2003 and 2004 was
HK$53,000 and HK$9,000, respectively, for assurance and related services by the
Principal Accountant(s) that are reasonably related to the performance of the
audit or review of the Company's financial statements and are not otherwise
reported under the paragraph entitled "Audit Fees" above.

    TAX FEES

    The aggregate fees incurred by the Company in each of 2003 and 2004 was
HK$0.5 million and HK$0.4 million, respectively, for professional services
rendered by the Principal Accountant(s) for tax compliance, tax advice and tax
planning. The nature of the services comprising the fees described in this
paragraph include services rendered in respect of tax in Hong Kong and India.

    ALL OTHER FEES

    The aggregate fees incurred by the Company in each of 2003 and 2004 was Nil
and HK$0.3 million, respectively, for products and services provided by the
Principal Accountant(s), other than for services described in the paragraphs
above.

    None of the services described above were provided under the de minimis
exception set forth in Rule 2-01(c)(7)(i)(c) under Regulation S-X.

    POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT
SERVICES OF INDEPENDENT AUDITORS

    The audit committee has adopted terms of reference which address, among
other matters, pre-approval of audit and non-audit services provided by the
independent auditor. The terms of reference requires that all services to be
provided by the independent auditors must be approved by the audit committee. To
facilitate smaller projects that may arise between scheduled meetings of the
audit committee, the audit committee may pre-approve the provision of audit and
non-audit services by the independent auditors. For both types of pre-

                                       63
<PAGE>

approvals, the audit committee considers whether such services are consistent
with the rules of the U.S. Securities and Exchange Commission on auditor
independence.

                                     PART IV

ITEM 17. FINANCIAL STATEMENTS.

    The Company has elected to provide the information required under Item 18 in
lieu of Item 17.

ITEM 18. FINANCIAL STATEMENTS.

    See Index to Financial Statements for a list of all financial statements
filed as part of this Annual Report.

ITEM 19. FINANCIAL STATEMENTS AND EXHIBITS.

    (a) Index to Financial Statements:

             Independent Auditors' Report (PwC)..............................F-2

             Independent Auditors' Report (DTT)..............................F-3

             Consolidated Statements of Operations...........................F-4

             Consolidated Balance Sheets.....................................F-5

             Consolidated Statement of Changes in Shareholders' Equity.......F-6

             Consolidated Statements of Cash Flows...........................F-7

             Notes to the Consolidated Financial Statements..................F-8


    (b) Exhibits to this Annual Report:

     NUMBER                           EXHIBIT
   ----------    --------------------------------------------------------------
      1.1.       Memorandum of Association and Bye-laws (incorporated by
                 reference to Exhibit 3.1 of the Company's Registration
                 Statement on Form F-1, File No.3334856).

      4.1.       Service Agreement, dated June 5, 1996, between the Company and
                 Peter Jackson (incorporated by reference to Exhibit 10.16 of
                 the Company's Registration Statement on Form F-1, File
                 No.3334856).

      4.2.       Service Agreement, dated June 3, 1996, between the Company and
                 William D. Wade (incorporated by reference to Exhibit 10.17 of
                 the Company's Registration Statement on Form F-1, File
                 No.3334856).

      4.3.       Amendment 9 to Contract No. AsiaSat-3-001/95, dated March 6,
                 1998, between Hughes Space and Communications International,
                 Inc. Asia Satellite Telecommunications Company Limited
                 (incorporated by reference to Exhibit 1 on Form 20-F for
                 fiscal year 1997, File No.3334856).

      4.4.       Contract for Launch Services, dated March 17, 1998, between
                 Lockheed-Khrunichev-Energia International, Inc. and Asia
                 Satellite Telecommunications Company Limited (incorporated by
                 reference to Exhibit 2 on Form 20-F for fiscal year 1997, File
                 No.3334856).

                                       64
<PAGE>

     NUMBER                           EXHIBIT
   ----------    --------------------------------------------------------------
      4.5.       Subscription Agreement made on March 21, 2000, between Tech
                 System Limited, Asia Satellite Telecommunications Company
                 Limited and PhoenixNet Holdings Limited (incorporated by
                 reference to Exhibit 2 on Form 20-F for fiscal year 1999, File
                 No.3334856).

      4.6.       Shareholders' Agreement dated as of April 6, 2000, among Asia
                 Satellite Telecommunications Company Limited, Tech System
                 Limited, TVG Asia Communications Fund II and PhoenixNet
                 Holdings Limited (incorporated by reference to Exhibit 3 on
                 Form 20-F for fiscal year 1999, File No.3334856).

      4.9.       Amendment 5 to Contract No. AsiaSat-3B/4 dated September 7,
                 2000, between Asia Satellite Telecommunications Company
                 Limited and Hughes Space and Communications International,
                 Inc. (incorporated by reference to Exhibit 4.9 on Form 20-F
                 for fiscal year 2000, File No.3334856)*

     4.10.       Contract for Launch Services LKEB-0009-0807 dated September
                 19, 2000, between AsiaSat and Lockheed Martin Commercial
                 Launch Services, Inc. (incorporated by reference to Exhibit
                 4.10 on Form 20-F for fiscal year 2000, File No.3334856)*

     4.11        Amended and Restated Deposit Agreement (incorporated by
                 reference to Exhibit A to the Registration Statement on Form
                 F-6, File No.333-13900, relating to the Company's American
                 Depositary Shares)

     4.12.       Share Option Scheme, dated January 25, 2002, of the Company
                 (incorporated by reference to Exhibit 4.11 on Form 20-F for
                 fiscal year 2001).

     4.13.       Lease Agreement, dated March 12, 2001, between AsiaSat and the
                 Hong Kong Industrial Estates Corporation (incorporated by
                 reference to Exhibit 4.12 on Form 20-F for fiscal year 2002).

     4.14        Construction Contract Agreement, dated March 4, 2002, between
                 AsiaSat and Leighton Contractors (Asia) Limited (incorporated
                 by reference to Exhibit 4.13 on Form 20-F for fiscal year
                 2002).

     4.15        Lease Agreement, dated January 26, 2005, between Asia
                 Satellite Telecommunications Company Limited and Perfect Win
                 Properties Limited.

     4.16        Equity Joint Venture Contract, dated March 29, 2004, between
                 Asia Satellite Telecommunications Company Limited and Sky
                 Networks Communications Group Company Limited.*

     4.17        Subscription Agreement, dated November 30, 2004, among Asia
                 Satellite Telecommunications Company Limited, Macau Cable TV,
                 Limited, Pacific Satellite International Limited and Skywave
                 TV Company Limited.*

     4.18        Shareholders Agreement, dated November 30, 2004, among Asia
                 Satellite Telecommunications Company Limited, Macau Cable TV,
                 Limited and Pacific Satellite International Limited.*

      8.1        Subsidiaries of the Registrant (included on page 11 of this
                 Annual Report).

     12.1        Certification of Chief Executive Officer pursuant to Section
                 302 of the Sarbanes-Oxley Act of 2002.

     12.2        Certification of Chief Financial Officer pursuant to Section
                 302 of the Sarbanes-Oxley Act of 2002.

     13.1        Certification of Chief Executive Officer pursuant to 18 U.S.C.
                 Section 1350, as adopted pursuant to Section 906 of the
                 Sarbanes-Oxley Act of 2002.

     13.2        Certification of Chief Financial Officer pursuant to 18 U.S.C.
                  Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

*  Confidential portions of this exhibit have been omitted and filed separately
with the Securities and Exchange Commission with a request for confidential
treatment pursuant to Rule 24B-2.


                                       65
<PAGE>

                                   SIGNATURES

    Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant certifies that it meets all of the requirements for filing
on Form 20-F and has duly caused this Annual Report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                             Asia Satellite Telecommunications Holdings Limited

                             By: /s/ Peter Jackson
                                 -------------------------
                                 Peter Jackson
                                 Director and Chief Executive Officer




    Date: June 29, 2005


<PAGE>





                         ASIA SATELLITE TELECOMMUNICATIONS
                         HOLDINGS LIMITED
                         -------------------------------------------------------

                         Consolidated Financial Statements
                         Years ended 31st December, 2002, 2003 and 2004 and
                         Report of Independent Registered Public Accounting Firm





<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED
                          INDEX TO FINANCIAL STATEMENTS



Report of Independent Registered Public Accounting Firm for the year ended
  31st December, 2004........................................................F-2

Report of Independent Registered Public Accounting Firm for the years ended
  31st December, 2002 and 2003...............................................F-3

Consolidated Statements of Operations for the years ended
  31st December, 2002, 2003 and 2004.........................................F-4

Consolidated Balance Sheets at 31st December, 2003 and 2004..................F-5

Consolidated Statements of Changes in Equity for the years ended
  31st December, 2002, 2003 and 2004.........................................F-6

Consolidated Statements of Cash Flows for the years ended
  31st December, 2002, 2003 and 2004.........................................F-7

Notes to the Consolidated Financial Statements...............................F-8



                                       F-1
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


         To the Board of Directors and Shareholders of
         Asia Satellite Telecommunications Holdings Limited

         In our opinion, the accompanying consolidated balance sheet and the
         related consolidated statement of operations, changes in equity and
         cash flow statement present fairly, in all material respects, the
         financial position of Asia Satellite Telecommunications Holdings
         Limited and its subsidiaries at 31st December, 2004, and the results of
         their operations and their cash flows for the year ended 31st December,
         2004 in conformity with accounting principles generally accepted in
         Hong Kong. These financial statements are the responsibility of the
         Company's management. Our responsibility is to express an opinion on
         these financial statements based on our audit. We conducted our audit
         of these statements in accordance with the standards of the Public
         Company Accounting Oversight Board (United States). Those standards
         require that we plan and perform the audit to obtain reasonable
         assurance about whether the financial statements are free of material
         misstatement. An audit includes examining, on a test basis, evidence
         supporting the amounts and disclosures in the financial statements,
         assessing the accounting principles used and significant estimates made
         by management, and evaluating the overall financial statement
         presentation. We believe that our audit provides a reasonable basis for
         our opinion.

         Accounting principles generally accepted in Hong Kong vary in certain
         significant respects from accounting principles generally accepted in
         the United States of America. Information relating to the nature and
         effect of such differences is presented in Note 31 to the consolidated
         financial statements.



         /s/ PricewaterhouseCoopers

         PricewaterhouseCoopers
         Hong Kong
         31st May, 2005


                                      F-2
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


         To the Board of Directors and Shareholders of
         Asia Satellite Telecommunications Holdings Limited


         We have audited the accompanying consolidated balance sheet of Asia
         Satellite Telecommunications Holdings Limited and subsidiaries as of
         31st December, 2003 and the related consolidated statements of
         operations, changes in equity and cash flows for each of the two years
         in the period ended 31st December, 2003, all expressed in Hong Kong
         dollars. These financial statements are the responsibility of the
         Company's management. Our responsibility is to express an opinion on
         these financial statements based on our audits.

         We conducted our audits in accordance with the standards of the Public
         Company Accounting Oversight Board (United States). Those standards
         require that we plan and perform the audit to obtain reasonable
         assurance about whether the financial statements are free of material
         misstatement. The Company is not required to have, nor were we engaged
         to perform, an audit of its internal control over financial reporting.
         Our audit includes consideration of internal control over financial
         reporting as a basis for designing audit procedures that are
         appropriate in the circumstances but not for the purpose of expressing
         an opinion on the effectiveness of the Company's internal control over
         financial reporting. Accordingly, we express no such opinion. An audit
         includes examining, on a test basis, evidence supporting the amounts
         and disclosures in the financial statements. An audit also includes
         assessing the accounting principles used and significant estimates made
         by management, as well as evaluating the overall financial statement
         presentation. We believe that our audits provide a reasonable basis for
         our opinion.

         In our opinion, such consolidated financial statements present fairly,
         in all material respects, the financial position of Asia Satellite
         Telecommunications Holdings Limited and subsidiaries as of 31st
         December, 2003, and the results of their operations and their cash
         flows for each of the two years in the period ended 31st December,
         2003, in conformity with accounting principles generally accepted in
         Hong Kong.

         Accounting principles generally accepted in Hong Kong vary in certain
         significant respects from accounting principles generally accepted in
         the United States of America. The application of the latter would have
         affected the determination of net income for each of the two years in
         the period ended 31st December, 2003 and the determination of
         shareholders' equity and financial position at 31st December, 2003, to
         the extent summarized in Note 31.



         /s/ Deloitte Touche Tohmatsu

         Deloitte Touche Tohmatsu
         Hong Kong
         11th March, 2004


                                      F-3
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED 31ST DECEMBER, 2004, 2003 AND 2002
---------------------------------------------------------------------------------------------------------------------------

                                               NOTES             2004              2004             2003              2002
                                               -----             ----              ----             ----              ----
                                                                US$'000          HK$'000           HK$'000          HK$'000

<S>                                             <C>             <C>            <C>                 <C>              <C>
Turnover - service revenue                      3               128,844        1,004,982           896,233          950,750
Cost of services                                                (53,909)        (420,490)         (313,265)        (243,071)
                                                              ---------        ---------         ---------        ---------

                                                                 74,935          584,492           582,968          707,679
Other operating income                                               22              169               848               39
Interest income                                                   2,797           21,813             4,945            6,423
Administrative expenses                                         (13,139)        (102,477)          (56,125)         (76,711)
                                                              ---------        ---------         ---------        ---------

Profit from operations                           4               64,615          503,997           532,636          637,430
Finance costs                                    5                   --               (1)           (3,029)              --
Share of results of associates
  (including goodwill amortization
  of HK$220,000;
  2003: HK$6,500,000;
  2002: HK$4,604,000)                                            (1,587)         (12,380)          (15,625)         (13,679)
Impairment loss recognized in
  respect of goodwill of associates                                  --               --            (1,896)              --
                                                              ---------        ---------         ---------        ---------

Profit before taxation                                           63,028          491,616           512,086          623,751
Taxation                                         8               (7,761)         (60,536)          (87,598)         (69,062)
                                                              ---------        ---------         ---------        ---------

Profit after taxation                                            55,267          431,080           424,488          554,689
Minority interests                                                   17              136                --               --
                                                              ---------        ---------         ---------        ---------

Profit attributable to shareholders                              55,284          431,216           424,488          554,689
                                                              =========        =========         =========        =========


Basic and diluted earnings per share            10              US$0.14          HK$1.10           HK$1.09          HK$1.42
                                                              =========        =========         =========        =========

The accompanying footnotes are an integral part of these consolidated financial statements.
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      F-4
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
AT 31ST DECEMBER, 2004 AND 2003
---------------------------------------------------------------------------------------------------------------------------

                                                            NOTES                2004             2004              2003
                                                            -----                ----             ----              ----
                                                                                 US$'000          HK$'000           HK$'000
<S>                                                          <C>                 <C>             <C>              <C>
NON-CURRENT ASSETS
Property, plant and equipment                                11                  374,263         2,919,249        3,165,399
Unbilled receivable                                                               22,470           175,267          181,625
Interests in associates                                      13                    1,717            13,397               --
Loan receivable from an associate                            14                       --                --            3,769
Amount paid to tax authority                                 15                    8,593            67,023           24,487
Deferred tax assets                                          23                       --                --               76
                                                                                 -------         ---------        ---------

                                                                                 407,043         3,174,936        3,375,356
                                                                                 -------         ---------        ---------

CURRENT ASSETS
Inventories                                                  16                       53               416               --
Trade and other receivables                                  17                   16,975           132,408          119,017
Loan receivable from an associate                            14                      650             5,070            3,510
Other loan receivable                                        18                      264             2,062               --
Bank balances and cash                                                           158,251         1,234,355          659,337
                                                                                 -------         ---------        ---------

                                                                                 176,193         1,374,311          781,864
                                                                                 -------         ---------        ---------

CURRENT LIABILITIES
Construction payable                                                                 639             4,989           10,854
Other payables and accrued expenses                                                8,375            65,322           18,829
Deferred revenue                                             19                   22,441           175,043          156,448
Taxation payable                                                                  13,553           105,717           65,684
Dividend payable                                                                      16               121              121
                                                                                 -------         ---------        ---------

                                                                                  45,024           351,192          251,936
                                                                                 -------         ---------        ---------

NET CURRENT ASSETS                                                               131,169         1,023,119          529,928
                                                                                 -------         ---------        ---------

TOTAL ASSETS LESS CURRENT LIABILITIES                                            538,212         4,198,055        3,905,284
                                                                                 =======         =========        =========

FINANCED BY:
Share capital                                                20                    5,003            39,027           39,027
Reserves                                                                         491,740         3,835,570        3,529,239
                                                                                 -------         ---------        ---------

Shareholders'funds                                                               496,743         3,874,597        3,568,266
                                                                                 -------         ---------        ---------

MINORITY INTERESTS                                                                   815             6,356              492
                                                                                 -------         ---------        ---------

NON-CURRENT LIABILITIES
Deferred tax liabilities                                     23                   26,315           205,258          213,598
Deferred revenue                                             19                   14,339           111,844          122,928
                                                                                 -------         ---------        ---------

                                                                                  40,654           317,102          336,526
                                                                                 -------         ---------        ---------

                                                                                 538,212         4,198,055        3,905,284
                                                                                 =======         =========        =========

The accompany footnotes are an integral part of these consolidated financial statements.
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      F-5
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED 31ST DECEMBER, 2004, 2003 AND 2002
---------------------------------------------------------------------------------------------------------------------------

                                                               SHARE             SHARE          RETAINED
                                                              CAPITAL           PREMIUM          PROFITS            TOTAL
                                                              -------           -------          -------            -----
                                                              HK$'000           HK$'000          HK$'000          HK$'000
<S>                                                            <C>               <C>           <C>              <C>
At 1st January, 2002                                           39,027            4,614         2,826,439        2,870,080
Final dividend for 2001 paid                                       --               --           (54,637)         (54,637)
Interim dividend for 2002 paid                                     --               --           (23,416)         (23,416)
Profit for the year                                                --               --           554,689          554,689
                                                              -------          -------         ---------        ---------

At 31st December, 2002 and 1st January, 2003                   39,027            4,614         3,303,075        3,346,716
Final dividend for 2002 paid                                       --               --           (74,151)         (74,151)
Special dividend for 2002 paid                                     --               --           (97,566)         (97,566)
Interim dividend for 2003 paid                                     --               --           (31,221)         (31,221)
Profit for the year                                                --               --           424,488          424,488
                                                              -------          -------         ---------        ---------

At 31st December, 2003 and 1st January, 2004                   39,027            4,614         3,524,625        3,568,266
Final dividend for 2003 paid                                       --               --           (93,664)         (93,664)
Interim dividend for 2004 paid                                     --               --           (31,221)         (31,221)
Profit for the year                                                --               --           431,216          431,216
                                                              -------          -------         ---------        ---------

At 31st December, 2004                                         39,027            4,614         3,830,956        3,874,597
                                                              =======          =======         =========        =========

The accompany footnotes are an integral part of these consolidated financial statements.
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      F-6
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

<TABLE>
<CAPTION>
CONSOLIDATED CASH FLOW STATEMENTS
FOR THE YEARS ENDED 31ST DECEMBER, 2004, 2003 AND 2002
---------------------------------------------------------------------------------------------------------------------------

                                                                 2004              2004             2003              2002
                                                                 ----              ----             ----              ----
                                                               US$'000           HK$'000          HK$'000           HK$'000
<S>                                                              <C>             <C>               <C>              <C>
OPERATING ACTIVITIES
Profit before taxation                                           63,028          491,616           512,086          623,751
Adjustments for:
  Allowance for bad and doubtful debts
    (written back) made                                           2,268           17,690            (6,279)          11,708
  Depreciation of property, plant and equipment                  36,919          287,965           222,277          166,632
  Finance costs                                                      --                1             3,029               --
  Gain on disposal of property, plant
    and equipment                                                   (22)            (169)              (76)             (39)
  Impairment loss recognized in respect of
    goodwill of associates                                           --               --             1,896               --
  Interest income                                                (2,797)         (21,813)           (4,945)          (6,423)
  Share of results of associates                                  1,587           12,380            15,625           13,679
                                                                -------         --------           -------          -------

Operating cash flows before
  movements in working capital                                  100,983          787,670           743,613          809,308
Decrease (increase) in unbilled receivable                          815            6,357           (16,643)         (34,757)
Increase in amount paid to tax authority                         (5,453)         (42,535)           (5,182)         (19,305)
Increase in inventories                                             (53)            (416)               --               --
(Increase) decrease in trade and
  other receivables                                              (3,479)         (27,136)          (16,416)          67,661
Increase in other payables and
  accrued expenses                                                6,149           47,964             4,597            4,846
Increase (decrease) in deferred revenue                             963            7,509           (19,580)          14,105
                                                                -------         --------           -------          -------

Cash generated from operations                                   99,925          779,413           690,389          841,858
                                                                -------         --------           -------          -------


Hong Kong Profits Tax paid                                       (1,402)         (10,934)          (48,977)         (28,513)
Overseas tax paid                                                (2,265)         (17,667)          (13,878)          (3,760)
                                                                -------         --------           -------          -------

                                                                 (3,667)         (28,601)          (62,855)         (32,273)
                                                                -------         --------           -------          -------

NET CASH GENERATED FROM
  OPERATING ACTIVITIES                                           96,258          750,812           627,534          809,585
                                                                -------         --------           -------          -------

INVESTING ACTIVITIES
Purchase of property, plant and equipment                        (6,112)         (47,672)         (162,196)        (440,227)
Loan to an associate                                               (167)          (1,301)           (7,279)              --
Loan to an independent third party                                 (484)          (3,778)               --               --
Repayment of loan from an associate                                 450            3,510                --               --
Repayment of loan from an independent third party                   220            1,716                --               --
Interest received                                                 2,601           20,290             4,858            6,291
Interest expense                                                     --               (1)               --               --
Proceeds from disposal of
  property, plant and equipment                                      33              257                81               41
Purchase of interests in associates                              (3,068)         (23,930)               --          (19,500)
                                                                -------         --------           -------          -------

NET CASH USED IN INVESTING ACTIVITIES                            (6,527)         (50,909)         (164,536)        (453,395)
                                                                -------         --------           -------          -------

FINANCING ACTIVITIES
Dividend paid                                                   (16,011)        (124,885)         (202,938)         (78,053)
Cost of raising bank borrowing facility                              --               --            (6,951)          (8,337)
                                                                -------         --------           -------          -------

NET CASH USED IN FINANCING ACTIVITIES                           (16,011)        (124,885)         (209,889)         (86,390)
                                                                -------         --------           -------          -------

INCREASE IN CASH AND CASH EQUIVALENTS                            73,720          575,018           253,109          269,800
CASH AND CASH EQUIVALENTS AT
  THE BEGINNING OF THE YEAR                                      84,530          659,337           406,228          136,428
                                                                -------         --------           -------          -------

CASH AND CASH EQUIVALENTS AT
  THE END OF THE YEAR, REPRESENTING
  BANK BALANCES AND CASH                                        158,250        1,234,355           659,337          406,228
                                                                =======         ========           =======          =======

THE ACCOMPANY FOOTNOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      F-7
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31ST DECEMBER, 2004
--------------------------------------------------------------------------------


1.       GENERAL

         The Company is incorporated in Bermuda as an exempted company under the
         Companies Act 1981 of Bermuda (as amended) and its shares are listed on
         the New York Stock Exchange and The Stock Exchange of Hong Kong Limited
         (hereafter collectively referred to as the "Stock Exchanges").

         The Group is engaged in the provision of transponder capacity.


2.       PRINCIPAL ACCOUNTING POLICIES

         The principal accounting policies adopted in the preparation of these
         financial statements are set out below:

         (a)      BASIS OF PREPARATION

                  The financial statements have been prepared in accordance with
                  accounting principles generally accepted in Hong Kong and
                  comply with accounting standards issued by the Hong Kong
                  Institute of Certified Public Accountants ("HKICPA"). They
                  have been prepared under the historical cost convention.

                  HKICPA has issued a number of new and revised Hong Kong
                  Financial Reporting Standards and Hong Kong Accounting
                  Standards ("new HKFRSs") which are effective for accounting
                  periods beginning on or after 1st January, 2005. The Group has
                  not early adopted these new HKFRSs in the financial statements
                  for the year ended 31st December, 2004. The Group has already
                  commenced an assessment of the impact of these new HKFRSs but
                  is not yet in position to state whether these new HKFRSs would
                  have a significant impact on its results of operations and
                  financial position.

         (b)      GROUP ACCOUNTING

                  (i) BASIS OF CONSOLIDATION

                      The consolidated financial statements incorporate the
                      financial statements of the Company and its subsidiaries
                      made up to 31st December each year.

                      Subsidiaries are those entities in which the company,
                      directly or indirectly, controls more than one half of the
                      voting power; has the power to govern the financial and
                      operating policies; to appoint or remove the majority of
                      the members of the board of directors; or to cast majority
                      of votes at the meetings of the board of directors.

                      The results of subsidiaries and associates acquired or
                      disposed of during the year are included in the
                      consolidated income statement from the effective dates of
                      acquisition or up to the effective dates of disposal, as
                      appropriate.

                      All significant intercompany transactions and balances
                      within the Group have been eliminated on consolidation.

                                      F-8
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

2.       PRINCIPAL ACCOUNTING POLICIES - continued

                  (i) BASIS OF CONSOLIDATION - CONTINUED

                      The gain or loss on the disposal of a subsidiary
                      represents the difference between the proceeds of the sale
                      and the Group's share of its net assets together with any
                      unamortized goodwill or negative goodwill or
                      goodwill/negative goodwill taken to reserves and which was
                      not previously charged or recognized in the consolidated
                      profit and loss account and any related accumulated
                      foreign currency translation reserve.

                      Minority interests represent the interests of outside
                      shareholders in the operating results and net assets of
                      subsidiaries.

                      Investments in subsidiaries are included in the Company's
                      balance sheet at cost less any identified impairment loss.
                      Results of subsidiaries are accounted for by the Company
                      on the basis of dividends received or receivable during
                      the year.

                  (ii)ASSOCIATES

                      An associated company is a company, not being a subsidiary
                      or a joint venture, in which an equity interest is held
                      for the long-term and significant influence is exercised
                      in its management.

                      The consolidated income statement includes the Group's
                      share of the post-acquisition results of its associates
                      for the year. In the consolidated balance sheet, interests
                      in associates are stated at the Group's share of the net
                      assets of the associates plus the goodwill in so far as it
                      has not already been amortized, less any identified
                      impairment loss.

                      Equity accounting is discontinued when the carrying amount
                      of the interests in an associated company reaches zero,
                      unless the Group has incurred obligations or guaranteed
                      obligations in respect of the associated company.

         (c)      GOODWILL

                  Goodwill arising on consolidation represents the excess of the
                  cost of acquisition over the Group's interest in the fair
                  value of the identifiable assets and liabilities of associates
                  at the date of acquisition.

                  Goodwill arising on acquisitions is capitalized within the
                  carrying amount of the associate and is charged to the income
                  statement on a straight-line basis over its useful economic
                  life or at such time as it is determined to be impaired.

                  On disposal of an associate, the attributable amount of
                  unamortized goodwill is included in the determination of the
                  profit or loss on disposal.

                                      F-9
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

2.       PRINCIPAL ACCOUNTING POLICIES - continued

         (d)      REVENUE RECOGNITION

                  Revenue from transponder utilization agreements is recognized
                  on a straight-line basis over the period of the agreements.
                  The excess of revenue recognized on a straight-line basis over
                  the amount received and receivable from customers in
                  accordance with the contract terms is shown as unbilled
                  receivable.

                  Revenue from the sale of transponder capacity under
                  transponder purchase agreements is recognized on a
                  straight-line basis from the date of delivery of the
                  transponder capacity until the end of the estimated useful
                  life of the satellite.

                  Deposits received in advance in connection with the provision
                  of transponder capacity are deferred and included in other
                  payables.

                  Services under transponder utilization agreements are
                  generally billed quarterly in advance. Such amounts received
                  in advance and amounts received from the sale of transponder
                  capacity under transponder purchase agreements in excess of
                  amounts recognized as revenue are recorded as deferred
                  revenue. Deferred revenue which will be recognized in the
                  following year is classified under current liabilities and
                  amounts which will be recognized after one year are classified
                  as non-current.

                  Interest income is accrued on a time basis, by reference to
                  the principal outstanding and at the interest rate applicable.

         (e)      PROPERTY, PLANT AND EQUIPMENT

                  Property, plant and equipment are stated at cost less
                  accumulated depreciation and accumulated impairment losses.

                  Buildings in the course of development for production, rental
                  or administrative purposes or for purposes not yet determined,
                  are carried at cost, less any identified impairment loss.
                  Depreciation of these assets, on the same basis as other
                  property assets, commences when the assets are ready for their
                  intended use.

                  Depreciation is provided to write off the cost of property,
                  plant and equipment, other than assets under construction,
                  over their estimated useful lives, on a straight-line basis,
                  at the following rates per annum:

                  Satellites:
                     AsiaSat 2                        8%
                     AsiaSat 3S                       6.25%
                     AsiaSat 4                        6.67%
                  Leasehold land                      Over the term of the lease
                  Buildings                           4%
                  Tracking facilities                 20%
                  Furniture, fixtures and fittings    20% - 33%
                  Office equipment                    25% - 33%
                  Motor vehicles                      25%
                  Plant and machinery                 20%

                                      F-10
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

2.       PRINCIPAL ACCOUNTING POLICIES - continued

         (e)      PROPERTY, PLANT AND EQUIPMENT - continued

                  Assets under construction are not depreciated until
                  construction is complete and the assets are put into use.

                  The plant components are depreciated over the period to
                  overhaul. Major costs incurred in restoring the plant
                  components to its normal working condition to allow continued
                  use of the overall asset are capitalized and depreciated over
                  the period to the next overhaul.

                  Improvements are capitalized and depreciated over their
                  expected useful lives to the Group.

                  The gain or loss arising from disposal or retirement of an
                  asset is determined as the difference between the sales
                  proceeds and the carrying amount of the asset and is
                  recognized in the income statement.

         (f)      IMPAIRMENT

                  At each balance sheet date, the Group reviews the carrying
                  amounts of its tangible and intangible assets to determine
                  whether there is any indication that those assets are
                  impaired. If the recoverable amount of an asset is estimated
                  to be less than its carrying amount, the carrying amount of
                  the asset is reduced to its recoverable amount. Impairment
                  losses are recognized as an expense immediately.

                  Where an impairment loss subsequently reverses, the carrying
                  amount of the asset is increased to the revised estimate of
                  its recoverable amount, but so that the increased carrying
                  amount does not exceed the carrying amount that would have
                  been determined had no impairment loss been recognized for the
                  asset in prior years. A reversal of an impairment loss is
                  recognized as income immediately.

         (g)      INVENTORIES

                  Inventories are stated at the lower of cost and net realizable
                  value. Cost, calculated on the first-in, first-out basis,
                  comprises all costs of purchase and other costs incurred in
                  bringing the inventories to their present locations and
                  conditions. Net realizable value is determined on the basis of
                  anticipated sales proceeds less estimated selling expenses.

         (h)      TRADE RECEIVABLES

                  Provision is made against trade receivables to the extent they
                  are considered to be doubtful. Trade receivables in the
                  balance sheet are stated net of such provision.

         (i)      CASH AND CASH EQUIVALENTS

                  Cash and cash equivalents are carried in the balance sheet at
                  cost. For the purposes of the cash flow statement, cash and
                  cash equivalents comprise cash on hand, deposits held at call
                  with banks, cash investments with a maturity of three months
                  or less from date of investment and bank overdrafts.

                                      F-11
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

2.       PRINCIPAL ACCOUNTING POLICIES - continued

         (j)      DEFERRED TAXATION

                  Deferred taxation is provided in full, using the liability
                  method, on temporary differences arising between the tax bases
                  of assets and liabilities and their carrying amounts in the
                  accounts. Taxation rates enacted or substantively enacted by
                  the balance sheet date are used to determine deferred
                  taxation.

                  Deferred tax assets are recognized to the extent that it is
                  probable that future taxable profit will be available against
                  which the temporary differences can be utilized.

                  Deferred taxation is provided on temporary differences arising
                  on investments in subsidiaries, associates and joint ventures,
                  except where the timing of reversal of the temporary
                  difference can be controlled and it is probable that the
                  temporary difference will not reverse in the foreseeable
                  future.

         (k)      BORROWING COSTS

                  Borrowing costs directly attributable to the acquisition,
                  construction or production of qualifying assets, are
                  capitalized as part of the cost of those assets.
                  Capitalization of such borrowing costs ceases when the assets
                  are substantially ready for their intended use or sale.

                  All other borrowing costs are recognized as an expense in the
                  period in which they are incurred.

         (l)      TRANSLATION OF FOREIGN CURRENCIES

                  Transactions in foreign currencies are translated into Hong
                  Kong Dollars at the rates ruling on the dates of the
                  transactions or at the contracted settlement rate. Monetary
                  assets and liabilities denominated in foreign currencies other
                  than Hong Kong Dollars are re-translated at the rates ruling
                  on the balance sheet date. Exchange differences arising in
                  these cases are dealt with in the income statement.

         (m)      OPERATING LEASES

                  Leases where substantially all the risks and rewards of
                  ownership of assets remain with the leasing company are
                  accounted for as operating leases.

                  Rentals payable under operating leases are charged to the
                  income statement on a straight-line basis over the relevant
                  lease terms.


                                      F-12
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

2.       PRINCIPAL ACCOUNTING POLICIES - continued

         (n)      EMPLOYEE BENEFITS

                  (i) Employee leave entitlements

                      Employee entitlements to annual leave and long service
                      leave are recognized when they accrue to employees. A
                      provision is made for the estimated liability for annual
                      leave and long-service leave as a result of services
                      rendered by employees up to the balance sheet date.

                      Employee entitlements to sick leave and maternity leave
                      are not recognized until the time of leave.

                  (ii)Profit sharing and bonus plans

                      The expected cost of profit sharing and bonus payments are
                      recognized as a liability when the Group has a present
                      legal or constructive obligation as a result of services
                      rendered by employees and a reliable estimate of the
                      obligation can be made.

                      Liabilities for profit sharing and bonus plans are
                      expected to be settled within 12 months and are measured
                      at the amounts expected to be paid when they are settled.

                  (iii)Pension obligations

                      The Group participates in defined contribution plans, the
                      assets of which are generally held in separate trustees -
                      administered funds. The pension plans are generally funded
                      by payments from employees and by the relevant Group
                      companies.

                      The Group's contributions to the defined contribution
                      retirement schemes are expensed as incurred and are
                      reduced by contributions forfeited by those employees who
                      leave the scheme prior to vesting fully in the
                      contributions, where applicable.

         (o)      CONTINGENT LIABILITIES

                  A contingent liability is a possible obligation that arises
                  from past events and their existence will only be confirmed by
                  the occurrence or non-occurrence of one or more uncertain
                  future events not wholly within the control of the Group. It
                  can also be a present obligation arising from past events that
                  is not recognized because it is not probable that outflow of
                  economic resources will be required or the amount of
                  obligation cannot be measured reliably.

                  A contingent liability is not recognized but is disclosed in
                  the notes to the financial statements. When a change in the
                  probability of an outflow occurs so that the outflow is
                  probable, it will then be recognized as a provision.

                                      F-13
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

3.       TURNOVER AND SEGMENT INFORMATION

         Turnover:

         The Group's turnover is analyzed as follows:
<TABLE>
<CAPTION>
                                                                                  2004              2003             2002
                                                                                  ----              ----             ----
                                                                                 HK$'000           HK$'000          HK$'000
         <S>                                                                   <C>               <C>              <C>
         Income from provision of satellite transponder capacity                 982,464           880,375          936,114
         Sales of satellite transponder capacity                                  20,518            15,858           14,636
         Other revenue                                                             2,000                --               --
                                                                               ---------           -------          -------

                                                                               1,004,982           896,233          950,750
                                                                               =========           =======          =======
</TABLE>

         The Group has only one business segment, namely the operation,
         maintenance and provision of satellite telecommunication systems for
         broadcasting and telecommunications. The Group's primary reporting
         format for segment reporting purposes under SSAP 26 "Segment Reporting"
         is the geographical basis. For the purpose of classification, the
         country where the customer is incorporated is deemed to be the source
         of turnover. However, the Group's operating assets consist primarily of
         its satellites which are used, or are intended for use, for
         transmission to multiple geographical areas and therefore cannot be
         allocated between geographical segments. Accordingly, no geographical
         analysis of expenses, assets and liabilities has been presented.

         The following table provides an analysis of the Group's sales by
geographical markets:
<TABLE>
<CAPTION>
                                                                                 2004             2003              2002
                                                                                 ----             ----              ----
                                                                                HK$'000          HK$'000           HK$'000
<S>                                                                              <C>               <C>              <C>
         Hong Kong                                                               323,133           323,187          341,224
         Greater China, including Taiwan                                         197,936           212,847          212,103
         United States of America                                                183,750            71,164           73,282
         United Kingdom                                                           46,073            23,930           43,432
         British Virgin Islands                                                   40,897            40,351           40,351
         Others                                                                  213,193           224,754          240,358
                                                                               ---------           -------          -------

                                                                               1,004,982           896,233          950,750
                                                                               =========           =======          =======
</TABLE>

                                      F-14
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

4.       PROFIT FROM OPERATIONS
<TABLE>
<CAPTION>
                                                                                 2004             2003              2002
                                                                                 ----             ----              ----
                                                                                HK$'000          HK$'000           HK$'000
         <S>                                                                    <C>              <C>               <C>
         Profit from operations is stated after charging and crediting the
           following:

         Charging:

         Salary and other benefits, including directors' remuneration             71,071            55,214           63,606
         Contributions to retirement benefits schemes                              4,356             4,011            4,104
                                                                                 -------           -------          -------

         Total staff costs                                                        75,427            59,225           67,710
                                                                                 -------           -------          -------

         Auditors' remuneration                                                      697               679              635
         Allowance for bad and doubtful debts                                     17,690                --           11,708
         Depreciation of property, plant and equipment                           287,965           222,277          166,632
         Operating leases - premises                                               5,380             5,965            6,390
         Net exchange loss                                                           288               672              390

         Crediting:

         Write-back of allowance for bad and doubtful debts                           --             6,279               --
         Gain on disposal of property, plant and equipment other
           than transponders                                                         169                76               39
                                                                                 =======           =======          =======


5.       FINANCE COSTS
                                                                                 2004             2003              2002
                                                                                 ----             ----              ----
                                                                                HK$'000          HK$'000           HK$'000

         Cost of raising bank borrowing facility                                      --             6,951            8,337
         Less: Amount capitalized in assets under construction                        --            (3,922)          (8,337)
                                                                                 -------           -------          -------
                                                                                      --             3,029               --
         Interest on bank overdrafts                                                   1                --               --
                                                                                 -------           -------          -------
                                                                                       1             3,029               --
                                                                                 =======           =======          =======
</TABLE>

         The costs in 2003 arose from the commitment fees paid to banks on the
         loan facility, which had never been drawn. The facility was not drawn
         during the grace period and, therefore, lapsed in November 2003. The
         commitment fees paid before the commissioning of AsiaSat 4 was
         capitalized whilst that portion paid after commissioning was expensed.

                                      F-15
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

6. DIRECTORS' EMOLUMENTS
<TABLE>
<CAPTION>
                                                                                 2004             2003              2002
                                                                                 ----             ----              ----
                                                                                HK$'000          HK$'000           HK$'000
         <S>                                                                    <C>              <C>               <C>
         Fees:
           Executive                                                                  --                --               --
           Non-executive                                                              --                --              134
           Independent non-executive                                                 525               475              400
                                                                                 -------           -------          -------
                                                                                     525               475              534
                                                                                 -------           -------          -------
         Other emoluments:
           Executive
             Salaries and other benefits                                           7,874             7,831            8,095
             Contributions to retirement benefits scheme                             698               698              698
             Performance related incentive payments                                4,652                --            2,900
                                                                                 -------           -------          -------
                                                                                  13,224             8,529           11,693
                                                                                 -------           -------          -------
         Total emoluments                                                         13,749             9,004           12,227
                                                                                 =======           =======          =======

         Their emoluments were within the following bands:

                                                                                                NO. OF DIRECTORS
                                                                                    2004              2003             2002
                                                                                    ----              ----             ----
         Nil to HK$1,000,000                                                          12                11               13
         HK$3,500,001 to HK$4,000,000                                                 --                 1               --
         HK$4,500,001 to HK$5,000,000                                                 --                 1               --
         HK$5,000,001 to HK$5,500,000                                                 --                --                1
         HK$5,500,001 to HK$6,000,000                                                  1                --               --
         HK$6,500,001 to HK$7,000,000                                                 --                --                1
         HK$7,000,001 to HK$7,500,000                                                  1                --               --
                                                                                 -------           -------          -------
                                                                                      14                13               15
                                                                                 =======           =======          =======
</TABLE>


         In addition to the remuneration listed above, the Group made payments
         to SES GLOBAL S.A. ("SES GLOBAL") and a subsidiary of CITIC Group
         ("CITIC"), the substantial shareholders of the Company throughout the
         year, amounting to HK$475,000 (2003: HK$475,000; 2002: HK$400,000) and
         HK$525,000 (2003: HK$525,000; 2002: HK$400,000) respectively, for
         certain Non-Executive Directors representing SES GLOBAL and CITIC.


                                      F-16
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

7.       EMPLOYEES' EMOLUMENTS

         Of the five individuals with the highest emoluments in the Group, two
         (2003 and 2002: two) were Directors of the Company whose emoluments are
         included in note 6 above. The emoluments of the remaining three (2003
         and 2002: three) individuals were as follows:

<TABLE>
<CAPTION>
                                                                                 2004             2003              2002
                                                                                 ----             ----              ----
                                                                                HK$'000          HK$'000           HK$'000
         <S>                                                                    <C>              <C>               <C>
         Salaries and other benefits                                               8,313             8,268            8,053
         Contributions to retirement benefits scheme                                 687               687              687
         Performance related incentive payments                                    3,666                --            2,286
                                                                                 -------           -------          -------
                                                                                  12,666             8,955           11,026
                                                                                 =======           =======          =======

         Their emoluments were within the following bands:
                                                                                               NO. OF EMPLOYEES
                                                                                  2004               2003             2002
                                                                                  ----               ----             ----

         HK$2,500,001 to HK$3,000,000                                                 --                 1               --
         HK$3,000,001 to HK$3,500,000                                                 --                 2                1
         HK$3,500,001 to HK$4,000,000                                                  1                --                1
         HK$4,000,001 to HK$4,500,000                                                  1                --                1
         HK$4,500,001 to HK$5,000,000                                                  1                --               --
                                                                                 -------           -------          -------
                                                                                       3                 3                3
                                                                                 =======           =======          =======
</TABLE>

                                      F-17
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

8.       TAXATION
<TABLE>
<CAPTION>
                                                                                 2004             2003              2002
                                                                                 ----             ----              ----
                                                                                HK$'000          HK$'000           HK$'000
         The charge comprises:
         <S>                                                                    <C>              <C>               <C>
         Current taxation:
           Hong Kong Profits Tax                                                  49,574            38,516           40,624
           Overseas taxation                                                      19,226            21,509           18,213
                                                                                 -------           -------          -------
                                                                                  68,800            60,025           58,837
                                                                                 -------           -------          -------
         Deferred taxation (note 23):
           Current year                                                           (8,264)           10,140           10,225
           Attributable to an increase in tax rate in Hong Kong                       --            17,433               --
                                                                                 -------           -------          -------
                                                                                  (8,264)           27,573           10,225
                                                                                 -------           -------          -------

                                                                                  60,536            87,598           69,062
                                                                                 =======           =======          =======
</TABLE>

         A significant portion of the Group's profit is treated as earned
         outside of Hong Kong and is not subject to Hong Kong Profits Tax. Hong
         Kong Profits Tax is calculated at 17.5% (2003: 17.5%; 2002: 16%) of the
         estimated assessable profit for these years.

         Overseas tax, including the Foreign Enterprises Income Tax in the
         People's Republic of China, is calculated at 5% to 20% of the gross
         revenue earned in certain of the overseas jurisdictions.

         Details of deferred taxation are set out in note 23.

         The Group currently has a tax case in dispute with the Indian tax
         authorities. Details of this are set out in note 28.

         The taxation expense on the Group's profit before taxation differs from
         the theoretical amount that would arise using the taxation rate of the
         home country of the Company as follows:

<TABLE>
<CAPTION>
                                                                                    2004              2003           2002
                                                                                    ----              ----           ----
                                                                                   HK$'000           HK$'000        HK$'000

         <S>                                                                       <C>               <C>            <C>
         Profit before taxation                                                    491,616           512,086        623,751
                                                                                   =======           =======        =======

         Calculated at a taxation rate of 17.5% (2003: 17.5%;
           2002: 16%)                                                               86,033            89,615         99,800
         Tax effect of income not taxable for tax purposes                         (91,475)          (78,454)       (76,135)
         Tax effect of expenses not deductible for tax purposes                     44,585            34,429         24,700
         Tax effect of tax losses of associates not recognized                       2,167             2,734          2,189
         Effect of income tax rate differential
           between Hong Kong and overseas locations                                 19,226            21,509         18,213
         Increase in deferred tax liability resulting
           from an increase in Hong Kong Profits Tax rate                               --            17,433             --
         Other                                                                          --               332            295
                                                                                   -------           -------        -------
         Tax expense                                                                60,536            87,598         69,062
                                                                                   =======           =======        =======
</TABLE>

                                      F-18
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

9.       DIVIDENDS

<TABLE>
<CAPTION>
                                                                                               THE COMPANY
                                                                                               -----------
                                                                                  2004             2003              2002
                                                                                  ----             ----              ----
                                                                                 HK$'000          HK$'000           HK$'000
         <S>                                                                     <C>              <C>               <C>
         Interim, paid - HK$0.08 per share (2003: HK$0.08;
           2002: HK$0.06)                                                         31,221            31,221           23,416
         Final, proposed - HK$0.27 per share
           (2003: HK$0.24; 2002: HK$0.19)                                        105,372            93,664           74,151
         Special, proposed - Nil per share (2003: Nil;
           2002: HK$0.25)                                                             --                --           97,566
                                                                                 -------           -------          -------
                                                                                 136,593           124,885          195,133
                                                                                 =======           =======          =======
</TABLE>

         The final dividend of HK$0.27 per share has been proposed by the
         Directors at a meeting held on 17th March, 2005 and is subject to
         approval by the shareholders in the Annual General Meeting. This
         proposed dividend is not reflected as a dividend payable in these
         financial statements, but will be reflected as an appropriation of
         retained earnings for the year ending 31st December, 2005.

10.      EARNINGS PER SHARE

         The calculation of basic and diluted earnings per share is based on the
         profit attributable to shareholders for 2004 of HK$431,216,000 (2003:
         HK$424,488,000; 2002: HK$554,689,000) and on 390,265,500 (2003 and
         2002: 390,265,500) shares in issue during the year.

         No diluted earnings per share was presented for either 2004, 2003 or
         2002 as the exercise of the outstanding share options of the Company
         would have an anti-dilutive effect.


11.      PROPERTY, PLANT AND EQUIPMENT

<TABLE>
<CAPTION>
         2004
         ----
                                 SATELLITES AND TRACKING FACILITIES
                                 ---------------------------------------
                                                                        FURNITURE,
                                                                         FIXTURES
                                     IN        UNDER                        AND     OFFICE    MOTOR  PLANT AND
                                 OPERATION CONSTRUCTION  LAND  BUILDINGS FITTINGS EQUIPMENT VEHICLES MACHINERY    TOTAL
                                 --------- ------------  ----- --------- -------- --------- -------- ---------   -------
                                  HK$'000    HK$'000   HK$'000  HK$'000  HK$'000  HK$'000   HK$'000  HK$'000     HK$'000
         COST
         <S>                    <C>          <C>        <C>     <C>       <C>       <C>       <C>      <C>     <C>
         At 1st January, 2004   4,167,029     41,837    26,968  117,866   10,558    6,925     3,427    2,524   4,377,134
         Additions                 14,953     22,826        --       34    1,291    1,055     1,722       22      41,903
         Transfer                  55,028    (55,028)       --       --       --       --        --       --          --
         Disposals                 (4,381)        --        --       --     (995)    (334)   (1,278)    (176)     (7,164)
                                ---------  ---------   -------  -------  -------  -------   -------  -------   ---------

         At 31st December, 2004 4,232,629      9,635    26,968  117,900   10,854    7,646     3,871    2,370   4,411,873
                                ---------  ---------   -------  -------  -------  -------   -------  -------   ---------

         DEPRECIATION
         At 1st January, 2004   1,191,719         --     1,603      393    8,962    5,335     2,125    1,598   1,211,735
         Provided for the year    280,171         --       583    4,716      716      762       797      220     287,965
         Disposals                 (4,381)        --        --       --     (979)    (333)   (1,207)    (176)     (7,076)
                                ---------  ---------   -------  -------  -------  -------   -------  -------   ---------

         At 31st December, 2004 1,467,509         --     2,186    5,109    8,699    5,764     1,715    1,642   1,492,624
                                ---------  ---------   -------  -------  -------  -------   -------  -------   ---------

         NET BOOK VALUES
         At 31st December, 2004 2,765,120      9,635    24,782  112,791    2,155    1,882     2,156      728   2,919,249
                                ---------  ---------   -------  -------  -------  -------   -------  -------  -------

         At 31st December, 2003 2,975,310     41,837    25,365  117,473    1,596    1,590     1,302      926   3,165,399
                                ---------  ---------   -------  -------  -------  -------   -------  -------   ---------
</TABLE>

                                      F-19
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

11.      PROPERTY, PLANT AND EQUIPMENT - continued
<TABLE>
<CAPTION>
         2003
         ----
                                 SATELLITES AND TRACKING FACILITIES
                                 ----------------------------------------------------
                                                                                     FURNITURE,
                                                                BUILDINGS            FIXTURES
                                     IN        UNDER              UNDER                AND     OFFICE    MOTOR   PLANT AND
                                 OPERATION CONSTRUCTION  LAND  DEVELOPMENT BUILDINGS FITTINGS EQUIPMENT VEHICLES MACHINERY    TOTAL
                                 --------- ------------  ----- ----------- --------- -------- --------- -------- --------   -------
                                  HK$'000    HK$'000   HK$'000   HK$'000    HK$'000  HK$'000   HK$'000  HK$'000  HK$'000    HK$'000
         COST
         <S>                    <C>          <C>        <C>      <C>        <C>       <C>       <C>      <C>     <C>      <C>
         COST
         At 1st January, 2003   3,629,079  1,618,864    26,968    59,198         --    9,151     5,637    2,954    1,690  5,353,541
         Additions                  2,155     89,768        --    58,668         --    1,416     1,439    1,051      834    155,331
         Transfer               1,666,795 (1,666,795)       --  (117,866)   117,866       --        --       --       --         --
         Disposals             (1,131,000)        --        --        --         --       (9)     (151)    (578)      -- (1,131,738)
                                ---------  ---------   -------   -------    -------  -------   -------  -------  -------  ---------

         At 31st December, 2003 4,167,029     41,837    26,968        --    117,866   10,558     6,925    3,427    2,524  4,377,134
                                ---------  ---------   -------   -------    -------  -------   -------  -------  -------  ---------

         DEPRECIATION
         At 1st January, 2003   2,103,079         --     1,020        --         --    8,676     4,901    1,985    1,530  2,121,191
         Provided for the year    219,640         --       583        --        393      292       583      718       68  222,277
         Eliminated on
           disposals           (1,131,000)        --        --        --         --       (6)     (149)    (578)      -- (1,131,733)
                                ---------  ---------   -------   -------    -------  -------   -------  -------  -------  ---------

         At 31st December, 2003 1,191,719         --     1,603        --        393    8,962     5,335    2,125    1,598  1,211,735
                                ---------  ---------   -------   -------    -------  -------   -------  -------  -------  ---------

         NET BOOK VALUES
         At 31st December, 2003 2,975,310     41,837    25,365        --    117,473    1,596     1,590    1,302      926  3,165,399
                                =========  =========   =======   =======    =======  =======   =======  =======  =======  =========
</TABLE>

         The land is situated in Hong Kong and held under a medium-term lease.

         The cost of property, plant and equipment includes borrowing cost
         capitalised during construction of satellite and tracking facilities of
         approximately HK$52,872,000 (2003: HK$52,872,000).


12.      INVESTMENTS IN SUBSIDIARIES
                                                                  THE COMPANY
                                                                  -----------
                                                                2004       2003
                                                                ----       ----
                                                               HK$'000   HK$'000

         Unlisted shares in subsidiaries, at cost              429,054   429,053
                                                               =======   =======


         The cost of the unlisted shares is based on the book value of the
         underlying net assets of the subsidiaries attributable to the Group as
         at the date on which the Company became the ultimate holding company of
         the Group under the Group reorganisation in 1996.


                                      F-20
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

12.      INVESTMENTS IN SUBSIDIARIES - continued

         Details of subsidiaries and a controlled partnership at 31st December,
2004 are as follows:

<TABLE>
<CAPTION>
                                             PLACE OF
                                          INCORPORATION/
                                           REGISTRATION/                       PERCENTAGE OF NOMINAL
                                          PRINCIPAL PLACE     CLASS OF        VALUE OF ISSUED CAPITAL
         NAME OF SUBSIDIARY                OF OPERATION      SHARE HELD         HELD BY THE COMPANY         PRINCIPAL ACTIVITY
         ------------------                ------------      ----------         -------------------         ------------------
                                                                               Directly   Indirectly
         <S>                              <C>               <C>                <C>        <C>               <C>
         AsiaSat BVI Limited              British Virgin    Ordinary shares      100%         --            Investment holding
                                              Islands

         Asia Satellite Telecommunications   Hong Kong      Ordinary shares       --         100%           Provision of satellite
           Company Limited                                                                                  transponder capacity

         Hanbury International            British Virgin    Ordinary shares       --         100%               Inactive
           Limited                            Islands

         SAT Limited                       Republic of      Ordinary shares      100%         --                Inactive
                                             Mauritius

         Skywave TV Company Limited          Hong Kong      Ordinary shares       --          80%           Provision of DTH
           (formerly known as Auspicious                                                                      broadcasting
           City Limited)                                                                                       services

         Sornico Limited                     Hong Kong      Ordinary shares       --         100%               Inactive

         The First Asian Satellite           Hong Kong            N/A             --           1%               Inactive
           Leasing Limited Partnership
           (the "Partnership")

         The Company continues to control the Partnership as it is a general partner and accordingly continues to consolidate it.
</TABLE>

                                      F-21
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

13.      INTERESTS IN ASSOCIATES
                                                                  THE GROUP
                                                                  ---------
                                                               2004        2003
                                                               ----        ----
                                                             HK$'000     HK$'000

         Share of net assets                                  11,109          --
         Goodwill (note a)                                       442          --
         Amount due from an associate                          1,846          --
                                                             -------     -------
                                                              13,397          --
                                                             =======     =======

         The Group had a 36.5% equity interest in SpeedCast Holdings Limited
         ("SHL") as at 31st December, 2001. The Group increased its equity
         interest in SHL to 45.3% in 2002 and further to 47.3% in 2004 by
         subscribing a rights issue. The purchase consideration of the 36.5%
         equity interest was HK$97,500,000 while that of the additional 8.8% and
         2.0% equity interest acquired in 2002 and 2004 was HK$31,200,000 and
         HK$11,700,000 respectively. The entire HK$97,500,000 and a portion of
         HK$31,200,000 (amounting to HK$11,700,000) were paid in the form of
         satellite transponder capacity and maintenance and other support
         services to be provided under agreements (valued using prices with
         third parties with comparable terms and conditions). The Group recorded
         goodwill from such acquisitions of HK$12,264,000, HK$13,000,000 and
         HK$662,000 respectively, for the excess of the purchase consideration
         over the fair value of the SHL net assets acquired. SHL consolidates
         the financial statements of SpeedCast Limited ("SpeedCast"), a
         wholly-owned subsidiary, and the Company's investment in SHL is
         accounted for using the equity method in the accompanying financial
         statements.

         During the year, the Group contributed capital to Beijing Asia Sky
         Telecommunications Technology Company Limited ("Beijing Asia") and had
         a 49% equity interest in Beijing Asia as at 31st December, 2004. The
         Company's investment in Beijing Asia is accounted for using the equity
         method in the accompanying financial statements.

         Details of the Group's associates as at 31st December, 2004 are as
         follows:

<TABLE>
<CAPTION>
                                          PLACE OF                         PERCENTAGE OF
                                       INCORPORATION/                      NOMINAL VALUE
                                        REGISTRATION/                        OF ISSUED
                                       PRINCIPAL PLACE    CLASS OF    CAPITAL INDIRECTLY HELD
         NAME OF ENTITY                 OF OPERATION     SHARE HELD       BY THE COMPANY        PRINCIPAL ACTIVITY
         --------------                 ------------     ----------       --------------        ------------------
         <S>                            <C>              <C>              <C>                   <C>
         Beijing Asia Sky                  China             N/A               49.0%             Provision of VSAT
            Telecommunications                                                                   technical and
            Technology Company                                                                   support services
            Limited

         SpeedCast Holdings Limited       Cayman          Ordinary             47.3%             Investment holding
                                          Islands

         SpeedCast Limited                Hong Kong       Ordinary             47.3%             Provision of Internet
                                                                                                 related services
                                                                                                 through satellite
                                                                                                 transponders
</TABLE>

                                      F-22
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

13.      INTERESTS IN ASSOCIATES - continued

         Note     (a) Included in interests in associates is goodwill arising on
                  acquisition of associates:

                                                                      THE GROUP
                                                                      ---------
                                                                       HK$'000
                  COST
                  At 1st January, 2004                                  25,264
                  Arising on acquisition during the year                   662
                                                                       -------
                  At 31st December, 2004                                25,926
                                                                       -------

                  AMORTIZATION AND IMPAIRMENT
                  At 1st January, 2004                                  25,264
                  Charge for the year                                      220
                                                                       -------
                  At 31st December, 2004                                25,484
                                                                       -------
                  CARRYING VALUE
                  At 31st December, 2004                                   442
                                                                       =======


                  2003
                                                                       HK$'000
                  COST
                  At 1st January, 2003 and at 31st December, 2003       25,264
                                                                       -------

                  AMORTIZATION AND IMPAIRMENT
                  At 1st January, 2003                                  16,868
                  Charge for the year                                    6,500
                  Impairment loss recognized during the year             1,896
                                                                       -------
                  At 31st December, 2003                                25,264
                                                                       -------
                  CARRYING VALUE
                  At 31st December, 2003                                    --
                                                                       =======


                  The goodwill is amortized over a period of two years.

                  Amortization charged to income in 2004 amounting to HK$220,000
                  (2003: HK$6,500,000; 2002: HK$4,604,000) has been included in
                  the amount reported as share of results of associates in the
                  consolidated statements of operations.

                  In 2003, in view of the continual losses incurred by SpeedCast
                  and the expectation that further losses would be incurred in
                  the near term, management decided to write off the goodwill as
                  impairment.

         Amount due from an associate is unsecured, interest free and will not
         be repaid within one year.

                                      F-23
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

14.      LOAN RECEIVABLE FROM AN ASSOCIATE

         The amount is secured, bearing interest at 6% per annum and is
repayable as follows:

                                                                    THE GROUP
                                                                    ---------
                                                                  2004     2003
                                                                  ----     ----
                                                               HK$'000  HK$'000

         Within one year                                         5,070    3,510
         More than one year but not exceeding two years             --    3,769
                                                               -------  -------

                                                                 5,070    7,279
         Less: amount shown under current assets                (5,070)  (3,510)
                                                               -------  -------

                                                                    --    3,769
                                                               =======  =======


15.      AMOUNT PAID TO TAX AUTHORITY

         At the balance sheet date, an amount of approximately HK$67,023,000
         (2003: HK$24,487,000) had been paid to the Government of India. For
         details, please refer to note 28.

16.      INVENTORIES

                                                                    THE GROUP
                                                                    ---------
                                                                  2004     2003
                                                                  ----     ----
                                                               HK$'000  HK$'000

         Merchandise                                               416       --
                                                               =======  =======

         At the balance sheet date, the carrying amount of inventories is
         carried at cost (2003: Nil).


                                      F-24
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

17.      TRADE AND OTHER RECEIVABLES

                                                                    THE GROUP
                                                                    ---------
                                                                  2004     2003
                                                                  ----     ----
                                                               HK$'000  HK$'000

         Trade receivables                                      72,708   68,118
         Other receivables                                      22,474   12,361
         Deposits and prepayments                               37,226   38,538
                                                               -------  -------

                                                               132,408  119,017
                                                               =======  =======


         The Group does not normally provide credit terms to its trade
         customers. The Group usually bills its trade customers quarterly in
         advance in accordance with its agreements. The aged analysis of trade
         receivables is stated as follows:

                                                                    THE GROUP
                                                                    ---------
                                                                  2004     2003
                                                                  ----     ----
                                                               HK$'000  HK$'000

         0 to 30 days                                           34,047   32,130
         31 to 60 days                                          18,318    9,438
         61 to 90 days                                          11,424    7,443
         91 to 180 days                                          3,796   11,652
         181 days or above                                       5,123    7,455
                                                               -------  -------

         Total trade receivables                                72,708   68,118
                                                               =======  =======


18.      OTHER LOAN RECEIVABLE

         The loan is receivable from an independent third party. It is
         unsecured, bearing interest at 8% per annum and is wholly repayable
         within one year.

19.      DEFERRED REVENUE
                                                                    THE GROUP
                                                                    ---------
                                                                  2004     2003
                                                                  ----     ----
                                                               HK$'000  HK$'000
         The maturity of deferred revenue is as follows:

         Within one year                                       175,043  156,448
         More than one year but not exceeding five years       111,844  122,928
                                                               -------  -------

                                                               286,887  279,376
         Less: amount shown as current                        (175,043)(156,448)
                                                               -------  -------

                                                               111,844  122,928
                                                               =======  =======

                                      F-25
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

20. SHARE CAPITAL
                                                                     ISSUED AND
                                                        AUTHORIZED   FULLY PAID
                                                        2004 & 2003  2004 & 2003
                                                        -----------  -----------
                                                          HK$'000      HK$'000

         Ordinary shares of HK$0.10 each                   55,000       39,027
                                                          =======      =======


21.      SHARE OPTION SCHEME

         SCHEME ADOPTED ON 3RD JUNE, 1996

         In accordance with the Company's share option scheme (the "1996
         Scheme") adopted pursuant to a resolution passed on 3rd June, 1996, the
         Board of Directors of the Company may at their discretion grant options
         to all permanent, full-time employees of the Company and its
         subsidiaries, to subscribe for shares in the Company. The primary
         purpose of the 1996 Scheme was to provide incentives to eligible
         employees.

         The total number of shares in respect of which options may be granted
         under the 1996 Scheme (including options already exercised) was not
         permitted to exceed 10% of the issued share capital of the Company at
         any point in time. The maximum number of share options issued to any
         employee, based on the subscription price of the options, shall not
         exceed four times the annual basic salary (excluding bonuses and
         allowances) of that employee.

         Options granted must be taken up within 28 days from the date of grant
         upon payment of HK$1 per each grant of share options. An option may be
         exercisable up to 50% on or after the third anniversary of the date of
         grant, up to 75% on or after the fourth anniversary and fully on or
         after the fifth anniversary but before the tenth anniversary of the
         date of offer unless the Board of Directors specifies other periods.
         The exercise price was determined by the Board of Directors, and was
         based on the average closing price of the shares for the five trading
         days immediately preceding the date of grant.

         The 1996 Scheme was terminated on 25th January, 2002 pursuant to a
         resolution passed on that date.

         SCHEME ADOPTED ON 25TH JANUARY, 2002

         A new share option scheme (the "2002 Scheme") was adopted pursuant to a
         resolution passed on 25th January, 2002 for the primary purpose of
         attracting and retaining the best personnel for the

                                      F-26
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

21.      SHARE OPTION SCHEME - continued

         development of the Company's businesses, and providing incentives to
         employees, Directors, consultants, agents, representatives and
         advisors, and promoting the long term financial success of the Company.
         The 2002 Scheme will expire on 24th January, 2012.

         Under the 2002 Scheme, the Board of Directors of the Company may at
         their discretion grant options to the employees, including Directors,
         of the Company or any company that directly, or indirectly through one
         or more intermediaries, controls or is controlled by, or is under
         common control with, the Company, to subscribe for shares in the
         Company. Options granted to a Director, chief executive or substantial
         shareholder of the Company or any of their respective associates must
         be approved by the Independent Non-Executive Directors of the Company
         (excluding any Independent Non-Executive Director who is also the
         grantee).

         No options were granted during 2004 and 2003. At 31st December, 2002,
         the number of shares in respect of which options had been granted under
         the 2002 Scheme was 7,149,500 representing 1.83% of the shares of the
         Company in issue at that date.

         The total number of shares in respect of which options may be granted
         under the 2002 Scheme and any other schemes is not permitted to exceed
         30% of the issued share capital of the Company from time to time. In
         addition, the total number of shares in respect of which options may be
         granted under the 2002 Scheme and any other schemes must not, in
         aggregate, exceed 10% of the issued share capital of the Company at the
         adoption date of the 2002 Scheme, being 39,026,550 shares, without
         prior approval from the Company's shareholders.

         The number of shares in respect of which options may be granted to any
         individual in any one year is not permitted to exceed 1% of the shares
         of the Company in issue, without prior approval from the Company's
         shareholders. Options granted to a substantial shareholder, or an
         Independent Non-Executive Director of the Company, or any of their
         respective associates under the 2002 Scheme, and any other schemes in
         any one year in excess of 0.1% of the Company's issued share capital or
         with a value in excess of HK$5 million must be approved in advance by
         the Company's shareholders.

         Options granted must be taken up within 28 days from the date of grant
         upon payment of HK$1 per each grant of share options. The exercise
         period of the share options granted under the 2002 Scheme shall be
         determined by the Board of Directors when such options are granted,
         provided that such period shall not end later than 10 years from the
         date of grant. The exercise price is determined by the Board of
         Directors, and will not be less than the higher of the closing price of
         the Company's shares on the date of grant, or the average closing price
         of the shares for the five trading days immediately preceding the date
         of grant, or the nominal value of a share of the Company.

         No options were granted during 2004 and 2003. Total consideration
         received in 2002 from employees for taking up the options granted
         amounted to HK$105.

         The financial impact of share options granted is not recorded in the
         Company's or the Group's balance sheet until such time as the options
         are exercised, and no charge is recognized in the statements of
         operations in respect of the value of options granted in the year. Upon
         the exercise of the share options, the resulting shares issued are
         recorded by the Company as additional share capital at the nominal
         value of shares and the excess of the exercise price per

                                      F-27
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

21.      SHARE OPTION SCHEME - continued

         share over the nominal value of the shares is recorded by the Company
         in the share premium account. Options which are lapsed or are cancelled
         prior to their exercise dates are deleted from the register of
         outstanding options.

         The following table discloses details of the Company's share options
         held by employees (including Directors) and movements in such holdings
         during the year:

<TABLE>
<CAPTION>
             SHARE                   OUTSTANDING                                                                OUTSTANDING
            OPTION                       AT              GRANTED       EXERCISED     CANCELLED       LAPSED         AT
            SCHEME      OPTION      1ST JANUARY,         DURING         DURING        DURING         DURING   31ST DECEMBER,
           CATEGORY      TYPE           2004              2004           2004          2004           2004         2004
           --------      ----           ----              ----           ----          ----           ----         ----
           <S>           <C>          <C>                 <C>            <C>           <C>           <C>          <C>
             2002          A          1,691,500            --              --             --             --       1,691,500
             2002          B          1,768,000            --              --             --         (15,000)     1,753,000
             2002          C          3,481,500            --              --             --             --       3,481,500
                                     ----------       ----------        --------     ----------     --------     ----------

                                      6,941,000            --              --             --         (15,000)     6,926,000
                                      =========        =========         =======      =========      =======      =========


             SHARE                   OUTSTANDING                                                                OUTSTANDING
            OPTION                       AT              GRANTED       EXERCISED     CANCELLED       LAPSED         AT
            SCHEME      OPTION      1ST JANUARY,         DURING         DURING        DURING         DURING   31ST DECEMBER,
           CATEGORY      TYPE           2003              2003           2003          2003           2003         2003
          ---------     -----          -----             -----          -----         -----          -----        -----

             2002          A          1,718,500            --              --             --         (27,000)     1,691,500
             2002          B          1,838,000            --              --             --         (70,000)     1,768,000
             2002          C          3,593,000            --              --             --        (111,500)     3,481,500
                                     ----------       ----------        --------     ----------     --------     ----------

                                      7,149,500            --              --             --        (208,500)     6,941,000
                                      =========        =========         =======      =========      =======      =========


             SHARE                   OUTSTANDING                                                                OUTSTANDING
            OPTION                       AT              GRANTED       EXERCISED     CANCELLED       LAPSED         AT
            SCHEME      OPTION      1ST JANUARY,         DURING         DURING        DURING         DURING   31ST DECEMBER,
           CATEGORY      TYPE           2002              2002           2002          2002           2002         2002
           --------      ----           ----              ----           ----          ----           ----         ----

             2002          A              --           1,718,500           --             --           --         1,718,500
             2002          B              --           1,838,000           --             --           --         1,838,000
             2002          C              --           3,718,000           --             --        (125,000)     3,593,000
             1996          D          1,718,500            --              --        (1,718,500)       --             --
             1996          E          1,838,000            --              --        (1,838,000)       --             --
                                     ----------       ----------        --------     ----------     --------     ----------

                                      3,556,500        7,274,500           --        (3,556,500)    (125,000)     7,149,500
                                      =========        =========         =======      =========      =======      =========


         Details of the share options held by the Directors included in the
above table as follows:

             SHARE                   OUTSTANDING                                                                 OUTSTANDING
            OPTION                       AT              GRANTED       EXERCISED     CANCELLED       LAPSED          AT
            SCHEME      OPTION      1ST JANUARY,         DURING         DURING        DURING         DURING    31ST DECEMBER,
           CATEGORY      TYPE           2004              2004           2004          2004           2004          2004
           --------      ----           ----              ----           ----          ----           ----          ----

             2002          A            651,000            --              --             --           --           651,000
             2002          B            264,000            --              --             --           --           264,000
             2002          C          1,360,000            --              --             --           --         1,360,000
                                     ----------         --------        --------       --------     --------     ----------

                                      2,275,000            --              --             --           --         2,275,000
                                      =========          =======         =======        =======      =======      =========
</TABLE>

                                      F-28
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

21. SHARE OPTION SCHEME - continued

<TABLE>
<CAPTION>
             SHARE                   OUTSTANDING                                                                 OUTSTANDING
            OPTION                       AT              GRANTED       EXERCISED     CANCELLED       LAPSED          AT
            SCHEME      OPTION      1ST JANUARY,         DURING         DURING        DURING         DURING    31ST DECEMBER,
           CATEGORY      TYPE           2003              2003           2003          2003           2003          2003
           --------      ----           ----              ----           ----          ----           ----          ----
           <S>           <C>          <C>                 <C>           <C>            <C>          <C>           <C>
             2002          A            651,000            --              --             --           --           651,000
             2002          B            264,000            --              --             --           --           264,000
             2002          C          1,360,000            --              --             --           --         1,360,000
                                     ----------         --------        --------       --------     --------     ----------

                                      2,275,000            --              --             --           --         2,275,000
                                      =========          =======         =======        =======      =======      =========


             SHARE                   OUTSTANDING                                                                OUTSTANDING
            OPTION                       AT              GRANTED       EXERCISED     CANCELLED       LAPSED         AT
            SCHEME      OPTION      1ST JANUARY,         DURING         DURING        DURING         DURING   31ST DECEMBER,
           CATEGORY      TYPE           2002              2002           2002          2002           2002         2002
           --------      ----           ----              ----           ----          ----           ----         ----

             2002          A              --             651,000           --             --           --           651,000
             2002          B              --             264,000           --             --           --           264,000
             2002          C              --           1,485,000           --             --        (125,000)     1,360,000
             1996          D            651,000            --              --          (651,000)       --             --
             1996          E            264,000            --              --          (264,000)       --             --
                                       --------      -----------        --------     ----------     --------     ----------

                                        915,000        2,400,000           --          (915,000)    (125,000)     2,275,000
                                        =======       ==========         =======      =========      =======      =========
</TABLE>

         Details of specific categories of options are as follows:

<TABLE>
<CAPTION>
    OPTION TYPE  DATE OF GRANT               VESTING PERIOD                        EXERCISE PERIOD                    EXERCISE PRICE
    -----------  -------------               --------------                        ---------------                     -------------
                                                                                                                             HK$
    <S>          <C>                 <C>                                        <C>                                         <C>
    2002 SCHEME
    A (Note a)   4th February, 2002               --                            4th February, 2002 - 25th November, 2006    17.48
    B (Note a)   4th February, 2002  4th February, 2002 - 30th September, 2002  1st October, 2002 - 30th September, 2009    17.48
    C (Note b)   4th February, 2002  4th February, 2002 - 3rd February, 2004    4th February, 2004 - 3rd February, 2012     14.35

    1996 SCHEME
    D (Note a)   26th November, 1996 26th November, 1996 - 25th November, 1999  26th November, 1999 - 25th November, 2006   17.48
    E (Note a)   20th September,1999 20th September, 1999 - 30th September,2002 1st October, 2002 - 30th September, 2009    17.48
</TABLE>

    Notes:
    a.       Pursuant to a resolution passed in the special general meeting
             of the Company held on 25th January, 2002, the 1996 Scheme was
             terminated and all existing options under that scheme were
             cancelled. New options were issued on 4th February, 2002 under
             the 2002 Scheme with the same exercise price and exercise
             periods to replace the options granted under the 1996 Scheme.

             OPTION TYPE A

             100% between 4th February, 2002 and 25th November, 2006

             The exercise periods of the following option types are divided
             into 3 tranches, as detailed below:

             OPTION TYPE D

             1. Up to 50% between 26th November, 1999 and 25th November, 2006
             2. Up to 75% between 26th November, 2000 and 25th November, 2006
             3. Up to 100% between 26th November, 2001 and 25th November, 2006

                                      F-29
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

21.      SHARE OPTION SCHEME - continued

              OPTION TYPES B AND E

              1. Up to 50% between 1st October, 2002 and 30th September, 2009
              2. Up to 75% between 1st October, 2003 and 30th September, 2009
              3. Up to 100% between 1st October, 2004 and 30th September, 2009


         b.   Additional share options were issued on 4th February, 2002 under
              the 2002 Scheme.

              The exercise period is divided into 3 tranches, as detailed
below:

              OPTION TYPE C

              1. Up to 25% between 4th February, 2004 and 3rd February, 2012
              2. Up to 50% between 4th February, 2005 and 3rd February, 2012
              3. Up to 100% between 4th February, 2006 and 3rd February, 2012

22.      RESERVES
<TABLE>
<CAPTION>
                                                   SHARE          CONTRIBUTED       RETAINED
                                                  PREMIUM           SURPLUS          PROFITS            TOTAL
                                                  -------           -------          -------            -----
                                                  HK$'000           HK$'000          HK$'000           HK$'000
         <S>                                      <C>               <C>              <C>               <C>
         THE COMPANY
         At 1st January, 2002                         4,614          390,053             1,759          396,426
         Final dividend for 2001 paid                    --               --           (54,637)         (54,637)
         Interim dividend for 2002 paid                  --               --           (23,416)         (23,416)
         Profit for the year                             --               --            79,130           79,130
                                                   --------         --------          --------         --------

         At 31st December, 2002 and
           1st January, 2003                          4,614          390,053             2,836          397,503
         Final dividend for 2002 paid                    --               --           (74,151)         (74,151)
         Special dividend for 2002 paid                  --               --           (97,566)         (97,566)
         Interim dividend for 2003 paid                  --               --           (31,221)         (31,221)
         Profit for the year                             --               --           202,578          202,578
                                                   --------         --------          --------         --------

         At 31st December, 2003 and
           1st January, 2004                          4,614          390,053             2,476          397,143
         Final dividend for 2003 paid                    --               --           (93,664)         (93,664)
         Interim dividend for 2004 paid                  --               --           (31,221)         (31,221)
         Profit for the year                             --               --           125,358          125,358
                                                   --------         --------          --------         --------

         At 31st December, 2004                       4,614          390,053             2,949          397,616
                                                   ========         ========          ========         ========
</TABLE>

         The contributed surplus represents the difference between the
         consolidated shareholders' funds of the subsidiaries at the date at
         which they were acquired by the Company and the nominal amount of the
         Company's shares issued for the acquisition at the time of the Group
         reorganization prior to the listing of the Company's shares in 1996.

                                      F-30
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

22.      RESERVES - THE COMPANY - continued

         Under the Companies Act 1981 of Bermuda (as amended), the contributed
         surplus account of the Company is available for distribution. However,
         the Company cannot declare or pay a dividend, or make a distribution
         out of the contributed surplus if:

         (a)      it is, or would after the payment be, unable to pay its
                  liabilities as they become due; or

         (b)      the realizable value of its assets would thereby be less than
                  the aggregate of its liabilities and its issued share capital.

         In the opinion of the Directors, as at 31st December, 2004, the
         Company's reserves available for distribution consisted of the
         contributed surplus of HK$390,053,000 (2003: HK$390,053,000) and
         retained profits of HK$2,949,000 (2003: HK$2,476,000).

23.      DEFERRED TAXATION

         Deferred taxation is calculated in full on temporary differences under
         the liability method using a principal taxation rate of 17.5% (2003:
         17.5%; 2002: 16%).

         Deferred income tax assets are recognized of tax loss carry forward to
         the extent that realization of the related tax benefit through the
         future taxable profits is probable. The Group has no unrecognized tax
         losses to carry forward against future taxable income (2003:
         HK$436,000; 2002: Nil).

         The movement on the deferred tax liabilities/(assets) is as follows:

<TABLE>
<CAPTION>
         THE GROUP
         ---------
                                                          ACCELERATED
                                                              TAX                             TAX
                                                         DEPRECIATION        OTHERS           LOSS            TOTAL
                                                         ------------        ------           ----            -----
                                                              HK$'000        HK$'000         HK$'000        HK$'000
         <S>                                                  <C>             <C>            <C>            <C>
         Balance at 1st January, 2002                         177,743         (2,019)             --        175,724
         Charge to statements of operations (note 8)            8,206          2,019              --         10,225
                                                             --------       --------        --------       --------

         Balance at 31st December, 2002
           and at 1st January, 2003                           185,949             --              --        185,949
         Charge (credit) to statements of
           operations (note 8)                                 10,527           (311)            (76)        10,140
         Effect of change in tax rate charge
           to statements of operations (note 8)                17,433             --              --         17,433
                                                             --------       --------        --------       --------

         Balance at 31st December, 2003
           and at 1st January, 2004                           213,909           (311)            (76)       213,522
         Charge (credit) to statements of
           operations (note 8)                                 (6,884)        (1,456)             76         (8,264)
                                                             --------       --------        --------       --------

         Balance at 31st December, 2004                       207,025         (1,767)             --        205,258
                                                             ========       ========        ========       ========
</TABLE>

                                      F-31
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

23.      DEFERRED TAXATION - continued

         THE COMPANY
         -----------
                                                                      TAX LOSS
                                                                       HK$'000


         Balance at 1st January, 2002 and 1st January, 2003                  --
         Credit to income statement                                         (76)
                                                                        -------

         Balance at 31st December, 2003
           and at 1st January, 2004                                         (76)
         Charge to income statement                                          76
                                                                        -------

         Balance at 31st December, 2004                                      --
                                                                        =======


         Deferred tax assets and liabilities are offset when there is a legally
         enforceable right to set off current tax assets against current tax
         liabilities and when the deferred income taxes relate to the same
         fiscal authority. The following amounts, determined after appropriate
         offsetting, are shown in the consolidated balance sheet.

                                                          2004          2003
                                                          ----          ----
                                                         HK$'000       HK$'000

         THE GROUP
         Deferred tax liabilities                         205,258       213,598
         Deferred tax assets                                   --           (76)
                                                          -------       -------

                                                          205,258       213,522
                                                          =======       =======


         THE COMPANY
         Deferred tax assets                                   --            76
                                                          =======       =======


                                      F-32
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

24.      MAJOR NON-CASH TRANSACTIONS

         During 2004, the Group decreased its equity interest in Skywave TV
         Company Limited ("Skywave") from 100% to 80% with two independent third
         parties making a contribution in kind of HK$3 million each in return
         for a 10% stake in Skywave. There was no major non-cash transaction
         during 2003.

         In 2002, the Company increased its interest in SpeedCast Holdings
         Limited, which is the holding company of SpeedCast Limited, from 36.5%
         to 45.3% for HK$31,200,000 (US$4,000,000), of which HK$11,700,000
         (US$1,500,000) was in the form of the provision of transponder
         capacity.


25.      OPERATING LEASES

         THE GROUP AS LESSEE

         At the balance sheet date, the Group had commitments for future minimum
         lease payments under non-cancellable operating leases which fall due as
         follows:

                                                                    THE GROUP
                                                                    ---------
                                                                  2004     2003
                                                                  ----     ----
                                                               HK$'000  HK$'000

         Within one year                                         6,504    5,339
         One to two years                                       10,647    1,847
         Later than two years                                       --       --
                                                               -------  -------

                                                                17,151    7,186
                                                               =======  =======


         Operating lease payments represent rental payable by the Group for
         certain of its office and residential premises. Leases are negotiated
         for an average term of two to four years.

         THE GROUP AS LESSOR

         Income from leasing of office premises during the year was HK$368,000
         (2003: Nil). The lease is negotiated for four years.

         At the balance sheet date, the Group had contracted with the customer
         for the following future minimum lease payments:
                                                                    THE GROUP
                                                                    ---------
                                                                  2004     2003
                                                                  ----     ----
                                                               HK$'000  HK$'000

         Within one year                                          552        --
         One to two years                                         552        --
         Two to three years                                       552        --
         Three to four years                                      184        --
                                                               ------    ------

                                                                1,840        --
                                                               ======    ======

                                      F-33
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

26.      CAPITAL COMMITMENTS

         At 31st December, 2004, the capital commitments in respect of the
         satellite earth station and other assets were as follows:
<TABLE>
<CAPTION>
                                                                              THE GROUP
                                                                              ---------
                                                                            2004      2003
                                                                            ----      ----
                                                                         HK$'000   HK$'000
         <S>                                                             <C>       <C>
         A satellite earth station
           Contracted for but not provided in the financial statements    15,561    21,130
           Authorized but not contracted for                                  --    28,114
         Other investment projects
           Authorized but not contracted for                               5,486        --
         Other assets
           Contracted for but not provided in the financial statements       345       168
                                                                         -------   -------

                                                                          21,392    49,412
                                                                         =======   =======
</TABLE>

         The Company had no capital commitments at the balance sheet date (2003
         and 2002: Nil).

27.      RETIREMENT BENEFITS SCHEME

         The Group participates in both a defined contribution scheme which is
         registered under the Occupational Retirement Ordinance (ORSO Scheme)
         and a Mandatory Provident Fund Scheme (the MPF Scheme) established
         under the Mandatory Provident Fund Ordinance. The schemes cover all
         eligible employees and all eligible employees are offered a choice of
         joining the ORSO Scheme or the MPF Scheme.

         The ORSO Scheme provides for participant contributions of 5% of salary
         and Group contributions of between 7.5% and 15% of salary depending on
         length of service and the participant's position in the Group.
         Participants vest in Group contributions increasing incrementally over
         10 years.

         The MPF Scheme is available to all employees aged 18 to 64 with at
         least 60 days of service in the employment of the Group in Hong Kong.
         Contributions are made by the Group at 5% based on the staff's relevant
         income with a cap of HK$1,000 per month. The maximum relevant income
         for contribution purposes contributed by employee is 5% of the monthly
         income. Staff members are entitled to 100% of the Group's contributions
         together with accrued returns irrespective of their length of service
         with the Group, but the benefits are required by law to be preserved
         until the retirement age of 65.

                                      F-34
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

28.      CONTINGENT LIABILITIES

         Under Indian tax regulations, the Company may be subject to Indian
         income tax on revenues received by the Company in respect of income
         from provision of satellite transponder capacity to the Company's
         customers for purposes of those customers carrying on business in India
         or earning income from any source in India.

         The Indian tax authorities have assessed the Company for income tax as
         follows:

             ------------------ --------------------- ---------------------
             Assessment year            Amount HK$            Amount INR
                                     (approximate)         (approximate)
             ------------------ --------------------- ---------------------
                     1997-98            20 million           115 million
             ------------------ --------------------- ---------------------
                     1998-99            23 million           141 million
             ------------------ --------------------- ---------------------
                     1999-00            22 million           127 million
             ------------------ --------------------- ---------------------
                     2000-01            14 million            84 million
             ------------------ --------------------- ---------------------
                     2001-02            29 million           171 million
             ------------------ --------------------- ---------------------
                     2002-03            38 million           210 million
             ------------------ --------------------- ---------------------
                       Total           146 million           848 million
             ------------------ --------------------- ---------------------

         The Company has filed appeals for each of the assessment years 1997-98
         to 2002-03.

         No assessment has yet been made for the 2003-04 or 2004-05 assessment
         years.

         The Income Tax Appellate Tribunal (the "Tribunal") in an earlier appeal
         filed against the original assessment for the assessment year 1997-98
         held that the Company is liable for Indian income tax under certain
         circumstances. The Company does not believe that it is liable for the
         Indian income tax as held by the Tribunal and has filed an appeal
         against the Tribunal's decision. The tax authorities have also filed an
         appeal against the Tribunal's decision. Both the appeals have been
         admitted by the High Court.

         In order to obtain a stay of recovery proceedings, the Company has made
         payments as follows and has recorded these payments as an asset on the
         assumption that the amounts are recoverable:

             ------------------ --------------------- ---------------------
             Assessment year            Amount HK$            Amount INR
                                     (approximate)         (approximate)
             ------------------ --------------------- ---------------------
                     1997-98            13 million            78 million
             ------------------ --------------------- ---------------------
                     1998-99            15 million            88 million
             ------------------ --------------------- ---------------------
                     1999-00            10 million            62 million
             ------------------ --------------------- ---------------------
                     2000-01             9 million            50 million
             ------------------ --------------------- ---------------------
                     2001-02            20 million           119 million
             ------------------ --------------------- ---------------------
                     2002-03            27 million           148 million
             ------------------ --------------------- ---------------------
                       Total            94 million           545 million
             ------------------ --------------------- ---------------------

         In addition, based on the general principles set forth by the Tribunal,
         the amount of income taxable in India depends on the payments made by
         the Company's customers to the Company for the purpose of those
         customers carrying on business in India or earning income from any
         source in India. As such information is proprietary in nature and has
         not been provided by the Company's customers, the Company cannot
         reasonably estimate the taxable income and therefore also cannot
         estimate the amount of income tax to which the Company may be assessed.
         Furthermore, as stated above, the Company has filed an appeal against
         the Tribunal's decision. The appeal has been admitted by the High Court
         and is pending before the Court. Accordingly, no provision has been
         recognized for Indian income tax in the Company's financial statements.

                                      F-35
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

29.      RELATED PARTY TRANSACTIONS

         The Group has entered into an agreement for provision of transponder
         capacity to a subsidiary of CITIC, CITIC Guoan Information Industry
         Company Limited. CITIC is a substantial shareholder of the Company
         throughout the years presented. The total amount of revenue recognized
         by the Group for 2004 under this agreement was approximately
         HK$3,101,000 (2003: HK$3,782,000; 2002: HK$4,095,000). In addition, the
         Group has entered into an agreement with CITIC Technology Company
         Limited, a subsidiary of CITIC, for collecting money from China
         customers on behalf of the Company. During 2004, the Group has
         recognized an agency fee of approximately HK$686,000 (2003: HK$719,000;
         2002: HK$1,611,000) under this agreement. Included in trade and other
         receivables was an amount of approximately HK$14,628,000 (2003:
         HK$11,826,000) due from CITIC Technology Company Limited, and included
         in other payables and accrued expenses was an amount of approximately
         HK$770,000 (2003: HK$433,000) due to CITIC Technology Company Limited.

         Other than that disclosed in note 14, during 2004, the Group recognized
         income from provision of satellite transponder capacity from its
         associate, SpeedCast, amounting to approximately HK$18,793,000 (2003:
         HK$20,829,000; 2002: HK$20,177,000). In addition, the Group recognized
         interest income on the loan receivable from SpeedCast amounting to
         approximately HK$419,000 (2003: HK$86,000 and 2002: Nil). At the
         balance sheet date, trade and other receivables included an amount of
         approximately HK$3,326,000 (2003: HK$1,951,000) due from SpeedCast.

         During 2004, a software license fee amounting to HK$49,000 (2003: Nil)
         was paid to SES ASTRA S.A. ("SES ASTRA"). No consultancy fee (2003:
         HK$390,000) was paid to SES ASTRA. SES ASTRA is a wholly-owned
         subsidiary of SES GLOBAL. In addition, in 2002, the Group recognized
         income from provision of satellite transponder capacity amounting to
         approximately HK$162,000 from SES AMERICOM, a wholly-owned subsidiary
         of SES GLOBAL. SES GLOBAL was a substantial shareholder of the Company
         throughout the years presented.

         In addition to the above, the Group made payments to SES GLOBAL and a
         subsidiary of CITIC amounting to HK$475,000 (2003: HK$475,000; 2002:
         HK$400,000) and HK$525,000 (2003: HK$525,000; 2002: HK$400,000)
         respectively, for certain Non-Executive directors representing SES
         GLOBAL and CITIC.

         The above transactions are entered into on terms determined and agreed
         by the Group and the relevant parties.

                                      F-36
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

30.      ULTIMATE HOLDING COMPANY

         The directors regard Bowenvale Limited, a company incorporated in
         British Virgin Islands, as being the ultimate holding company.


31.      SUMMARY OF DIFFERENCES BETWEEN HONG KONG ("HK") AND UNITED STATES
         ("US") GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP")

         The accompanying consolidated financial statements are prepared in
         accordance with HK GAAP, which differs in certain significant respects
         from US GAAP as follows:

         The following table summarizes the effect on profit (net income) of
         differences between HK GAAP and US GAAP:
<TABLE>
<CAPTION>
                                                                            YEAR ENDED 31ST DECEMBER (UNAUDITED)
                                                                            -------------------------------------
                                                                   2004              2004              2003           2002
                                                                   ----              ----              ----           ----
                                                                  US$'000           HK$'000           HK$'000        HK$'000
                                                                 (Note 1)
         <S>                                                     <C>               <C>               <C>            <C>
         Profit for the year (net income) as reported
           under HK GAAP                                           55,284          431,216           424,488        554,689
         US GAAP adjustments:
           Amortization of interest and
             borrowing costs (a)                                   (1,035)          (8,072)          (11,780)       (23,051)
           Amortization of goodwill (b)                                28              221             6,500          4,604
           Impairment loss of goodwill (b)                             --               --           (11,104)            --
           Tax effect on reconciling items (c)                         92              706               151          1,844
                                                                  -------          -------           -------        -------

         Profit for the year (net income) under
             US GAAP                                               54,369          424,071           408,255        538,086
                                                                  =======          =======           =======        =======

         Basic and diluted earnings per share
           under US GAAP                                          US$0.14          HK$1.09           HK$1.05        HK$1.38

         Basic and diluted earnings per
           American Depositary Share ("ADS")
           under US GAAP (Note 2)                                 US$1.39         HK$10.86          HK$10.46       HK$13.79

         Shares used in computation of basic
           and diluted earnings per share
           (in thousands)                                         390,266          390,266           390,266        390,266
</TABLE>

                                      F-37
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

31.      SUMMARY OF DIFFERENCES BETWEEN HONG KONG ("HK") AND UNITED STATES
         ("US") GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP") - continued

         The following table summarizes the effect on shareholders' equity of
         the differences between HK GAAP and US GAAP:
<TABLE>
<CAPTION>
                                                                               AT 31ST DECEMBER (UNAUDITED)
                                                                               ----------------------------
                                                                          2004             2004              2003
                                                                          ----             ----              ----
                                                                         US$'000          HK$'000           HK$'000
                                                                        (Note 1)
         <S>                                                            <C>               <C>            <C>
         Shareholders' equity as reported under HK GAAP                   496,743         3,874,597      3,568,266

         US GAAP adjustments:
           Capitalization of interest and borrowing costs (a)              15,767           122,980        122,980
           Amortization of interest and borrowing costs (a)                (9,301)          (72,545)       (64,473)
           Amortization of goodwill (b)                                     1,452            11,325         11,104
           Impairment loss of goodwill (b)                                 (1,424)          (11,104)       (11,104)
           Tax effect on reconciling items (c)                             (1,094)           (8,537)        (9,243)
                                                                          -------         ---------      ---------

         Shareholders' equity under US GAAP                               502,143         3,916,716      3,617,530
                                                                          =======         =========      =========
</TABLE>

         (a)      CAPITALIZATION OF INTEREST AND BORROWING COSTS

                  Under HK GAAP, interest on bank loans and related costs of
                  obtaining the loans (including costs incurred in connection
                  with loan facilities), taken out to finance construction of
                  satellites is capitalized during the period of construction.
                  Under US GAAP, the interest cost incurred during the period of
                  construction that could have been avoided if the construction
                  of satellites had not been made is capitalized. The interest
                  capitalized is computed by applying an average borrowing rate
                  of outstanding debt to the total amount of qualifying assets
                  under construction, not to exceed total interest costs
                  incurred.

                  In addition, under US GAAP, certain related borrowing costs
                  payable to lenders are excluded from the amounts capitalized.

         (b)      AMORTIZATION AND IMPAIRMENT LOSS OF GOODWILL

                  Under HK GAAP, goodwill is amortized on a systematic basis
                  over its useful life. Under US GAAP, effective from 1st
                  January, 2002, goodwill is: (i) no longer amortized, (ii)
                  assigned to a reporting unit, and (iii) tested for impairment
                  at least annually. Prior to 1st January, 2002, goodwill was
                  amortized under US GAAP.

         (c)      The amounts included in the reconciliation show the income tax
                  effects of the differences between HK GAAP and US GAAP as
                  described above.

         (d)      INTEREST INCOME

                  Under HK GAAP, interest income is included in profit from
                  operations. Under US GAAP, interest income is excluded from
                  operating income and is included in net income as other
                  income.

                                      F-38
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

31.      SUMMARY OF DIFFERENCES BETWEEN HONG KONG ("HK") AND UNITED STATES
         ("US") GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP") - continued

         The changes in shareholders' equity based on US GAAP are as follows:

<TABLE>
<CAPTION>
                                                                         AT 31ST DECEMBER (UNAUDITED)
                                                                         ----------------------------
                                                                    2004             2004              2003
                                                                    ----             ----              ----
                                                                   US$'000          HK$'000           HK$'000
         <S>                                                       <C>             <C>            <C>
         Balance, beginning of year                                463,785         3,617,530      3,412,213
         Transactions during the year:
           i) Net income                                            54,369           424,071        408,255
          ii) Dividends paid                                       (16,011)         (124,885)      (202,938)
                                                                   -------         ---------      ---------

         Balance, end of year                                      502,143         3,916,716      3,617,530
                                                                   =======         =========      =========
</TABLE>

         Note: One ADS is equivalent to 10 ordinary shares.


                                      F-39
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

31.      SUMMARY OF DIFFERENCES BETWEEN HONG KONG ("HK") AND UNITED STATES
         ("US") GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP") - continued

         A reconciliation of the significant balance sheet accounts under HK
         GAAP and to the amounts determined under US GAAP is as follows:
<TABLE>
<CAPTION>
                                                                         AT 31ST DECEMBER (UNAUDITED)
                                                                         ----------------------------
                                                                      2004           2004              2003
                                                                      ----           ----              ----
                                                                     US$'000        HK$'000           HK$'000
         <S>                                                         <C>            <C>             <C>
         Property, plant and equipment
           Amount under HK GAAP                                      374,263         2,919,249      3,165,399
           US GAAP adjustments:
             Capitalization of interest and borrowing costs           15,767           122,980        122,980
             Amortization of interest and borrowing costs             (9,301)          (72,545)       (64,473)
                                                                     -------         ---------      ---------
           Amount under US GAAP                                      380,729         2,969,684      3,223,906
                                                                     =======         =========      =========

         Interests in associates
           Amount under HK GAAP                                        1,717            13,397             --
           US GAAP adjustments:
             Amortization of goodwill                                  1,452            11,325         11,104
             Impairment loss of goodwill                              (1,424)          (11,104)       (11,104)
                                                                     -------         ---------      ---------
           Amount under US GAAP                                        1,745            13,618             --
                                                                     =======         =========      =========

         Deferred tax liabilities
           Amount under HK GAAP                                       26,315           205,258        213,598
           US GAAP adjustments:
             Tax effect on reconciling items                           1,094             8,537          9,243
                                                                     -------         ---------      ---------
           Amount under US GAAP                                       27,409           213,795        222,841
                                                                     =======         =========      =========
</TABLE>

         The amounts of total assets determined using US GAAP, as a result of
         the foregoing adjustments, are HK$4,599,903,000 (US$589,731,000) and
         HK$4,215,727,000 as of 31st December, 2004 and 2003, respectively. The
         amounts of total liabilities (excluding minority interests) determined
         using US GAAP, as a result of the foregoing adjustments, are
         HK$676,831,000 (US$86,773,000) and HK$597,705,000 as of 31st December,
         2004 and 2003, respectively.


                                      F-40
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

31.      SUMMARY OF DIFFERENCES BETWEEN HONG KONG ("HK") AND UNITED STATES
         ("US") GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP") - continued

         A reconciliation of major captions of cash flows under HK GAAP to US
         GAAP is as follows:

<TABLE>
<CAPTION>
                                                                                  AT 31ST DECEMBER (UNAUDITED)
                                                                                  ----------------------------
                                                                   2004              2004              2003           2002
                                                                   ----              ----              ----           ----
                                                                  US$'000           HK$'000           HK$'000        HK$'000
         <S>                                                      <C>              <C>               <C>            <C>
         Net cash generated from operating activities
             Amount under HK GAAP                                  96,258          750,812           627,534        809,585
             US GAAP adjustments:
               Interest received                                    2,601           20,290             4,858          6,291
               Cost of raising bank borrowing facility                 --               --            (6,951)        (8,337)
                                                                  -------          -------           -------        -------
           Amount under US GAAP                                    98,859          771,102           625,441        807,539
                                                                  =======          =======           =======        =======

         Net cash used in investing activities
           Amount under HK GAAP                                    (6,527)         (50,909)         (164,536)      (453,395)
           US GAAP adjustment:
             Interest received                                     (2,601)         (20,290)           (4,858)        (6,291)
                                                                  -------          -------           -------        -------
           Amount under US GAAP                                    (9,128)         (71,199)         (169,394)      (459,686)
                                                                  =======          =======           =======        =======

         Net cash used in financing activities
           Amount under HK GAAP                                   (16,011)        (124,885)         (209,889)       (86,390)
           US GAAP adjustment:
             Cost of raising bank borrowing facility                   --               --             6,951          8,337
                                                                  -------          -------           -------        -------
           Amount under US GAAP                                   (16,011)        (124,885)         (202,938)       (78,053)
                                                                  =======          =======           =======        =======
</TABLE>

         The reclassification for US GAAP consolidated statements of cash flows
         pertains to interest received and costs for bank borrowing facility
         which are presented as investing and financing activities under HK
         GAAP, respectively (as opposed to operating activities and investing
         activities under US GAAP, respectively).


                                      F-41
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

31.      SUMMARY OF DIFFERENCES BETWEEN HONG KONG ("HK") AND UNITED STATES
         ("US") GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP") - continued

         Additional disclosures as required by US GAAP:

         (a)      US GAAP requires that all items that are required to be
                  recognized as components of comprehensive income be reported
                  in a separate financial statement. There are no material
                  differences between total recognized gains and losses for the
                  periods shown in the consolidated statements of changes in
                  Equity presented under HK GAAP comprehensive income, except
                  for the differences between HK GAAP and US GAAP profit
                  attributable to shareholders shown above.

         (b)      The Company applies Accounting Principles Board ("APB")
                  Opinion No. 25, "ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES",
                  and related Interpretations in accounting for options granted
                  under the 1996 Scheme and 2002 Scheme (see Note 20). No
                  compensation cost has been recognized on options granted under
                  the 1996 Scheme and the 2002 Scheme.

                  The Company, on 8th September, 1999, cancelled 2,161,000 share
                  options (granted under the 1996 Scheme) exercisable from
                  November 26, 1999 to November 25, 2006 at an exercise price of
                  HK$19.00 per share. The Company had, simultaneous to the
                  cancellation, issued 2,022,000 replacement share options to
                  the same employees with similar exercise period but at a lower
                  exercise price of HK$17.48 per share. The 139,000 share
                  options cancelled but not replaced were those share options
                  held by resigned employees. There was no change in the number
                  of shares to be issued to satisfy the exercise of the
                  replacement share options. The Company, through 31st December,
                  2001, did not account for the option modification under a
                  variable plan accounting that would have been required under
                  Financial Accounting Standards Board Interpretation No. 44,
                  "ACCOUNTING FOR CERTAIN TRANSACTIONS INVOLVING STOCK
                  COMPENSATION". There would be no impact on the Company's 2002
                  consolidated financial statements and on 2003 and 2004
                  consolidated financial statements when the Company accounted
                  for the option modification under a variable plan required
                  under FIN 44 as the fair value of the underlying shares was
                  less than the exercise price of the share options as at 31st
                  December, 2002, 2003 and 2004, respectively.

                                      F-42
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

31.      SUMMARY OF DIFFERENCES BETWEEN HONG KONG ("HK") AND UNITED STATES
         ("US") GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP") - continued

                  Had compensation cost for the Company's share option schemes
                  been determined based on the fair value at the grant dates for
                  awards under the share option schemes consistent with the
                  method of Statement of Financial Accounting Standards ("SFAS")
                  No. 123 "ACCOUNTING FOR STOCK-BASED COMPENSATION", the
                  Company's net income and earnings per share would have been as
                  follows:
<TABLE>
<CAPTION>
                                                                           2004             2003              2002
                                                                           ----             ----              ----
                                                                          HK$'000          HK$'000           HK$'000
                  <S>                                                 <C>               <C>              <C>
                  Net income as reported under US GAAP                    424,071           408,255          538,086
                  Add: Stock compensation as reported                          --                --               --
                  Less: Stock compensation determined using
                             the fair value method                         (6,983)          (10,952)         (14,351)
                                                                      -----------       -----------      -----------

                  Pro forma net income under US GAAP                      417,088           397,303          523,735
                                                                      ===========       ===========      ===========

                  Shares used in computation                          390,265,500       390,265,500      390,265,500
                                                                      ===========       ===========      ===========

                  Net income per share under US GAAP:
                    Basic and diluted, as reported                        HK$1.09           HK$1.05          HK$1.38

                    Basic and diluted, pro forma                          HK$1.07           HK$1.02          HK$1.34
</TABLE>

                  The weighted average fair value of options granted during 2002
                  (Option Types A, B and C) was HK$8, using the Black-Scholes
                  option-pricing model based on the following assumptions:

                  Expected life of options                            10 years
                  Expected volatility                                   51.00%
                  Risk-free rate                                         5.99%
                  Expected annual dividend yield                         1.62%

                  The Black-Scholes option pricing model requires the input of
                  highly subjective assumptions, including the volatility of
                  share price. Because changes in subjective input assumptions
                  can materially affect the fair value estimate, in the
                  directors' opinion, the existing model does not necessarily
                  provide a reliable single measure of the fair value of the
                  share options.

                  Share option with Option Types A and B issued in 2002
                  represent replacement share options to Option Types D and E,
                  respectively. There would be no impact on pro forma net
                  income, assuming SFAS No. 123 is used with respect to issuance
                  of the replacement share options as the fair value of share
                  options prior to and subsequent to the replacement remained
                  the same.

                  Compensation expense resulting from the fair value method of
                  SFAS No. 123 may not be representative of compensation expense
                  to be incurred on a pro forma basis in future years.

                                      F-43
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

31.      SUMMARY OF DIFFERENCES BETWEEN HONG KONG ("HK") AND UNITED STATES
         ("US") GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP") - continued

                  A summary of the status of the Company's 2002 Scheme and 1996
                  Scheme as of 31st December, 2004, 2003 and 2002, and changes
                  during the years then ended is presented below:
<TABLE>
<CAPTION>
                                                          2004                        2003                     2002
                                                 ----------------------   --------------------------  ------------------------
                                                              WEIGHTED-                    WEIGHTED-                 WEIGHTED-
                                                               AVERAGE                      AVERAGE                   AVERAGE
                                                              EXERCISE                     EXERCISE                  EXERCISE
                                                   SHARES       PRICE         SHARES         PRICE        SHARES       PRICE
                                                   ------       -----         ------         -----        ------       -----
                                                                 HK$                          HK$                       HK$
                  <S>                             <C>            <C>        <C>              <C>        <C>            <C>
                  Outstanding, beginning of year  6,941,000      15.91      7,149,500        15.91      3,556,500      17.48
                  Granted                                --         --             --           --      7,274,500      15.88
                  Exercised                              --         --             --           --             --         --
                  Forfeited/cancelled/lapsed        (15,000)     17.48       (208,500)       15.81     (3,681,500)     17.37
                                                 ----------     ------     ----------       ------     ----------     ------
                  Outstanding, end of year        6,926,000      15.91      6,941,000        15.91      7,149,500      15.91
                                                  =========      =====      =========        =====      =========      =====

                  Options exercisable at year-end 4,314,875      17.48      3,017,500        17.48      2,637,500      17.48
                                                  =========      =====      =========        =====      =========      =====

                  Weighted-average fair value of
                    options granted during the year               N/A                         N/A                      8.00
</TABLE>

                  The following table summarizes information on the 2002 Scheme
                  and 1996 Scheme outstanding at 31st December, 2004:

<TABLE>
<CAPTION>
                                   OPTIONS OUTSTANDING                                         OPTIONS EXERCISABLE
                  -------------------------------------------------------      --------------------------------------------
                                                             WEIGHTED
                                                              AVERAGE
                                                             REMAINING
                                         NUMBER             CONTRACTUAL                                           NUMBER
                  EXERCISE PRICE       OF OPTIONS              LIFE             EXERCISE PRICE                  OF OPTIONS
                  --------------       ----------              ----             --------------                  ----------
                  <S>                  <C>                   <C>                <C>                             <C>
                  HK$14.35                3,481,500          7.09 years         HK$14.35                            870,375
                  HK$17.48                3,444,500          3.36 years         HK$17.48                          3,444,500
                                          ---------           ---------                                           ---------

                                          6,926,000          5.23 years                                           4,314,875
                                          =========           =========                                           =========
</TABLE>

                                      F-44
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

31.      SUMMARY OF DIFFERENCES BETWEEN HONG KONG ("HK") AND UNITED STATES
         ("US") GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP") - continued

         (c)      Recent changes in accounting standards

                  SHARE-BASED PAYMENT
                  On 16th December, 2004, FASB published FASB Statement No. 123
                  (revised 2004), "Share-Based Payment" ("SFAS No. 123R") which
                  replaces FASB Statement No. 123, "Accounting for Stock-Based
                  Compensation" and supersedes APB No. 25, "Accounting for Stock
                  Issued to Employees". SFAS No. 123R will provide investors and
                  other users of financial statements with more complete and
                  neutral financial information by requiring that the
                  compensation cost relating to share-based payment transactions
                  be recognized in the financial statements. That cost will be
                  measured based on the fair value of the equity or liability
                  instruments issued. Public entities (other than those filing
                  as small business issuers) will be required to apply SFAS No.
                  123R as of the first annual reporting period that begins after
                  15th June, 2005. The adoption of SFAS 123R will have a
                  significant impact on the consolidated statement of operations
                  as the Group will be required to expense the fair value of
                  stock option grants and stock purchases under employee stock
                  option plan.

                  INVENTORY COSTS
                  In November 2004, the Financial Accounting Standards Board, or
                  the FASB, issued FASB Statement No. 151, "Inventory Costs--an
                  amendment of ARB No. 43" ("FAS 151"), which is the result of
                  its efforts to converge U.S. accounting standards for
                  inventories with International Accounting Standards. FAS No.
                  151 requires idle facility expenses, freight, handling costs,
                  and wasted material (spoilage) costs to be recognized as
                  current-period charges. It also requires that allocation of
                  fixed production overheads to the costs of conversion be based
                  on the normal capacity of the production facilities. FAS No.
                  151 will be effective for inventory costs incurred during
                  fiscal years beginning after 15th June, 2005. The Group is
                  currently evaluating the impact of this standard on its
                  consolidated financial statements.

                  RECENT HK GAAP ACCOUNTING PRONOUNCEMENTS
                  The HKICPA has undertaken to converge by 1st January, 2005 all
                  Hong Kong Financial Reporting Standards, or HKFRSs, with
                  International Financial Reporting Standards, or IFRSs, issued
                  by the International Accounting Standards Board. As a result,
                  the HKICPA has issued a number of new and revised HKFRSs,
                  including Hong Kong Accounting Standards, or HKASs, HKAS
                  Interpretations, or HKAS-INTS, and HKFRSs, which are effective
                  for accounting periods beginning on or after 1st January,
                  2005. As a consequence, the corresponding SSAPs and
                  Interpretations are superseded effective 1st January, 2005.
                  The applicable HKFRSs required to be adopted by us for the
                  year ending 31st December, 2005 are set out below.

                                      F-45
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

31.      SUMMARY OF DIFFERENCES BETWEEN HONG KONG ("HK") AND UNITED STATES
         ("US") GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP") - continued

<TABLE>
<CAPTION>
                              HKFRSS ISSUED                                           STANDARDS SUPERSEDED
         -------------------------------------------------------      ----------------------------------------------------
         <S>           <C>                                            <C>          <C>
         HKAS 1        Presentation of Financial Statements           SSAP 1       Presentation of financial statements
         HKAS 2        Inventories                                    SSAP 22      Inventories
         HKAS 7        Cash Flow Statements                           SSAP 15      Cash flow statements
         HKAS 8        Accounting Policies, Changes in                SSAP 2       Net profit or loss for the period,
                        Accounting Estimates and Errors                             fundamental errors and changes
                                                                                    in accounting policies
         HKAS 10       Events After the Balance Sheet Date            SSAP 9       Events after the balance sheet date
         HKAS 12       Income Taxes                                   SSAP 12      Income taxes
         HKAS 14       Segment Reporting                              SSAP 26      Segment reporting
         HKAS 16       Property, Plant and Equipment                  SSAP 17      Property, plant and equipment
         HKAS 17       Leases                                         SSAP 14      Leases
         HKAS 18       Revenue                                        SSAP 18      Revenue
         HKAS 19       Employee Benefits                              SSAP 34      Employee benefits
         HKAS 21       The Effects of Changes in Foreign              SSAP 11      Foreign currency translation
                        Exchange Rates
         HKAS 23       Borrowing Costs                                SSAP 19      Borrowing costs
         HKAS 24       Related Party Disclosures                      SSAP 20      Related party disclosures
         HKAS 27       Consolidated and Separate Financial            SSAP 32      Consolidated financial statements
                        Statements                                                  and accounting for investments in
                                                                                    subsidiaries
         HKAS 28       Investment in Associates                       SSAP 10      Accounting for investments in
                                                                                    associates
         HKAS 31       Interests in Joint Ventures                    SSAP 21      Accounting for interests in joint
                                                                                    ventures
         HKAS 33       Earnings Per Share                             SSAP 5       Earnings per share
         HKAS 36       Impairment of Assets                           SSAP 31      Impairment of assets
         HKAS 37       Provisions, Contingent Liabilities             SSAP 28      Provisions, contingent liabilities
                        and Contingent Assets                                       and contingent assets
         HKAS 38       Intangible Assets                              SSAP 29      Intangible assets
         HKFRS 2       Share-based Payment                                -
         HKFRS 3       Business Combinations                          SSAP 30      Business combinations
</TABLE>

         The adoption of following HKASs is not expected to result in
         substantial changes to our existing accounting policies under HK GAAP.
         In summary:

         o     HKAS 1 will affect certain presentations of accounts in the
               consolidated balance sheet, consolidated income statement and
               consolidated statement of changes in equity;

         o     HKAS 2, 8, 16, 21, 28 and 36 will affect certain disclosures in
               the financial statements;

         o     HKAS 7, 10, 12, 14, 17, 18, 19, 23, 27, 31, 33, 37 are not
               expected to have any material
               impact as our existing accounting policies already comply with
               the standards in all material respects; and

         o     HKAS 24 will affect the identification of related parties and the
               disclosure of related party transactions.

                                      F-46
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

31.      SUMMARY OF DIFFERENCES BETWEEN HONG KONG ("HK") AND UNITED STATES
         ("US") GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP") - continued

         For the HKFRSs set out below, we are currently assessing the potential
         impact but are not yet in a position to state whether these HKFRSs
         would have a significant impact on our financial statements presented
         in accordance with HK GAAP:

         o     HKAS 38 requires an intangible asset to be recognized as an asset
               apart from goodwill if it satisfies either the "separability" or
               "contractual-legal" criterion. It requires intangible assets with
               infinite useful lives be no longer amortized but tested for
               impairment at least annually. Intangible assets with finite
               useful lives are required to be amortized over their useful
               lives, which are no longer limited to the rebuttable presumption
               of 20 years, and tested for impairment on the occurrence of a
               triggering event.

         o     HKFRS 2 prescribes the recognition principles and fair value
               measurement basis for all share-based payment transactions,
               including (i) equity-settled share-based payment transactions,
               (ii) cash-settled share-based payment transactions; and (iii)
               transactions with a choice of whether they are settled in cash or
               by issuing equity instruments. It requires companies to reflect
               in their profit or loss and financial position the effects of
               share-based payment transactions, including expenses associated
               with transactions in which share options are granted to
               employees. HKFRS 2 applies to grants of shares, share options or
               other equity instruments after 7th November, 2002 and not yet
               vested as at 1st January, 2005, and it applies retrospectively to
               liabilities arising from share-based payment transactions
               existing as at 1st January, 2005.

         o     HKFRS 3 requires all business combinations for which the
               agreement date is on or after January 1, 2005 to be accounted for
               using the purchase method. Goodwill acquired in a business
               combination will no longer be amortized but will be subject to
               impairment tests at least annually in accordance with HKAS 36.
               Upon the adoption of HKFRS 3, the net carrying amount of goodwill
               carried on the balance sheet is frozen and will be tested for
               impairment. Goodwill previously taken directly to reserves will
               no longer be subject to impairment testing and will not be
               recognized in the income statement when all or part of the
               business to which the goodwill relates is disposed of.
               Accordingly, goodwill previously taken directly to reserves will
               not impact the income statement in the future upon the adoption
               of HKAS 36.

         (d)      Details of the movements of the allowance for doubtful
                  accounts for the years ended 31st December, 2004, 2003 and
                  2002 are as follows:
<TABLE>
<CAPTION>
                                                         2004          2003         2002
                                                         ----          ----         ----
                                                        HK$'000       HK$'000      HK$'000
                  <S>                                   <C>           <C>          <C>
                  At beginning of year                    5,540        15,012        3,612
                  Bad debt expense                       17,690            --       11,708
                  Bad debt recovered                         --        (6,279)          --
                  Amount written off                         --        (3,193)        (308)
                                                        -------       -------      -------
                  At end of year                         23,230         5,540       15,012
                                                        =======       =======      =======
</TABLE>

         (e)      Major customers

                  The Company has one customer accounting for 10% or more of its
                  service revenue. Service revenue from such customer represents
                  22.4%, 24.9% and 23.5% of revenues in 2004, 2003 and 2002,
                  respectively.

                                      F-47
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

31.      SUMMARY OF DIFFERENCES BETWEEN HONG KONG ("HK") AND UNITED STATES
         ("US") GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP") - continued

         (f)      Income tax


                  The Company is subject to Hong Kong Profits Tax on its
                  operations deemed to be located in Hong Kong. It is also
                  subject to an overseas tax on its operations in certain
                  overseas jurisdictions.

                  The Group's operating assets consist primarily of its
                  satellites which are used, or are intended for use, for
                  transmission to multiple geographical areas and therefore
                  cannot be allocated between tax jurisdictions. Accordingly, no
                  analysis of income tax and profit from operations by
                  jurisdiction has been presented.

         (g)      Fair value of financial instruments


                  The carrying value of cash and cash equivalents, other
                  receivables, other payables and customer deposits approximates
                  fair value because of the relatively short maturities of these
                  financial instruments. It is not practical to determine the
                  fair value of unbilled rental receivable as it involves high
                  volume of transactions.

         (h)      Concentration of credit risk

                  Financial instruments which potentially subject the Company to
                  concentrations of credit risks consist principally of cash and
                  cash equivalents and trade receivables. The Company believes
                  that no significant credit risk exists relative to cash and
                  cash equivalents as substantially all of these financial
                  instruments are held in the form of term deposits at a major
                  bank.

                  The Company performs on-going credit evaluations of its
                  customers. The Company believes that no significant credit
                  risk exists for these assets as credit losses, when realized,
                  is expected to be within the range of management's
                  expectations.

                                      F-48
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

31.      SUMMARY OF DIFFERENCES BETWEEN HONG KONG ("HK") AND UNITED STATES
         ("US") GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP") - continued

         (i)      Concentration - industry and major customers

                  The Company's revenues were derived from the following
                  markets:

                                                          2004     2003    2002
                                                          ----     ----    ----

                  Broadcasting                            70.6%    70.4%   68.3%

                  Telecommunications,
                    Internet and Multimedia               29.4%    29.6%   31.7%

                  The five largest customers accounted for 46.0%, 42.0% and
                  43.2% of the Company's total revenue for the years ended 31st
                  December, 2004, 2003 and 2002, respectively.

                  The trade receivables from the five customers with the largest
                  receivables balances represents 71.5% and 67.1% of total trade
                  receivables as of 31st December, 2004 and 2003, respectively.

         (j)      Use of estimates

                  The preparation of financial statements in conformity with
                  generally accepted accounting principles requires management
                  to make estimates and assumptions that affect the reported
                  amounts of assets and liabilities and certain disclosures at
                  the date of the consolidated financial statements and the
                  reported amounts of revenues and expenses. Actual results
                  could differ from those estimates.

         (k)      Earnings per share

                  As of 31st December, 2004, 2003 and 2002 the Company had share
                  options outstanding of 6,926,000, 6,941,000 and 7,149,500,
                  which could potentially dilute basic earnings per share in the
                  future, but were excluded in the computation of diluted
                  earnings per share in such periods, as their effect would have
                  been antidilutive.

         (l)      Segment information

                  SFAS No. 131 "Disclosures about Segments of an Enterprise and
                  Related Information" establishes standards for reporting
                  information about operating segments and related disclosures
                  products and services, geographic areas, and major customers.
                  Operating segments are components of an enterprise about which
                  separate financial information is available that is evaluated
                  regularly by the chief operating decision-maker in deciding
                  how to allocate resources and in assessing performance. The
                  chief operating decision-maker of the Company allocates
                  resources and assess performance on the basis its consolidated
                  financial statements. No other financial information that
                  presents segment profit or loss is generated by the Company
                  that is used by its chief operating decision-maker in
                  allocating resources and assessing performance. Thus, the
                  Company is a single operating segment under SFAS No. 131 and
                  the geographical segments disclosed in note 4 do not represent
                  operating segments under SFAS No. 131.

                                      F-49
<PAGE>

               ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

32.      CONVENIENT TRANSLATION TO UNITED STATES DOLLARS

         The translation of Hong Kong dollar amounts into United States dollars
         are for convenience and have been made at a rate of HK$7.8 to US$1, the
         approximate rate of exchange at 31st December, 2004. Such transactions
         should not be construed as representations that the Hong Kong dollars
         amounts represent, or have keen, or could be converted into United
         States dollars at that or any other rate.



                                      F-50

<PAGE>

                                  EXHIBIT INDEX
                                  -------------


     NUMBER                           EXHIBIT
   ----------    --------------------------------------------------------------
      1.1.       Memorandum of Association and Bye-laws (incorporated by
                 reference to Exhibit 3.1 of the Company's Registration
                 Statement on Form F-1, File No.3334856).

      4.1.       Service Agreement, dated June 5, 1996, between the Company and
                 Peter Jackson (incorporated by reference to Exhibit 10.16 of
                 the Company's Registration Statement on Form F-1, File
                 No.3334856).

      4.2.       Service Agreement, dated June 3, 1996, between the Company and
                 William D. Wade (incorporated by reference to Exhibit 10.17 of
                 the Company's Registration Statement on Form F-1, File
                 No.3334856).

      4.3.       Amendment 9 to Contract No. AsiaSat-3-001/95, dated March 6,
                 1998, between Hughes Space and Communications International,
                 Inc. Asia Satellite Telecommunications Company Limited
                 (incorporated by reference to Exhibit 1 on Form 20-F for
                 fiscal year 1997, File No.3334856).

      4.4.       Contract for Launch Services, dated March 17, 1998, between
                 Lockheed-Khrunichev-Energia International, Inc. and Asia
                 Satellite Telecommunications Company Limited (incorporated by
                 reference to Exhibit 2 on Form 20-F for fiscal year 1997, File
                 No.3334856).

      4.5.       Subscription Agreement made on March 21, 2000, between Tech
                 System Limited, Asia Satellite Telecommunications Company
                 Limited and PhoenixNet Holdings Limited (incorporated by
                 reference to Exhibit 2 on Form 20-F for fiscal year 1999, File
                 No.3334856).

      4.6.       Shareholders' Agreement dated as of April 6, 2000, among Asia
                 Satellite Telecommunications Company Limited, Tech System
                 Limited, TVG Asia Communications Fund II and PhoenixNet
                 Holdings Limited (incorporated by reference to Exhibit 3 on
                 Form 20-F for fiscal year 1999, File No.3334856).

      4.9.       Amendment 5 to Contract No. AsiaSat-3B/4 dated September 7,
                 2000, between Asia Satellite Telecommunications Company
                 Limited and Hughes Space and Communications International,
                 Inc. (incorporated by reference to Exhibit 4.9 on Form 20-F
                 for fiscal year 2000, File No.3334856)*

<PAGE>


     NUMBER                           EXHIBIT
   ----------    --------------------------------------------------------------

     4.10.       Contract for Launch Services LKEB-0009-0807 dated September
                 19, 2000, between AsiaSat and Lockheed Martin Commercial
                 Launch Services, Inc. (incorporated by reference to Exhibit
                 4.10 on Form 20-F for fiscal year 2000, File No.3334856)*

     4.11        Amended and Restated Deposit Agreement (incorporated by
                 reference to Exhibit A to the Registration Statement on Form
                 F-6, File No.333-13900, relating to the Company's American
                 Depositary Shares)

     4.12.       Share Option Scheme, dated January 25, 2002, of the Company
                 (incorporated by reference to Exhibit 4.11 on Form 20-F for
                 fiscal year 2001).

     4.13.       Lease Agreement, dated March 12, 2001, between AsiaSat and the
                 Hong Kong Industrial Estates Corporation (incorporated by
                 reference to Exhibit 4.12 on Form 20-F for fiscal year 2002).

     4.14        Construction Contract Agreement, dated March 4, 2002, between
                 AsiaSat and Leighton Contractors (Asia) Limited (incorporated
                 by reference to Exhibit 4.13 on Form 20-F for fiscal year
                 2002).

     4.15        Lease Agreement, dated January 26, 2005, between Asia
                 Satellite Telecommunications Company Limited and Perfect Win
                 Properties Limited.

     4.16        Equity Joint Venture Contract, dated March 29, 2004, between
                 Asia Satellite Telecommunications Company Limited and Sky
                 Networks Communications Group Company Limited.*

     4.17        Subscription Agreement, dated November 30, 2004, among Asia
                 Satellite Telecommunications Company Limited, Macau Cable TV,
                 Limited, Pacific Satellite International Limited and Skywave
                 TV Company Limited.*

     4.18        Shareholders Agreement, dated November 30, 2004, among Asia
                 Satellite Telecommunications Company Limited, Macau Cable TV,
                 Limited and Pacific Satellite International Limited.*

      8.1        Subsidiaries of the Registrant (included on page 11 of this
                 Annual Report).

     12.1        Certification of Chief Executive Officer pursuant to Section
                 302 of the Sarbanes-Oxley Act of 2002.

     12.2        Certification of Chief Financial Officer pursuant to Section
                 302 of the Sarbanes-Oxley Act of 2002.

     13.1        Certification of Chief Executive Officer pursuant to 18 U.S.C.
                 Section 1350, as adopted pursuant to Section 906 of the
                 Sarbanes-Oxley Act of 2002.

     13.2        Certification of Chief Financial Officer pursuant to 18 U.S.C.
                  Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

*  Confidential portions of this exhibit have been omitted and filed separately
with the Securities and Exchange Commission with a request for confidential
treatment pursuant to Rule 24B-2.