##### 



SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 40-F

o
    
    Registration statement pursuant to Section 12 of the Securities Exchange Act of 1934orþ
    
    Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934


For the Fiscal year ended:
    
    August 31, 2003Commission File number:
    
    001-14992


CORUS ENTERTAINMENT INC.

(Exact name of registrant as specified in its charter)


Canada
(Province or other jurisdiction of
incorporation or organization)
    
    4832, 4833
(Primary standard industrial classification
code number, if applicable)
    
    Not Applicable
(I.R.S. employer identification
number, if applicable)


BCE Place
181 Bay Street, Suite 1630
P.O. Box 767
Toronto, Ontario
M5J 2T3 Canada
(416) 642-3770
(Address and telephone number of registrants principal executive office)

CT Corporation System
111 8th Avenue, 13th Floor
New York, New York 10011
(212) 894-8700
(Name, address and telephone number of agent for service in the United States)

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

Title of each class
    
    Name of each exchange on which registered:Class B Non-Voting Shares
    
    New York Stock Exchange


Securities registered or to be registered pursuant to Section 12(g) of the Act:   None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:83⁄4% Senior Subordinated Notes due 2012

For annual reports, indicate by check mark the information filed with this form:þ         Annual Information Form         þ         Audited Annual Financial Statements

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:

Class A Shares
    
    1,726,712Class B Non-Voting Shares
    
    40,914,420


Indicate by check mark whether the registrant by filing the information contained in this form is also thereby furnishing the information to the
Commission pursuant to Rule12g3-2(b) under the Securities Exchange
Act of 1934 (the Exchange Act). If Yes is marked, indicate the file number assigned to the
registrant in connection with such rule.

Yes   o         No   þ

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13(d) or 15(d) of the Exchange Act during the
proceeding 12 months (or for such shorter period that the registrant has been
required to file such reports); and (2) has been subject to such filing
requirements in the past 90 days.

Yes   þ         No   o





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(CORUS LOGO)

RENEWAL ANNUAL INFORMATION FORM

Fiscal year ended August 31, 2003



Corus Entertainment Inc.



October 31, 2003





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RENEWAL ANNUAL INFORMATION FORM
CORUS ENTERTAINMENT INC.

Table of Contents

INCORPORATION OF CORUS
    
    
    3Organization and Name
    
    
    3Subsidiaries and Affiliates
    
    
    4GENERAL DEVELOPMENT OF THE BUSINESS
    
    
    5Historical Background
    
    
    5Significant Acquisitions and Divestitures
    
    
    5DESCRIPTION OF THE BUSINESS
    
    
    8Radio
    
    
    8Description of the Industry
    
    
    8Competition
    
    
    9Business Overview
    
    
    9Operating Strategy
    
    
    11Television
    
    
    11Description of the Industry
    
    
    11Competition
    
    
    13Business Overview
    
    
    14Operating Strategy
    
    
    16Content
    
    
    17Description of the Industry
    
    
    17Competition
    
    
    18Business Overview
    
    
    18Operating Strategy
    
    
    20GENERAL INFORMATION
    
    
    20Intellectual Properties
    
    
    20Principal Properties
    
    
    20Employees
    
    
    22Legal
    
    
    22Environmental
    
    
    22Controls and Procedures
    
    
    22Code of Ethics
    
    
    23CANADIAN COMMUNICATIONS INDUSTRY REGULATORY ENVIRONMENT
    
    
    23Canadian Radio-television and Telecommunications Commission
    
    
    23Industry Canada
    
    
    23Restrictions on Non-Canadian Ownership
    
    
    23Broadcasting Services
    
    
    24Radio Undertakings
    
    
    24Specialty and Premium Television Undertakings
    
    
    25Local Television Undertakings
    
    
    25Pay Audio Services
    
    
    26Cable Advertising Services
    
    
    26Canadian Content Requirement for Broadcasters
    
    
    26Film and Television Tax Credits and Grants
    
    
    26International Treaty Co-Productions
    
    
    26Competition Act Requirements
    
    
    27Investment Canada Act
    
    
    27Copyright Act Requirements
    
    
    27SELECTED CONSOLIDATED FINANCIAL INFORMATION
    
    
    29DIVIDEND POLICY
    
    
    30MANAGEMENTS DISCUSSION AND ANALYSIS
    
    
    30MARKET FOR SECURITIES
    
    
    30DIRECTORS AND OFFICERS
    
    
    31Audit Committee Financial Expert
    
    
    32ADDITIONAL INFORMATION
    
    
    33


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FORWARD-LOOKING STATEMENTS

This Annual Information Form contains forward-looking statements. The results
or events predicted in these statements may differ materially from actual
results or events. These forward-looking statements can generally be
identified by the use of statements that include phrases such as believe,
expect, anticipate, intend, plan, likely, will or similar words or
phrases. Similarly, statements that describe our objectives, plans or goals
are or may be forward-looking statements.

These forward-looking statements are based on our current expectations and our
projections about future events. However, whether actual results and
developments will conform with our expectations and projections is subject to a
number of risks and uncertainties, including, among other things: our ability
to attract and retain advertising revenues; audience acceptance of our radio
stations, specialty television networks and the television programs we produce;
our ability to recoup production costs, the availability of tax credits and the
existence of co-production treaties; our ability to compete in any of the
industries in which we do business; conditions in the entertainment,
information and communications industries and technological developments
therein; changes in laws or regulations or the interpretation or application of
those laws and regulations; our ability to protect our trade-marks, copyrights
and other proprietary rights; and changes in accounting standards. These are
not necessarily all of the important factors that could cause actual results to
differ materially from those expressed in any of our forward-looking
statements. Other unknown and unpredictable factors could also harm our
results. Consequently, there can be no assurance that the actual results or
developments anticipated by us will be realized or, even if substantially
realized, that they will have the expected consequences to, or effects on, us.
Unless otherwise required by applicable securities laws, we disclaim any
intention or obligation to publicly update or revise any forward-looking
statements whether as a result of new information, future events or otherwise.

INCORPORATION OF CORUS

Organization and Name

Corus Entertainment Inc. (Corus or the Company) is a Canadian based media
and entertainment company with interests in radio broadcasting, television
broadcasting, and production and distribution of childrens media content. The
Company was originally incorporated under the Canada Business Corporations Act
as 3470652 Canada Inc. on March 3, 1998. Corus amended its articles to change
its name to Corus Entertainment Inc. on May 28, 1999 and subsequently amended
its articles on August 26, 1999 to create additional classes of shares.

Corus commenced operations on September 1, 1999. On that date, pursuant to a
statutory plan of arrangement (the Arrangement), Corus was separated from
Shaw Communications Inc. (Shaw) as an independently operated, publicly traded
company, and assumed ownership of Shaws radio broadcasting, specialty
television programming, digital audio services and cable advertising services
businesses, as well as certain investments held by Shaw.

Corus commenced trading on the Toronto Stock Exchange (CJR.B) on September 3,
1999 and on the New York Stock Exchange (CJR) on May 10, 2000.

Corus registered office and an
executive office is located at 501, 630  3rd
Avenue S.W., Calgary, Alberta, T2P 4L4. A second executive office is located
at BCE Place, Bay-Wellington Tower, Suite 1630, 181 Bay Street, P.O. Box 767,
Toronto, Ontario, M5J 2T3.

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Subsidiaries and Affiliates

The following table describes the material operating subsidiaries and
affiliates of Corus as at August 31, 2003, their jurisdiction of incorporation
or organization, the percentage of voting and non-voting securities owned by
Corus directly or indirectly and the nature of the business in which each
subsidiary or affiliate is engaged.

JURISDICTION 
    
    %
    
    %INCORPORATION/
    
    OWNED
    
    OWNEDNAME
    
    ORGANIZATION
    
    VOTING
    
    NON-VOTING
    
    NATURE OF BUSINESSRadioCorus Radio Company
    
    Nova Scotia
    
    100%
    
    100%
    
    Radio BroadcastingMetromedia CMR Broadcasting Inc.
    
    Canada
    
    100%
    
    N/A
    
    Radio BroadcastingCorus Premium Television Ltd.
    
    Canada
    
    100%
    
    100%
    
    Radio Broadcasting591989 B.C. Ltd.
    
    British Columbia
    
    100%
    
    100%
    
    Radio Broadcasting591991 B.C. Ltd.
    
    British Columbia
    
    100%
    
    100%
    
    Radio BroadcastingCKIK-FM Limited
    
    Alberta
    
    100%
    
    50%
    
    Radio BroadcastingCanadian Broadcast Sales
Partnership
    
    Ontario
    
    50%
    
    50%
    
    Radio Airtime SalesTelevisionYTV Canada Inc.
    
    Canada
    
    100%
    
    100%
    
    CRTC License Holder (YTV and Treehouse TV)YTV Productions Inc.
    
    Ontario
    
    100%
    
    N/A
    
    Television ProductionLifestyle Television (1994) Ltd.
    
    Canada
    
    100%
    
    100%
    
    CRTC License Holder (W Network)Country Music Television Ltd.
    
    British Columbia
    
    90%
    
    68.5%
    
    CRTC License Holder (CMT)591987 B.C. Ltd.
    
    British Columbia
    
    100%
    
    100%
    
    CRTC License Holder (Ontario Television)Superchannel Ltd.
    
    Alberta
    
    100%
    
    100%
    
    CRTC License Holder (Premium Television)MovieMax! Ltd.
    
    Alberta
    
    100%
    
    N/A
    
    CRTC License Holder (Premium Television)Corus Audio and Advertising
Services Ltd.
    
    Alberta
    
    100%
    
    N/A
    
    Advertising Services (Digital ADventure)Max Trax Music Ltd.
    
    British Columbia
    
    100%
    
    N/A
    

CRTC
License Holder  Residential Pay Audio Services (Max Trax)Telelatino Network Inc.
    
    Ontario
    
    50.5%
    
    N/A
    
    CRTC License Holder (TLN Television)Teletoon Canada Inc.
    
    Canada
    
    40%
    
    N/A
    
    CRTC License Holder (Teletoon)ContentNelvana Limited
    
    Ontario
    
    100%
    
    N/A
    
    Animated Television Program ProductionNelvana Marketing Inc.
    
    Ontario
    
    100%
    
    N/A
    
    Merchandising and Consumer ProductsNelvana Enterprises Inc.
    
    Ontario
    
    100%
    
    N/A
    
    Sales and Distribution of Television ProgramsNelvana Communications Inc.
    
    United States
    
    100%
    
    N/A
    
    Sales and Development of Television ProgramsNelvana International Limited
    
    Ireland
    
    100%
    
    N/A
    
    Sales and Distribution of Television ProgramsNelvana Enterprises (U.K.) Limited
    
    United Kingdom
    
    100%
    
    N/A
    
    Sales and Distribution of Television ProgramsKids Can Press Limited
    
    Ontario
    
    100%
    
    N/A
    
    Childrens Book Publishing




| |  | N/A  subsidiary has no non-voting shares outstanding
| |  | -----------------------------------------------------

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GENERAL DEVELOPMENT OF THE BUSINESS

Corus is a leading, integrated Canadian media and entertainment company with an
established global distribution network for the programming we produce. Corus
has strong established brands in each of its businesses: radio, television, and
content. Our principal assets consist of 50 radio stations; a number of
specialty television networks focused on children and adult genres; western
Canadas premium television services; Nelvana Limited, an international
producer and distributor of childrens programming and products; Kids Can
Press, Canadas largest publisher of childrens books; three conventional
television stations; a local cable advertising service (Digital ADventure); and
Max Trax (formerly DMX Music), a digital audio service.

Historical Background

Certain of the businesses of Corus were operated by Shaw Communications Inc.
(Shaw) prior to September 1, 1999. On that date, the shareholders of Shaw
approved a statutory arrangement (the Arrangement) which had the effect of
creating Corus as an independently operated, publicly traded company. Under the
Arrangement, the assets of Shaw were separated into two distinct, publicly
traded corporations: one continued under the name Shaw Communications Inc. and
the other one became Corus Entertainment Inc. Shaw continues to carry on
Shaws cable television, Internet access, telecommunications and satellite
businesses. Corus now owns and operates the media businesses which had
previously been carried on by Shaw.

Pursuant to the Arrangement, Class A shareholders of Shaw received one Class A
participating share (Shaw Class A Share) of Shaw and one-third of a Class A
participating share of Corus (Corus Class A Voting Share) for each Shaw Class
A Share previously held by them. Class B non-voting shareholders of Shaw
received one Class B non-voting participating share of Shaw (Shaw Class B
Share) and one-third of one Class B non-voting participating share of Corus
(Corus Class B Non-Voting Share) for each Shaw Class B Share previously held
by them.

Pursuant to the Arrangement, 1,907,665 Corus Class A Shares and 28,492,618
Corus Class B Shares were issued. On September 3, 1999, the Corus Class B
Shares were listed and posted for trading on the Toronto Stock Exchange (CJR.B)
and commenced trading at $18.90 per share. On May 10, 2000, Corus Class B
Shares were listed for trading on the New York Stock Exchange (CJR) and
commenced trading at US $26.125 per share.

Significant Acquisitions and Divestitures

Since September 1, 1999, Corus has become one of Canadas leading media and
entertainment companies and one of the largest radio broadcasters and specialty
and premium television operators in Canada. Corus radio and television
divisions have expanded through a number of acquisitions. As well, Corus
expanded its business to include production and distribution of television
programs, merchandise licensing and publishing. The most significant
acquisitions and divestitures since the Companys inception include the
following:

Power Broadcasting Inc.

Effective March 31, 2000, Corus acquired the Canadian broadcasting assets of
Power Broadcasting Inc. consisting of 17 radio stations and four television
stations for $114 million. The broadcasting assets acquired included 11 radio
stations in Ontario between Guelph and Kingston and six radio stations in
Quebec between Montreal and Rimouski. The television stations in Ontario
(CKWS-TV  Kingston and CHEX-TV in Peterborough and CHEX-TV in Oshawa) and
Quebec (CHAU-TV) are affiliates of the CBC and TVA, respectively. Corus
subsequently sold the Quebec (CHAU-TV) television station in February 2001 for
approximately $9 million in cash.

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WIC Western International Communications Ltd. (WIC)

Effective July 6, 2000, Corus acquired 12 radio stations, certain premium
television undertakings and certain other related assets of WIC for a total
consideration after integration costs of approximately $347 million, of which
approximately $200 million was satisfied through the issuance of 7,125,000
Corus Class B Non-Voting Shares at a price of $28.05 per share and the balance
in cash. This acquisition was part of a series of transactions pursuant to
which Corus, CanWest Global Communications Corp. and Shaw divided the various
broadcasting, distribution and other businesses of WIC.

The CRTC did not grant Corus the right to acquire WICs 50% ownership in The
Family Channel Inc. and its direct 40% ownership interest in TELETOON Canada
Inc. These ownership interests were sold to Astral Media Inc. on May 31, 2001
for cash consideration of $127 million.

Metromedia CMR Broadcasting Inc. (Metromedia)

Effective August 28, 2000, Corus acquired a 29.9% interest in Belcand Mount
Royal Holdings Inc., the parent company of Metromedia, and entered into an
agreement to acquire the remaining 70.1% interest subject to CRTC approval,
which was completed on February 28, 2001. Metromedia operates five radio
stations in Montreal (three French and two English), and one French station in
the Laurentians. Total consideration paid included approximately $170 million
in cash plus assumption of approximately $22 million in debt.

Nelvana Limited (Nelvana)

Nelvana is an international producer and distributor of childrens programming
and products. At August 31, 2000, the Company owned an approximate 6.7%
interest in Nelvana. Effective November 14, 2000, Corus completed the
acquisition resulting in Nelvana becoming a wholly-owned subsidiary of Corus.
Total consideration after integration costs of approximately $561 million was
satisfied through the issuance of 5,047,532 Corus Class B Non-Voting Shares at
a price of $41.807 per share and approximately $350 million in cash and the
assumption of $94 million of debt.

The Comedy Network Inc.

On October 11, 2001, Corus acquired an additional 14.95% interest in The Comedy
Network Inc., increasing its total ownership interest to 29.9%. The specialty
channel provides programming such as Canadian and foreign comedy series, comedy
sketches, variety and human interest programs. On December 18, 2001, Corus
disposed of its 29.9% interest to CTV Inc. for cash consideration of $36
million.

Telelatino Network Inc. (Telelatino)

Effective November 16, 2001, Corus acquired shares that increased its total
interest in Telelatino to 50.5% from 20% for cash consideration of
approximately $11 million. Telelatino operates TLN Television, a specialty
ethnic channel that provides programming in Italian, Spanish and English.

The Womens Television Network (WTN or W Network)

Effective November 19, 2001, Corus acquired all of the outstanding shares of
Lifestyle Television (1994) Limited, which operated WTN, a specialty television
network (relaunched April 15, 2002 as W Network) focused on womens
programming, from a subsidiary of Shaw, for cash consideration of $205 million.

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Klutz

Effective April 8, 2002, Corus completed the sale of Klutz, a publisher of
childrens books in the United States which was a subsidiary of Nelvana, to
Scholastic Inc. for approximately $68 million (US$43 million) in cash plus a
three-year earn-out based on revenue.

Max Trax Music Ltd. (formerly DMX Music Inc.)

For accounting purposes, Corus recorded, effective March 1, 2002, the exchange
of ownership interests in digital music subscription services to residential
and commercial customers in Canada with DMX Music, Inc. The transaction
resulted in Corus acquiring the remaining 20% ownership of the existing
Canadian residential subscription business in exchange for DMX Music, Inc.
gaining 100% ownership of the Canadian commercial business. Corus acquired
assets with an assigned fair value of approximately $19 million for which cash
of approximately $11 million was paid.

The Locomotion Channel

On May 17, 2002, Corus acquired a 50% interest in The Locomotion Channel, an
action-oriented animation cable service targeting young adults aged 18-35
available throughout Latin America for a maximum consideration of approximately
$16 million (US$11 million in cash) less a holdback in the event of certain
economic changes that may impact revenue projections. The service is operated
in conjunction with the other 50% shareholder, Hearst Corporation.

Corus VC Ltd.

Effective May 31, 2002, Corus sold to Shaw all of its outstanding shares in
Corus VC Ltd., which operates the Viewers Choice pay-per-view service in
western Canada, for cash consideration of $33 million.

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DESCRIPTION OF THE BUSINESS

Corus principal business activities are conducted through three operating
groups: Radio, Television and Content, as described below.

RADIO

Corus radio group (Corus Radio) is comprised of 50 radio stations situated
primarily in eight of the ten largest Canadian markets by population and in the
densely-populated area of southern Ontario. Corus Radio is Canadas leading
radio operator in terms of revenues and audience reach.

Description of the Industry

The Canadian radio industry has historically been fragmented, with most
stations being owned locally and oriented towards local advertisers and
markets. In April 1998, the CRTC adopted a new radio multiple ownership policy
allowing a single owner to own a maximum of two AM and two FM stations in each
of Canadas larger markets. Since then, there has been a significant amount of
consolidation of ownership within the radio industry.

According to the CRTC, as of August 31, 2002, there were 515 commercial radio
stations in Canada of which approximately 60% were FM stations and 40% were AM
stations.

The industry is dependent upon advertising revenues for economic performance
and growth. According to the CRTC, the industry generated over $1.09 billion in
revenues in 2002. Radio stations compete for advertising dollars with other
radio stations and many other forms of media. According to the CRTC, in 2002,
the radio industry captured 14% of the approximately $7.5 billion spent on
advertising in 2002, compared to the newspaper and television industries, which
captured 22% and 34% of the total, respectively. According to the CRTC, in
2002, local advertising and national advertising represented 77% and 21%,
respectively of total radio advertising revenues.

Radio is an efficient, cost-effective medium for advertisers to reach specific
demographic groups. Stations are typically classified by their on-air format,
such as country, adult contemporary, oldies and news/talk. A stations format
and style of presentation enables it to target certain demographics. By
capturing a specific share of a markets radio listening audience, with
particular concentration in a targeted demographic market, a station is able to
market its broadcasting time to advertisers seeking to reach that specific
audience demographic. Advertisers and stations utilize data published by
audience measuring services, such as Bureau of Broadcast Measurement (BBM),
to estimate how many people within particular geographical and demographic
markets listen to specific stations. The number of advertisements that can be
broadcast without jeopardizing listening levels, and the resulting ratings, is
determined primarily by the format of a particular station and the local
competitive environment. The number of advertisements that can be broadcast is
not regulated.

The Canadian radio industry continues to invest in the ongoing development and
deployment of digital audio broadcasting, or DAB, in major radio markets. DAB
technology provides clearer audio signals and allows for the broadcast of
additional interactive data on separate streams to enhance the listening
experience. This additional data can include information related to the play
list or updated news and information reports. The successful roll-out of DAB
will depend on consumer acceptance and demand for this new technology.

Radio broadcasters are continuing to see the importance of new media outlets to
work in tandem with the traditional radio stations. There is a growing need to
ensure that strong local websites exist for each station to offer advertisers
an opportunity to complement on-air campaigns with an interactive element not
previously possible through radio streaming alone. A successful combination of
on-air and on-line streaming will lead to increased brand awareness for the
radio broadcaster and the advertiser and should translate to a rise in ratings
and advertising revenues.

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Competition

Radio stations compete for advertising dollars with other radio stations in
their respective market areas as well as with other forms of media such as
conventional television, specialty television networks, daily, weekly, and
free-distribution newspapers, outdoor billboard advertising, magazines, other
print media, direct mail marketing, and the Internet. In each market, Corus
radio stations face competition from other stations with substantial financial
resources, including stations targeting the same demographic groups. In markets
near the U.S. border, such as Kingston, Corus also competes with U.S. radio
stations. On a national level, Corus competes generally with Standard Radio,
Rogers Media, CHUM Radio and Astral Media, each of which owns and operates
stations across Canada.

Factors that are material to competitive position include the stations rank in
its market, authorized power, assigned frequency, audience characteristics,
local program acceptance and the number and characteristics of stations in the
market area.

Business Overview

Corus Radio is the largest radio operator in Canada in terms of advertising
revenues and reach. In Spring 2003, Corus led the industry with a market share
of 29.0% in terms of reach, compared to our closest competitors, Standard Radio
and Rogers Media, which had market shares of 23.4% and 19.4%, respectively in
terms of reach, during that same period. During this period, Corus Radio
attracted a cumulative weekly audience of approximately eight million
listeners. In terms of audience tuning, Corus Radios share was 31% larger than
our next competitor.

Corus Radio operates stations in urban centres in Canada, including Montreal,
Toronto, Hamilton/Burlington, Winnipeg, Edmonton, Calgary and Vancouver, and in
the densely-populated area of southern Ontario. Based on Spring 2003 BBM
targeted demographics, more than half of our stations ranked number one. Corus
Radio operates news/talk stations in eight out of Canadas 10 largest markets
by population (Vancouver, Calgary, Edmonton, Winnipeg, Hamilton, London,
Toronto and Montreal) and, in Spring 2003, half of these news/talk stations had
the largest share of listeners in their markets. According to BBM rankings, in
Spring 2003, the news/talk stations were the most listened to AM stations in
Calgary, Edmonton, Vancouver and Winnipeg, measured by audience tuning.

The following table sets out particulars of Corus radio stations:

Targeted
    
    Rank within
    
    Audience share withinLocation
    
    Call letter
    
    Frequency
    
    Format
    
    demographic(1)
    
    demographic(2)
    
    total market(3)AlbertaCalgary
    
    CHQR (QR77)
    
    AM
    
    News/Talk/Sports/Info
    
    
    A35+
    
    
    
    1
    
    
    
    13.1CKRY (Country 105)
    
    FM
    
    Country
    
    
    A25-54
    
    
    
    2
    
    
    
    17.4CKIK (The Peak)
    
    FM
    
    Hot Adult Contemporary
    
    
    F18-44
    
    
    
    1
    
    
    
    11.2Edmonton
    
    CHQT (Cool 880)
    
    AM
    
    Oldies
    
    
    A35-54
    
    
    
    5
    
    
    
    6.6CHED (630 CHED)
    
    AM
    
    News/Talk/Sports/Info
    
    
    A35+
    
    
    
    1
    
    
    
    15.5CISN (Country 103.9)
    
    FM
    
    Country
    
    
    A25-54
    
    
    
    2
    
    
    
    13.0CKNG (Power 92)
    
    FM
    
    Contemporary Hit Radio
    
    
    F18-49
    
    
    
    2
    
    
    
    12.5Red Deer
    
    CKGY (KG Country)
    
    FM
    
    Country
    
    
    A25-54
    
    
    
    2
    
    
    
    31.7CIZZ (ZED FM)
    
    FM
    
    Top 40/Rock
    
    
    A18-44
    
    
    
    1
    
    
    
    38.8B.C.Vancouver
    
    CHMJ (MOJO 730)
    
    AM
    
    Talk Radio for Guys
    
    
    M25-49
    
    
    
    11
    
    
    
    1.2CKNW (NW 980)
    
    AM
    
    News/Talk/Sports/Info
    
    
    A35+
    
    
    
    1
    
    
    
    20.1CFOX (The Fox)
    
    FM
    
    New Rock
    
    
    A18-34
    
    
    
    4
    
    
    
    4.7CFMI (Rock 101)
    
    FM
    
    Classic Rock
    
    
    M25-49
    
    
    
    3
    
    
    
    8.1ManitobaWinnipeg
    
    CJOB (CJOB 680)
    
    AM
    
    News/Talk/Sports/Info
    
    
    A35+
    
    
    
    1
    
    
    
    27.3CJKR (Power 97)
    
    FM
    
    Rock
    
    
    A18-34
    
    
    
    1
    
    
    
    13.1OntarioBarrie
    
    CIQB (B101)
    
    FM
    
    Adult Contemporary
    
    
    A25-54
    
    
    
    2
    
    
    
    27.9CHAY (Energy)(4)
    
    FM
    
    Contemporary Hit Radio
    
    
    F18-34
    
    
    
    1
    
    
    
    15.7Burlington
    
    CING (Country 95.3)
    
    FM
    
    Country
    
    
    A25-54
    
    
    
    3
    
    
    
    13.2


9



---



##### 



Targeted
    
    Rank within
    
    Audience share withinLocation
    
    Call letter
    
    Frequency
    
    Format
    
    demographic(1)
    
    demographic(2)
    
    total market(3)Cambridge
    
    CIZN (The Zone 92.9)(7)
    
    FM
    
    Hot Adult Contemporary
    
    
    A18-44
    
    
    
    N/A
    (5)
    
    
    N/A
    (5)Collingwood
    
    CKCB (The Peak)
    
    FM
    
    Adult Contemporary
    
    
    A25-54
    
    
    
    N/A
    (5)
    
    
    N/A
    (5)Cornwall
    
    CFLG (Variety 104.5)
    
    FM
    
    Adult Contemporary
    
    
    A25-49
    
    
    
    1
    
    
    
    75.1CJSS (Blaze 101.9)(8)
    
    FM
    
    Contemporary Country
    
    
    A35-54
    
    
    
    2
    
    
    
    18.2CJUL (Jewel 1220)
    
    AM
    
    Nostalgia/Information
    
    
    A50+
    
    
    
    1
    
    
    
    6.8Guelph
    
    CJOY (CJOY)
    
    AM
    
    Full Service/Oldies
    
    
    A35+
    
    
    
    1
    
    
    
    37.4CIMJ (Magic 106.1)
    
    FM
    
    Adult Contemporary
    
    
    A25-49
    
    
    
    1
    
    
    
    62.6Hamilton
    
    CHML (AM 900)
    
    AM
    
    News/Talk/Sports/Info
    
    
    A35+
    
    
    
    2
    
    
    
    20.2CJXY (Y 108)
    
    FM
    
    Classic Rock
    
    
    M18-49
    
    
    
    1
    
    
    
    15.7Kingston
    
    CFFX (GT0 960)
    
    AM
    
    Oldies
    
    
    A35+
    
    
    
    5
    
    
    
    5.6CFMK (Country 96)
    
    FM
    
    Country
    
    
    F25-54
    
    
    
    1
    
    
    
    19.5London
    
    CFPL (AM 980)
    
    AM
    
    News/Talk/Sports/Info
    
    
    A35+
    
    
    
    4
    
    
    
    8.2CFPL (FM 96)
    
    FM
    
    Contemporary Album Rock
    
    
    M18-49
    
    
    
    1
    
    
    
    14.1St. Thomas
    
    CFHK (Energy)
    
    FM
    
    Top 40
    
    
    F18-34
    
    
    
    2
    
    
    
    10.0Peterborough
    
    CKRU (980 Kruz)
    
    AM
    
    Oldies/Sports
    
    
    A35-64
    
    
    
    3
    
    
    
    18.7CKWF (The Wolf)
    
    FM
    
    Rock
    
    
    M18-49
    
    
    
    1
    
    
    
    60.1Toronto
    
    CFMJ (Mojo 640)
    
    AM
    
    Talk Radio for Guys
    
    
    M25-49
    
    
    
    8
    
    
    
    2.2CFNY (Edge 102)
    
    FM
    
    New Rock
    
    
    M18-34
    
    
    
    1
    
    
    
    5.0CILQ (Q107)
    
    FM
    
    Classic Rock
    
    
    M25-49
    
    
    
    2
    
    
    
    7.7Woodstock
    
    CKDK (The Hawk)
    
    FM
    
    Classic Rock
    
    
    M25-49
    
    
    
    2
    
    
    
    10.4QuebecAmqui
    
    CFVM
    
    FM
    
    Adult Contemporary
    
    
    A25-54
    
    
    
    N/A
    (5)
    
    
    N/A
    (5)Drummondville
    
    CJDM
    
    FM
    
    Adult Pop Rock(9)
    
    
    A18-49
    
    
    
    1
    
    
    
    77.8Montmagny
    
    CFEL
    
    FM
    
    Adult Contemporary(9)
    
    
    A25-54
    
    
    
    N/A
    (6)
    
    
    N/A
    (6)Montreal
    
    CINW (940 News)
    
    AM
    
    All News
    
    
    A25-54
    
    
    
    5
    
    
    
    5.1CINF (Info 690)
    
    AM
    
    All News(9)
    
    
    A25-54
    
    
    
    7
    
    
    
    3.1CFQR (Lite Rock Q92)
    
    FM
    
    Adult Contemporary
    
    
    F25-54
    
    
    
    1
    
    
    
    28.0CKOO (98.5 Cool FM)
    
    FM
    
    Modern Rock(9)
    
    
    A18-34
    
    
    
    4
    
    
    
    2.3CKOI (CKOI-FM)
    
    FM
    
    Contemporary Hit Radio(9)
    
    
    A18-49
    
    
    
    2
    
    
    
    14.6Rimouski
    
    CIKI
    
    FM
    
    Contemporary Hit Radio(9)
    
    
    A18-49
    
    
    
    1
    
    
    
    38.1CJOI
    
    FM
    
    Adult Contemporary(9)
    
    
    A35-54
    
    
    
    1
    
    
    
    35.5St. Jean
    
    CFZZ
    
    FM
    
    Adult Contemporary(9)
    
    
    A25-54
    
    
    
    N/A
    (6)
    
    
    N/A
    (6)St. Jerome
    
    CIME
    
    FM
    
    Adult Contemporary(6)
    
    
    A25-54
    
    
    
    N/A
    (6)
    
    
    N/A
    (6)




|Source: Spring 2003 BBM and Fall 2002 BBM for Fall only stations.
|-----------------------------------------------------------------



|(1) |  | Targeted demographic specifies male (M), female (F) or adult (A) and the age range.                           
|--- |  | --------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Based on cumulative weekly audience in the targeted demographic.                                              
|   
|(3) |  | Share of hours tuned of commercial originating stations by listeners 12 years of age and older in that market.
|   
|(4) |  | CHAY was repositioned to Adult Contemporary focused on A 35-54 in Aug. 2003.                                  
|   
|(5) |  | Unmeasured market.                                                                                            
|   
|(6) |  | Single station market.                                                                                        
|   
|(7) |  | CIZN was relocated to a new frequency 107.5 in Summer 2003 and was relaunched as DAVE-FM (CJDV-FM).           
|   
|(8) |  | CJSS was reformatted as Rock 101.9 - Classic Rock in Aug. 2003.                                               
|   
|(9) |  | French language broadcast.                                                                                    

Corus Radio derives the majority of its revenues from advertising sales.
Revenues for fiscal 2003 and 2002 were approximately $226 million and $211
million respectively.

Revenues from Corus Radio are derived from two types of advertising: (a)
advertising by local advertisers who are generally local merchants and who
operate in the trading area encompassed by the stations signal; and (b)
advertising by national businesses such as automotive manufacturers, breweries,
banks, fast food chains and similar operations which develop national
advertising campaigns. The extent to which our advertising revenues are from
local or national advertising depends on the given market, although, on
average, approximately 75% of Corus Radios revenues were derived from local
advertising. In order for FM stations to access advertising revenues in
markets served by more than one commercial radio station, the CRTC requires
that each FM radio licensee broadcast at least 42 hours each week of local
programming.

Each group of radio stations in a market has its own sales force, which is
responsible for acquiring and maintaining local advertising revenues. This
local sales force is paid primarily on a commission basis at a rate of
approximately 15% of the revenues from the advertising obtained. National
advertising is placed by advertising agency representatives. The commissions
paid to these agencies are approximately 4% - 5%. The rates that we charge are
determined in part by ratings, intensity of competition in the market, and
frequency and demographic characteristics.

10



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Operating Strategy

Corus Radio will continue to strengthen its position in major markets and grow
revenues and margins through research-driven programming decisions,
professional sales execution and highly efficient operations. Corus Radio will
also focus on leveraging new media to benefit both the listener and the
advertiser.

Corus Radio aims to be rated by audience measuring services, such as BBM, as
number one or two in the targeted demographic for their relevant markets, by
continuing to provide attractive programming. Corus Radio has a clustering
strategy pairing AM and FM radio stations to the limits allowed by the CRTC for
the given market. Such clustering improves operating performance by expanding
demographic coverage of the market, thereby providing local and national
advertisers with one stop shopping. Clustering also provides opportunities to
share costs between radio stations, thereby improving operating margins.

Corus Radio is also committed to having the best radio sales force in the
industry. To that end, in 2002, Corus launched Corus Radio Sales University,
an internal training course designed to provide the sales team with the tools
to succeed. To date, over 200 Corus radio sellers and managers have completed
stage one and two of this training.

Corus Radios dedication to sales excellence extends beyond our clustering
strategy and our training initiatives. In 2002, Corus launched Deep Sky, a
radio marketing solutions business based in Toronto. Deep Sky has two major
objectives, to market Corus generated syndicate content, available throughout
Canada on Corus stations and other stations and to provide customized radio
solutions for new radio advertisers in the form of content, promotions and the
creative use of new radio.

Corus owns a 50% stake in Canadian Broadcast Sales (CBS), in partnership with
Rogers Media. CBS is Canadas leading national sales representation firm.

Corus Radio will continue to leverage new media to expand our audience and give
new opportunities to advertisers through a series of strong local web-sites to
complement our radio stations. On-line audio streaming through web-sites
affords the broadcaster and advertiser a more personal connection with the
listener not available through traditional radio. Advertisers are able to
complement their on-air campaigns with more information on their products and
can offer an interactive element through permission based e-mail available
through Corus web-sites.

TELEVISION

Corus television group (Corus Television) is comprised of specialty
television networks, premium television services, three conventional television
stations, and other media services.

Description of the Industry

According to the Canadian Cable Television Association, as of September 2002,
the Canadian television industry served approximately 11.8 million homes with
televisions, of which 94.8% are passed by cable. Also as of September 2002,
there were approximately 7.9 million cable subscribers and 1.9 million
direct-to-home satellite subscribers. Total digital subscribers were
approximately 3.2 million, up from 2.8 million a year earlier. In 2002, the
four largest cable operators controlled approximately 87% of total cable
subscribers in Canada.

Specialty and Premium Television Networks

Specialty and premium television networks generated $1.7 billion of combined
advertising and subscriber revenues in 2002. Specialty and premium television
networks are available to those Canadians who subscribe to the service package
of a particular broadcasting distribution undertaking (BDU) (i.e. cable
television, direct-to-home satellite and multipoint distribution systems).
Specialty television networks provide special interest, news, sports, arts and
entertainment programming, while premium television networks provide
commercial-free movies, series and special event programming.

Specialty and premium television networks each obtain revenues by charging a
monthly subscriber fee to cable and direct-to-home satellite operators.
Subscriber fees are the lone source of revenues for licensed premium

11



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television services, while specialty services can also generate advertising
revenue. The CRTC regulates the maximum subscriber fee if the network is
included as part of the basic cable service of a large cable operator, but not
if the network is carried on a discretionary tier. Regardless, the amount of
the subscriber fee is specified in the networks agreement with the BDU.
Digital specialty services are carried on a new discretionary tier of digital
only theme packages, as a stand-alone digital offering, or as part of
individual premium services provided to digital subscribers. Specialty and
premium television networks benefit from these subscriber fees, which are
supported by the high level of cable and satellite penetration in Canada.
Subscribers to discretionary tiers pay monthly fees to their BDU that reflect
an amount for the basic service, plus an additional amount for specialty and
premium television networks for which they subscribe on discretionary tiers.

Because all subscribers receive at least basic service, specialty television
networks that are carried on basic service typically have a much higher number
of subscribers. The number of subscribers for a cable network in a
discretionary tier depends primarily upon pricing and subscriber preference. A
specialty television networks subscriber penetration will also benefit to the
extent it is packaged or tiered with other popular specialty television
networks. As a consequence, discretionary specialty television networks that
are popular (or are otherwise packaged with popular specialty television
networks) can generally be priced at rates above those for specialty television
networks on basic service.

Unlike premium television networks, which are prevented by CRTC regulations
from obtaining advertising revenues, specialty television networks may obtain
both subscriber and national advertising revenues. Specialty television
networks appeal to advertisers seeking highly targeted markets. The CRTC limits
national advertising to 12 minutes an hour but does not regulate advertising
rates and specialty television networks are not required to share a portion of
their advertising revenues with the cable and direct-to-home satellite
operators. According to the CRTC, in 2002, television advertising comprised
approximately 34% or $2.6 billion of the total $7.5 billion spent on
advertising in Canada in 2002. Specialty television networks had an
approximate 44% share of total television viewership in 2002 but only received
a 19% share of total television advertising revenues, or approximately $508
million, up from $438 million, or a 13% share of total television advertising
revenues in 2001.

Canadian specialty and premium television networks have experienced subscriber
growth over the past decade due to the advances in cable-based delivery systems
and the growth of direct-to-home satellite services. In November 2000, a number
of new digital specialty television network licenses were awarded by the CRTC
for launch commencing September 2001. Of these licenses, 21 were Category 1
and 262 were Category 2. Category 1 digital specialty television networks are
must carry services. Category 2 digital cable networks, on the other hand,
are not guaranteed any distribution rights by virtue of their license. However,
the CRTC requires a distribution undertaking to distribute five Category 2
services in which it or an affiliate does not own 10% of the equity for every
Category 2 service it distributes in which it or an affiliate owns more than
10% of the equity. Since the initial awarding of 262 Category 2 licenses,
additional Category 2 licenses have been granted. However, as of August 31,
2002, only 32 Category 2 networks are in operation. It remains unclear how
many, if any, of the remaining Category 2 networks will be launched in the
future. Category 2 networks may be competitive with one another but may not be
directly competitive with an existing licensed analog specialty television
network or premium television network or a Category 1 digital specialty
television network.

The trend in the television sector is on innovative new products and services
in the digital environment. The emphasis on instant gratification for consumers
is dominating the industry. New product offerings will fuel growth in the
digital sector, reduce churn and contribute to incremental revenue growth.
Video-on-demand (VoD); Subscription video-on-demand (SVoD); High Definition
Television (HDTV); impulse subscriptions; and Personal Video Recorders
(PVR) all provide greater choice in delivery to the consumer and increase the
amount of digital subscriptions for the provider. A description of these new
digital products are as follows:



| |  |  | VoD provides an alternate method for the supply of video and
related content material over cable and telecommunications networks.
For broadcasters it represents a fundamental shift from a linear
program service to the consumer having complete control over the
programming segment.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | SVoD is a video on demand service offered at a flat
subscription price that provides viewers with unlimited access to
select programs from the libraries of featured cable networks.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12



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| |  |  | HDTV is a high-resolution digital television combined with
Dolby Digital surround sound. This combination creates an unparalled
combination of sound and image. HDTV requires new production and
transmission equipment at the HDTV stations, as well as new equipment
for reception by the consumer. The higher resolution picture is the
main selling point for HDTV.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A PVR is an interactive television recording device. Like the
VCR, a PVR records and plays back television programs, but, unlike
the VCR, it stores the programs in digital as opposed to analog form,
allowing the user the ability to watch what they want when they want.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The growth of the digital universe has added the capability for programmers to
offer impulse subscriptions to customers. This allows the customer to act on
impulse and become a one-time or short-term subscriber to certain digital
offerings.

Conventional Television

Local television stations are licensed by the CRTC and provide over-the-air
television signals to viewers within a local geographical market or on a
network basis. The CRTC has licensed three English-language television
networks, two private commercial networks and one public network. The private
commercial networks are operated by CTV Television Network Inc. (CTV) and
Global Television Network (Global) with the Canadian Broadcasting Corporation
(CBC) operating the public broadcasting network. In addition to receiving
conventional television signals off-air, the majority of Canadian viewers have
access, either directly or through a BDU, to the television signals of U.S.
border stations which are generally affiliated with one of the four U.S.
commercial networks (ABC, NBC, CBS and Fox) and a Public Broadcast System
station. Canadian conventional television stations generate revenue from
advertising and receive no subscription revenues. The number of commercial
messages that a station may broadcast is restricted to 12 minutes an hour and
in some instances, as in the case of Corus Oshawa television station, is
dependent on the production of local programming. The success of conventional
television is dependent on the quality of programming which results in audience
ratings that in turn attract advertisers to a station or network. In the case
of stations affiliated with the CBC, the local, private affiliated station
receives a fee from the CBC to air or broadcast CBC national programming at
certain designated times, in addition to being able to generate advertising
revenues.

Other Media Businesses

Digital audio services distribute music in a digital mode to homes served by
BDUs. A digital stream is delivered via cable or satellite to a set top box
and converted to a signal that a residential customers television or audio
system can understand. A variety of music formats are available, including
channels devoted exclusively to classical, rock, jazz, country and many other
music genres. Residential digital audio services are subject to licensing
requirements by the CRTC.

Cable advertising services provide commercial customers with wide coverage,
high-frequency advertising at rates that are competitive with other forms of
media. The business is exempt from licensing or regulatory requirements. An
access fee is paid to the cable provider.

Competition

Corus Televisions specialty and premium television networks compete for
subscriber fees with other specialty and premium television network operators,
including Bell Globemedia, Alliance Atlantis Communications Inc., CHUM Limited
and Astral Media Inc. According to the CRTC, in 2002, the Canadian specialty
television and premium television network industries generated $1.5 billion of
combined advertising and subscriber revenues. Corus specialty services also
compete directly for advertising revenues with the operators of cable networks
listed above and with broadcast networks, including Global, CBC and CTV, and
with other advertising media. Corus conventional television stations compete principally for viewers and
advertisers with other television stations that broadcast in Toronto and
southern Ontario.

13



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Business Overview

Corus had the following interests in specialty and premium television networks
in Canada as at October 31, 2003:

NETWORK
    
    DESCRIPTION OF PROGRAMMING
    
    INTERESTYTV
    
    Children/Family
    
    100%Treehouse TV
    
    Pre-school Children/Parents
    
    100%W Network Inc.
    
    Lifestyle and Entertainment geared to women
    
    100%Country Music Television (CMT)
    
    Country Music /Country Lifestyle
    
    80%Telelatino Network Inc.
    
    Canadian-Italian and Spanish
    
    50.5%The Locomotion Channel
    
    Action-Orientated Animation
    
    50% Aired in Latin America, Iberia (Spain andPortugal)TELETOON Canada Inc.
    
    Children/Family/Adult Animation
    
    40%The Food Network Canada
    
    Food Related
    
    19.9%Movie Central
    
    Premium Television  Premium Movies and Series
    
    100%Encore
    
    Premium Television  Classic Movies
    
    100%Discovery Kids (Digital Service)
    
    Children/Family
    
    54%SCREAM TV (Digital Service)
    
    Horror Movies and Series
    
    51%The Documentary Channel (Digital Service)
    
    Documentaries
    
    53%Max Trax
    
    Digital Music Services
    
    100%


Specialty Television Networks

Corus Televisions group of specialty television networks appeal particularly
to kids, teens and women, much-coveted target groups among Canadian marketers.
Corus Televisions specialty networks had the largest viewing audience, based
on Nielsen Media Research People Meters Fall 2002 and Spring 2003 surveys. Each
of the analog specialty television networks is ranked among the top three
analog television networks that compete within its genre, based on targeted
demographic.

YTV is a specialty television network dedicated to programming for children and
youth aged two to 17. Based on the Nielsen Fall 2002 and Spring 2003 surveys,
YTV broadcast 17 of the top 20 childrens shows in Canada in the Kids 2-11
genre. This network reaches children beyond the television with interactive
events and initiatives including ytv.com,the top Canadian kids web-site. YTV
is generally carried on the basic tier.

Treehouse TV is the only specialty service in Canada dedicated to preschoolers
(ages two to five). Treehouse TV operates on a 24-hour basis offering a
commercial-free television environment in its preschool programming that
reflects the interests and developmental levels of young children.

W Network was acquired in November 2001 and is a specialty television service
dedicated to serving the needs and interests of women. On April 15, 2002, the
service, which was previously know as WTN, was rebranded, reformatted and
relaunched as W Network. Recent Nielsen statistics indicates that W Network
achieved a 60% growth in average minute audience of women 25-54 over the same
period last year and now ranks #1 in its core demographic of W25-54.

Country Music Television,or CMT,is a specialty service dedicated to
exhibiting country music videos and related programming. CMTmixes country
music with country-themed movies and specials. Corus has a 90% voting interest
and an 80% equity interest in CMT.The remaining 10% voting interest and 20%
equity interest is held by Country Music Television Inc., the operator of a
similar service in the United States.

Telelatino, in which Corus acquired a controlling interest in November 2001, is
an ethnic specialty service that offers general interest domestic and
international programming in the Italian, Spanish and English languages.

Max Trax is a residential digital audio service launched in the Spring of 1997.
Max Trax (formerly DMX Music Inc.) is carried by BDUs as part of their basic
service. Revenues for Max Trax are earned through subscriber fees. Max Trax
is a partner in a joint marketing agreement with CBC to offer a 40 channel
service to some customers under the brand name Max Trax Galaxie.

14



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Currently, Corus offers three digital specialty television networks: The
Documentary Channel, featuring documentaries from Canada and around the world;
Discovery Kids,which offers children informative and entertaining programming
with an emphasis on action, adventure and the environment; and SCREAM TV,which
offers a horror theme through a movie-rich schedule of classic and modern
thrillers, cult favorites and popular series. These services were launched in
September 2001. Corus also holds interests in the following specialty
television networks:



| |  |  | A 50% interest in The Locomotion Channel (Locomotion), an
action-oriented animation premium television service. Locomotion is our
first international venture, offering service in over 20 countries and
four million homes throughout Latin America.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A 40% interest in TELETOON,which is a Canadian specialty service
featuring a wide range of animation programming in all forms. TELETOON
is available in both an English language version and a French language
version.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A 19.9% equity interest in The Food Network Canada,a specialty
service which provides information and entertainment programming related
to food and nutrition.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------

Revenues from our specialty television networks are derived primarily from
subscriber fees and advertising. In fiscal 2003, subscriber fees accounted for
46% and advertising accounted for 51% of total revenues from the specialty
television networks.

Premium Television Networks

Movie Central and Encore Avenue are the exclusive licensed providers of premium
television services in western Canada, featuring blockbuster movies, series and
specials from diverse genres on six distinct channels. Each channel broadcasts
commercial-free 24 hours a day, seven days a week. The Movie Centralbrand
consists of four thematic channels: Movie Central, Adrenaline Drive, Shadow
Lane and Heartland Road. The Encorebrand consists of two thematic channels:
Encore Avenue and Comic Strip. As at August 31, 2003, our Movie Central service
had over 658,000 subscribers, an 8% increase in year-over-year subscribers,
representing penetration of approximately 60% of digital cable and
direct-to-home satellite subscribers in western Canada.

Revenues from premium television networks have experienced significant growth
over the past two years as a result of increased direct-to-home satellite and
digital cable subscribers. Revenues from these networks increased 29% to $72
million in fiscal 2003 from $56 million in fiscal 2001.

Local Television

Corus owns three local television stations  one in each of Kingston,
Peterborough and Oshawa, Ontario  all of which are CBC affiliates. They were
acquired in April 2000 as part of the Power Broadcasting acquisition.

Revenues are almost exclusively derived from advertising. In fiscal 2003,
national agency directed clients accounted for 48% of revenues while local
advertisers comprised nearly 36%. CBC network affiliate payments amounted to
10% of revenues, with the remaining 6% originating from a variety of sources.

Other Media Services

Digital ADventure primarily operates TV Listings channels, providing viewers
with current and easily accessible listings for the local cable television
program lineup. Revenues for Digital ADventure are derived through advertising.

Max Trax, a residential digital audio service, is offered to customers in a 40
channel audio package. Max Trax is carried by cable operators and
direct-to-home satellite operators. Revenues from Max Trax are earned through
subscriber fees.

15



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##### 



Operating Strategy

To allow for the strategic development and integration, the various television
assets are internally organized under two categories. The adult television
group includes the operations of W Network, CMT, Telelatino, The Documentary
Channel, SCREAM TV,our conventional television stations, Digital ADventure and
Max Trax. Management responsible for adult-targeted programming develop
strategies for integrating operations where possible, as well as
cross-promotion and marketing opportunities and joint sales initiatives. The
kids television group includes YTV, Treehouse TV, TELETOON and Discovery Kids,
allowing management to consider shared programming, cross-promotion and
value-added content opportunities.

Corus Televisions operating strategy is to focus on maximizing two key areas
of its portfolio: (i) increasing its position in the kids and womens genres
and (ii) expanding the Premium Television services by capitalizing on the
growth in digital services.

Kids and Women

Corus Television continues to lead the kids entertainment market place in
Canada through programming on YTV, Treehouse TV, TELETOON and Discovery Kids.
Corus Television intends to drive revenue growth in the kids sector by
building program ratings, building the kids market by attracting new
advertisers and building new revenue sources. Corus Television will also focus
on programming and operational synergies across its properties.

The kids market and new media provide growth opportunities. Corus Television
will capitalize on the growth in the home entertainment industry by
constructing and investing in the new media platforms such as VoD, SVoD and
interactive games to create new revenue streams. Sales of interactive CD-roms,
branded DVDs, CDs and other merchandise will also fuel revenue growth in our
kids area.

Corus Television has achieved a leadership position in the womens genre with
its W Network targeting women aged 25-54. The viewing audience in this
demographic has increased 60% over the prior year, making W Network the number
one ranked specialty service for women. W Network currently holds a 1.7% share
of total viewing for the W25-54 audience, which affects further growth
potential. However, W Network intends to increase its audience size by
continuing to take a focused programming strategy that has proven successful
 movie blocks, design shows and big ticket event specials.

Corus will expand the W Network brand through our wnetwork.com web-site and
through network branded CDs and other merchandise offerings.

Premium Television

The Premium Television services, Movie Central and Encore Avenue, will continue
to capitalize on the growth in the number of digital households in western
Canada and the increased demand for movies. As well, being the only premium
movie channel licensee in western Canada, Movie Central has secured output
agreements with major Hollywood studios for exclusive programming, such as
first windows on blockbuster feature films and new HBO and Showtime products.

Corus Premium Television is also leading with innovative new digital product
offerings which will fuel digital growth, reduce churn and contribute
incremental revenues. In this regard, Corus Premium Television, in conjuction
with Shaws VoD service, provides the first and only SVoD product in Canada,
Movie Central Express. Movie Central Express showcases programming from four
major Hollywood studios and offers up to 100 hours of unique programming each
week that subscribers can view on demand for a monthly subscription.

As well, Corus Premium Television currently offers simulcast HDTV feeds with
Bell ExpressVU, StarChoice and Shaw. HDTV is an important retention factor for
high-end customers. It allows Movie Central subscribers the opportunity to
have a television movie experience that exceeds that of the traditional DVD.
By pairing SVoD and HDTV, programmers can offer subscribers the best in quality
and convenience. In addition to growing and retaining customers, there can be
additional revenue growth through increased subscriber fees for HDTV and/or an
HD on-demand component.

16



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Other Television Services

The CBC-affiliated television stations improved operating efficiencies by
consolidating with our local market radio stations. Revenue growth is being
achieved through an improved program schedule, expansion of news service and
joint selling radio and television. Each of the stations represents the only
local television broadcaster in their respective communities.

Corus believes cable advertising services such as Digital ADventure are a
cost-effective advertising vehicle for national accounts and local merchants,
particularly in areas where there are no local television stations. Our
operating strategy involves optimizing existing products and services through
product quality enhancements. Digital ADventure is also investigating new types
of advertising-related businesses that are complementary to its core
competencies. Digital ADventure has streamlined operations by creating
regional hubs to service advertisers.

Max Trax is expected to continue to grow as the rollout of digital cable and
the extension of direct-to-home satellite services expand. Max Trax now has
greater profit coverage due to the elimination of the DMX license requirements.

CONTENT

The Content group consists of the operations of Corus wholly-owned
subsidiary, Nelvana, an integrated childrens production and distribution
company that develops, produces, markets and distributes quality branded media
content and related products for children worldwide. Its brand portfolio
includes internationally recognized animated characters such as Babar,
Franklin, Beyblade, Little Bear,and The Berenstain Bears. Kids Can Press, a
Canadian publisher of childrens books, is a wholly-owned subsidiary of
Nelvana. Nelvanas operations consist of the production and distribution of
film and television programs, and branded consumer products (comprised of
merchandise licensing and publishing).

Description of the Industry

In recent years the launch of numerous segmented networks in the North American
television broadcasting industry has provided viewers with greater channel
selection. This has also served to increase demand for programming for
specialty television networks. There are now numerous television networks
around the world that program dedicated childrens blocks and other programming
exclusively for children. Nelvanas content is seen in more than 180 countries
on over-the-air, analog and digital platforms.

Over the past few years, the childrens television market has fundamentally
changed. Demand for production has slowed due to consolidation and vertical
integration of U.S. production studios and television networks, world economic
downturn causing an advertising slump and the collapse of the German market.

Despite the current environment, the long-term outlook for the worldwide
animation business and the childrens entertainment sector is favourable.
Growth in the sector is being fueled by:



| |  |  | the growth of the 3-D animation market;
| | - |  | ---------------------------------------



| |  |  | the shift of audiences from traditional broadcast networks to cable networks;
| | - |  | -----------------------------------------------------------------------------



| |  |  | the growth of digital television services, providing a new platform
for additional cable and satellite services and thereby new programming
opportunities;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | continuing international expansion by all types of programming
services, including major U.S. broadcasters and domestic childrens
services; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the growth in demand for content featuring recognizable characters on
the Internet.
| | - |  | -----------------------------------------------------------------------------------

According to industry sources, total spending on filmed entertainment, which
includes feature films, video, television shows, animation and other
programming in the United States is expected to grow from an estimated US$64
billion in 2002 to US$88 billion in 2007. In part due to the proliferation of
cable and satellite services, channels targeting children have increased
substantially in recent years.

Merchandising has grown from the popularity of toys that are associated with
movies, books and television characters. According to industry sources, in 2002
licensed retail sales in the United States and Canada were

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approximately US$71.5 billion. All of Nelvanas character brands fall into the
entertainment/character property type category, which, according to industry
sources, accounted for US$14.1 billion of retail sales in the United States and
Canada in 2002. The entertainment/character property type category is the
second largest category of licensed retail products, accounting for 20% of
total sales in the United States and Canada in 2002.

According to industry sources, in the United States alone, juvenile publishing
sales of paperbacks were approximately US$882 million in 2002.

The home entertainment market is a huge market and continues to grow. In 2003,
the estimated world-wide market for home entertainment is expected to be US
$244 per household or $23 billion marketwide. There has been a purchasing
shift from VHS to DVD as the advancement of DVD technology has made it more
user friendly and more affordable. Unit growth for DVD was up 69% in 2002,
with a corresponding unit decline of 39% for VHS.

Competition

The business of producing and distributing childrens television programs is
highly competitive. We compete with a variety of international companies,
including HIT Entertainment, DIC, 4KIDS, TV LOONLAND and several U.S. studios
such as the Walt Disney Company, Warner Bros, and Nickelodeon (a division of
Viacom International Inc.). These U.S. studios are substantially larger, and
have greater financial resources. Many have their own television networks on
which their in-house productions are aired. In Canada we also compete with
several producers and distributors such as Cinar Corp. and Decode Entertainment
Inc.

Business Overview

Production and Distribution

Nelvana is an animation production and distribution company specializing in
childrens and youth programming for television. Nelvana distributes
programming to broadcasters in over 180 countries, including some of the
worlds leading networks, such as Nickelodeon, the Disney Channel, HBO, ITV in
the United Kingdom and France 3. We have 41 television programs on the air in
Canada, and 26 in the United States. Nelvanas production facility in Toronto
houses state-of-the-art 2D and 3D digital animation technology as well as
traditional animation capabilities. Most production is handled at Nelvanas new
state-of-the-art digital facility in Toronto, opened in June 2003, and
programming is distributed internationally through five sales and distribution
offices.

Over the past five years, Nelvana has grown its proprietary production
deliveries from 135 half-hour equivalent episodes in fiscal 1998 to a peak
level production level of 252 in fiscal 2002. However, the growth was achieved
with significant investment in the new programs. In 2002, in response to a
leaner marketplace, Nelvana committed to reducing cash flow requirements with
the goal of achieving operating cash flow neutrality within the next year while
continuing to grow its library. This was successful. Nelvana reduced its
production slate to 140 new episodes for fiscal 2003. This amount of
production maintained Nelvanas leadership position in the industry while
reducing cash flow requirements to produce the years slate. The following are
some highlights from the production and distribution business in fiscal 2003:



| |  |  | versioning of 50 episodes of season II of Beybladenearing completion;
| | - |  | ---------------------------------------------------------------------



| |  |  | produced 11 episodes of Jacob Two Twowhich premiered in September 2003 on YTV to solid ratings;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | produced Miss Spiders Sunny Patch Kids,based on the preschool books
by David Kirk, and featuring the voices of Rick Moranis and Brooke
Sheilds;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | secured a major catalogue deal in the U.S. to release 44 back
catalogue titles with Texas based Funimation, a rapidly growing home
entertainment company, which was signed in September 2003; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | secured a major catalogue deal in the U.K. with Maverick to release
33 backlisted Nelvana titles, which was signed in September 2003.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------

18



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At August 31, 2003, Nelvanas program library totaled over 2,300 half-hour
equivalent episodes, comprising 60 animated television series, 16 specials, 12
animated feature length films and 12 live action series. Childrens animated
programs generally have longer life spans than those of live action programs
because they can typically be resold continually to new generations of
audiences around the world. The United States is the biggest market, accounting
for 35% of production and distribution revenues in fiscal 2003, compared to 18%
from the Canadian market and 47% from other countries.

Branded Consumer Products

Nelvanas merchandising business contains some of Nelvanas most popular
characters, including Beyblade, Rescue Heroes, Babar, Little Bearand Franklin,
which have achieved recognition and popularity worldwide and have become
valuable long-term merchandising brands. Nelvanas merchandising efforts focus
on marketing its most popular brands and co-ordinating with retailers to
promote its character merchandise in North America and around the world.
Nelvana acquires brands from which it produces media content and becomes either
the licensor or agent, on behalf of the owner of the property, for most product
categories, including toys, plush, apparel, gifts, book publishing and
interactive products. In January 2002, we entered into a master toy agreement
with Hasbro for the distribution of Beyblade, a property owned by d-rights,
Inc. Highlights in fiscal 2003 include the following:



| |  |  | Nelvana and Sony Wonder Canada signed an exclusive five-year Video,
DVD and Soundtrack licensing agreement that will see the release of
programming from Beybladealong with music from the show and original
songs created specifically from upcoming shows and soundtracks;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Nelvana announced a new Babarlicensing program that includes an
infant layette program from Childrens Apparel Network that will
develop into a full complement of products, including home décor and
toys; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Nelvana announced the acquisition of worldwide merchandise licensing
rights for Nickelodeons Fairly Odd Parents.
| | - |  | -----------------------------------------------------------------------------------------------------------------

Nelvanas publishing business is conducted through its subsidiary Kids Can
Press, acquired in 1998. Kids Can Press is the largest Canadian-owned English
language publisher of childrens books with a broad and growing backlist of
titles. Highlights of the Kids Can Press catalogue include:



| |  |  | Franklin more than 50 million books sold worldwide, is taking
Europe by storm. Currently Franklinis number one in France (and
Norway). New and recent product lines launched in North America include
Franklin First Readersand Franklin Workbooks, which focus on the
educational market;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Stevie Diamond continues to be a strong series with a recent
release in France and a relaunch of the entire series in the U.S. The
award winning mysteries have been licensed to Ragged Rascal Production
for live action television;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Kids Book of..series with its focus on Canadian history,
released a new title on Black Canadians, and is leading fall sales with
this important contribution to both our programming and childrens
literature;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Elliot Moose wraps up with an endearing Christmas story;
| | - |  | ---------------------------------------------------------



| |  |  | ALPHABEASTS last year won the Governor Generals Award for
childrens book illustration, and next year will see a follow-up by
rising star Wallace Edwards; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Amazing International Space Station launches a new publishing
relationship with Canadian kids science magazine, YES MAG.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------

Revenues from branded consumer products have shifted from 20% of total Content
revenues in fiscal 2002 on a pro forma basis to 39% in fiscal 2003.

19



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Operating Strategy

The operating strategy for Nelvana has undergone a fundamental change in the
past year. The key to Nelvanas strategy is to mine new revenue streams in
consumer products including: merchandise licensing; home entertainment;
interactive; music; publishing and alliances/sponsorships. By launching
multiple revenue platforms, thereby increasing the touch points with children
and families, Nelvana increases the appeal and affinity for its character
properties, thus increasing their value. No longer focused on production as
the only revenue source, Nelvana is making solid progress in becoming a
market-focused consumer products company. This strategy operates around three
key themes;:



| |  |  | retooling Nelvana to mine new revenue streams;
| | - |  | ----------------------------------------------



| |  |  | producing a strong new slate of animation appealing to a diverse demographic; and
| | - |  | ---------------------------------------------------------------------------------



| |  |  | exploiting our deep library of classic brands.
| | - |  | ----------------------------------------------

Nelvana has identified its key brands and has created integrated brand plans
for the next 12-18 months for each of these brands.

Nelvanas home entertainment strategy focuses on the exploitation of existing
catalogue properties and establishing strategic distributor relationships for
new releases. As well, home entertainment products will drive significant
merchandise sales in North Americas major retailers. Nelvana will focus on
expanding character merchandise assortments around video street date events
thus creating a valuable synergy between the two.

Nelvanas near-term production strategy focuses on a market-driven slate, based
on key demographics and genres, paired with an on-going reduction in the
production cost per episode. This market-driven strategy will see production
skew towards three main target groups  preschoolers, teens/tweens and big
kids. The production slate will capitalize on vertical integration to maximize
merchandising revenue growth for the new titles.

GENERAL INFORMATION

Intellectual Properties

Corus uses a number of trademarks for its products and services as well as
trademarks, logos and other representations of characters used in our
productions. Many of these trade-marks are registered by Corus, and those
trademarks that are not registered are protected by common law. Corus has taken
affirmative legal steps to protect its trademarks, and Corus believes its
trademark position is adequately protected.

Distribution rights to television programming and motion pictures are granted
legal protection under the copyright laws of Canada, the United States and most
foreign countries, which impose substantial civil and criminal sanctions for
unauthorized duplication and exhibition of television programming. Corus
believes that it takes and plans to continue taking all appropriate and
reasonable measures to secure, protect and maintain or obtain agreements from
licensees to secure, protect and maintain copyright protection for all of the
television programming produced and distributed by us under the laws of all
applicable jurisdictions.

Principal Properties

Corus principal properties consist of the lands and buildings housing the
offices, broadcasting studios, transmitter sites as well as the related
electronic and other broadcasting equipment for each broadcasting licensee. In
addition, the principal properties of the Company include the executive offices
of Corus; the studios and offices of its radio stations; the administrative and
sales offices of Max Trax and Digital ADventure, the premium television
facilities; and Nelvanas administrative offices, production and distribution
facilities, and publishing facilities.

20



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The table below describes the purpose, location, area and interest of the
Companys principal properties as at August 31, 2003:

PURPOSE
    
    LOCATION
    
    AREA (SQ FT)
    
    OWNED OR LEASEDCorporate Offices:Executive Office  Corus
    
    
    
    Toronto, ON
    
    
    9,959
    
    
    LeasedExecutive Office  Corus
    
    Calgary, AB
    
    
    13,566
    
    
    LeasedExecutive Office  Corus Radio
    
    
    
    Toronto, ON
    
    
    5,287
    
    
    LeasedVarious Offices  Administration
    
    
    
    Toronto, ON
    
    
    28,673
    
    
    LeasedSpecialty Programming Studios & Offices:Specialty Channels
    
    Toronto, ON
    
    
    131,000
    
    
    LeasedCorus Premium
    
    Edmonton, AB
    
    
    30,000
    
    
    LeasedRadio Broadcasting Studios & Offices:CIZZ-FM, CKGY-FM
    
    Red Deer, AB
    
    
    10,500
    
    
    OwnedCHAY-FM/CIQB-FM
    
    Barrie, ON
    
    
    5,971
    
    
    OwnedCKDK-FM
    
    Woodstock, ON
    
    
    5,300
    
    
    OwnedCFPL-AM, CFPL-FM, CFHK-FM
    
    London, ON
    
    
    16,054
    
    
    LeasedCKNW-AM, CFMI-FM, CFOX-FM, CHMJ-AM
    
    Vancouver, BC
    
    
    33,600
    
    
    LeasedCKIK-FM, CHQR-AM, CKRY-FM
    
    Calgary, AB
    
    
    17,960
    
    
    LeasedCKNG-FM, CHED-AM, CISN-FM, CHQT-AM
    
    Edmonton, AB
    
    
    29,363
    
    
    OwnedEdmonton  10550  102 Street
    
    Edmonton, AB
    
    
    14,000
    
    
    OwnedCJKR-FM, CJOB-AM
    
    Winnipeg, MB
    
    
    15,458
    
    
    OwnedCJXY-FM, CHML-AM, CING-FM
    
    Hamilton, ON
    
    
    22,409
    
    
    LeasedCILQ-FM, CFMJ-AM, CFNY-FM
    
    Toronto, ON
    
    
    17,371
    
    
    LeasedCKCB-FM
    
    Collingwood, ON
    
    
    3,225
    
    
    OwnedCJOY-AM, CIMJ-FM
    
    Guelph, ON
    
    
    8,500
    
    
    OwnedCFFX-AM, CFMK-FM
    
    Kingston, ON
    
    
    10,000
    
    
    OwnedCIZN-FM
    
    Cambridge, ON
    
    
    2,200
    
    
    LeasedCKRU-AM, CKWF-FM
    
    Peterborough, ON
    
    
    4,500
    
    
    LeasedCFEL-FM
    
    Montmagmy, QC
    
    
    4,128
    
    
    OwnedCFVM-FM
    
    Amqui, QC
    
    
    4,500
    
    
    OwnedCFZZ-FM
    
    St.Jean-sur-Richelieu, QC
    
    
    2,600
    
    
    LeasedCJDM-FM
    
    Drummondville, QC
    
    
    3,200
    
    
    LeasedCIKI-FM, CJOI-FM
    
    Rimouski, QC
    
    
    19,175
    
    
    OwnedCFQR-FM
    
    Montreal, QC
    
    
    4,000
    
    
    LeasedCKOO-FM
    
    Montreal, QC
    
    
    4,000
    
    
    LeasedCKOI-FM
    
    Montreal, QC
    
    
    8,000
    
    
    LeasedCINW-AM/CINF-AM
    
    Montreal, QC
    
    
    6,500
    
    
    LeasedMontreal Sales Office
    
    Montreal, QC
    
    
    5,175
    
    
    LeasedCIME-FM
    
    St. Jerome, QC
    
    
    3,200
    
    
    LeasedCFLG-FM, CJSS-FM, CJUL-AM
    
    Cornwall, ON
    
    
    6,000
    
    
    OwnedMax Trax and Digital ADventure:Various Offices
    
    BC, AB, SK, MB, ON
    
    
    22,194
    
    
    Owned & LeasedConventional Television:CHEX-TV
    
    Peterborough, ON
    
    
    11,500
    
    
    LeasedCHEX-TV
    
    Oshawa, ON
    
    
    4,781
    
    
    LeasedCKWS-TV
    
    Kingston, ON
    
    
    19,634
    
    
    OwnedOntario TV Management
    
    Peterborough, ON
    
    
    35,970
    
    
    Leased & OwnedNelvana:32 Atlantic
    
    Toronto, ON
    
    
    66,000
    
    
    Owned42 Pardee
    
    Toronto, ON
    
    
    45,000
    
    
    Leased204 Evans
    
    Toronto, ON
    
    
    16,000
    
    
    OwnedNelvana International
    
    Europe
    
    
    13,101
    
    
    LeasedPublishing Facilities:Kids Can Press
    
    Toronto, ON
    
    
    15,000
    
    
    Leased


21



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In addition, Corus leases various distribution facilities from third parties.
These facilities include roof rights for the placement of Corus antenna
towers, and land and space for other portions of our distribution system,
including satellite transmission facilities.

All fixed assets and properties are encumbered by security interests securing
repayment of certain sums borrowed by us under our credit facility with a
syndicate of major Canadian chartered banks. Corus believes that its
properties are in good condition and sufficient for its purposes.

Employees

As at August 31, 2003, Corus had approximately 2,800 full-time employees. The
Company operates in a non-union environment except for 204 employees in
conventional television and radio, and 55 employees in our premium television
operations who are members of the Communications, Energy and Paperworkers Union
of Canada and 115 employees in Quebec radio operations who are members of the
Syndicat Général de la Radio.)

Legal

Corus is involved from time to time in various claims and lawsuits incidental
to the ordinary course of our business, including intellectual property
actions. Adverse determinations in litigation could result in the loss of our
proprietary rights, subject us to significant liabilities, or require us to
seek licenses from third parties, any one of which could have an adverse effect
on our business and results of operations. Actions which are incidental to our
business are typically covered by insurance and management has estimated the
potential liability and expensed the amount on its financial statements. Corus
does not anticipate that the damages which may be awarded in any material
action of which the Company is currently aware will exceed its insurance
coverage. While no assurance can be given that these proceedings will be
favorably resolved, Corus does not believe that the outcome of these legal
proceedings will have a material adverse impact on our financial position or
results of operations.

Environmental

The Companys operations do not have any significant impact on the environment.
The Company has not made and does not anticipate making any significant
capital expenditures to comply with environmental regulations.

Controls and Procedures

As required by Section 302(a) of the Sarbanes-Oxley Act of 2002, Corus Chief
Executive Officer and Chief Financial Officer will be making certifications
related to the information in Corus annual report on Form 40-F. As part of
such certification, the Chief Executive Officer and Chief Financial Officer
must certify that they are responsible for establishing and maintaining
disclosure controls and procedures and have designed such disclosure controls
and procedures (or caused such disclosure controls and procedures to be
designed under their supervision) to ensure that material information with
respect to Corus, including its consolidated subsidiaries, is made known to
them and that they have evaluated the effectiveness of Corus disclosure
controls and procedures as of the end of the period covered by this annual
report. Disclosure controls and procedures ensure that information required to
be disclosed by Corus in the reports that it files or submits under the U.S.
Securities Exchange Act of 1934, as amended (the Exchange Act) is recorded,
processed, summarized and reported, within the time periods required. Corus
has adopted or formalized such controls and procedures as it believes are
necessary and consistent with its business and internal management and
supervisory practices.

Evaluation of disclosure controls and procedures

The Companys Chief Executive Officer and Chief Financial Officer, after
evaluating the effectiveness of the Companys disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the
end of the period covered by this annual report, have concluded that, as of the
end of such period, the Companys disclosure controls and procedures were
effective.

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Changes in internal control over financial reporting

As of the end of the period covered by this annual report, there were no
changes in the Companys internal control over financial reporting that
occurred during the period covered by this annual report that have materially
affected or are reasonably likely to materially affect the Companys internal
control over financial reporting.

Code of Ethics

Corus is committed to fair dealing, honesty and integrity in all aspects of its
business conduct. The Company takes its responsibility to its employees,
shareholders and other stakeholders very seriously. The Companys Code of
Business Conduct (the Code) aims to demonstrate to its stakeholders and the
public the Companys commitment to conduct itself ethically.

The Code applies to all employees and members of the board of directors of
Corus Entertainment Inc. and its subsidiary companies. For purposes of rules
promulgated under Section 406 of the Sarbanes Oxley Act of 2002, portions of
this Code shall comprise the Companys code of ethics for senior executives
and financial officers. The Code is included on pages 21 to 23 of the
Companys Annual Report for fiscal 2003.

CANADIAN COMMUNICATIONS INDUSTRY
REGULATORY ENVIRONMENT

Canadian Radio-television and Telecommunications Commission

Under the Broadcasting Act(Canada), the CRTC is responsible for regulating and
supervising all aspects of the Canadian broadcasting system with a view to
implementing broadcasting policy objectives set forth in the Broadcasting Act.

Since 1996, the CRTC has been implementing a competitive policy framework and
has focused its attention on strengthening the creation of Canadian content and
programming.

The current objectives of the CRTC, as articulated in its 1997 Vision Statement
and revised in 1998, are to:



| |  |  | promote an environment in which existing and new communications
services are available to Canadians;
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | ensure a strong Canadian presence in content that fosters creative
talent and reflects Canadian society, including its linguistic duality
and cultural diversity;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | promote choice and diversity of high quality communications services; and
| | - |  | -------------------------------------------------------------------------



| |  |  | foster strong competitive and socially responsive communications industries.
| | - |  | ----------------------------------------------------------------------------

Industry Canada

The technical aspects of the operation of radio and television stations in
Canada are subject to the licensing requirements and oversight of Industry
Canada, a Ministry of the Government of Canada.

Restrictions on Non-Canadian Ownership

The legal requirements relating to Canadian ownership and control of
broadcasting undertakings are embodied in a statutory order (the Order) from
the Governor in Council (i.e. Cabinet of the Canadian federal government) to
the CRTC. The Order is issued pursuant to authority contained in the
Broadcasting Act. Under the Order, non-Canadians are permitted to own and
control, directly or indirectly, up to 33 1/3% of the voting shares and 33 1/3%
of the votes of a holding company which has a subsidiary operating company
licensed under the Broadcasting Act. In addition, up to 20% of the voting
shares and 20% of the votes of the operating licensee company may be owned and
controlled, directly or indirectly, by non-Canadians. The Order also provides
that the Chief Executive Officer and 80% of the members of the board of
directors of the operating company must

23



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be Canadian. In addition, where the holding company is less than 80%
Canadian-owned, the holding company and its directors are prohibited from
exercising any control or influence over the programming decisions of a
subsidiary operating company. There are no restrictions on the number of
non-voting shares that may be held by the non-Canadians at either the holding
company or licensee operating company level. The CRTC, however, retains the
discretion under the Order to determine as a question of fact whether a given
licensee is controlled by non-Canadians.

The Companys articles currently give our board of directors the authority to
restrict the issue, transfer and voting of our Class A participating shares and
the transfer of our Class B non-voting participating shares for the purpose of
ensuring that we remain qualified to hold or obtain licenses to carry on any
broadcasting or programming business.

Broadcasting Services

Corus radio stations and conventional television undertakings, specialty and
premium television networks and pay audio services are subject to licensing and
regulation by the CRTC. The Broadcasting Actgives the CRTC the power to issue
and renew broadcasting licenses for a maximum term of seven years.
Historically, all licenses issued by the CRTC have been consistently renewed
except where there have been serious breaches of license conditions or
regulations, in which case the licenses have been renewed for less than seven
years. In order to conduct our business, we maintain our licenses in good
standing and are in material compliance with conditions of license and
regulatory requirements. All licenses held by us are in good standing and the
CRTC has never declined to renew a license held by any broadcasting undertaking
in which we hold an ownership interest.

Licenses issued by the CRTC generally sets out the terms and conditions of the
broadcasters program offering, including Canadian content expenditures,
Canadian exhibition requirements and signal delivery terms for our specialty,
premium television and pay audio services. The CRTC also imposes restrictions
on the transfer of ownership and effective control of all licensed broadcasting
undertakings. Transferees of ownership or control of a licensed undertaking
must demonstrate to the CRTC that the transfer is in the public interest, and
the purchaser is required, in most instances, to provide a specific package of
tangible benefits designed to benefit the Canadian broadcasting system. For
transfer of ownership applications involving profitable radio stations,
tangible benefits are required to represent a financial contribution equal to
6% of the purchase price and for acquisitions of television, or specialty or
premium television network services, a financial contribution of 10% of the
value of the transaction is expected.

The CRTCs regulations that apply to radio, conventional television and
specialty and premium television services require these broadcasting
undertakings to obtain the prior approval of the CRTC in respect of any act,
agreement or transaction that, directly or indirectly, would result in (i) a
change in the effective control of a broadcasting undertaking; or (ii) a person
together with any associate acquiring control of 30% or more of the issued
voting securities, or 50% or more of the common shares, of a broadcasting
undertaking or (iii) of a person that has, directly or indirectly, effective
control of that broadcasting undertaking.

Radio Undertakings

The CRTC no longer regulates the formats of commercial FM radio stations except
in the case of specialty radio licenses which, by definition, requires that
(i) the language of broadcast is neither French nor English; (ii) more than 50%
of the programming is spoken word; or (iii) less than 70% of the musical
selections broadcast are not pop, rock, dance, country or country-orientated
selections. For non-specialty format FM stations, the CRTC continues to
require that less than 50% of the musical selections broadcast each week be
hits which are defined in English markets as any selection which, prior to
December 31, 1980, achieved a Top 40 position in any of the charts recognized
by the CRTC. Each commercial station is required to make a contribution to
Canadian talent development initiatives ranging from an annual payment of
$27,000 for major market stations to $400 for small market stations.

On April 30, 1998, the CRTC announced certain changes to its commercial radio
policy. By regulation, the CRTC increased Canadian popular music content levels
broadcast to 35%. For French-language radio stations, at least 65% of popular,
vocal music selections must be in the French language. The CRTC also changed
ownership restrictions on the number of stations that could be owned within a
particular market. The ownership

24



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##### 



changes allow a single owner to operate up to three stations provided only two
may be in the same band, in a given language in smaller markets and, in markets
with eight or more commercial stations in a given language, one owner may hold
up to two AM stations and two FM stations. In assessing transactions involving
a change in control or ownership, the CRTC has stated it will examine the
impact on diversity of news voices, the level of competition and, if the
applicant has equity holdings in other local radio stations or media,
cross-media ownership levels in a given market. Under its new policy, the CRTC
also stated that it would no longer apply market entry criteria in assessing
applications for new radio services in a particular market. Radio broadcasters
derive substantially all of their revenues from advertising revenues. There is
no regulatory limit on the number of commercials that can be broadcast. In
markets with more than one commercial FM station, FM licensees are required to
broadcast at least 42 hours per week of local programming in order to access
local advertising. The CRTC will be conducting a review of its 1998 commercial
radio policy in 2005 following its consideration of at least one application
seeking a license to operate a satellite radio service in Canada.

Specialty and Premium Television Networks Undertakings

Specialty and premium television networks each have varying Canadian
programming and expenditure requirements set by a condition of license. These
requirements depend on a number of factors, including the nature of the service
and the types and availability of programming offered. The Canadian content
conditions of license are reviewed by the CRTC at the time that the networks
renew their licenses. Licensees are also required to make financial
contributions to the creation of Canadian programming which is imposed by
condition of license.

Specialty television networks derive substantially all of their revenues from
subscription and advertising revenues. Premium television networks derive their
revenues from subscriptions and by regulation are required to be commercial
free. The CRTC generally requires cable and direct-to-home satellite
distributors to carry all licensed specialty and premium television networks
appropriate to the markets in which they are distributed with the exception of
Category 2 digital services as described below. The maximum wholesale
subscriber fee that can be charged to subscribers for the carriage of the
service is regulated if it is carried as part of the basic service, but is not
regulated if it is carried on an extended or discretionary tier. Subscriber
fees payable to premium television network licensees are not regulated by the
CRTC.

On November 24, 2000, the CRTC announced that it would license 16 new
English-language and five French-language digital programming services for
mandatory distribution on a digital basis known as Category 1 services. The
CRTC stated that all Category 1 services must commence operation on or before
November 24, 2001, but subsequently extended this date until September 30, 2002
for certain of the French-language Category 1 services. An additional 262
Category 2 digital services were also approved by the CRTC for distribution on
a digital basis and continue to be licensed by the CRTC. Category 2 services
may be competitive with one another but may not be directly competitive with an
existing licensed analog specialty or premium television network or a Category
1 digital service. Category 2 services have no guaranteed distribution rights
except that, if a cable or direct-to-home satellite operator carries a Category
2 service in which it or an affiliate owns more than 10% of the issued equity,
it must distribute at least five non-related Category 2 services for each
related service carried. The Category 2 services licensed in the Fall of 2000
are required to implement service no later than November 24, 2004, unless the
CRTC approves an extension before that date.

Local Television Undertakings

The CRTC reviewed its policies and regulations pertaining to Canadian
television, primarily as they affect local broadcasters, and, on June 11, 1999,
issued a new policy entitled Building on Success  A Policy Framework for
Canadian Television. This policy introduced changes to the regulatory
environment in an attempt to provide more flexibility and diversity for
broadcasters while still providing a predominant amount of Canadian programming
content.

Under this new policy, Canadian content levels for conventional private
television broadcasters will remain at 60% overall and 50% in prime time. As
part of its new policy, the CRTC also announced that it would not require
licensees to make quantitative commitments to local news programming but would
require licensees to demonstrate how they intend to respond to the demands of
local viewers as part of a license renewal application. The CRTC retained its
policy of requiring the provision of local programming in order to access local

25



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##### 



advertising. The CRTC also retained the existing 150% dramatic programming
credit for stations not part of a large multi-stations group applicable to
Canadian programming in the calculation of Canadian content requirements. As of
September 1, 2000, the CRTC eliminated the Canadian programming expenditure
requirements and the expectations that had been imposed on stations. As well,
in a departure from past practice, the renewal of all conventional television
licenses held by an ownership group will be considered at the same hearing.

Pay Audio Services

Pay audio musical programming services provided to residential Canadian
subscribers by broadcast distribution undertakings are licensed and regulated
by the CRTC. The CRTC has established an open licensing framework and has
imposed identical requirements on each licensee regarding Canadian content and
French-language selection requirements. Canadian-originated pay audio channels
may be linked on a 1:1 basis with foreign originated channels.

The CRTC has also imposed access requirements in the Broadcasting Distribution
Regulationsfor third party pay audio services. If a Class 1 cable licensee
distributes a pay audio service in which it or an affiliate controls 30% or
more of the issued shares of the pay audio licensee, the Class 1 cable licensee
is required to distribute at least one other third party pay audio service.

Cable Advertising Services

Still image and teleshopping advertising services are exempted from having to
hold a CRTC license. If the CRTC is satisfied that the licensing of an
undertaking will not contribute in a material manner to the implementation of
the broadcasting policy outlined in the Broadcasting Act, it shall exempt such
undertaking from licensing requirements. The CRTC has issued a number of
exemption orders which allow an undertaking to be operated without a license,
provided it satisfies any terms and conditions contained in the particular
order. Still image and teleshopping cable advertising services operate under
the terms of exemption orders.

Canadian Content Requirement for Broadcasters

As mentioned previously, Canadian conventional television services, specialty
television networks and premium television networks are required to devote a
certain amount of their programming schedules to Canadian productions. These
requirements provide support to the market for Canadian programs (such as the
ones we produce through Nelvana) as long as they qualify as Canadian programs
for purposes of the Canadian Audio Visual Certification Office (CAVCO) as an
officially recognized co-production or the CRTC.

CAVCO and the CRTC determine the criteria for qualification of a program as
Canadian. Generally, a program will qualify if it is produced by an
individual Canadian producer with the involvement of individual Canadians in
principal functions, and where a substantial portion of the budget is spent on
Canadian elements. In addition, the Canadian producer must have full creative
and financial control of the project.

Film and Television Tax Credits and Grants

Nelvana generally receives various federal and provincial tax credits on its
television series and feature films, which typically provide benefits of
between 15% and 18% of the Canadian production budget. These tax credits are
calculated on the basis of each individual production.

Nelvana is also eligible to receive additional funding for its productions from
various programs through the Canadian Television Fund, Telefilm Canada in
respect of feature films and other Canadian industry funding sources. However,
given the limited resources of these programs, Nelvana has no assurance that it
will obtain these funds for future productions.

International Treaty Co-Productions

Canada is a party to co-production treaties with many countries throughout the
world, excluding the United States. These international co-production treaties
allow for the reduction of the risks of production by

26



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##### 



permitting the pooling of creative, technical and financial resources of
Canadian producers with non-Canadian producers under prescribed conditions.
Canadian co-production treaty partners include China, France, Great Britain,
Germany and Australia. A production that qualifies as a co-production for
treaty purposes is considered to be a domestic product in each of the
participating countries and, as such, is entitled to many aspects of national
treatment in each country. More specifically, the co-production usually
qualifies for domestic treatment under applicable broadcasting legislation and
certain government subsidies. The co-producers in their respective domestic
market jointly hold the copyright in the production. Sharing of foreign
revenues is based on the respective contribution of each co-producer, subject
to negotiation between the co-producers and approval by the appropriate
government authorities. Many of Nelvanas series are produced through
international treaty co-productions.

Competition Act Requirements

The Commissioner of Competition has the authority pursuant to the Competition
Act(Canada) to inquire into mergers and apply to the Competition Tribunal for
remedial orders, including an order blocking a merger, where the Commissioner
determines the merger is or will likely prevent or lessen competition
substantially in a market. To facilitate the Commissioners review of mergers,
parties to a merger transaction are required to pre-notify the Commissioner of
Competition prior to completing the transaction when specified party and
transaction-size thresholds are satisfied. For example, in the case of an asset
purchase, a transaction is notifiable if the parties to the transaction,
together with their affiliates, have assets in Canada or annual gross revenues
from sales in, from or into Canada that exceed $400 million and if the
aggregate value of the Canadian assets to be acquired or annual gross revenues
from sales in or from Canada generated from those assets exceed $50 million.

Ownership transfers of licensed broadcasting undertakings exceeding these
financial thresholds thus require the approval of both the CRTC and the
Commissioner of Competition according to their respective statutory mandates.
The two authorities could come to different conclusions on a given transaction.
For example, the CRTC could approve a broadcasting companys acquisition of
radio stations as being in accordance with its commercial radio policy whereas
the Commissioner of Competition might conclude that the acquisition would
substantially lessen competition in the market or markets under consideration.

Investment Canada Act

Under the Investment Canada Act,or ICA, certain transactions which involve the
acquisition of control of a Canadian business by a non-Canadian require the
approval of the Canadian government. The Ministry of Industry (Canada) is
responsible for reviewing proposed acquisitions of control of Canadian
businesses by non-Canadians. However, where the Canadian business is a
cultural business, the proposed acquisition would also be subject to review
by the Minister of Canadian Heritage. Cultural businesses include those
involved in the publication, distribution or sale of books, magazines,
periodicals and newspapers, as well as businesses involved in the production
and distribution of film and video recordings, audio and video music
recordings. Radio, television and cable television broadcasting undertakings
are also considered cultural businesses under the ICA, but they are also the
subject of other, more stringent, Canadian ownership and control regulations
under the Broadcasting Act,as discussed above.

Before an acquisition of a cultural business by a non-Canadian can be
completed, the non-Canadian must be able to demonstrate that the proposed
acquisition is likely to be of net benefit to Canada. In determining whether
this test has been met, the Ministry is required to take into account a number
of factors outlined in the ICA, including compatibility with Canadas cultural
policy objectives, as well as any applicable government policies and any
written undertakings that may have been given by the non-Canadian investor.

Copyright Act Requirements

Corus radio, conventional television, specialty television, premium television
and pay audio service undertakings rely upon licenses under the Copytright Act
(Canada) in order to make use of the music component of the programming
distributed by these undertakings. Under these licenses, Corus is required to
pay royalties established by the Copyright Board pursuant to the requirements
of the Copyright Actto collecting societies which represent the copyright
owners in such music component. These royalties are paid by these undertakings
on a monthly basis in the normal course of their business.

27

The levels of the royalties payable by Corus are subject to change upon
application by the collecting societies and approval by the Copyright Board.
The Government of Canada may, from time to time, make amendments to the
Copyright Actto implement Canadas international treaty obligations and for
other purposes. Any such amendments could result in Corus broadcasting
undertakings being required to pay additional royalties for these licenses.

28



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##### 



SELECTED CONSOLIDATED FINANCIAL INFORMATION

The following table set forth certain financial information for each of the
years in the three year period ended August 31:

(thousands of Canadian dollars
    
    Years Ended August 31except per share data)
    
    2003
    
    2002(1)
    
    2001Operations:Revenues
    
    $
    643,918
    
    
    $
    674,503
    
    
    $
    556,825EBITDA(2)
    
    $
    165,312
    
    
    $
    125,571
    
    
    $
    123,916Net income (loss):
    
    $
    40,021
    
    
    $
    (168,647
    )
    
    $
    128,167Per share basic
    
    $
    0.94
    
    
    $
    (3.96
    )
    
    $
    3.09Per share diluted
    
    $
    0.94
    
    
    $
    (3.96
    )
    
    $
    3.06Weighted average number of Class A Voting and
Class B Non-Voting shares (thousands)Basic
    
    
    42,641
    
    
    
    42,621
    
    
    
    41,539Diluted
    
    
    42,645
    
    
    
    42,621
    
    
    
    41,819Financial Position:Working capital
    
    $
    107,354
    
    
    $
    66,696
    
    
    $
    16,655Total assets
    
    $
    1,940,626
    
    
    $
    1,939,984
    
    
    $
    2,269,811Total long-term debt(3)
    
    $
    558,437
    
    
    $
    649,005
    
    
    $
    710,301Shareholders equity
    
    $
    884,677
    
    
    $
    850,716
    
    
    $
    1,167,607Stock Prices:Closing price at year-end
    
    $
    23.90
    
    
    $
    20.25
    
    
    $
    29.87




|(1) |  | See note 2(b) to the consolidated financial statements contained in
the Companys Annual Report for fiscal 2003 which discuss the adoption of the
proportionate consolidation method for certain investments on a retroactive
basis and the amended Canadian accounting standard for foreign currency
translation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | This measure is provided to assist investors in determining the ability of
the Company to generate cash from operations to cover financial charges before
income and expense items from investing activities, income taxes and items not
considered to be in the ordinary course of business. It is also widely used
for valuation purposes. A reconciliation of EBITDA and net income is provided
in the consolidated statements of income (loss) and retained earnings
(deficit). EBITDA (which corresponds to the line item Operating income before
the following in the consolidated statements of income (loss) and retained
earnings (deficit)) is calculated as net income (loss) before minority
interest, equity earnings from investees, income tax expense (recovery),
goodwill and intangible impairment loss, asset write-downs, hedge transaction
loss, restructuring charges, other expense (income), loss (gain) on sale of
investments, interest on long-term debt, amortization and depreciation. A
listing of these items is disclosed in the consolidated statements of income
(loss) and retained earnings (deficit). These items are excluded in the
determination of EBITDA as they are non-cash in nature, pre-tax financing
charges, income or expense from investing activities or are not considered to
be in the ordinary course of business. EBITDA should not be considered in
isolation of or as a substitute for (1) net income or loss, as an indicator of
the Companys operating performance, or (2) cash flow from operating, investing
and financing activities, as a measure of the Companys liquidity.
|   
|(3) |  | Long-term debt includes current portion of long-term debt, long-term debt
and securitized borrowings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

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DIVIDEND POLICY

The decision to pay dividends on the Corus Class A voting shares or Class B
non-voting shares is made by the board of directors of Corus on the basis of
earnings (loss), financial requirements and other considerations.

On December 9, 2003, the board of directors of Corus approved a semi-annual
dividend for holders of Class A and Class B shares of $0.02 and $0.025,
respectively. The Companys first semi-annual dividend will be paid on
December 31, 2003 to shareholders of record at the close of business on
December 19, 2003.

MANAGEMENTS DISCUSSION AND ANALYSIS

For Managements Discussion and Analysis of Financial Condition and Results of
Operations, see pages 4 to 22 of the Companys 2003 Annual Report incorporated
herein by reference.

MARKET FOR SECURITIES

The Corus Class B Shares are publicly traded on the Toronto Stock Exchange
under the symbol CJR.B and on the New York Stock Exchange under the symbol
CJR.

30



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DIRECTORS AND OFFICERS

The following are the names and municipalities of residence of the directors
and executive officers of the Company as of October 31, 2003 or as otherwise
noted, their positions within the Company and their principal occupations
during the last five years.

|                                                |  |                                                |  |                                                                                                                                                               
|----------------------------------------------- |  | ---------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name and Municipality of                        |  |                                                |  |                                                                                                                                                               
|Residence                                       |  | Director/Officer                               |  | Position with Corus/Principal Occupation                                                                                                                      
|                                                |  |                                                |  |                                                                                                                                                               
|Pierre Béland(4)Montreal, Quebec                |  | Director                                       |  | President, Metromedia Plus                                                                                                                                    
|                                               
|                                               
|                                               
|                                               
|Fernand Bélisle(5)Breckenridge, Quebec          |  | Director                                       |  | President of 19 FB Inc. (a consulting company)                                                                                                                
|                                               
|                                               
|                                               
|                                               
|John M. CassadayToronto, Ontario                |  | President, Chief ExecutiveOfficer and Director |  | President and Chief Executive Officer, Corus Entertainment Inc.                                                                                               
|                                                |  |                                                |  |                                                                                                                                                               
|                                               
|                                               
|                                               
|                                               
|Dennis M. Erker(3)Edmonton, Alberta             |  | Director                                       |  | Partner, The FE Advisory Group (a financial and estate planning company)                                                                                      
|                                               
|                                               
|                                               
|                                               
|Clinton C. Forster(6)Victoria, British Columbia |  | Director                                       |  | President, Forvest Investments Inc. (an investment company)                                                                                                   
|                                               
|                                               
|                                               
|                                               
|Wendy A. Leaney(1)Toronto, Ontario              |  | Director                                       |  | President, Wyoming Associates Ltd. (a private investing and consulting firm)                                                                                  
|                                               
|                                               
|                                               
|                                               
|Dorothy Zolf McDonald, PhD(4)Toronto, Ontario   |  | Director                                       |  | Corporate Director, former Associate Professor, Graduate Program
in Communication Studies, University of Calgary and Visiting Professor, University of Alberta
|                                               
|                                               
|                                               
|                                               
|Ronald D. Rogers(5)Calgary, Alberta             |  | Director                                       |  | Senior Vice-President & Chief Financial Officer Shaw Communications Inc.                                                                                      
|                                               
|                                               
|                                               
|                                               
|Catherine Roozen(1)(3)Edmonton, Alberta         |  | Director                                       |  | Director and Corporate Secretary of Cathton Holdings Ltd.                                                                                                     
|                                               
|                                               
|                                               
|                                               
|Terrance E. Royer(1)(2)Calgary, Alberta         |  | Director                                       |  | Executive Vice Chairman, Royal Host Reit and Royal
Host Corp. (a hotel and resort ownership, franchising and management company)                              
|                                               
|                                               
|                                               
|                                               
|Heather A. Shaw(2)(3)Calgary, Alberta           |  | Director                                       |  | Executive Chair, Corus Entertainment Inc.                                                                                                                     
|                                               
|                                               
|                                               
|                                               
|Julie M. Shaw(4)Calgary, Alberta                |  | Director                                       |  | Vice President, Facilities, Design and Management, Shaw Communications,
and Secretary, Shaw Foundation                                                        
|                                               
|                                               
|                                               
|                                               
|Thomas C. Peddie, FCAToronto, Ontario           |  | Officer                                        |  | Senior Vice President and Chief Financial Officer, Corus Entertainment Inc.                                                                                   
|                                               
|                                               
|                                               
|                                               
|Paul W. RobertsonToronto, Ontario               |  | Officer                                        |  | President, Television and Content, Corus Entertainment Inc.                                                                                                   
|                                               
|                                               
|                                               
|                                               
|John P. HayesToronto, Ontario                   |  | Officer                                        |  | President, Radio, Corus Entertainment Inc.                                                                                                                    
|                                               
|                                               
|                                               
|                                               
|Kathleen C. McNairToronto, Ontario              |  | Officer                                        |  | Vice President, Corporate and Regulatory Affairs,
General Counsel, Corus Entertainment Inc.                                                                   
|                                               
|                                               
|                                               
|                                               
|Judy Adam, C.AOakville, Ontario                 |  | Officer                                        |  | Vice President, Controller, Corus Entertainment Inc.                                                                                                          
|                                                |  |                                                |  |                                                                                                                                                               
|                                               
|                                               
|                                               
|                                               
|Hal BlackadarOakville, Ontario                  |  | Officer                                        |  | Vice President, Human Resources, Corus Entertainment Inc.                                                                                                     
|                                               
|                                               
|                                               
|                                               
|Pierre ArcandTown of Mount Royal, Quebec        |  | Officer                                        |  | President, Quebec Radio, Corus Entertainment Inc.                                                                                                             
|                                               
|                                               
|                                               
|                                               
|John R. (Jack) PerratonCalgary, Alberta         |  | Secretary                                      |  | Senior Partner, PerratonLaw                                                                                                                                   

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|(1) |  | Member of the Audit Committee in fiscal 2003               
|--- |  | -----------------------------------------------------------
|   
|(2) |  | Member of the Executive Committee in fiscal 2003           
|   
|(3) |  | Member of the Human Resources Committee in fiscal 2003     
|   
|(4) |  | Member of the Corporate Governance Committee in fiscal 2003
|   
|(5) |  | Appointed to the board of directors on December 9, 2003    
|   
|(6) |  | Retired from the board of directors on December 9, 2003    

Each director named above, except Clinton Forster, was appointed a director on
December 9, 2003 and will hold office until the next scheduled annual meeting
of shareholders. Thereafter, each director will be elected at the annual
meeting of shareholders to serve until the next annual meeting or until a
successor is elected or appointed.

Each officer or director of Corus has been engaged for more than five years in
his or her principal or prior occupation, as the case may be, except as
follows: Pierre Béland was the President of Corus Radio Quebec prior to July
25, 2002 and was President of Metromedia CMR prior to August 31, 2000; prior to
January 1999, Terrance E. Royer was President and Chief Executive Officer of
Royco Hotels and Resorts Ltd.; prior to September 1999, Heather A. Shaw was
President, DMX Canada and Shaw Advertising Services and Vice President of Shaw
Communications Inc.; prior to September 1999, John M. Cassaday was President
and Chief Executive Officer of Shaw Media; prior to September 1999, Thomas C.
Peddie was President and Chief Executive Officer, WIC; prior to September 1999,
Paul Robertson was President of YTV; prior to July 2001, John P. Hayes was
Chairman and CEO of RadioAmp and prior to 2000, he was a consultant to Goldman
Sachs International, and prior to 1998, he was CEO and President of Alliance
Broadcasting LP; Kathleen McNair was Vice President and General Counsel for
Salter Street Films Limited prior to January 2000, and prior to May 1999 she
was a Partner at the communications law firm, Johnston & Buchan; prior to
September 1999, Judy Adam was Director, Finance of WIC Connexus Inc.; Hal
Blackadar was the General Manager of Corus Radio Ontario prior to June 2002;
and prior to July 2002, Pierre Arcand was Executive Vice President of
Metromedia CMR.

As of October 31, 2003, the directors and executive officers of the Company
beneficially owned, directly or indirectly, or exercised control or direction
over 896,638 Class A participating shares and 846,180 Class B non-voting
participating shares, representing 52% and 3% of the issued and outstanding
Class A participating shares and Class B non-voting participating shares,
respectively.

Audit Committee Financial Expert

As required by Section 407 of the Sarbanes-Oxley Act of 2002, Corus must
disclose in its annual report on Form 40-F whether its board of directors has
determined that it has at least one audit committee financial expert, as
defined by Section 407, serving on its audit committee, or if not, the reasons
why it does not.

At the annual and special meeting of shareholders held on December 9, 2003, Mr.
Fernand Bélisle, CA was appointed as a director of the Company and will serve
until the next annual meeting. Mr. Bélisle was also appointed as a member of
the Audit Committee. The Companys board of directors has determined that Mr.
Bélisle is an audit committee financial expert.

32



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##### 



ADDITIONAL INFORMATION

Corus Entertainment Inc. shall provide to any person, upon request to the
Secretary of the Company:



|a) |  | when the securities of the Company are in the course of a
distribution pursuant to a short form prospectus or a preliminary short
form prospectus has been filed in respect of a distribution of its
securities:
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 1) |  | one copy of the Annual Information Form of the Company,
together with one copy of any document, or the pertinent pages of
any document, incorporated by reference in the Annual Information
Form;
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2) |  | one copy of the comparative financial statements of the
Company for its most recently completed financial year together
with the accompanying auditors report and one copy of any
subsequent interim financial statements of the Company;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3) |  | one copy of the information circular of the Company in
respect of its most recent annual meeting of shareholders that
involved the election of directors or one copy of any annual
filing prepared in lieu of that information circular, as
appropriate; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4) |  | one copy of any other documents that are incorporated by
reference into the short form prospectus or preliminary short form
prospectus that are not mentioned in (1), (2) or (3) above.
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|b) |  | at any other time, one copy of any documents referred to in (a)(1),
(2) and (3) above, provided the Company may require the payment of a
reasonable charge if the request is made by a person who is not a
security holder of the Company.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|
|

The Secretary of the Company can be contacted at:

Corus Entertainment Inc.
501, 630  3rd Avenue S.W.
Calgary, Alberta
T2P 4L4
Phone: (403) 444-4244

33



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##### 



(CORUS LOGO)

34



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##### 



UNDERTAKING AND CONSENT TO SERVICE OF PROCESS

A. Undertaking

Corus Entertainment Inc. (the Registrant) undertakes to make available,
in person or by telephone, representatives to respond to inquiries made by the
staff of the Securities and Exchange Commission (the SEC), and to furnish
promptly, when requested to do so by the SEC staff, information relating to the
securities in relation to which the obligation to file an annual report on Form
40-F arises or transactions in said securities.

B. Consent to Service of Process

The Registrant has previously filed with the SEC a written irrevocable
consent and power of attorney on Form F-X in connection with the Class B
Non-Voting Shares and 8 3/4% Senior Subordinated Notes due 2012.





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SIGNATURES

Pursuant to the requirements of the Exchange Act, the Registrant certifies
that it meets all of the requirements for filing on Form 40-F and has duly
caused this annual report to be signed on its behalf by the undersigned,
thereto duly authorized.

CORUS ENTERTAINMENT INC.Date:
    January 13, 2003
    
    By: /s/ THOMAS C. PEDDIEName:  Thomas C. PeddieTitle: Senior Vice President andChief Financial Officer






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EXHIBIT INDEX

1.   Comparative
consolidated financial statements for the year ended August 31, 2003,
together with the auditors report thereon2.   Managements Discussion and Analysis of Operating Results and Financial Position3.   Consent
of auditors  Ernst & Young LLP dated January 13, 20044.   Officers certifications required by Rule 13a-14(a) or Rule 15d-14(a)5.   Officers
certifications required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code.6.   Business Code of Conduct