**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**FORM
      40-F**




o                        Registration
      statement pursuant to Section 12 of the Securities Exchange Act of
      1934




or




þ                        Annual
      report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
      1934




**For
      the Fiscal year
      ended:**                                                      August
      31, 2007


**Commission
      File
      number:**                                                      001-14992




**CORUS
      ENTERTAINMENT INC.**


(Exact
      name of registrant as specified in its charter)




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




**Brookfield
      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: **None**




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 Voting Shares**
            **1,722,929
              As of August 31, 2007****Class
              B Non-Voting Shares**
            **40,512,297
              As of August 31, 2007**


****


****


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
      beenrequired to file such reports); and (2) has been subject to such filing
      requirements in the past 90 days.




Yes  þ
            No  o























**RENEWAL
        ANNUAL INFORMATION FORM**
 
 **Fiscal
        year ended August 31, 2007**
 
 
 
 **Corus
        Entertainment Inc.**
 
 
 
 
 
 
 
 
 **November
        28, 2007**
         1
 **RENEWAL
        ANNUAL INFORMATION FORM - CORUS ENTERTAINMENT INC.**
 
 **Table
                  of
                  Contents**
   **FORWARD-LOOKING
                    STATEMENTS**
                **3****INCORPORATION
                    OF CORUS**
                **3**Organization
                    and Name
                3Subsidiaries
                    and Affiliates
                4**GENERAL
                    DEVELOPMENT OF THE BUSINESS**
                **5**Historical
                    Background
                5Significant
                    Acquisitions and Divestitures
                5**DESCRIPTION
                    OF THE BUSINESS**
                **6**Radio
                6Description
                    of the Industry
                6Business
                    Overview
                7Operating
                    Strategy
                9Competition
                    Conditions
                9Television
                10Description
                    of the Industry
                10Business
                    Overview
                12Operating
                    Strategy
                13Competition
                    Conditions
                15Content
                16Description
                    of the Industry
                16Business
                    Overview
                16Operating
                    Strategy
                18Competition
                18**ADDITIONAL
                    INFORMATION CONCERNING CORUS’ BUSINESSES**
                **19**Intangible
                    Properties
                19Seasonality
                    and Cycles
                19Economic
                    Dependence
                20Environmental
                20Employees
                20Foreign
                    Operations
                20Lending
                20Bankruptcy
                21Reorganizations
                21Social
                    or Environmental Policies
                21Risk
                    Factors
                21**CANADIAN
                    COMMUNICATIONS INDUSTRY - REGULATORY ENVIRONMENT**
                21Canadian
                    Radio-television and Telecommunications Commission
                21Industry
                    Canada
                22Restrictions
                    on Non-Canadian Ownership
                22Broadcasting
                    Services
                22Radio
                    Undertakings
                23Specialty
                    and Premium Television Undertakings
                24Local
                    Television Undertakings
                24Pay
                    Audio Services
                25Cable
                    Advertising Services
                25Canadian
                    Content Requirement for Broadcasters
                25Film
                    and Television Tax Credits and Grants
                25International
                    Treaty Co-Productions
                25Competition
                    Act Requirements
                26Investment
                    Canada Act
                26Copyright
                    Act Requirements
                26**CAPITAL
                    STRUCTURE**
                **27**Description
                    of Capital Structure
                27Share
                    Constraints
                31
  2
  Ratings
                31**MARKET
                    FOR SECURITIES**
                **31**Marketplaces
                31Trading
                    Price and Volume
                32**DIVIDEND
                    POLICY**
                **33****DIRECTORS
                    AND OFFICERS**
                **34****AUDIT
                    COMMITTEE**
                **35**Charter
                35Composition
                    of the Audit Committee
                36Principal
                    Accounting Fees and Services - Independent Auditors
                36**LEGAL
                    AND REGULATORY**
                **37****INTERESTS
                    OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS**
                **38****TRANSFER
                    AGENTS**
                **38****MATERIAL
                    CONTRACTS**
                **38**Senior
                    Secured Credit Facility
                38Trust
                    Indenture for 83⁄4% Senior Subordinated Notes due 2012
                39Cross
                    Currency Interest Rate Swaps
                39**ADDITIONAL
                    INFORMATION**
                **39****CORPORATE
                    GOVERNANCE PRACTICES**
                **40****SCHEDULE
                    A - AUDIT COMMITTEE CHARTER**
                **41**
   **FORWARD-LOOKING
        STATEMENTS**
 
 *To
        the extent any statements made in this report contain information that is
        not
        historical; these statements are forward-looking statements and may be
        forward-looking information within the meaning of applicable securities laws
        (collectively, “forward-looking statements”).  These forward-looking
        statements related to, among other things, our objectives, goals, strategies,
        intentions, plans, estimates and outlook, including advertising, program,
        merchandise and subscription revenues, operating costs and tariffs, taxes
        and
        fees. and can generally be identified by the use of the words such as "believe",
        "anticipate", "expect", "intend", "plan", "will", "may" and other similar
        expressions.  In addition, any statements that refer to expectations,
        projections or other characterizations of future events or circumstances
        are
        forward-looking statements.  Although Corus believes that the
        expectations reflected in such forward-looking statements are reasonable,
        such
        statements involve risks and uncertainties and undue reliance should not
        be
        placed on such statements.  Certain material factors or assumptions
        are applied in making forward-looking statements, including without limitation
        factors and assumptions regarding advertising, program, merchandise and
        subscription revenues, operating costs and tariffs, taxes and fees and actual
        results may differ materially from those expressed or implied in such
        statements.  Important factors that could cause actual results to
        differ materially from these expectations include, among other things: our
        ability to attract and retain advertising revenues; audience acceptance of
        our
        television programs and cable networks; 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; the
        opportunities (or lack thereof) that may be presented to and pursued by us;
        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
        integrate and realize anticipated benefits from our acquisitions and to
        effectively manage our growth; our ability to successfully defend ourselves
        against litigation matters arising out of the ordinary course of
        business;  and changes in accounting standards. Additional information
        about these factors and about the material assumptions underlying such
        forward-looking statements may be found in this Annual Information
        Form.  Corus cautions that the foregoing list of important factors
        that may affect future results is not exhaustive.  When relying on our
        forward-looking statements to make decisions with respect to Corus, investors
        and others should carefully consider the foregoing factors and other
        uncertainties and potential events. 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,
        events or circumstances that arises after the date thereof 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 the 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.
 
 3
  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
        Brookfield Place, Bay-Wellington Tower, Suite 1630, 181 Bay Street, P.O.
        Box
        767, Toronto, Ontario, M5J 2T3.
 
 **Subsidiaries
        and Affiliates**
 
 The
        following table describes the significant operating subsidiaries and affiliates
        of Corus as at August 31, 2007, their jurisdiction of incorporation or
        organization, and the percentage of voting and non-voting securities owned
        by
        Corus directly or indirectly.
 
 **Subsidiary**
              **Jurisdiction**
              **Percentage
                  of securitiesowned by the Company**Corus
                  Radio Company
              Nova
                  Scotia
              100%Metromedia
                  CMR Broadcasting Inc.
              Canada
              100%Corus
                  Premium Television Ltd.
              Canada
              100%591989
                  BC Ltd.
              British
                  Columbia
              100%YTV
                  Canada Inc
              Canada
              100%W
                  Network Inc.
              Canada
              100%591987
                  BC Ltd.
              British
                  Columbia
              100%Movie
                  Central Ltd.
              Alberta
              100%Encore
                  Avenue Ltd.
              Alberta
              100%Corus
                  Audio & Advertising Services Ltd.
              Alberta
              100%TELETOON
                  Canada Inc.
              Canada
              50%Nelvana
                  Limited
              Ontario
              100%
 
 The
        Corporation has other subsidiaries and associated companies but they have
        been
        omitted as each represents 10% or less of total consolidated assets and 10%
        or
        less of total consolidated revenues.  These omitted subsidiaries
        together represent less than 20% of total consolidated assets and
        revenues.
 
 
 **GENERAL
        DEVELOPMENT OF THE BUSINESS**
 
 Corus
        is an integrated Canadian media and entertainment company with an established
        global distribution network for the programming the Company
        produces.  Corus has strong established brands in each of its
        businesses: Radio, Television, and Content.  The principal assets
        consist of 52 radio stations; a variety 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 merchandise products; Kids Can Press, the largest Canadian-owned
        English language publisher of children’s books; three broadcast television
        stations; a cable advertising service; and a digital audio service.
 
 **Historical
        Background**
 
 Certain
        of the businesses of Corus were operated by Shaw prior to September 1,
        1999.  On that date, the shareholders of Shaw approved 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.
  4
 
 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 Voting Shares and 28,492,618
        Corus
        Class B Non-Voting Shares were issued.  On September 3, 1999, the
        Corus Class B Non-Voting 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 Non-Voting 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 in the past three fiscal years include the
        following:
 
 ***Sale
        of Locomotion***
 
 On
        January 18, 2005, the Company sold its 50% share in the assets of the Locomotion
        Channel to a wholly-owned subsidiary of Sony Pictures Inc. for an aggregate
        $6.2
        million purchase price.
 
 ***Astral/Corus
        radio asset exchange***
  On
        May 26, 2004, the Company and Astral Media Inc. (“Astral”) entered into an
        agreement to swap certain assets, being radio stations located in the Province
        of Quebec.  The transaction was reviewed and approved by the Canadian
        Radio-television and Telecommunications Commission (“CRTC”) on January 21,
        2005.  See *Broadcasting Decision CRTC 2005-15*.  A
        labour union associated with one of the swapped stations appealed the decision
        to the federal Cabinet pursuant to the appeal provisions in the *Broadcasting
        Act*.  Cabinet released its decision on April 21, 2005, finding
        that the CRTC’s decision was sound and met the objectives of the
*Broadcasting Act*.  As a result the transaction closed on May
        29, 2005.
 
 ***Red
        Deer radio sale***
  The
        Company entered into an agreement in January 2005 with Newfoundland Capital
        Corporation (“NewCap”) to sell two radio stations located in Red Deer, Alberta.
        On August 10, 2005, the CRTC approved the application to transfer the Red
        Deer
        assets (CIZZ-FM and CKGY-FM) to NewCap. *See Broadcasting Decision CRTC
        2005-390.*The transaction was closed on September 25,
        2005.
 
 ***TELETOON
        acquisition***
  In
        the first quarter of fiscal 2007, the Company completed the acquisition of
        an
        additional 10% share of TELETOON, to increase its ownership interest in this
        television network from 40% to 50%.  The total cash consideration paid
        was $46.6 million.
 
 ***Radio
        station acquisition***
  In
        the fourth quarter of fiscal 2007, the Company completed the acquisition
        of two
        radio stations.  The total cash consideration paid was $18.0
        million.
  5
 
  ***Sale
        of Controlling Interest in The Documentary Channel***
  In
        the last quarter of fiscal 2007, the Company completed its sale of its
        controlling interest in The Canadian Documentary Channel Limited Partnership
        to
        the Canadian Broadcasting Corporation.
  
 **DESCRIPTION
        OF THE BUSINESS**
 
 Corus’
        principal business activities are conducted through three operating groups:
        Radio, Television and Content, as described below.
 
 **RADIO**
 
 **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.  In any
        market where there are at least eight commercial radio stations in English
        or
        French, a single owner can own as many as two AM and two FM stations in that
        language. Since then, there has been a significant amount of consolidation
        of
        ownership within the radio industry.
 
 According
        to the CRTC, as of December 31, 2006, there were 649 commercial radio stations
        in Canada of which approximately 72%were FM
        stations
        and 28% were AM stations.
 
 The
        industry is dependent upon advertising revenues for economic performance
        and
        growth. According to the CRTC, the industry generated over $1.415 billion
        in
        revenues in 2006 up 5.7% versus last year. Radio stations compete for
        advertising dollars with other radio stations and many other forms of media.
        According to industry sources, the radio industry captures approximately
        17% of
        an estimated $8.4 billion spent on advertising in Canada, compared to the
        newspaper and television industries, which capture approximately 38%and 31%
        of the
        total, respectively. According to the CRTC, in 2006, local advertising and
        national advertising represented 75% and 25%, 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 classic rock, 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.
 
 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.
 
 Advances
        in digital technology have now made subscription radio a reality. Subscription
        or Satellite radio provides a number of channels of programming to listeners
        for
        a flat monthly fee. Three licenses were approved by the CRTC in 2004 to
        distribute digital radio signals across Canada.  Two of these licenses
        were launched in 2005 and now distribute digital signals via
        satellite.  The third license has not been pursued to date on the
        basis of existing license conditions. Results to date indicate some minor
        penetration in the market place.
 
 6
  **Business
        Overview**
 Corus’
        radio group (“Corus Radio”) comprises 52 radio stations situated primarily in
        nine of the 10 largest Canadian markets by population and in the densely
        populated area of southern Ontario.
 
 Corus
        Radio is the largest radio operator in Canada in terms of audience reach
        and
        tune-in. According to BBM’s Survey 1 2007 (“S1 ’07”), Corus led the industry
        with a market share of 29.1% in terms of audience reach, compared to its
        closest
        competitors, Standard Radio and Rogers Media, which had market shares of
        21.4%
        and 18.0%, respectively, in terms of reach, during that same period. Corus
        Radio
        reaches one in three Canadians on a weekly basis.
 
 Corus
        Radio operates stations primarily in urban centres in Canada, including
        Montreal, Quebec City, Toronto, Hamilton/Burlington, Winnipeg, Edmonton,
        Calgary
        and Vancouver, and in the densely populated area of southern Ontario. Corus
        Radio operates news/talk stations in nine****out of Canada’s
        10 largest markets by population (Vancouver, Calgary, Edmonton, Winnipeg,
        Hamilton, London, Toronto, Quebec City and Montreal).  Corus is well
        positioned in the Toronto market through its three stations that focus on
        adults
        18 to 49: Q107, 102.1 The Edge and AM 640.  Corus Radio news &
talk stations continue to be the most listened to AM stations in Calgary,
        Edmonton, Vancouver and Winnipeg, measured by audience tuning.
 
 Corus
        Radio’s primary method of distribution is over-the-air, analog radio
        transmission.  Each radio station’s content is available to audiences
        through traditional analog radio receivers at the particular station’s licensed
        frequency on the AM or FM band.  The following table sets out
        particulars of Corus’ radio stations as at October 31, 2007:
 
 **Location**
              **Call
                  letter**
              **Frequency**
              **Format**
              **Target**
              **Rank**
              **Audience
                  share (i)****B.C.**Vancouver
              CKNW
                  (CKNW 980)
              AM
              News/Talk
              A35+
              1
              13.1CFOX
                  (The Fox)
              FM
              Active
                  rock
              M18-34
              1
              17.8CFMI
                  (Rock 101)
              FM
              Classic
                  rock
              M25-54
              1
              12.8CHMJ
                  (AM 730)
              AM
              Traffic
              M25-49
              14
              0.4**Alberta**Calgary
              CKRY
                  (Country 105)
              FM
              Country
              A35-54
              2
              10.9CHQR
                  (QR77)
              AM
              News/Talk
              A35+
              3
              10.5CFGQ
                  (Q107)
              FM
              Classic
                  rock
              M25-49
              3
              10.7Edmonton
              CHED
                  (630 CHED)
              AM
              News/Talk
              A25+
              1
              13.6CKNG
                  (JOE)
              FM
              80’s/90’s
              A25-49
              1
              14.2CISN
                  (CISN Country)
              FM
              New
                  country
              F35-54
              3
              9.6CHQT
                  (Cool 880)
              AM
              Oldies
              A35-54
              11
              1.6**Manitoba**Winnipeg
              CJOB
                  (CJOB 680)
              AM
              News/Talk/Sports
              A35+
              1
              22.2CJZZ
                  (99.1 Cool FM)
              FM
              Smooth
                  adult jazz
              A35-64
              10
              2.9CJKR
                  (Power 97)
              FM
              Rock
              M18-34
              1
              26.1**Ontario**Barrie
              CIQB
                  (B101)
              FM
              Hot
                  adult contemporary
              A25-54
              2
              12.1CHAY
                  (The New CHAY)
              FM
              Adult
                  contemporary
              A25-54
              5
              5.7Burlington
              CING
                  (Country 95.3)
              FM
              Country
              A25-49
              3
              5.4Cambridge
              CJDV
                  (DAVE)
              FM
              80’s/90’s
              A25-49
              3
              11.6Collingwood
              CKCB
                  (The Peak)
              FM
              Adult
                  contemporary
              A25-54
              NA
              NACornwall
              CFLG
                  (Variety 104.5)
              FM
              Adult
                  contemporary
              A25-49
              1
              24.0CJSS
                  (Rock 101.9)
              FM
              Rock
              M25-54
              2
              10.6CJUL
                  (Jewel 1220)
              AM
              Oldies
              A50+
              2
              14.2
  7
  **Location**
              **Call
                  letter**
              **Frequency**
              **Format**
              **Target**
              **Rank**
              **Audience
                  share (i)**
 Guelph
              CJOY
                  (1460 CJOY)
              AM
              Oldies
              A35+
              1
              7.0CIMJ
                  (Magic 106.1)
              FM
              Adult
                  contemporary
              A25-49
              1
              18.0Hamilton
              CJXY
                  (Y108)
              FM
              Rock
                  hits
              M25-49
              1
              15.2CHML
                  (AM 900)
              AM
              News/Talk
              A35+
              2
              10.5Kingston
              CFMK
                  (JOE)
              FM
              80’s/90’s
              A25-49
              4
              6.0CFFX
                  (Oldies 960)
              AM
              Oldies
              A35+
              5
              5.1Kitchener
              CKBT
                  (91.5 The Beat)
              FM
              Contemporary
                  hit
              A25-44
              4
              7.4London
              CFPL
                  (FM 96)
              FM
              Rock
              M18-49
              1
              24.1CFPL
                  (AM 980)
              AM
              News/Talk
              A35+
              5
              4.9St.
                  Thomas
              CFHK
                  (Fresh FM)
              FM
              Contemporary
                  hit
              A18-34
              2
              16.2Peterborough
              CKWF
                  (The Wolf)
              FM
              Rock
              A25-49
              1
              28.2CKRU
                  (980 Kruz)
              AM
              Oldies/Sports
              A35+
              3
              12.5Toronto
              CFNY
                  (102.1 The Edge)
              FM
              New
                  rock
              M18-34
              1
              17.7CILQ
                  (Q107)
              FM
              Classic
                  rock
              M25-49
              1
              11.5CFMJ
                  (AM 640)
              AM
              News/Talk
              M25-49
              12
              2.8Woodstock
              CKDK
                  (The Hawk)
              FM
              Classic
                  rock
              M25-49
              1
              17.3**Quebec**Gatineau
              CJRC
              AM
              News/Talk
              A35+
              3
              11.7Montmagny
              CFEL
              FM
              Soft
                  rock
              A25-54
              NA
              NAMontreal
              CFQR
              FM
              Adult
                  contemporary
              F25-54
              1
              29.2CKOI
              FM
              Contemporary
                  hit
              A25-54
              5
              8.9CKAC
              AM
              News/Talk/Sports
              A35+
              7
              3.2CINW
                  (940 News)
              AM
              News/Talk
              A35+
              5
              4.0CHMP
              FM
              News/Talk
              A25-54
              3
              10.6CINF
                  (Info 690)
              AM
              News
              A35+
              9
              1.1Quebec
                  City
              CHRC
              AM
              News/Talk
              A35+
              6
              6.1CFOM
              FM
              Adult
                  contemporary
              A25-54
              5
              8.6Saguenay
              CKRS
              AM
              News/Talk
              A35+
              1
              24.2St.
                  Jerome
              CIME
              FM
              Adult
                  contemporary
              A25-54
              1
              11.2Sherbrooke
              CHLT
              AM
              News/Talk
              A35+
              4
              11.3Trois
                  Rivieres
              CHLN
              AM
              News/Talk
              A35+
              4
              8.5
 
 (i)
                  Sources:
              S2’07
                  - Vancouver, Calgary, Edmonton, Winnipeg, Hamilton, Toronto, Gatineau,
                  Montreal, Quebec City,  S4’06 - Cornwall, Guelph, Peterborough,
                  Woodstock; St. Jerome,  S1’07 - All other
                  markets
 
 Corus
        Radio derives the majority of its revenues from advertising sales. Revenues
        for
        fiscal 2007 and 2006 were $276 million and $268 million,
        respectively.
 
 Revenues
        from Corus Radio are derived mainly 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 Corus’ advertising revenues are from
        local or national advertising depends on the given market.  In 2007,
        approximately 75% of Corus Radio’s revenues were derived from local
        advertising.
 
 In
        addition to advertising revenues, Corus Radio derives a smaller portion of
        its
        revenues through non-traditional revenue sources
        (non-airtime).  Websites have proven to be extremely popular with
        audiences and advertisers and are a growing source of revenue.  Corus
        Radio has very loyal listeners that continue to be connected to the station
        for
        the music, the hosts, the events and information-entertainment that is present
        on Corus websites.  With approximately 1,200,000  people
        registered to Corus Radio’s stations’ web-clubs and permission-based e-mail, the
        stations are able to develop one-to-one relationships and connect audiences
        with
        advertisers in areas that meet their needs.  Other sources of
        non-traditional revenue include sponsorships, concerts and other events that
        allow Corus Radio to diversify its revenue streams and reach more potential
        listeners.
 
 8
  **Operating
        Strategy**
 Corus
        Radio has a focused strategy for the coming fiscal year.   It
        will continue to emphasize growth in the listener and advertising base in
        the
        top 10 markets in Canada.  It will strengthen core competencies of
        both sales management and programming.  Corus will seek to dominate
        its target demographics.  The Company will leverage new media to
        connect audiences with advertisers.
 
 During
        fiscal 2007, Corus concluded the purchase of two FM stations (CJZZ and CKBT)
        in
        Winnipeg and Kitchener from Canwest Media Works.  The transaction
        closed on July 28, 2007.  In addition, Corus Radio announced on June
        18, 2007 that it had reached an agreement to buy one radio station from an
        independent operator in Sherbrooke, QC and also announced on August 9, 2007,
        the
        sale of one radio station in Quebec City, QC.  Both transactions are
        subject to approval by the CRTC which is expected in early 2008.
 
 Corus
        Radio is committed to providing the best quality in programming for the
        listener.  Corus Radio stations boast key proprietary personalities
        that are both highly recognized in their communities and dedicated to Corus
        programming standards.  The Company is committed to reformatting
        stations when research shows that there is a need.  In fiscal 2007,
        Corus’ recently reformatted stations continued to gain traction with their
        targeted demographics.
 
 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 an
        attractive and efficient medium with which to allocate their advertising
        dollars.  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.  In 2002, Corus launched Corus Radio Sales University, an
        internal training course designed to provide the sales team with the tools
        to
        succeed.  Stage one is an 80-hour on-line training session that is an
        orientation to customer-focused selling.  Stage two involves on-site
        training and customer calls with the trainer who visits every major market
        cluster at least twice a year.  To date, all of the Corus radio
        sellers and managers in the major markets have completed both stage one and
        two
        of the training.  All new sales representatives and managers hired by
        Corus must participate in the training.
 
 Corus
        owns a 50% stake in Canadian Broadcast Sales (“CBS”), in partnership with Rogers
        Media.  CBS is Canada’s leading national sales representation firm. In
        2007, Corus Radio entered into a joint venture with Cogeco to form Group
        Force
        Radio a new sales representation firm in the province of Quebec. Similarly
        to
        CBS, Group Force Radio will focus on developing and delivering increased
        National revenues for the Corus Radio operations in the province of
        Quebec.
 
 Corus
        Radio will continue to leverage new media to expand its audience and give
        new
        opportunities to advertisers through a series of strong local websites to
        complement Corus’ radio stations.  On-line audio streaming through
        websites affords the broadcaster and advertiser a more personal connection
        with
        the listener not available through traditional radio.
 
 **Competitive
        Conditions**
 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, each of which owns and operates stations
        across Canada. The acquisition of Standard Radio by Astral was approved by
        the
        CRTC on September 28, 2007.  At the time of writing the transaction
        had not yet closed.  CHUM Radio was acquired by CTVglobemedia during
        the fiscal year 2007.
 
 9
  Factors
        that are material to competitive position include the station’s rank in its
        demographic, market share of audience, authorized power, assigned frequency,
        audience characteristics, local program acceptance and the number and
        characteristics of stations in the market area.
 
 **TELEVISION**
 
 Corus’
        television group (“Corus Television”) comprises specialty television networks,
        premium pay television services, three local television stations, and other
        media services.
 
 **Description
        of the Industry**
 According
        to the CRTC Broadcasting Policy Monitoring Report 2007, there were approximately
        9.978 million subscribers to television programming services in 2006. There
        were
        approximately 7.3 million cable subscribers and 2.628 million direct-to-home
        (“DTH”) satellite and multipoint distribution systems (“MDS”) subscribers. Total
        digital subscribers were approximately 5.789 million, up from 5.275 million
        a
        year earlier.
 
 *Specialty
        and Premium Pay Television Networks*
 Specialty
        and premium pay television networks generated $2.5 billion of combined
        advertising and subscriber revenues in 2006. 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 pay television networks each obtain revenues by charging a monthly
        subscriber fee to cable and direct-to-home satellite
        operators.  Subscriber fees are the sole source of revenues for
        licensed premium 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 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 a basic tier 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 DTH satellite operators. According
        to
        the CRTC, television advertising in 2006 totaled approximately $3.2 billion
        in
        Canada.  Specialty television networks received a 27% share of total
        television advertising revenues, or approximately $882 million, up from $769
        million or a 26 % share of total television advertising revenues in
        2005.
 
 10
  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 DTH 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. Since the initial awarding of 262 Category 2 licenses, additional
        Category 2 licenses have been granted.  However, as of December 2006,
        approximately 79 Category 2 digital networks are in operation.  It
        remains unclear how many of the remaining Category 2 networks will be launched
        in the future.
 
 *Local
        Television*
 
 Local
        television stations are licensed by the CRTC and provide over-the-air broadcast
        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
        Broadcasting Service 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.  These advertising limits will be relaxed and
        eliminated over the next two years. 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.
 
 *New
        Products*
 
 The
        trend in the television sector is in 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”); 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 is 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.
  •
              HDTV
                  is a high-resolution digital television service combined with Dolby
                  Digital surround sound. This combination creates an unparalleled
                  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.
  11
  •
              A
                  PVR is a Personal Video Recorder or 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.
 
 
 **Business
        Overview**
 Corus
        had the following interests in specialty and premium television networks
        in
        Canada as at October 31, 2007:
 
 **Network**
              **Description
                  of programming**
              **Interest**YTV
              Children/Family
              100%Treehouse
                  TV
              Preschool
                  children/Parents
              100%W
                  Network
              Lifestyle
                  and entertainment geared to women
              100%Country
                  Music Television
              Country
                  music/Country lifestyle
              80%Telelatino
              Canadian-Italian
                  and Spanish
              50.5%TELETOON
              Children/Family/Adult
                  animation
              50%The
                  Food Network Canada
              Food
                  related
              20%Movie
                  Central
              Premium
                  movies and series
              100%Encore
                  Avenue
              Classic
                  movies
              100%Discovery
                  Kids (Digital Service)
              Children/Family
              53.6%SCREAM
                  TV ( Digital Service)
              Horror
                  movies and series
              51%Cosmopolitan
                  Television
              Lifestyle
                  and entertainment geared to working women aged 18 to 34
              54%
 
 *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 have a 41.4% higher
        cumulative average minute audience (2-54 demographic) than its nearest
        competitor, based on BBM Nielsen Media Research (“BBM NMR”) 06/07 broadcast year
        data. Each of the analog specialty television networks is ranked among the
        top
        three analog television networks based on targeted demographics.
 
 YTV
        is a specialty television network dedicated to programming for children and
        teens aged two to 17. YTV broadcasts 5 of the top 20 children’s shows in Canada
        in the Kids 2-11 demographic, based on the BBN NMR 06/07 broadcast year
        data.  This network reaches children beyond the television with
        interactive events and initiatives including *ytv.com,* a top Canadian
        kids’ website. YTV is generally carried on the basic tier.
 
 Treehouse
        TV is a specialty service in Canada dedicated to preschoolers (aged 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.  Treehouse TV broadcasts
        50 of the top 50 preschool shows in Canada, based on BBM NMR  06/07
        broadcast year data.
 
 W
        Network is a specialty television service dedicated to serving the needs
        and
        interests of women.  On April 15, 2002, the service, which was
        previously known as WTN, was rebranded, reformatted and relaunched as W
        Network.  Since the relaunch, W Network has achieved a 100% growth in
        its core demographic of women 25-54. Recent Nielsen statistics indicate that
        W
        Network is tied for the highest average minute audience of all Canadian
        specialty networks for W25-54 and is watched by 11 million Canadians in an
        average month.
 
 Country
        Music Television (“CMT”) is a specialty service dedicated to exhibiting country
        music videos, a prime-time lineup of comedy and drama series, movies and
        specials, music programming and daily entertainment
        news.    In 2000, the network established the Video
        Advantage Program to support the development and production of original Canadian
        music videos for emerging artists.  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.  According to
        recent Nielsen statistics, CMT has seen an 88% increase in the adult 25-54
        demographic over the past five years and the network has more than doubled
        its
        prime time audience in the five year period.
 
 12
  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.
 
 Currently,
        Corus offers two digital specialty television networks: Discovery Kids*,*
        which offers children informative and entertaining programming with an emphasis
        on action, adventure and the environment; and SCREAM TV*,* which offers
        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 will launch a third digital specialty
        television network Cosmopolitan TV, which will offer lifestyle and entertainment
        programming geared to working women 18-34, early in calendar
        2008.  Corus also holds interests in the following specialty
        television networks:
 
 •
              A
                  50% 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. For fiscal 2006, Corus had a 40% interest in TELETOON,
                  however,
                  in fiscal 2007 this interest increased to
                  50%.
 
 •
              A
                  20% equity interest in The Food Network Canada*,* a specialty
                  service which provides information and entertainment programming
                  related
                  to food and nutrition.
 
 Revenues
        from Corus’ specialty television networks are derived primarily from subscriber
        fees and advertising.  In fiscal 2007, subscriber fees accounted for
        39% and advertising accounted for 59% of total revenues from the specialty
        television networks.
 
 *Premium
        Television Networks*
 
 Movie
        Central and Encore Avenue provide premium television services in western
        Canada,
        featuring blockbuster movies, series and specials from diverse genres on
        six
        channels. Each channel broadcasts commercial-free 24 hours a day, seven days
        a
        week. *The Movie Central* brand consists of four channels and the
*Encore*brand consists of two channels.
 
 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. As at August 31, 2007, Corus’ Movie Central service had
        883,000 subscribers, a 7% increase in year-over-year subscribers, representing
        penetration of approximately 50% of digital cable and direct-to-home satellite
        subscribers in western Canada.
 
 *Local
        Television*
 
 Corus
        owns three local television stations - one in each of Kingston, Peterborough
        and
        Oshawa, Ontario. Each is an affiliate of the CBC.  These were acquired
        in April 2000 as part of the Power Broadcasting acquisition.
 
 Revenues
        are almost exclusively derived from advertising. In fiscal 2007, national
        agency
        directed clients and local advertisers accounted for a combined 85% of
        revenues.  CBC network affiliate payments amounted to 12% of revenues,
        with the remaining 3% originating from a variety of other sources.
 
 *Other
        Media Services*
 
 Corus
        Custom Networks primarily operates TV listings channels, providing viewers
        with
        current and easily accessible listings for the local cable television program
        lineup. Revenues for Corus Custom Networks are derived through
        advertising.
 
 Max
        Trax is a residential digital audio service launched in the spring of
        1997.  Max Trax is a partner in a joint marketing agreement with CBC
        to offer a 40 channel service package.  Max Trax is carried by cable
        operators and direct-to-home satellite operators.  Revenues from Max
        Trax are earned through subscriber fees.
 
 13
  **Operating
        Strategy**
 Corus
        has reorganized its television division to focus on two strategic portfolios.
        The kids’ portfolio includes YTV, Treehouse TV, TELETOON, Discovery Kids and the
        Nelvana Studio.  The consolidation of the kids assets will allow for
        shared programming, a streamlined development process, the ability to create
        and
        maintain multi-platform rights in Canada and ensure stable output with cost
        certainty for the studio.  The Lifestyle, Drama and Movies portfolio
        includes the operations of W Network, CMT, Telelatino, Movie Central, Encore
        Avenue, Cosmopolitan TV and SCREAM TV.   Management is
        responsible for generating program buying synergies, developing strategies
        for
        integrating operations where possible, as well as consolidating cross-promotion
        and marketing opportunities and joint sales initiatives.
 
 Corus
        Television’s operating strategy remains focused on four key areas: (i)
        increasing its position in the kids’ and women’s genres, (ii) leveraging the
        competitive position of Corus Premium Television, (iii) building key
        relationships with BDUs and (iv) maximizing operational synergies across
        all
        Corus brands.
 
 Corus
        will continue to focus on managing and growing its core business.  The
        Company will continue to explore new platform opportunities and make investments
        to test where appropriate.
 
 *Kids*
 
 Corus
        Television continues to lead the kids’ entertainment marketplace 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
        integration of Nelvana Studios and the interactive group maximizes new platform
        efforts, an increasingly important segment of the kids market.  The
        consolidation of the development streams has ensured that Corus continues
        to
        create superior content which will drive ratings.  The studio will
        continue to provide content to Teletoon to meet that networks unique
        needs.
 
 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, including massive multiplayer on-line games (“MMOG”) to
        create new revenue streams.  Sales of branded DVDs, CDs and other
        merchandise will also fuel revenue growth in the kids’ area.
 
 *Lifestyle,
        Drama and Movies*
 
 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 100% since the 2001-2002 season, making W Network
        one
        of the leading specialty service for women.  In fiscal 2007, W Network
        is tied for the highest average minute audience of all Canadian specialty
        networks for women 25-54.  W Network intends to invest in its
        programming to maximize audience growth and revenue potential.  W
        Network is building an outstanding programming schedule anchored on movie
        blocks, lifestyle shows and drama and comedy series.  The Company will
        focus on new media opportunities and platforms to deliver the programming
        that
        the target audience wants, in the format they want it in, through the
        wnetwork.com website and other merchandise offerings.
 
 Corus
        Premium Television services, has been integrated into the Toronto
        facility.  The service will continue to operate under two separate
        licenses (Movie Central and Encore Avenue), and will continue to focus marketing
        effort on customer acquisition and retention. Having established a track
        record
        of successful direct marketing campaigns, undertaken with the cooperation
        of key
        cable and satellite providers, Corus will continue to capitalize on the growth
        in the number of digital households in western Canada as well as up-selling
        current digital households. Demand for movies and new original dramatic series
        continue to fuel strong interest in the service’s programming. To this end,
        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. These agreements allow Movie Central to premiere
        HBO series on Movie Central at the same time as they debut in the United
        States.
 
 14
  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 established the first
        SVOD product in Canada, Movie Central Express.  Movie Central Express
        showcases programming from five major Hollywood studios with up to 90 hours
        of
        unique programming each week. In conjunction with Shaw’s VOD service, this
        service is offered to current subscribers for a separate monthly subscription.
 
 Movie
        Central has two dedicated high definition channel offering an unparalleled
        lineup of new releases, original series and re-mastered library features
        all in
        true high definition format.
 
 In
        addition to the growth of digital products, opportunities are developing
        on two
        mainstream platforms, broadband and mobile, that are creating new revenue
        opportunities for Corus Premium Television. Although the products are still
        quite nascent, Corus believes the potential is substantial and is actively
        exploring and developing these opportunities with the BDUs now.
 
 *Other
        Media Services*
 
 The
        CBC-affiliated local television stations improved operating efficiencies
        by
        consolidating with Corus’ local market radio stations. Revenue growth is being
        achieved through an improved program schedule, expansion of news service
        and
        joint selling of radio and television. Each of the stations represents the
        only
        local television broadcaster in their respective communities.
 
 Corus
        believes cable advertising services such as Corus Custom Networks are a
        cost-effective advertising vehicle for national accounts and local merchants,
        particularly in areas where there are no local television stations. Corus’
operating strategy involves optimizing existing products and services through
        product quality enhancements. Corus Custom Networks is also investigating
        new
        types of advertising-related businesses that are complementary to its core
        competencies.  Corus Custom Networks has streamlined operations by
        creating regional hubs to service advertisers.
 
 **Competitive
        Conditions**
 The
        television broadcast environment is highly competitive.  The principal
        methods of competition in broadcast television are the development and
        acquisition of popular programming and the development of audience interest
        through programming and promotion, in order to sell advertising at profitable
        rates.  Broadcast networks like YTV, W, CMT, the local stations and
        digital channels compete for audience, advertising revenues, and programming
        with other broadcast networks such as CBC, CTV, Global, specialty networks
        owned
        by Alliance Atlantis Communications Inc. (“AAC”) and other digital channels,
        independent television stations, basic cable program services as well as
        other
        media, including DTH television services, videocassettes, DVDs, print and
        the
        Internet.
 
 Television
        stations compete for programming, audiences and advertising revenues with
        other
        stations and cable networks in their respective coverage areas and, in some
        cases, with respect to programming, with other station groups, and in the
        case
        of advertising revenues, with other local and national media.
 
 Because
        conversion to digital television broadcasting has begun, current and future
        technological and regulatory developments may affect competition within the
        television marketplace.
 
 Corus
        Television’s specialty and premium television networks compete for subscriber
        fees with other specialty and premium television network operators, including
        CTVglobeMedia, AAC, Allarco Limited and Astral. According to the CRTC, in
        2006,
        the Canadian specialty television and premium television network industries
        generated $2.5 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 central and eastern Ontario.
 
 In
        June 2006, the CRTC licensed a national pay television service which will
        compete directly with Corus’ premium television networks.  The service
        is expected to launch in the fall of 2007.
 
 15
 
 **CONTENT**
 
 **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.  There are now numerous television networks around the
        world that program dedicated children’s blocks and other programming exclusively
        for children.  Corus’ content is seen in more than 190 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.
 
 Despite
        the current environment, the long-term outlook for the worldwide animation
        business and the children’s entertainment sector is favorable.  Future
        growth in the sector is being fueled by:
 
 •
              the
                  growth of the 3D 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;
 •
              the
                  continued international expansion by all types of programming services,
                  including major U.S. broadcasters and domestic children’s
                  services;
 •
              the
                  growth in demand for content featuring recognizable characters
                  on the
                  Internet; and
 •
              the
                  emerging platforms for content distribution (i.e. VOD, SVOD, broadband,
                  cell phones and video games).
 
 According
        to industry sources, total spending on filmed entertainment, which includes
        feature films, video, television shows, animation and other programming
        worldwide is expected to grow from an estimated US$81.2 billion in 2006 to
        US$103.3 billion in 2011. 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 2006 licensed retail
        sales in the United States and Canada were approximately US$71 billion. All
        of
        Corus’ character brands fall into the entertainment/character property type
        category, which, according to industry sources, accounted for US$12.7 billion
        of
        retail sales in the United States and Canada in 2005. The
        entertainment/character property type category is the third largest category
        of
        licensed retail products, accounting for 18% of total sales in the United
        States
        and Canada in 2005.
 
 The
        home entertainment market is a US$55.8 billion industry worldwide, and includes
        DVD & VHS sales and in-store rental and online rental subscription
        revenues.  At more than double the size of the global box office
        business, the home entertainment market enjoyed double digit and high single
        digit growth through 2004.  Growth in the market has slowed somewhat
        in the past two years, but is anticipated to pickup again due to two factors.
        First is the increased penetration of HD TV systems, which in turn will spur
        DVD
        sell-through as customers upgrade their DVD collections to HD.  The
        second catalyst is the launch of new digital download-to-own and subscription
        streaming services, which make available a much broader selection of content
        to
        potential customers.
 
 **Business
        Overview**
 The
        Content group consists of Nelvana Enterprises, the distribution operations
        of
        Corus’ wholly-owned subsidiary, Nelvana, and Kids Can Press, a Canadian
        publisher of children’s books that is a wholly-owned subsidiary of
        Nelvana.  Nelvana Enterprises distributes quality animated branded
        media content and related products for children worldwide. Its brand portfolio
        includes internationally recognized animated characters such as *Babar,
        Franklin, The Backyardigans, Grossology,*and *The Berenstain Bears*.
        Nelvana Enterprises’ operations consist of the distribution of film and
        television programs, and the sale and licensing of related
        products.
 
 16
  *Production
        and Distribution*
 Nelvana
        Enterprises distributes programming that has been developed and produced
        by the
        Nelvana Studio, a division of the Corus Kids Television
        group.   In the Canadian marketplace, Nelvana Enterprises
        exploits 2nd
        window and French language window sales for Nelvana Studio produced
        programming.  In the international marketplace, Nelvana Enterprises is
        responsible for exploiting all new and existing Nelvana Studio
        titles.  Nelvana Enterprises distributes programming to broadcasters
        in over 190 countries, including some of the world’s leading networks, such as
        Nickelodeon, the Disney Channel, HBO, ITV in the United Kingdom and France
        3.
        Nelvana Enterprises, together with the Nelvana Studio, has 79 television
        programs licensed in Canada, and 41 in the United States.  Programming
        is distributed through three sales and distribution offices located in Toronto,
        Canada, Shannon, Ireland and Paris, France.
 
 In
        2002, in response to a leaner marketplace, Corus committed to reducing cash
        flow
        requirements with the goal of achieving operating cash flow neutrality within
        one year while continuing to grow its library.  This was successfully
        achieved.  In the last three years, Corus’ production slate has ranged
        between 90 to 120 new episodes, well below the 252 episodes peak reached
        in
        fiscal 2002.  This amount of production maintained Corus’ leadership
        position in the industry while reducing cash flow requirements to produce
        the
        year’s slate.  Following are some highlights of titles that became
        available for Nelvana Enterprises to distribute in Fiscal 2007:
 
 •
              17
                  episodes of *The Backyardigans*, a series which airs on Nickelodeon
                  in the United States and on Treehouse TV in Canada, bringing the
                  total to
                  44 episodes
 •
              21
                  episodes of *DiGata Defenders,*  which airs on TELETOON
                  in Canada, bringing the total to 32
                  episodes
 •
              21
                  episodes of *Grossology,* which airs on Discovery Kids in the U.S.
                  and on TELETOON in Canada, bringing the total to 26
                  episodes
 
 At
        August 31, 2007, Nelvana Enterprises’ program library totaled over 3,000
        half-hour equivalent episodes, comprising 83 animated television series,
        18
        specials, 19 animated feature length films and 9 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. International television markets outside of the
        United States and Canada are Nelvana Enterprises’ largest source of revenue,
        accounting for 37.4% of production and distribution revenues in fiscal 2007,
        compared to 33.3% from the Canadian market and 28.3% from the United
        States.
 
 *Merchandising*
 
 Nelvana
        Enterprises’ merchandising business contains some of Nelvana’s most popular
        characters, including *Franklin, Babar,*and*Backyardigans*,
        which have achieved recognition and popularity worldwide and have become
        valuable long-term merchandising brands. Nelvana Enterprises’ merchandising
        efforts focus on marketing its most popular brands and co-coordinating with
        retailers to promote its character merchandise in North America and around
        the
        world. Nelvana Enterprises acquires brands from the Nelvana Studio produced
        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. Highlights in fiscal 2007
        include continued growth in *Babar* merchandising revenue in France, as
        well as the ongoing rollout of the *Backyardigans* merchandising program
        in key international markets.
 
 *Publishing*
 
 Content’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 61 million books sold worldwide.   In the fall
                  of 2006, we celebrated the 20th
                  anniversary
                  of the very first *Franklin* book, *Franklin in the Dark*,
                  with a commemorative-boxed set, a special edition of the book going
                  to
                  500,000 school children in Canada thanks to the Canadian Children’s Book
                  Centre and a series of public events with Paulette Bourgeois and
                  Brenda
                  Clark;
  17
  •
              *Scaredy
                  Squirrel -*a new character has arrived.  This book, which
                  tells of a squirrel too afraid to leave his nut tree in which he
                  lives the
                  same existence day in and day out, has gathered steam since publication
                  in
                  February 2006.  The charming worrywart who finally breaks out of
                  his fears to see that he too can soar has made a second appearance
                  in
                  Spring 2007 with *Scaredy Squirrel Makes a
                  Friend.*
 
 **Operating
        Strategy**
 The
        operating strategy for Content is based on the diversification of revenue
        streams.  In a marketplace where dependence on worldwide broadcast
        license fees is no longer viable, Content is seeking to maximize revenue
        from
        all streams including:
 
 •      Broadcasting
        (traditional and new platforms);
 •      Merchandise
        licensing;
 •      Publishing;
 •      Home
        entertainment;
 •      Interactive;
        and
 •      Music
 
 To
        capitalize on the dominance that Corus enjoys in the kids broadcast market
        in
        Canada, Corus is putting a “Made in Canada” strategy into effect.  The
        Nelvana Studio was integrated into Corus Kids Television in the fall of 2006
        as
        part of the strategy.  This integration is designed to ensure
        alignment of new Nelvana Studio produced content with the Corus Kids Television
        programming priorities. Corus Kids Television covers a significant portion
        of
        the hard costs of new productions by maximizing all available sources of
        production financing in the Canadian marketplace.  Corus optimizes
        brand success by aligning all of Corus’ resources, both broadcasting and
        merchandising, to establish great ratings which will drive strong consumer
        product performance.  The success in Canada can then be used to roll
        the brand out worldwide as Nelvana Enterprises exploits these new productions
        in
        the international marketplace.
 
 Nelvana
        Enterprises will focus on the strong near-term revenue growth potential of
        the
        home entertainment market.  With the worldwide DVD business expected
        to double by 2008, Nelvana Enterprises is in a perfect position to exploit
        this
        market with a strong catalogue of existing titles and titles in
        production.  As well, home entertainment products will drive
        significant merchandise sales in North America’s major retailers.
 
 Many
        existing outlets are expanding and new markets are emerging for branded
        children’s content.  As the marketplace changes with new distribution
        platforms, Nelvana Enterprises is investigating how this new technology can
        benefit the Corus stable of shows.  Many of these distribution
        platforms - VOD, SVOD, cell phones and broadband - are in the early stages
        and
        are not expected to generate significant revenue for at least five
        years.  Nelvana Enterprises has concluded transactions or is in
        dialogue with all of the major strategic players in the On-Demand space
        including Comcast, Microsoft, Hewlett Packard and Sony in order to determine
        the
        best fit for Corus’ properties.
 
 Nelvana
        Enterprises is also using its programming library to help launch new linear
        broadcast channels internationally.  One such channel initiative,
        Kidsco, was launched in fiscal 2007 to help increase the profile of Nelvana
        Enterprises’ brands. Nelvana Enterprises has partnered with Sparrowhawk Media
        and DIC Entertainment to launch Kidsco, new kids channel that is being rolled
        out across 40 different territories within the next 18 months. The channel
        will
        help bring Nelvana Enterprises’ brands to a whole new generation of children
        around the world.
 
 This
        ever growing number of outlets for the distribution of children’s content
        creates a need for Nelvana Enterprises to be focused on rights
        management.  By identifying and properly tracking the full spectrum of
        rights attached to Nelvana Enterprises’ properties, we are better able to
        optimize current deal structures. Nelvana Enterprises ensures that it licenses
        only those specific rights required by its current customers, and retains
        unrelated, neighboring rights for future exploitation.   This in
        turn will enable us to monetize emerging distribution platforms that have
        yet to
        appear in today’s marketplace.
 
 18
  **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, 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,
        Corus also competes with several domestic producers and distributors such
        as
        Cookie Jar Corp. and Studio B Productions.
 
 
 **ADDITIONAL
        INFORMATION CONCERING CORUS’ BUSINESSES**
 
 *a)*
              *Intangible
                  Properties*
 
 Corus
        uses a number of trademarks, service marks and official marks for its products
        and services. Many of these brands and marks are owned and registered by
        Corus,
        and those trademarks that are not registered are protected by common law.
        Corus
        also licenses certain marks from third parties. Corus has taken affirmative
        legal steps to protect its owned and licensed trade marks, and Corus believes
        its trademark position is adequately protected.  The exclusive rights
        to trademarks depend upon the Company’s efforts to use and protect these and
        Corus does so vigorously.
 
 Distribution
        rights to television programming and motion pictures as well as ancillary
        rights
        are granted legal protection under the copyright laws and other laws of Canada,
        the United States and most foreign countries. These laws impose substantial
        civil and criminal sanctions for the 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
        and other legal protections for all of the television programming produced
        and
        distributed by Corus under the laws of all applicable
        jurisdictions.
 
 Corus
        can give no assurance that its actions to establish and protect Corus trademarks
        and other proprietary rights will be adequate to prevent imitation or copying
        of
        its filmed and animated entertainment by others or to prevent third parties
        from
        seeking to block sales of its filmed and animated entertainment as a violation
        of their trademarks and proprietary rights.
 
 Moreover,
        Corus can give no assurance that others will not assert rights in, or ownership
        of, its trademarks and other proprietary rights, or that Corus will be able
        to
        successfully resolve these conflicts.  In addition, the laws of
        certain foreign countries may not protect proprietary rights to the same
        extent
        as do the laws of the United States and Canada.
 
 Corus
        also licenses copyright materials either by way of direct contracting or
        through
        blanket licensing regimes.  The tariffs for blanket licenses are
        established by the Copyright Board in Canada.  Although the amount of
        a blanket license is set by this third party regulator, the system provides
        certainty as to cost and also a modicum of immunity from claim for innocent
        infringements due to the presumptions of right to use works that flow with
        the
        imposition of these tariffs.
 
 The
        Company operates a comprehensive clearance and rights management system to
        both
        protect its rights and to ensure that works that Corus uses have the requisite
        clearances or licenses from the owners.  A key element of contracts
        for copyright works is the term or time period of the license granted which
        in
        the broadcasting sector can vary but usually is or for a time period such
        as one
        to three years.  In some circumstances the time period is combined
        with a right to only a certain number of “plays” or broadcasts.
 
 *b)
        Seasonality and Cycles*
 
 Corus’
        operating results are subject to seasonal fluctuations that can significantly
        impact quarter-to-quarter operating results.  Accordingly,
        one-quarter’s operating results are not necessarily indicative of what a
        subsequent quarter’s operating results will be.  Corus’ broadcasting
        businesses (Radio and Television) and the Content business each has unique
        seasonal aspects.
 
 19
  For
        the Company’s broadcasting businesses, operating results are dependent on
        general advertising and retail cycles associated with consumer spending
        activity.   Accordingly, operating results for the first quarter
        tend to be the strongest, reflecting pre-Christmas advertising activity,
        and the
        second quarter tends to be the weakest, consistent with lower consumer spending
        in winter months.
 
 For
        Corus’ Content business, operating results are dependent on the timing and
        number of television programs made available for delivery in the period,
        as well
        as timing of merchandising royalties received, none of which can be predicted
        with certainty. Consequently, Content’s operating results may fluctuate
        significantly from quarter to quarter.  Cash flows may also fluctuate
        and are not necessarily closely related to revenue recognition.
 
 *c)  Economic
        Dependence*
 
 Corus’
        operating results for the Company’s broadcasting businesses are not dependent
        upon any single customer or upon a few customers with respect to revenues
        from
        advertisers.
 
 Corus’
        broadcasting businesses are dependent upon on-air talent to provide quality,
        consistent programming to attract advertisers.  All on-air talent is
        under contractual obligation to the Company.
 
 Corus
        Television’s premium pay television services are solely dependent on subscriber
        fees.  The major BDUs are Rogers, Shaw, Cogeco, BEV, Videotron and
        Star Choice.
 
 The
        Company’s regulated properties operate in a competitive environment with both
        regulated and unregulated competitors.  Although entry by new
        competitors into the Company’s markets is slowed by the regulatory process, new
        competition always poses a risk to the Company’s revenue streams.  The
        regulatory environment is more fully explained below.
 
 *d)  Environmental*
 
 Corus’
        operations do not have any significant impact on the
        environment.  Corus has not made, and does not anticipate making, any
        significant capital expenditures to comply with environmental
        regulations.
 
 *e)  Employees*
 
 As
        at August 31, 2007, Corus had approximately 2,037 full-time employees.  The
        Company operates in a non-union environment except for: 140 employees in
        specialty and conventional television and radio and 33 employees in its Quebec
        radio operations who are members of the Communications, Energy and Paperworkers
        Union of Canada; 42 employees in Quebec radio operations who are members
        of the
        Syndicat Général de la Radio;  7 employees in Quebec radio operations
        who are members of the Centrale Syndicat Nationale; 11 employees in Quebec
        radio
        operations who are members of the Independent Syndicat; and 31 employees
        in
        Quebec operations who are members of the Syndicat Canadien de la Fonction
        Publique.
 
 There
        are 118 Corporate employees, 1,112 Radio employees of which 146 are unionized,
        538 TV employees of which 118 are unionized and 269 Content
        employees.
 
 *f)  Foreign
        Operations*
 
 A
        significant portion of the revenues in the Content division are in currencies
        other than Canadian dollars and therefore subject to fluctuation in exchange
        rates.  Approximately 7% of Corus’ consolidated revenues for the year
        ended August 31, 2007 were derived from foreign operations.
 
 *g)
        Lending*
 
 Corus
        does not have any lending operations as a distinct or significant business.
        Corus has, however, provided financing through loans to its digital channels
        and
        loans to privately owned Canadian media companies and has outstanding loans
        to
        executive officers. Corus may make loan investments in companies involved
        in the
        media sector of up to $5 million with the approval of the chief executive
        officer (“CEO”) or the chief financial officer (“CFO”) and more than $5 million
        with the approval of the Executive Committee of the Board of Directors.
        Outstanding loans to executive officers were granted prior to July 31,
        2002.
 
 20
  *h)
        Bankruptcy*
 
 There
        have been no bankruptcies, receiverships or similar proceedings against Corus
        or
        any of its subsidiaries within the past three years.
 
 *i)
        Reorganizations*
 
 There
        have been no material reorganizations at Corus or any of its subsidiaries
        within
        the past three years.
 
 *j)
        Social or Environmental Policies*
 
 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
        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 available on the Corus Entertainment
        website at www.corusent.com under “Investor Information.”
 
 *k)
        Risk Factors*
 
 A
        discussion of risk affecting the Company and its business is set forth under
        the
        heading “Risks and Uncertainties” in the Management’s Discussion and Analysis
        for the year ended August 31, 2007, as contained in the Company’s 2007 Annual
        Report, which discussion is incorporated by reference herein.  In
        addition, the Company is subject to the risks and uncertainties set forth
        below
        in the discussion of the Canadian communications industry regulatory
        environment.
 
 These
        descriptions of risks do not include all possible risks, and there may be
        other
        risks of which the Company is currently not aware.
 
 *l)
        Control of Corus by the Shaw family*
 
 JR
        Shaw and members of his family and the corporations owned and controlled
        by JR
        Shaw and members of his family (the “JR Shaw Group”) currently own 84.4% of the
        outstanding Class A participating shares in the capital of Corus.  The
        Class A participating shares are the only shares entitled to vote in all
        circumstances.  All of the Class A participating shares held by the JR
        Shaw Group are subject to a Voting Trust Agreement entered into by such
        persons.  The voting rights with respect to such Class A participating
        shares are exercised by the representative of a committee of five
        trustees.  Accordingly, the JR Shaw Group is, and as long as it owns a
        majority of the Class A participating shares will continue to be, able to
        elect
        a majority of the Board of Directors of Corus and to control the vote on
        matters
        submitted to a vote of Corus’ Class A participating shareholders.
 
 **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*.
 
 Changes
        in the regulation of Corus’ business activities, including decisions by
        regulators affecting the Company’s operations (such as the granting or renewal
        of licenses; decisions as to the rights to programming licenses to competitors
        in the Company’s markets) or changes in interpretations of existing regulations
        by courts or regulators, could adversely affect the Company’s results of
        operations.  The Company’s CRTC licenses must be renewed from time to
        time and cannot be transferred without regulatory approval.
 
 21
  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 May 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
 •
              to
                  foster strong competitive and socially responsive communications
                  industries.
 
 On
        April 1, 2004, the CRTC issued its so-called “CRTC 3-Year Work Plan” which
        included four objectives for the broadcasting sector which expand upon the
        aforementioned Vision Statement:
 
 1.
              Increased
                  availability of Canadian content and programming that reflects
                  Canadian
                  creative talent and Canada’s linguistic duality, cultural diversity and
                  social values, as well as its national, regional and community
                  characteristics.
 2.
              Increased
                  access to a variety of innovative, high-quality communications
                  services,
                  at reasonable prices, that meet consumers’ needs and reflect their
                  values.
 3.
              A
                  sustainable competitive Canadian communications
                  industry.
 4.
              Commission
                  processes that are fair, transparent and
                  effective.
 
 **Industry
        Canada**
 
 The
        technical aspects of the operation of radio and television stations in Canada
        are also 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 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 its Board of Directors the authority to
        restrict the issue, transfer and voting of its Class A participating shares
        and
        the transfer of its Class B non-voting participating shares for the purpose
        of
        ensuring that Corus remains qualified to hold or obtain licenses to carry
        on any
        broadcasting or programming business.
 
 **Broadcasting
        Services**
 
 Corus’
        radio stations and local television undertakings, specialty and premium
        television networks and pay audio services are subject to licensing and
        regulation by the CRTC. The *Broadcasting Act* gives 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, or, in a very limited number of instances, not at all. In order to
        conduct its business, Corus maintains its licenses in good standing and is
        in
        material compliance with conditions of license and regulatory requirements.
        The
        CRTC has never declined to renew a license held by any broadcasting undertaking
        in which Corus holds an ownership interest.
 
 22
  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 Corus’ 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 changes allow a single owner
        to
        operate up to three stations provided only two are 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.
 
 On
        December 15, 2006, the CRTC released its most recent review of radio
        policy.  The new policy maintained current levels of Canadian Content
        music required of broadcast licensees.  The contributions required of
        licensees to Canadian Talent Development was renamed to Canadian Content
        Development, the amounts payable were slightly increased, and the list of
        eligible recipients was amended.
 
 23
  **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 DTH 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 DTH 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 were
        required to implement service no later than November 24, 2004, unless the
        CRTC
        approved an extension before that date.  Since then, the Commission
        has licensed many new Category 2 services while at the same time allowing
        for carriage of new foreign services, especially those in third
        languages.
  In
        the fall of 2006, the Commission started a policy review for over-the-air
        broadcasting stations.  Key issues include the imposition of a fee for
        carriage of broadcast stations, the introduction of high definition television
        technology, transfer of ownership benefits payments, and closed captioning
        regulations.  It is expected that this will be followed by a review of
        policies regarding pay and specialty services and broadcasting distribution
        undertakings.
 
 New
        applications for Category 2 services are considered on an ongoing
        basis.
 
 **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 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 is considered at the same hearing.
 
 24
  **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
        Regulations* for 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 produced 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 10%
        and
        25% 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
        Canadian industry funding sources including the Canadian Television Fund
        and
        Telefilm Canada in respect of feature films. 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 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, New Zealand
        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 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 productions are produced through international
        treaty co-productions.
 
 25
  **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* (“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 Minister of Canadian Heritage 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 *Copyright Act*
        (Canada) in order to make use of the music component of the programming and
        other uses of works used or distributed by these undertakings.  Under
        these licenses, Corus is required to pay a range of royalties established
        by the
        Copyright Board pursuant to the requirements of the *Copyright Act*to
        collecting societies (which represent the copyright owners) and individual
        copyright owners. These royalties are paid by these undertakings in the normal
        course of their business.
 
 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 Act* to 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.
 
 26
  **CAPITAL
        STRUCTURE**
 
 **Description
        of Capital Structure**
 
 *(a)
        General*
 
 The
        authorized share capital of Corus consists of an unlimited number of Class
        A
        participating shares (“Class A Voting Shares”); an unlimited number of Class B
        non-voting participating shares (“Class B Non-Voting Shares”) (and, together
        with the Class A Voting Shares, the “Corus Shares”); an unlimited number of
        Class 1 preferred shares (the “Class 1 Preferred Shares”), issuable in series;
        an unlimited number of Class 2 preferred shares (the “Class 2 Preferred
        Shares”), issuable in series; and an unlimited number of Class A preferred
        shares (the “Class A Preferred Shares”). As at August 31, 2007, there were
        1,722,929 Class A Voting Shares, 40,512,297 Class B Non-Voting Shares and
        no
        preferred shares outstanding.
 
 *(b)
        Class A Voting Shares and Class B Non-Voting Shares*
 
 *(i)*
              *Authorized
                  Number of Shares*
 
 The
        authorized number of Class A Voting Shares and Class B Non-Voting Shares
        is
        unlimited. No Class A Voting Shares, however, shall be issued unless the
        prior
        written consent of holders of no fewer than two-thirds of the then outstanding
        Class A Voting Shares is obtained.
 
 *(ii)*
              *Voting
                  Rights*
 
 The
        holders of Class A Voting Shares are entitled to one vote per share at all
        meetings of shareholders. The holders of Class B Non-Voting Shares are entitled
        to receive notice of, to attend, and to speak at all meetings of shareholders
        but are not entitled to vote thereat except as required by law and except
        upon
        any resolution to authorize the liquidation, dissolution or winding up of
        Corus
        or the distribution of assets among its shareholders for the purpose of winding
        up its affairs, in which event each holder of Class B Non-Voting Shares will
        be
        entitled to one vote per share.
 
 *(iii)*
              *Dividends*
 
 In
        general, subject to the rights of any preferred shares outstanding from time
        to
        time, holders of Class A Voting Shares and Class B Non-Voting Shares are
        entitled to receive such dividends as the Board of Directors of Corus determines
        to declare on a share-for-share basis, as and when any such dividends are
        declared or paid, except that, during each Dividend Period (as defined below),
        the dividends (other than stock dividends) declared and paid on the Class
        A
        Voting Shares will always be $0.01 per share per annum less than the dividends
        declared and paid in such Dividend Period to holders of the Class B Non-Voting
        Shares, subject to proportionate adjustment in the event of any future
        consolidations or subdivisions of Corus Shares and in the event of any issue
        of
        Corus Shares by way of stock dividends. A “Dividend Period” is defined as the
        fiscal year of Corus or such other period not exceeding one year in respect
        of
        which the directors of Corus have an announced current policy to declare
        and pay
        or set aside for payment of regular dividends.
 
 *(iv)*
              *Rights
                  on Liquidation*
 
 In
        the event of the liquidation, dissolution or winding up of Corus or other
        distribution of assets of Corus for the purpose of winding up its affairs,
        all
        property and assets of Corus available for distribution to the holders of
        Corus
        Shares will be paid or distributed equally, share for share, between the
        holders
        of Corus Shares without preference or distinction.
 
 27
  *(v)*
              *Conversion
                  Privilege*
 
 Any
        holder of Class A Voting Shares may, at any time or from time to time, convert
        any or all Class A Voting Shares held by such holder into Class B Non-Voting
        Shares on the basis of one Class B Non-Voting Share for each Class A Voting
        Share so converted.
 
 Subject
        to certain exceptions described below, if an Exclusionary Offer is made,
        any
        holder of Class B Non-Voting Shares may, at any time or from time to time
        during
        a Conversion Period, convert any or all of the Class B Non-Voting Shares
        held by
        such holder into Class A Voting Shares on the basis of one Class A Voting
        Share
        for each Class B Non-Voting Share so converted. For the purpose of this
        paragraph, the following terms have the following meanings:
 
 “Conversion
        Period” means the period of time commencing on the eighth day after the Offer
        Date and terminating on the Expiry Date;
 
 “Exclusionary
        Offer” means an offer to purchase Class A Voting Shares that:
 
 (A)
              must,
                  by reason of applicable securities legislation or the requirements
                  of a
                  stock exchange on which the Class A Voting Shares are listed, be
                  made to
                  all or substantially all holders of Class A Voting Shares who are
                  residents of a province of Canada to which the requirement applies;
                  and
 
 (B)
              is
                  not made concurrently with an offer to purchase Class B Non-Voting
                  Shares
                  that is identical to the offer to purchase Class A Voting Shares
                  in terms
                  of price per share and percentage of outstanding shares to be taken
                  up
                  exclusive of shares owned immediately prior to the offer by the
                  Offeror,
                  and in all other material respects (except with respect to the
                  conditions
                  that may be attached to the offer for Class A Voting Shares), and
                  that has
                  no condition attached other than the right not to take up and pay
                  for
                  shares tendered if no shares are purchased pursuant to the offer
                  for Class
                  A Voting Shares,
 
 and
        for the purposes of this definition if an offer to purchase Class A Voting
        Shares is not an Exclusionary Offer as defined above but would be an
        Exclusionary Offer if it were not for sub-clause (B), the varying of any
        term of
        such offer shall be deemed to constitute the making of a new offer unless
        an
        identical variation concurrently is made to the corresponding offer to purchase
        Class B Non-Voting Shares;
 
 “Expiry
        Date” means the last date upon which holders of Class A Voting Shares may accept
        an Exclusionary Offer;
 
 “Offer
        Date” means the date on which an Exclusionary Offer is made;
 
 “Transfer
        Agent” means the transfer agent for the time being of the Class A Voting Shares;
        and
 
 “Offeror”
        means a person or company that makes an offer to purchase Class A Voting
        Shares
        (the “bidder”), and includes any associate or affiliate of the bidder or any
        person or company that is disclosed in the offering document to be acting
        jointly or in concert with the bidder.
 
 Subject
        to certain exceptions, the foregoing conversion right shall not come into
        effect
        if:
 
 (A)
              prior
                  to the time at which the offer is made there is delivered to the
                  Transfer
                  Agent and to the Secretary of Corus a certificate or certificates
                  signed
                  by or on behalf of one or more shareholders of Corus owning in
                  the
                  aggregate, as at the time the Exclusionary Offer is made, more
                  than 50% of
                  the then outstanding Class A Voting Shares, exclusive of shares
                  owned
                  immediately prior to the Exclusionary Offer by the Offeror, which
                  certificate or certificates shall confirm, in the case of each
                  such
                  shareholder, that such shareholder shall
                  not:
 
 a.
              tender
                  any shares in acceptance of any Exclusionary Offer without giving
                  the
                  Transfer Agent and the Secretary of Corus written notice of such
                  acceptance or intended acceptance at least seven days prior to
                  the Expiry
                  Date;
  28
  b.
              make
                  any Exclusionary Offer;
 
 c.
              act
                  jointly or in concert with any person or company that makes any
                  Exclusionary Offer; or
 
 d.
              transfer
                  any Class A Voting Shares, directly or indirectly, during the time
                  at
                  which any Exclusionary Offer is outstanding without giving the
                  Transfer
                  Agent and the Secretary of Corus written notice of such transfer
                  or
                  intended transfer at least seven days prior to the Expiry Date,
                  which
                  notice shall state, if known to the transferor, the names of the
                  transferees and the number of Class A Voting Shares transferred
                  or to be
                  transferred to each transferee; or
 
 (B)
              as
                  of the end of the seventh day after the Offer Date there has been
                  delivered to the Transfer Agent and to the Secretary of Corus a
                  certificate or certificates signed by or on behalf of one or more
                  shareholders of Corus owning in the aggregate more than 50% of
                  the then
                  outstanding Class A Voting Shares, exclusive of shares owned immediately
                  prior to the Exclusionary Offer by the Offeror, which certificate
                  or
                  certificates shall confirm, in the case of each such
                  shareholder:
 
 a.
              the
                  number of Class A Voting Shares owned by the
                  shareholder;
 
 b.
              that
                  such shareholder is not making the offer and is not an associate
                  or
                  affiliate of, or acting jointly or in concert with, the person
                  or company
                  making the offer;
 
 c.
              that
                  such shareholder shall not tender any shares in acceptance of the
                  offer,
                  including any varied form of the offer, without giving the Transfer
                  Agent
                  and the Secretary of Corus written notice of such acceptance or
                  intended
                  acceptance at least seven days prior to the Expiry Date;
                  and
 
 d.
              that
                  such shareholder shall not transfer any Class A Voting Shares,
                  directly or
                  indirectly, prior to the Expiry Date without giving the Transfer
                  Agent and
                  the Secretary of Corus written notice of such transfer or intended
                  transfer at least seven days prior to the Expiry Date, which notice
                  shall
                  state, if known to the transferor, the names of the transferees
                  and the
                  number of Class A Voting Shares transferred or to be transferred
                  to each
                  transferee; or
 
 (C)
              as
                  of the end of the seventh day after the Offer Date, a combination
                  of
                  certificates that comply with either clause (A) or (B) from shareholders
                  of Corus owning in the aggregate more than 50% of the then outstanding
                  Class A Voting Shares, exclusive of shares owned immediately prior
                  to the
                  Exclusionary Offer by the Offeror, has been delivered to the Transfer
                  Agent and to the Secretary of
                  Corus.
 
 *(vi)*
              *Modification*
 
 Neither
        class of Corus Shares may be subdivided, consolidated, reclassified or otherwise
        changed unless contemporaneously therewith the other class of Corus Shares
        is
        subdivided, consolidated, reclassified or otherwise changed in the same
        proportion and in the same manner.
 
 *(vii)*
              *Offer
                  to Purchase*
 
 Corus
        may not make an offer to purchase any outstanding Class A Voting Shares unless
        at the same time it makes an offer to purchase at the same price and on the
        same
        terms as to payment an equivalent proportion of the outstanding Class B
        Non-Voting Shares.
 
 *(viii)*
              *Redemption*
 
 The
        Corus Shares are not redeemable at the option of either Corus or the holder
        of
        any such Corus Shares.
 
 *(c)
        Class 1 Preferred Shares*
 
 The
        Class 1 Preferred Shares are issuable in one or more series. The Board of
        Directors may fix from time to time before such issue the number of shares
        which
        is to comprise each series then to be issued and the designation, rights,
        conditions, restrictions and limitations attaching thereto, including, without
        limiting the generality of the foregoing, the rate of preferential dividends
        and
        whether or not such dividends shall be cumulative, the dates of payment thereof,
        the redemption price and terms and conditions of redemption, including the
        rights, if any, of the holders of Class 1 Preferred Shares of such series
        to
        require the redemption thereof, conversion rights, if any, and any redemption
        fund, purchase fund or other provisions to be attached to the Class 1 Preferred
        Shares of such series.
 
 29
  The
        holders of Class 1 Preferred Shares of any series shall not be entitled to
        receive notice of, to attend or vote at any meeting of shareholders of Corus,
        other than a meeting of holders of Class 1 Preferred Shares, as provided
        by
        applicable law.
 
 The
        shares of each successive series of Class 1 Preferred Shares shall have
        preference over the Class A Voting Shares and Class B Non-Voting Shares as
        to
        dividends of not less than 1/100th of a cent per share, and shall not confer
        upon the shares of one series a priority over the shares of any other series
        of
        the Class 1 Preferred Shares in respect of voting, dividends or return of
        capital. If any amount of cumulative dividends or any amount payable on return
        of capital in respect of shares of a series of Class 1 Preferred Shares is
        not
        paid in full, the shares of such series shall participate rateably with the
        shares of all other series of Class 1 Preferred Shares in respect of accumulated
        dividends and return of capital. The Class 1 Preferred Shares and each series
        thereof shall rank junior to and be subject to in all respects to the
        preferences, rights, conditions, restrictions, limitations and prohibitions
        attached to the Class A Preferred Shares.
 
 *(d)
        Class 2 Preferred Shares*
 
 The
        Class 2 Preferred Shares are issuable in one or more series. From time to
        time
        before any such issue, the directors may fix the number of shares which is
        to
        comprise each series then to be issued and the designation, rights, conditions,
        restrictions or limitations attaching thereto, including, without limiting
        the
        generality of the foregoing, the rate of preferential dividends and whether
        or
        not such dividends shall be cumulative, the dates of payment thereof, the
        redemption price and terms and conditions of redemption, including the rights,
        if any, of the holders of Class 2 Preferred Shares of such series to require
        the
        redemption thereof, conversion rights, if any, and any redemption fund, purchase
        fund or other provisions to be attached to the Class 2 Preferred Shares of
        such
        series.
 
 The
        holders of Class 2 Preferred Shares of any series shall not be entitled to
        receive notice of, to attend or vote at any meeting of shareholders of Corus,
        other than a meeting of holders of Class 2 Preferred Shares, as provided
        by
        applicable law.
 
 The
        shares of each successive series of Class 2 Preferred Shares shall have
        preference over the Class A Voting Shares and Class B Non-Voting Shares as
        to
        dividends in right of payment and shall not confer upon the shares of one
        series
        a priority over the shares of any other series of Class 2 Preferred Shares
        in
        respect of voting, dividends or return of capital. If any amount of cumulative
        dividends or any amount payable on return of capital in respect of shares
        of a
        series of Class 2 Preferred Shares is not paid in full, the shares of such
        series shall participate rateably with the shares of all other series of
        the
        Class 2 Preferred Shares in respect of accumulated dividends and return of
        capital. The Class 2 Preferred Shares and each series thereof shall rank
        junior
        to and be subject to in all respects to the preferences, rights, conditions,
        restrictions, limitations and prohibitions attached to the Class A Preferred
        Shares and the Class 1 Preferred Shares.
 
 *(e)
        Class A Preferred Shares*
 
 In
        accordance with  the provisions of subsection 26(3) of the *Canada
        Business Corporations Act* (the “CBCA”), the directors of Corus may add to
        the stated capital account maintained for Class A Preferred Shares the whole
        or
        any part of the amount of consideration received by Corus in an exchange
        for
        property, or shares of another class, or pursuant to an amalgamation referred
        to
        in section 182 of the CBCA or an arrangement referred to in subsection 192(1)(b)
        or (c) of the CBCA. The Class A Preferred Shares shall be redeemed (the “Class A
        Redemption Amount”) at the amount of consideration received therefore as
        determined by the directors of Corus at the time of issuance. No Class A
        Preferred Shares shall be issued by Corus at any particular time if, at that
        time, there are Class A Preferred Shares issued and outstanding
 
 30
  The
        holders of the Class A Preferred Shares shall not be entitled to receive
        notice
        of, to attend or vote at any meeting of shareholders of Corus, subject to
        the
        CBCA.
 
 When
        and if declared by the directors of Corus, the holders of Class A Preferred
        Shares shall be entitled to receive out of the net profits or surplus of
        Corus
        properly applicable to the payment of dividends, a non-cumulative dividend
        at
        such rate as the directors may from time to time determine. Upon the
        liquidation, dissolution or winding up of Corus, or other distribution of
        the
        assets of Corus or repayment of capital to its shareholders for the purpose
        of
        winding up its affairs, the holders of Class A Preferred Shares shall be
        entitled to receive for each such share, in priority of the holders of Class
        A
        Voting Shares and Class B Non-Voting Shares, the Class A Redemption Amount
        per
        share together with all declared but unpaid dividends thereon (the “Class A
        Redemption Price”). After such payment the holders of the Class A Preferred
        Shares shall have no right or claim to any of the remaining assets of Corus.
        Class 1 Preferred Shares, Class 2 Preferred Shares, Class A Voting Shares
        and
        Class B Non-Voting Shares shall rank junior to and shall be subject in all
        respect to the preferences, rights, conditions, restrictions, limitations
        and
        prohibitions attached to the Class A Preferred Shares. The Class A Preferred
        Shares are redeemable at the demand of Corus and are retractable at the demand
        of a holder of Class A Preferred Shares at the Class A Redemption
        Price.
 
 **Share
        constraints**
 
 The
        statutes which govern the provision of broadcasting services by Corus and
        its
        regulated subsidiaries impose restrictions on the ownership of shares of
        Corus
        and its regulated subsidiaries by persons that are not Canadian. (See
        information under the heading “Canadian Communications Industry Regulatory
        Environment - Restrictions on Non-Canadian Ownership”). In order to ensure that
        Corus and its regulated subsidiaries remain eligible or qualified to provide
        broadcasting services in Canada, the Articles of Incorporation of Corus require
        the directors of Corus to refuse to issue or register the transfer of any
        “Voting Shares” (defined as the Class A Voting Shares and any other shares of
        Corus carrying voting rights under all circumstances or by reason of an event
        that has occurred and is continuing, and includes a security that is convertible
        into such a share and a currently exercisable option or right to acquire
        such a
        share or such a convertible security) to a person that is not a Canadian
        if such
        issue or transfer would result in the total number of such shares held by
        non-Canadians exceeding the maximum number permitted by applicable law. In
        addition, the directors of Corus are required to refuse to issue or register
        the
        transfer of any Voting Shares to a person in circumstances where such issue
        or
        transfer would affect the ability of Corus and its regulated subsidiaries
        to
        obtain, maintain, amend or renew a license to carry on any business. The
        Articles of Incorporation of Corus further provide that if, for whatever
        reason,
        the number of Voting Shares held by non-Canadians or other such persons exceeds
        the maximum number permitted by applicable law or would affect the ability
        to
        carry on any licensed business, Corus may, to the extent permitted by corporate
        or communications statutes, sell the Voting Shares held by such non-Canadians
        or
        other persons as if it were the owner of such shares. The Articles of
        Incorporation of Corus also give the directors of Corus the right to refuse
        to
        issue or register the transfer of shares of any class in the capital of Corus
        if
        (i) the issue or the transfer requires the prior approval of a regulatory
        authority unless and until such approval has been obtained; or (ii) the person
        to whom the shares are to be issued or transferred has not provided Corus
        with
        such information as the directors may request for the purposes of administering
        these share constraints.
 
 **Ratings**
 
 As
        a result of the successful tender offer and consent solicitation for Corus’
Senior Subordinated Debt, completed in January 2006, the ratings previously
        assigned by Standard & Poor’s and Moody’s Investors Service, Inc. for Corus
        were withdrawn.
 
 **MARKET
        FOR SECURITIES**
 
 **Marketplaces**
 The
        securities of the Company are listed and posted for trading on the exchanges
        set
        forth below.
 
 Security
              Exchange
              SymbolClass
                  B Non-Voting Shares
              Toronto
                  Stock Exchange (“TSX”)
              CJR.BClass
                  B Non-Voting Shares
              New
                  York Stock Exchange (“NYSE”)
              CJR
 
 31
  **Trading
        Price and Volume**
 The
        following table sets forth the monthly price range and volume traded for
        each of
        the Company’s publicly traded securities for each month during the fiscal year
        ended August 31, 2007.
 
 **TSX
                  - CJR.B**Month
              High
              Low
              Close
              Average
                  DailyVolumeSeptember
                  2006
              44.94
              38.41
              42.62
              108,289October
                  2006
              43.25
              38.11
              42.25
              120,868November
                  2006
              42.36
              38.07
              41.00
              96,319December
                  2006
              42.71
              39.95
              41.50
              60,919January
                  2007
              49.10
              41.00
              49.00
              125,013February
                  2007
              49.99
              46.03
              46.52
              111,145March
                  2007
              48.89
              43.50
              44.05
              117,489April
                  2007
              48.99
              43.88
              46.52
              91,369May
                  2007
              50.05
              45.60
              49.50
              82,324June
                  2007
              51.10
              49.00
              49.80
              158,942July
                  2007
              50.66
              47.51
              48.44
              114,869August
                  2007
              54.24
              46.75
              48.83
              137,028
 
 **NYSE
                  - CJR**Month
              High
              Low
              Close
              Average
                  DailyVolumeSeptember
                  2006
              40.00
              34.65
              38.20
              5,815October
                  2006
              39.00
              34.11
              37.64
              9,332November
                  2006
              37.50
              33.75
              35.56
              8,957December
                  2006
              37.05
              34.61
              35.96
              7,450January
                  2007
              41.70
              34.97
              41.66
              8,910February
                  2007
              42.40
              39.71
              40.20
              19,563March
                  2007
              41.10
              37.55
              38.20
              7,082April
                  2007
              43.41
              38.10
              42.19
              11,900May
                  2007
              46.55
              41.10
              46.35
              19,823June
                  2007
              47.88
              45.78
              46.83
              11,362July
                  2007
              48.56
              44.50
              45.84
              19,000August
                  2007
              54.50
              44.43
              46.06
              24,435
 
 All
        price and volume information is from independent third-party
        sources.
 
 **DIVIDEND
        POLICY**
 
 *(a)
        Dividend Policy*
 
 On
        April 3, 2007, the Company announced that its Board of Directors has approved
        a
        monthly dividend for holders of its Class A Voting Shares and Class B Non-Voting
        Shares of $0.0825 and $0.08333, respectively.  The expected dividend
        on an annual basis for the Company’s Class A Voting Shares and the Class B
        Non-Voting Shares is $0.99 and $1.00, respectively.
 
 The
        Company’s Board of Directors will review the dividend on a quarterly
        basis.  Shareholders are entitled to receive dividends only when any
        such dividends are declared by the Company’s Board of Directors, and there is no
        entitlement to any dividend prior thereto.
 
 32
  As
        described above, the dividends (other than stock dividends) declared and
        paid on
        the Class A Voting Shares shall be $0.01 per share per annum less than the
        dividends declared and paid to holders of the Class B Non-Voting Shares.
        See the
        information under the heading “Capital Structure - Description of Capital
        Structure - Class Voting A Shares and Class B Non-Voting Shares”.
 
 *(b)
        Restrictions on Payment of Dividends*
 
 Covenants
        under Corus’ credit agreement with a syndicate of lenders, as amended and
        restated on January 23, 2006, may restrict Corus’ ability to pay dividends
        should Corus fail to achieve certain financial ratios and/or financial
        performance or if an event of default has occurred and is continuing or would
        result from the payment of the dividend.
 
 *(c)
        Distribution Rates and Payment Dates*
 
 The
        annual distribution rates on securities of the Company and payment dates
        for the
        fiscal year ended August 31, 2007, as well as the annual dividend payments
        for
        the past three fiscal years, are set forth in the tables below.
 
 **Fiscal
                  2007 dividends paid per share**Date
                  paid
              Class
                  A Voting Shares
              Class
                  B Non-Voting SharesAugust
                  31, 2007
              $0.0825
              $0.08333July
                  31, 2007
              $0.0825
              $0.08333June
                  30, 2007
              $0.0825
              $0.08333May
                  31, 2007
              $0.0825
              $0.08333April
                  30, 2007
              $0.0825
              $0.08333March
                  31, 2007
              $0.2125
              $0.21500December
                  31, 2006
              $0.2125
              $0.21500September
                  30, 2006
              $0.2125
              $0.21500
 
 
 **Annual
                  dividend payments per share**Fiscal
                  2007
              Fiscal
                  2006
              Fiscal
                  2005Class
                  A Voting Shares
              $1.0500
              $0.24
              $0.065Class
                  B Non-Voting Shares
              $1.0617
              $0.25
              $0.075
 
 
 **NORMAL
        COURSE ISSUER BID**
 
 On
        December 15, 2005 Corus announced its intention to make a Normal Course Issuer
        Bid for its Class B Non-Voting Shares.  The TSX subsequently accepted
        the notice filed by Corus. Under the bid Corus could purchase for cancellation
        up to a total of 3,000,000 Class B Non-Voting Shares during the 12 month
        period
        commencing January 1, 2006 and ending December 31, 2006.  To December
        31, 2006 Corus purchased 1,089,000 shares at an average price of $35.80 per
        share.
 
 On
        February 12, 2007, the Company announced that the TSX had accepted the notice
        filed by the Company of its intention to renew its normal course issuer bid
        for
        its Class B Non-Voting Shares through the facilities of the TSX.  The
        Company intends to purchase for cancellation a maximum of 1,500,000 Class
        B
        Non-Voting Shares.  To August 31, 2007 Corus purchased 714,800 shares
        at an average price of $47.88 per share.
 
 33
 
 **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, 2007 or as otherwise
        noted,
        their positions within the Company and their principal occupations during
        the
        last five years.  The term of office for each director will be until
        the next annual meeting or until his or her successor is elected or
        appointed.
 
 **Name
                  and municipality of residence**
              **Director/Officer**
              **Position
                  with Corus/Principal occupation**Pierre
                  Béland
                Montréal,
                  Québec
              Director
              President,
                  Métromédia PlusJohn
                  M. Cassaday
                Toronto,
                  Ontario
              Director
                  and Officer
              President
                  and Chief Executive Officer,
                Corus
                  Entertainment Inc.Dennis
                  Erker
                Edmonton,
                  Alberta
              Director
              Partner,
                  Fairly Erker Advisory GroupCarolyn
                  Hursh
                Calgary,
                  Alberta
              Director
              Chairman,
                  James Richardson & Sons, LimitedWendy
                  A. Leaney
                Toronto,
                  Ontario
              Director
              President,
                  Wyoming Associates Ltd.Ronald
                  D. Rogers
                Calgary,
                  Alberta
              Director
              Corporate
                  director/trusteeCatherine
                  Roozen
                Edmonton,
                  Alberta
              Director
              Director
                  and Corporate Secretary, Cathton Holdings Ltd.Terrance
                  Royer
                Calgary,
                  Alberta
              Director
              Chairman,
                  Royco Hotels Ltd.Heather
                  A. Shaw
                Calgary,
                  Alberta
              Director
                  and Officer
              Executive
                  Chair,
                Corus
                  Entertainment Inc.Julie
                  M. Shaw
                Calgary,
                  Alberta
              Director
              Vice
                  President, Facilities, Design and Management, Shaw Communications
                  Inc; and
                  Secretary, Shaw FoundationThomas
                  C. Peddie FCA
                Toronto,
                  Ontario
              Officer
              Senior
                  Vice President and Chief Financial Officer,
                Corus
                  Entertainment Inc.John
                  R. (Jack) Perraton
                Calgary,
                  Alberta
              Officer
              Corporate
                  Secretary
                Corus
                  Entertainment Inc.
                Senior
                  Partner, Perraton LawPaul
                  W. Robertson
                Toronto,
                  Ontario
              Officer
              President,
                  Television
                Corus
                  Entertainment Inc.John
                  P. Hayes
                Toronto,
                  Ontario
              Officer
              President,
                  Radio
                Corus
                  Entertainment Inc.Doug
                  Murphy
                Toronto,
                  Ontario
              Officer
              President,
                  Nelvana Enterprises
                Corus
                  Entertainment Inc.Scott
                  Dyer
                Toronto,
                  Ontario
              Officer
              Executive
                  Vice President, General Manager, Corus Kids
                Corus
                  Entertainment Inc.Gary
                  Maavara
                Toronto,
                  Ontario
              Officer
              Vice
                  President, General Counsel
                Corus
                  Entertainment Inc.David
                  Spence CA
                Markham,
                  Ontario
              Officer
              Vice
                  President, Controller
                Corus
                  Entertainment Inc.Hal
                  Blackadar
                Oakville,
                  Ontario
              Officer
              Vice
                  President, Human Resources
                Corus
                  Entertainment Inc.Susan
                  Ross
                Toronto,
                  Ontario
              Officer
              Executive
                  Vice President, General Manager, Corus Lifestyle, Drama and
                  Movies
                Corus
                  Entertainment Inc.
  34
  Each
        director named above was appointed a director on January 10, 2007 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.
 
 The
        Board of Directors has four committees made up of the following
        members:
 
 **Committee**
              **Members**Executive
                  Committee
              Heather
                  A. Shaw - Chair
                John
                  M. Cassaday
                Terrance
                  Royer
                Dennis
                  ErkerAudit
                  Committee
              Ronald
                  D. Rogers - Chair
                Wendy
                  A. Leaney
                Catherine
                  Roozen
                Terrance
                  RoyerHuman
                  Resources Committee
              Terrance
                  Royer - Chair
                Pierre
                  Béland
                Dennis
                  Erker
                Ronald
                  D. RogersCorporate
                  Governance Committee
              Dennis
                  Erker - Chair
                Carolyn
                  Hursh
                Catherine
                  Roozen
 
 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:
 •
              Prior
                  to July 2004, Ronald D. Rogers was Senior Vice President and Chief
                  Financial Officer of Shaw Communications
                  Inc.;
 •
              Prior
                  to September 2006, Doug Murphy was Executive Vice President, Business
                  Development, Nelvana, and prior to December 2002 he was Principal,
                  Doug
                  Murphy and Company;
 •
              Prior
                  to September 2006, Scott Dyer was Executive Vice President, Production
                  and
                  Development, Nelvana;
 •
              Gary
                  Maavara was Vice President, Public Relations for CanWest Global
                  Communications Corp. from July 2003 to September 2004, and from
                  2001 to
                  2003 Senior Vice President, Global Television Inc. and concurrently
                  Senior
                  Vice President and Chief Operating Officer, CanWest Interactive
                  Inc.;
 •
              Prior
                  to February 2005, David Spence was Corporate Controller, Corus
                  Entertainment Inc.
 •
              Prior
                  to September 2006, Susan Ross was Executive Vice President and
                  General
                  Manager, Specialty Television, Corus Entertainment
                  Inc.
 
 As
        of October 31, 2007, the directors and executive officers of the Company
        beneficially owned, directly or indirectly, or exercised control or direction
        over 914,366 Class A Voting Shares and 1,302,510 Class B Non-Voting Shares,
        representing 53.1% and 3.4% of the issued and outstanding Class A Voting
        Shares
        and Class B Non-Voting Shares, respectively.
 
 **AUDIT
        COMMITTEE**
 
 **Charter**
 
 The
        text of the Audit Committee’s Charter is attached as Schedule A.
 
 **Composition
        of the Audit Committee**
 
 The
        Company’s Audit Committee is composed of Ronald D. Rogers, Wendy A. Leaney,
        Catherine Roozen and Terrance Royer, each of whom is a financially literate,
        independent director of the Company.  The relevant education and
        experience of each Audit Committee member is outlined below:
 
 35
 
 *Ronald
        D. Rogers (Chair)*
 
 Mr.
        Rogers holds a Bachelor of Commerce degree and is a chartered
        accountant.  Mr. Rogers retired as Senior Vice President and Chief
        Financial Officer of Shaw Communications Inc. in August of 2004.  Mr.
        Rogers serves as a trustee for The Brick Group Income Fund, Transforce Income
        Fund, Pizza Pizza Royalty Income Fund and Parkland Income Fund.
 
 *Wendy
        A. Leaney*
 
 Ms.
        Leaney holds a Bachelor of Arts (Hon) degree.  Ms. Leaney is President
        of Wyoming Associates Ltd., a private investment and consulting firm based
        in
        Toronto.  Prior to that, Ms. Leaney was Managing Director and Co-Head
        Global Communications Finance for TD Securities Inc.  Ms. Leaney
        serves on the Board of Canadian Western Bank.  From 2001 to 2005, Ms.
        Leaney also served on the Board of Call-Net Enterprises.
 
 *Catherine
        Roozen*
 
 Ms.
        Roozen is Director and Corporate Secretary of Cathton Holdings Ltd. and the
        Allard Foundation, positions she has held since 1981.  Ms. Roozen also
        serves as a Director for Melcor Developments Ltd.  Ms. Roozen serves
        on the Alberta Cancer Board as well as on a number of charitable
        boards.
 
 *Terrance
        Royer*
 
 Mr.
        Royer is Chairman of Royco Hotels Ltd., a hotel management
        company.  Mr. Royer retired as Executive Vice-Chairman of the
        Calgary-based Royal Host REIT in December of 2005.  He is also retired
        President, CEO and founder of Royal Host Corp., a hotel and resort ownership,
        franchising and management company.  Mr. Royer served on the Board of
        Royal Host REIT from January, 1998 to June, 2006. Mr. Royer is Chairman Emeritus
        of the University of Lethbridge (Chairman from January 2001 - July 2006)
        and
        Chairman of the Alberta “Access to the Future Fund” for post-secondary
        institutions in Alberta.
 
 **Principal
        Accounting Fees and Services - Independent Auditors**
 
 Fees
        payable to the Registrant’s independent auditor, Ernst and Young LLP, for the
        years ended August 31, 2007 and 2006 totaled $1,696,355 and $2,228,680,
        respectively, as detailed in the following table.  All funds are in
        Canadian dollars:
 
 **Fiscal
                  year ended August 31,****2007**
              **2006**Audit
                  fees
              1,333,000
              1,553,000Audit-related
                  fees
              266,500
              445,880Tax
                  fees
              96,855
              229,800All
                  other fees
              -
              -**Total**
              **1,696,355**
              **2,228,680**
 
 The
        nature of the services provided by Ernst and Young LLP under each of the
        categories indicated in the table is described below:
 
 *Audit
        Fees*
 
 Audit
        fees were for professional services rendered by Ernst and Young LLP for the
        audit of the Registrant’s annual financial statements and services provided in
        connection with statutory and regulatory filings or engagements.
 
 *Audit-Related
        Fees*
 
 Audit-related
        fees were for assurance and related services reasonably related to the
        performance of the audit or review of the annual financial statements and
        are
        not reported under “Audit Fees” above.  These services consisted of
        employee benefit plan audits, non-statutory audits of wholly-owned subsidiaries,
        assistance with the Company’s plans to comply with Section 404 of the
*Sarbanes-Oxley Act of 2002*, and translation services in respect of the
        financial statements and other regulatory filings.
 
 36
  *Tax
        Fees*
 
 Tax
        fees were for tax compliance, tax advice and tax-planning professional
        services.  These services consisted of tax planning and advisory
        services relating to common forms of domestic and international taxation
        (i.e.
        income tax, capital tax, Goods and Services Tax, and value added tax) as
        well as
        assistance with various tax audit matters.
 
 *All
        Other Fees*
 
 Fees
        disclosed in the table above under the item “all other fees” represent products
        and services other than the audit fees, audit-related fees and tax fees
        described above.  No such fees were paid in 2007 and
        2006.
 
 The
        Company’s Audit Committee has implemented a policy restricting the services that
        may be provided by the auditors and the fees paid to the
        auditors.  Prior to the engagement of the auditors, the Audit
        Committee pre-approves the provision of the service.  In making their
        determination regarding non-audit services, the Audit Committee considers
        the
        compliance with the policy and the provision of non-audit services in the
        context of avoiding impact on auditor independence.  Each quarter, the
        CFO makes a presentation to the Audit Committee detailing the non-audit services
        performed by the auditors on a year-to-date basis, and details of any proposed
        assignments for consideration by the Audit Committee and pre-approval if
        appropriate.
 
 As
        required by the *Sarbanes-Oxley Act of 2002*, all audit, audit-related
        and non-audit services rendered by Ernst and Young LLP pursuant to engagements
        entered into since May 6, 2003 were pre-approved by the Audit Committee pursuant
        to the Company’s policy and pre-approval procedures.  In fiscal 2007,
        no audit-related or non-audit services rendered by the auditors were required
        to
        be approved by the Audit Committee pursuant to the DE MINIMIS exception set
        out
        in paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
  
 **LEGAL
        AND REGULATORY**
 
 Corus
        is involved from time to time in various claims and lawsuits incidental to
        the
        ordinary course of business, including intellectual property actions and
        acts
        for defamation. Adverse determinations in litigation could result in the
        loss of
        proprietary rights, subject the Company to significant liabilities, or require
        Corus to seek licenses from third parties, any one of which could have an
        adverse effect on the business and results of operations. Actions which are
        incidental to the 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 in a material way. While no assurance can be given that
        these
        proceedings will be favourably resolved, Corus does not believe that the
        outcome
        of these legal proceedings will have a material adverse impact on its financial
        position or results of operations.
 
 
 **INTERESTS
        OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS**
 
 To
        the knowledge of the Company, no director or executive officer of the Company,
        or a shareholder holding a sufficient number of securities of the Company
        to
        affect materially the control of the Company, is or has been, since the
        incorporation of the Company, a director or executive officer of any company
        that, while that person was acting in that capacity, (a) was the subject
        of a
        cease trade order or similar order or an order that denied the company access
        to
        any exemptions under Canadian securities legislation for a period of more
        than
        30 consecutive days; (b) was subject to an event that resulted, after that
        person ceased to be a director or executive officer, in the company being
        the
        subject of a cease trade or similar order or an order that denied the company
        access to any exemption under Canadian securities legislation for a period
        of
        more than 30 consecutive days; or (c) has, since the incorporation of the
        Company, become bankrupt, made a proposal under any legislation relating
        to
        bankruptcy or insolvency or become subject to or instituted any proceedings,
        arrangement or compromise with creditors or had a receiver, receiver manager
        or
        trustee appointed to hold the assets of the director, executive officer or
        shareholder.
 
 37
 
 **TRANSFER
        AGENTS**
 
 In
        Canada, CIBC Mellon Trust Company acts as Corus’ transfer agent.  In
        the United States, The Bank of New York Mellon acts as Corus’ transfer
        agent.
 
 
 **MATERIAL
        CONTRACTS**
 
 **Senior
        Secured Credit Facility**
 
 A
        syndicate of lenders has provided Corus with a senior secured revolving term
        credit facility (the “Revolving Facility”) and a senior secured non-revolving
        term credit facility (the “Term Facility”) under the Amended and Restated Credit
        Agreement dated as of January 23, 2006 (the “Credit Agreement”).
 
 The
        Revolving Facility consists of a committed credit of $300 million that matures
        January 24, 2011. As a revolving facility, amounts borrowed may be repaid
        and
        re-borrowed as required through the term of the Revolving Facility. The
        commitment expires at the maturity date and there are no mandatory reductions
        to
        the committed amount, subject to certain covenants, during the term of the
        facility. As at August 31, 2007, $115 million was drawn against the Revolving
        Facility.
 
 The
        Term Facility amounts to $500 million and matures January 24, 2011. Any amounts
        repaid before the maturity date may not be re-borrowed. The commitment expires
        at the maturity date and there are no mandatory reductions to the committed
        amount, subject to certain covenants, during the term of the facility. As
        at
        August 31, 2007 $500 million was drawn against the Term Facility.
 
 Advances
        under the Credit Agreement are available in either Canadian or U.S. dollars
        at
        the option of Corus. Interest rates applicable to Canadian dollar advances,
        at
        Corus’ option, are equal to (i) the Canadian prime rate, or (ii) Bankers
        Acceptance rates for terms up to six months, plus, in each case, an applicable
        margin. Interest rates applicable to U.S. dollar advances, at Corus’ option, are
        equal to (i) the U.S. base rate, or (ii) the U.S. London inter-bank offered
        rate
        (“LIBOR”) for terms up to six months, plus, in each case, an applicable margin.
        Margins will vary based on the type of advance and debt to cash flow ratios
        achieved.
 
 The
        Credit Agreement requires that Corus comply on a quarterly basis with certain
        financial covenants, including maximum debt to cash flow ratio tests and
        a
        minimum interest coverage ratio test. The  Credit Agreement also
        includes negative covenants that, subject to certain exceptions, may restrict
        or
        limit the ability of Corus (and its significant operating subsidiaries) to,
        among other things, incur, assume or permit to exist additional indebtedness
        or
        encumbrances, engage in mergers, consolidations, amalgamations or other
        reorganizations, sell or otherwise dispose of significant assets, make
        investments, declare dividends or repurchase equity securities, engage in
        activities that adversely affect the ranking or validity of the lenders’
security, or make optional prepayments on subordinated debt (excepting residual
        senior subordinated notes outstanding subsequent to the January 2006 completion
        of the tender offer and consent solicitation).
 
 The  Credit
        Agreement contains certain customary representations and warranties, positive
        covenants and events of default, including payment defaults, covenant defaults,
        cross-defaults to other material indebtedness or other material agreements,
        insolvency or bankruptcy defaults, material judgments, material breach of
        representations and warranties and failure to maintain security. If an event
        of
        default occurs and continues, the lenders are entitled to take all actions
        permitted to a secured creditor including the acceleration of amounts
        due.
 
 The
        lenders under the Credit Agreement have a first ranking charge on the present
        and future property of Corus, including the present and future property of
        its
        significant operating subsidiaries. Those subsidiaries have provided guarantees
        to the lenders and securities pledge agreements have been entered into relative
        to the ownership interest in most of the significant operating
        subsidiaries.
 
 38
  **Interest
        Rate Swaps**
 
 Corus
        has entered into Canadian interest rate swap agreements with certain Canadian
        banks (that are also lenders under the Credit Agreement) to fix the interest
        rate at 4.13% plus a margin on $400 million of the Term Facility for the
        full
        term of the facility. These swap agreements are considered senior debt and
        are
        subject to the same covenants and security as available to the lenders under
        the
        Credit Agreement.
 
 
 **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.
 
 Additional
        information including directors’ and officers’ remunerations and indebtedness,
        principal holders of the Company’s securities, options to purchase securities
        and interests of insiders in material transactions, where applicable, is
        contained in the Company’s Management Information Circular dated December 7,
        2007.  Additional financial information is provided in the Company’s
        consolidated financial statements for its most recently completed financial
        year.  A copy of such documents may be obtained upon request from 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
 **CORPORATE
        GOVERNANCE PRACTICES**
 
 The
        Board of Directors of the Company endorses the principles that sound corporate
        governance practices (“Corporate Governance Practices”) are important to the
        proper functioning of the Company and the enhancement of the interests of
        the
        shareholders.
 
 The
        Company’s Statement of Corporate Governance Practices as they compare to the TSX
        Guidelines on Corporate Governance, a statement of the significant ways that
        the
        Company’s Corporate Governance Practices differ from the NYSE Corporate
        Governance Rules, charters of the Board of Directors and its committees,
        and the
        Code of Business Conduct may be found in the Company’s most recently filed
        Management Information Circular, as well as on the Company’s website at
        www.corusent.com.
  39
  **Schedule
        A**
 
 **AUDIT
        COMMITTEE CHARTER**
 **1.           Mandate**
 
 The
        mandate of the Audit Committee (the “Committee”) shall be to: provide assistance
        to the Board of Directors (the “Board”) of Corus Entertainment Inc. (“Corus” or
        the “Company”) in fulfilling their oversight responsibilities relating to: (i)
        the integrity of the Company’s financial statements; (ii) the Company’s
        compliance with legal and regulatory requirements; (iii) the external auditor’s
        qualifications and independence; and, (iv) the performance of the Company’s
        internal audit function and external auditors.
 
 In
        fulfilling its purpose, it is the responsibility of the Committee to maintain
        free and open communication between the Committee, external auditors, the
        internal auditors, and management of the Company, and to determine that all
        parties are aware of their responsibilities.
 
 **2.           Composition
        and Operations**
 
 2.1
              The
                  Committee shall be composed of three or more unrelated and independent
                  directors, as determined and appointed by the Board on an annual
                  basis.  “Unrelated and independent director” means a director
                  who is independent of management of the Company and is free from
                  any
                  interest and any business or other relationship which could, or
                  could
                  reasonably be perceived to, materially interfere with the director’s
                  ability to act with a view to the best interests of the
                  Company.  In this regard, to maintain their independence,
                  members of the Committee may not accept any consulting, advisory
                  or other
                  compensatory fee (other than regular Board and Committee fees)
                  from the
                  Company or any of its affiliates.  Members also may not receive
                  any indirect payments from the Company or any of its affiliates,
                  including
                  payments (whether or not material) made to spouses or family members,
                  or
                  payments for services to law firms, accounting firms, consulting
                  firms and
                  investment banks for which the Committee member serves as a partner,
                  member, managing director or executive.  The members of the
                  committee and the Chair will be appointed annually by the Board
                  and each
                  member shall serve until the next Annual General Meeting of the
                  shareholders of the Company or until his or her earlier resignation
                  or
                  removal by the Board.
 
 2.2
              Every
                  Committee member must be considered financially literate and at
                  least one
                  Committee member must be considered a financial expert.  The
                  definition of “financial literacy” and “financial expertise”, and the
                  determination of whether any given member of the Committee meets
                  such
                  definition, will be made by the Board, in consultation with the
                  Corporate
                  Governance Committee, in accordance with applicable laws, policies
                  and
                  guidelines of securities
                  regulatory  authorities.
 
 2.3
              The
                  Committee should meet at least quarterly.  Special meetings
                  should be authorized at the request of any member of the Committee
                  or at
                  the request of the external auditor, internal auditor or senior
                  members of
                  management.  The external auditors should have the right to
                  attend all meetings of the
                  Committee.
 
 2.4
              The
                  Committee has access to Corus senior management and documents as
                  required
                  to fulfill its responsibilities and is provided with the resources
                  necessary to carry out its
                  responsibilities.
 
 2.5
              The
                  Board should be kept informed of the Committee’s activities by a report
                  following each Committee meeting.  The person designated to act
                  as secretary should prepare minutes of all meetings, to be filed
                  in the
                  corporate records.
 
 2.6
              The
                  Committee may at its discretion retain the services of independent
                  outside
                  advisors or counsel in consultation with the Executive
                  Chair.
 
 2.7
              The
                  secretary to the Committee shall be either the Corporate Secretary
                  or a
                  person delegated by the Chair and that person will be responsible
                  to keep
                  minutes of all meetings.
  40
  2.8
              Notice
                  of each meeting of the Committee shall be given to each member
                  of the
                  Committee as far in advance of the time for the meeting as possible,
                  but
                  in any event, not later than 24 hours preceding the time stipulated
                  for
                  the meeting (unless otherwise waived by all members of the
                  Committee).  Each notice of meeting shall state the nature of
                  the business to be transacted at the meeting in reasonable detail
                  and to
                  the extent practicable, be accompanied by copies of documentation
                  to be
                  considered at the meeting.
 
 2.9
              A
                  quorum for the transaction of business at a meeting shall consist
                  of not
                  less than a majority of the members of the Committee, which majority
                  must
                  include the Committee’s designated financial expert.  Members of
                  the Committee may participate in any meeting by means of such telephonic,
                  electronic or other communication facilities as permit all persons
                  participating in the meeting to communicate adequately with each
                  other,
                  and a member participating by any such means shall be deemed to
                  be present
                  at that meeting.  Senior management of the Company and other
                  parties may attend meetings of the Committee, as may be deemed
                  appropriate
                  by the Committee.
 
 **3.           Duties
        and Responsibilities**
 
 The
        Committee has the responsibilities and powers set forth in this
        Charter:
 
 ***General***
 
 3.1
              The
                  Committee shall review and reassess the charter at least annually
                  and
                  obtain the approval of the Board.
 
 3.2
              The
                  Committee shall perform an evaluation of its performance at least
                  bi-annually to determine whether it is functioning
                  effectively.
 
 3.3
              The
                  Committee shall review, at least on an annual basis, and approve
                  the
                  Company’s policies for hiring existing and former employees and partners
                  of the external auditors.
 
 3.4
              The
                  Committee shall meet separately, periodically, as it deems appropriate,
                  with management, with internal auditors and with external
                  auditors.
 
 ***Financial
        and other reports***
 
 3.5
              The
                  Committee shall review the Company’s quarterly and annual financial
                  statements, including Management’s Discussion and Analysis, Annual
                  Information Form, Management Information Circular and annual and
                  interim
                  earnings press releases that require approval by the Board prior
                  to their
                  release and make recommendations to the Board for their approval.
                  In
                  addition, the Committee will review any report of management that
                  accompanies published financial
                  statements.
 
 3.6
              The
                  Committee’s review of the annual audited financial statements shall
                  include: (i) major issues regarding accounting principles and financial
                  statement presentations, including any significant changes in the
                  Company’s selection or application of accounting principles; (ii) major
                  issues as to the adequacy of the Company’s internal controls and any
                  specific remedial actions adopted in light of material control
                  deficiencies; (iii) discussions with management and the external
                  auditors
                  regarding significant financial reporting issues and judgments
                  made in
                  connection with the preparation of the financial statements and
                  the
                  reasonableness of those judgments; (iv) consideration of the effect
                  of
                  regulatory accounting initiatives, as well as off-balance sheet
                  structures
                  on the financial statements; (v) consideration of the judgment
                  of both
                  management and the external auditors about the quality and disclosure,
                  not
                  just the acceptability, of accounting principles; (vi) the clarity
                  of the
                  disclosures in the financial statements; and (vii) discussions
                  with
                  management and the external auditors regarding accounting adjustments
                  that
                  were noted or proposed by the external auditors but were “passed” (as
                  immaterial or otherwise).
 
 3.7
              The
                  Committee shall review with the external auditors any audit problems
                  or
                  difficulties encountered during the course of the audit work, including
                  any restrictions on the scope of the external auditors’ activities or
                  access to requested information, and management’s
                  response.
  41
  3.8
              The
                  Committee shall review and discuss financial information and earnings
                  guidance provided to analysts and rating agencies prior to their
                  release.
 
 3.9
              The
                  Committee shall, on an annual basis, review and assess the adequacy
                  of the
                  Company’s procedures in place for the review of the Company’s public
                  disclosure of financial information, other than the information
                  referred
                  to in subsection 3.8.
 
 ***Risk
        Management, Internal Controls and Information Systems***
 
 3.10
              The
                  Committee shall discuss with management, the internal auditors
                  and the
                  external auditors the adequacy and effectiveness of internal control
                  over
                  financial reporting, including any significant deficiencies or
                  material
                  weaknesses identified by management of the Company in connection
                  with its
                  required quarterly certifications with securities regulatory
                  authorities.
 
 3.11
              Commencing
                  August 31, 2006, the Committee shall review management’s assessment of the
                  effectiveness of internal control over financial reporting as of
                  the end
                  of the most recent fiscal year and the external auditor’s report on
                  management’s assessment.
 
 3.12
              The
                  Committee shall review with management, the external auditor and
                  if
                  necessary with legal counsel, any litigation, claim or other contingency,
                  including tax assessments that could have a material effect upon
                  the
                  financial position or operating results of the Company, and the
                  manner in
                  which these matters have been disclosed in the financial
                  statements.
 
 3.13
              The
                  Committee shall monitor compliance with statutory and regulatory
                  observations.
 
 3.14
              The
                  Committee is responsible for establishing appropriate processes
                  and
                  procedures surrounding the receipt, retention, and treatment of
                  accounting, internal controls or auditing matter complaints received
                  by
                  the company.  In addition the Committee shall ensure that the
                  company has a mechanism to allow employees to communicate concerns
                  regarding questionable accounting or auditing matters on a confidential,
                  anonymous basis without fear of
                  reprisal.
 
 3.15
              The
                  Committee shall discuss the Company’s policies with respect to risk
                  assessment and risk management, including the risk of
                  fraud.  The Committee also shall discuss the Company’s major
                  financial risk exposures and the steps management has taken to
                  monitor and
                  control such exposures.
 
 3.16
              The
                  Committee shall review the process for identifying related party
                  transactions.
 
 ***External
        Audit
        Services***
 
 3.17           The
        external auditors will report directly to the Committee.
 
 3.18           The
        Committee will recommend to the Board of Directors:
 (a)
              the
                  external auditor to be nominated for the purpose of preparing or
                  issuing
                  an auditor’s report or performing other audit, review or attest services
                  of the Company; and
 (b)
              the
                  compensation of the external
                  auditor.
 
 3.19
              The
                  Committee will oversee the work of the external auditor engaged
                  for the
                  purpose of preparing or issuing an auditor’s report or performing other
                  audit, review or attest services for the Company, including but
                  not
                  limited to the following:
 (a)
              objectives
                  and scope of audit, review or attest
                  services
 (b)
              reviewing
                  the results of the external audit and any changes in accounting
                  practices
                  or policies and the financial statement impact
                  thereof
 (c)
              reviewing
                  any accruals, provisions or estimates that have a significant effect
                  upon
                  the financial statements
 (d)
              resolution
                  of any disagreement between management and the external auditor
                  regarding
                  financial reporting.
  42
  3.20
              The
                  Committee will pre-approve all audit and non-audit services provided
                  to
                  the Company or its subsidiaries by the external auditors and shall
                  not
                  engage the external auditors to perform non-audit services proscribed
                  by
                  law or regulation.
 
 3.21
              The
                  Committee may delegate to one or more members of the Committee
                  the
                  authority to pre-approve any audit and non-audit services up to
                  a
                  pre-determined cap in satisfaction of the requirement under subsection
                  3.20.
 
 3.22
              The
                  pre-approval of audit and non-audit services pursuant to subsection
                  3.21
                  must be presented to the Committee at its first scheduled meeting
                  following such pre-approval.
 
 3.23
              The
                  Committee shall determine that the external audit firm has a process
                  in
                  place to address the rotation of the lead audit partner and other
                  audit
                  partners serving the account in accordance with applicable laws,
                  policies
                  and guidelines of securities regulatory
                  authorities.
 
 3.24
              Annually,
                  the Committee shall obtain and review a report by the external
                  auditors
                  describing : (i) the audit firm’s internal quality control procedures;
                  (ii) any material issues raised by the most recent internal quality
                  control review, or peer review, of the audit firm, or by any inquiry
                  or
                  investigation by governmental or professional authorities, within
                  the
                  preceding five years, respecting one or more independent audits
                  carried
                  out by the audit firm, and any steps taken to deal with any such
                  issues;
                  and (iii) all relationships between the external auditors and the
                  Company
                  (to assess the auditor’
independence).
 
 **4.**
              **Committee
                  Timetable**
 
 The
        Committee shall fulfill its oversight responsibilities primarily by carrying
        out
        the activities set forth in a detailed quarterly schedule, as well as all
        such
        other actions which may be incidental thereto or which may be necessary for
        the
        Committee to comply with the spirit and intent of this Charter.  The
        items enumerated in the schedule are not intended to be exhaustive of the
        duties
        of the Committee.  The schedule is reviewed annually by the Board and
        may be supplemented and revised from time to time as may be
        appropriate.
 
 **5.           Committee
        Chair - Job Description**
 
 At
        the time of the annual appointment of the members of the Audit committee,
        the
        Board of Directors shall appoint a Chair of the Audit Committee.  The
        Chair shall: be a member of the Audit Committee, preside over all Audit
        Committee meetings, coordinate the Audit Committee’s compliance with this
        charter, work with management to develop the Audit Committee’s annual work-plan
        and provide reports of the Audit Committee to the Board.  The Chair
        may vote on any matter requiring a vote and shall provide a second vote in
        the
        case of a tie vote.
 
 
 43



















**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.











**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: November
              28, 2007
            By:
            /s/  THOMAS
              C.
              PEDDIEName:
            Thomas
              C. PeddieTitle:
            Senior
              Vice President andChief Financial
              Officer

















**EXHIBIT
      INDEX**







99.1
            Comparative
                consolidated financial statements for the year ended August 31, 2007,
                together with the auditors’ reports thereon99.2
            Management’s
                Discussion and Analysis of Operating Results and Financial
                Position99.3
            Consent
                of auditors - Ernst & Young LLP dated November 28,
                2007.99.4
            Officers’
                certifications required by Rule 13a-14(a) or Rule
                15d-14(a).99.5
            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.99.6
            Business
                Code of Conduct