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SECURITIES AND EXCHANGE COMMISSIONWashington, 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, 2002
|Commission File number:    |  | 001-14992      

CORUS ENTERTAINMENT INC.(Exact name of registrant as specified in its charter)

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

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

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

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

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

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: 8 3/4% Senior Subordinated Notes due 2012

For annual reports, indicate by check mark the information filed with this form:

|  |  |                         |  |   |  |                                    
|- |  | ----------------------- |  | - |  | -----------------------------------
|þ |  | Annual Information Form |  | þ |  | Audited Annual Financial Statements

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

|                          |  |           
|------------------------- |  | ----------
|Class A Shares            |  | 1,838,712 
|Class B Non-Voting Shares |  | 40,802,588

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
Rule 12g3-2(b) under the Securities Exchange Act of 1934 (the Exchange Act).
If Yes is marked, indicate the file number assigned to the
registrant in connection with such rule.

|    |  |   |  |    |  |  
|--- |  | - |  | -- |  | -
|Yes |  | o |  | No |  | þ

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

|    |  |   |  |    |  |  
|--- |  | - |  | -- |  | -
|Yes |  | þ |  | No |  | o





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(CORUS ENTERTAINMENT LOGO)

ANNUAL INFORMATION FORM



2002



Corus Entertainment Inc.



October 31, 2002





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##### 



ANNUAL INFORMATION FORM
CORUS ENTERTAINMENT INC.

Table of Contents

|                                                        |                                                                |                             |    |    |    | 
|------------------------------------------------------- | -------------------------------------------------------------- | --------------------------- | -- | -- | -- | 
|INCORPORATION OF CORUS                                  |                                                                |                             | 3  |   
|                                                        | Organization and Name                                          |                             |    | 3  |   
|                                                        | Subsidiaries                                                   |                             |    | 4  |   
|GENERAL DEVELOPMENT OF THE BUSINESS                     |                                                                |                             | 5  |   
|                                                        | Historical Background                                          |                             |    | 5  |   
|                                                        | Significant Acquisitions and Divestitures Prior to Fiscal 2002 |                             |    | 5  |   
|                                                        | Significant Acquisitions and Divestitures  Fiscal 2002        |                             |    | 6  |   
|DESCRIPTION OF THE BUSINESS                             |                                                                |                             | 7  |   
|                                                        | Radio Broadcasting                                             |                             |    | 7  |   
|                                                        |                                                                | Description of the Industry |    |    | 7  | 
|                                                        |                                                                | Competition                 |    |    | 8  | 
|                                                        |                                                                | Business Overview           |    |    | 8  | 
|                                                        |                                                                | Operating Strategy          |    |    | 11 | 
|                                                        | Television                                                     |                             |    | 11 |   
|                                                        |                                                                | Description of the Industry |    |    | 11 | 
|                                                        |                                                                | Competition                 |    |    | 13 | 
|                                                        |                                                                | Business Overview           |    |    | 13 | 
|                                                        |                                                                | Operating Strategy          |    |    | 15 | 
|                                                        | Content                                                        |                             |    | 16 |   
|                                                        |                                                                | Description of the Industry |    |    | 16 | 
|                                                        |                                                                | Competition                 |    |    | 17 | 
|                                                        |                                                                | Business Overview           |    |    | 17 | 
|                                                        |                                                                | Operating Strategy          |    |    | 20 | 
|GENERAL INFORMATION                                     |                                                                |                             | 20 |   
|                                                        | Intellectual Properties                                        |                             |    | 20 |   
|                                                        | Principal Properties                                           |                             |    | 20 |   
|                                                        | Employees                                                      |                             |    | 22 |   
|                                                        | Legal                                                          |                             |    | 22 |   
|                                                        | Environmental                                                  |                             |    | 22 |   
|                                                        | Controls and Procedures                                        |                             |    | 22 |   
|CANADIAN COMMUNICATIONS INDUSTRY REGULATORY ENVIRONMENT |                                                                |                             | 23 |   
|                                                        | Canadian Radio-television and Telecommunications Commission    |                             |    | 23 |   
|                                                        | Industry Canada                                                |                             |    | 23 |   
|                                                        | Restrictions on Non-Canadian Ownership                         |                             |    | 23 |   
|                                                        | Broadcasting Services                                          |                             |    | 24 |   
|                                                        | Radio Undertakings                                             |                             |    | 24 |   
|                                                        | Specialty Television and Pay Television Undertakings           |                             |    | 24 |   
|                                                        | Ownership of Specialty and Pay Devices                         |                             |    | 25 |   
|                                                        | Local Television Undertakings                                  |                             |    | 25 |   
|                                                        | Pay Audio Services                                             |                             |    | 25 |   
|                                                        | Canadian Content Requirement for Broadcasters                  |                             |    | 26 |   
|                                                        | Film and Television Tax Credits and Grants                     |                             |    | 26 |   
|                                                        | International Treaty Co-Productions                            |                             |    | 26 |   
|                                                        | Competition Act Requirements                                   |                             |    | 26 |   
|                                                        | Investment Canada Act                                          |                             |    | 27 |   
|                                                        | Copyright Act Requirements                                     |                             |    | 27 |   
|SELECTED CONSOLIDATED FINANCIAL INFORMATION             |                                                                |                             | 28 |   
|DIVIDEND POLICY                                         |                                                                |                             | 28 |   
|MANAGEMENTS DISCUSSION AND ANALYSIS                    |                                                                |                             | 29 |   
|MARKET FOR SECURITIES                                   |                                                                |                             | 29 |   
|DIRECTORS AND OFFICERS                                  |                                                                |                             | 30 |   
|ADDITIONAL INFORMATION                                  |                                                                |                             | 32 |   

2



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FORWARD-LOOKING STATEMENTS

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

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

INCORPORATION OF CORUS

Organization and Name

Corus Entertainment Inc. (Corus or the Company) is a Canadian based media
and entertainment company with interests in radio broadcasting, television
broadcasting, and production and distribution of childrens media content. The
Company was originally incorporated under the Canada Business Corporations Act
as 3470652 Canada Inc. on March 3, 1998. Corus amended its articles to change
its name to Corus Entertainment Inc. on May 28, 1999 and subsequently amended
its articles on August 26, 1999 to create an unlimited number of Class 1
preferred shares issuable in series; an unlimited number of Class 2 preferred
shares issuable in series; an unlimited number of Class A preferred shares; an
unlimited number of Class A participating shares; and an unlimited number of
Class B non-voting participating shares.

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

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 500, 630  3rd
Avenue S.W., Calgary, Alberta, T2P 4L4. A second executive office is located
at BCE Place, Bay-Wellington Tower, Suite 1630, 181 Bay Street, P.O. Box 767,
Toronto, Ontario, M5J 2T3.

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Subsidiaries

The following table describes the material subsidiaries of Corus as at August
31, 2002, their jurisdiction of incorporation or organization, the percentage
of voting and non-voting securities owned by Corus directly or indirectly and
the nature of the business in which each subsidiary is engaged.

|                                                     |  |                  |  |        |  |            |  |                                                               
|---------------------------------------------------- |  | ---------------- |  | ------ |  | ---------- |  | --------------------------------------------------------------
|                                                     |  | JURISDICTION    |  | %      |  | %          |  |                                                               
|                                                     |  | INCORPORATION/   |  | OWNED  |  | OWNED      |  |                                                               
|NAME                                                 |  | ORGANIZATION     |  | VOTING |  | NON-VOTING |  | NATURE OF BUSINESS                                            
|                                                     |  |                  |  |        |  |            |  |                                                               
|Radio                                                |  |                  |  |        |  |            |  |                                                               
|Corus Radio Company                                  |  | Nova Scotia      |  | 100%   |  | 100%       |  | Radio Broadcasting                                            
|Metromedia CMR Broadcasting Inc.                     |  | Canada           |  | 100%   |  | N/A        |  | Radio Broadcasting                                            
|Metromedia CMR Montreal Inc.                         |  | Canada           |  | 100%   |  | N/A        |  | Radio Broadcasting                                            
|Corus Premium Television Ltd.                        |  | Canada           |  | 100%   |  | 100%       |  | Radio Broadcasting                                            
|591989 B.C. Ltd.                                     |  | British Columbia |  | 100%   |  | 100%       |  | Radio Broadcasting                                            
|591991 B.C. Ltd.                                     |  | British Columbia |  | 100%   |  | 100%       |  | Radio Broadcasting                                            
|CKIK-FM Limited                                      |  | Alberta          |  | 100%   |  | N/A        |  | Radio Broadcasting                                            
|Canadian Broadcast Sales
Partnership                 |  | Canada           |  | 50%    |  | N/A        |  | Radio Airtime Sales                                           
|Tri-Co Broadcasting Limited                          |  | Ontario          |  | 100%   |  | N/A        |  | Radio Broadcasting                                            
|                                                     |  |                  |  |        |  |            |  |                                                               
|Television                                           |  |                  |  |        |  |            |  |                                                               
|YTV Canada Inc.                                      |  | Canada           |  | 100%   |  | 100%       |  | CRTC License Holder (YTV and Edge TV)                         
|YTV Productions Inc.                                 |  | Ontario          |  | 100%   |  | N/A        |  | Television Production                                         
|3429873 Canada Inc.                                  |  | Canada           |  | 100%   |  | N/A        |  | CRTC License Holder (Treehouse TV)                            
|Lifestyle Television (1994) Ltd.                     |  | Canada           |  | 100%   |  | 100%       |  | CRTC License Holder (W Network)                               
|Country Music Television Ltd.                        |  | British Columbia |  | 90%    |  | 68.5%      |  | CRTC License Holder (CMT)                                     
|591987 B.C. Ltd.                                     |  | British Columbia |  | 100%   |  | 100%       |  | CRTC License Holder (Ontario Television)                      
|Superchannel Ltd.                                    |  | Alberta          |  | 100%   |  | N/A        |  | CRTC License Holder (Pay Television)                          
|MovieMax! Ltd.                                       |  | Alberta          |  | 100%   |  | N/A        |  | CRTC License Holder (Pay Television)                          
|3899071 Canada Inc.                                  |  | Ontario          |  | 70%    |  | N/A        |  | CRTC License Holder (Country Canada)                          
|3924181 Canada Inc.                                  |  | Ontario          |  | 51%    |  | N/A        |  | CRTC License Holder (SCREAM)                                  
|The Canadian Documentary Channel
Limited Partnership |  | Ontario          |  | 53%    |  | N/A        |  | CRTC License Holder
(The Documentary Channel)                 
|Discovery Kids Canada Co. (ULC)                      |  | Nova Scotia      |  | 80%    |  | 0%         |  | CRTC License Holder (Discovery Kids)                          
|Corus Audio and Advertising
Services Ltd.            |  | Alberta          |  | 100%   |  | N/A        |  | Advertising Services and Holding Company
(Digital ADventure)  
|Max Trax Music Ltd.                                  |  | British Columbia |  | 100%   |  | N/A        |  | CRTC License Holder (Residential Music
Services and Pay Audio)
|Telelatino Network Inc.                              |  | Ontario          |  | 50.5%  |  | N/A        |  | CRTC License Holder (TLN Television)                          
|                                                     |  |                  |  |        |  |            |  |                                                               
|Content                                              |  |                  |  |        |  |            |  |                                                               
|Nelvana Limited                                      |  | Ontario          |  | 100%   |  | N/A        |  | Animated Television Program Production                        
|Nelvana Marketing Inc.                               |  | Ontario          |  | 100%   |  | N/A        |  | Merchandising and Consumer Products                           
|Nelvana Enterprises Inc.                             |  | Ontario          |  | 100%   |  | N/A        |  | Sales and Distribution of Television Programs                 
|Nelvana Communications Inc.                          |  | United States    |  | 100%   |  | N/A        |  | Sales and Development of Television Programs                  
|Nelvana International Limited                        |  | Ireland          |  | 100%   |  | N/A        |  | Sales and Distribution of Television Programs                 
|Nelvana Enterprises (U.K.) Limited                   |  | United Kingdom   |  | 100%   |  | N/A        |  | Sales and Distribution of Television Programs                 
|Kids Can Press Limited                               |  | Ontario          |  | 100%   |  | N/A        |  | Childrens Book Publishing                                    

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

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GENERAL DEVELOPMENT OF THE BUSINESS

Corus is a leading, integrated Canadian media and entertainment company with an
established global distribution network for the programming we produce. Corus
has strong established brands in each of its businesses: radio, television, and
content. Our principal assets consist of 50 radio stations (subject to
approval by the Canadian Radio-television and Telecommunications Commission
(CRTC) of Corus disposition of two Oshawa radio stations); a number of
specialty television networks focused on children and adult genres; western
Canadas pay television services; Nelvana Limited, an international producer
and distributor of childrens programming and products; three conventional
television stations; a local cable advertising service (Digital ADventure); and
Max Trax (formerly DMX Music), a digital audio service.

Historical Background

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

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

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

Significant Acquisitions and Divestitures Prior to Fiscal 2002

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/divestitures prior to fiscal 2002 are as follows:

Power Broadcasting Inc.

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

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WIC Western International Communications Ltd. (WIC)

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

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

Metromedia CMR Broadcasting Inc. (Metromedia)

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

Nelvana Limited (Nelvana)

Nelvana is an international producer and distributor of childrens programming
and products. At August 31, 2000, the Company owned approximately a 6.7%
interest in Nelvana. Effective November 14, 2000, Corus completed the
acquisition resulting in Nelvana becoming a wholly owned subsidiary of Corus.
Included in the acquisition of Nelvana was Nelvanas wholly owned subsidiary
Klutz which was subsequently disposed of on April 8, 2002. Total consideration
after integration costs of approximately $561 million was satisfied through the
issuance of 5,047,532 Corus Class B Non-Voting Shares at a price of $41.807 per
share, approximately $350 million in cash and the assumption of $94 million of
debt.

The Family Channel Inc.

Effective May 30, 2001, Corus sold its 50% interest in The Family Channel Inc.
and its 40% interest in TELETOON to Astral Media Inc., for cash consideration
of $127 million resulting in a pre-tax gain of approximately $100 million.

Significant Acquisitions and Divestitures  Fiscal 2002

The most significant acquisitions/divestitures in fiscal 2002 are as follows:

The Comedy Network

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

Telelatino Network Inc. (Telelatino)

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

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

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

Klutz

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

Max Trax

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

Locomotion

On May 17, 2002, Corus acquired a 50% interest in The Locomotion Channel, an
action-oriented animation pay television service targeting young adults aged
18-35 available in over 27 countries and seven million homes throughout Latin
America and Iberia (Spain and Portugal) for a maximum consideration of
approximately $16 million (U.S. $11 million in cash) less a holdback in the
event of certain economic changes that may impact revenue projections. The
service will be operated in partnership with Hearst Corporation.

Corus VC Ltd.

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

DESCRIPTION OF THE BUSINESS

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

RADIO

Our Radio broadcasting business is comprised of 50 radio stations (subject to
approval by the CRTC of Corus disposition of the two Oshawa radio stations
announced on August 20, 2002) situated primarily in eight of the 10 largest
Canadian markets by population and in the densely-populated area of southern
Ontario. We are Canadas leading radio operator in terms of revenues, audience
reach and operating margins.

Description of the Industry

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

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According to the CRTC, as of March 31, 2002, the industry was comprised of
approximately 1,880 licensed stations of which approximately 76% were FM
stations and 24% were AM stations. Approximately 34% of these stations were
privately owned.

The industry is dependent upon advertising revenues for economic performance
and growth. According to the CRTC, the industry generated over $1 billion in
revenues in 2001. Radio stations compete for advertising dollars with other
radio stations and many other forms of media. According to the CRTC , in 2001,
the radio industry captured 14% of the $7.6 billion in total annual advertising
revenues generated by Canadian media companies, compared to the newspaper and
television industries, which captured 37% and 32% of the total, respectively.
According to the CRTC, in 2001, local advertising and national advertising
represented 76% and 22% respectively of total radio advertising revenues.

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

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

Competition

Radio stations compete for advertising dollars with other radio stations in
their respective market areas as well as with other forms of media such as
broadcast television, specialty television networks (which can offer concurrent
exposure on a number of specialty television networks to enlarge the potential
audience), daily, weekly, and free-distribution newspapers, outdoor billboard
advertising, magazines, other print media, direct mail marketing, and the
Internet. In each of our markets, Corus 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, we
also compete with U.S. radio stations. On a national level, we compete
generally with Standard Radio, Rogers Media, CHUM Radio and Astral Media, each
of which owns and operates stations across Canada.

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

Business Overview

We are the largest radio operator in Canada in terms of advertising revenues,
reach and operating margin. In spring 2002, Corus led the industry with a
market share of 29.5% in terms of reach, compared to our closest competitors,
Standard Radio and Rogers Media, which had market shares of 24.2% and 19.1%,
respectively, during that same period. During this period, our stations
attracted a cumulative weekly audience of approximately 8 million listeners. In
terms of audience tuning, Corus stations share was 23% larger than our next
competitor.

Our Radio group operates stations in urban centers in Canada, including
Montreal, Toronto, Hamilton/Burlington, Winnipeg, Edmonton, Calgary and
Vancouver, and in the densely-populated area of southern Ontario. Based on
Spring 2002 BBM targeted demographics, more than half of our stations ranked
number one. We operate news/talk stations in eight out of Canadas 10 largest
markets by population and, in

8



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spring 2002, half of these news/talk stations
were leaders in their markets. According to BBM rankings, in spring 2002, our
news/talk stations were the most listened to AM stations in Hamilton, Winnipeg,
Edmonton, Calgary and Vancouver, measured by audience tuning.

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

|              |  |                      |  |           |  |                           |  |                |  |                |  |                      
|------------- |  | -------------------- |  | --------- |  | ------------------------- |  | -------------- |  | -------------- |  | ---------------------
|              |  |                      |  |           |  |                           |  | Targeted       |  | Rank within    |  | Audience share within
|Location      |  | Call letter          |  | Frequency |  | Format                    |  | demographic(1) |  | demographic(2) |  | total market(3)      
|              |  |                      |  |           |  |                           |  |                |  |                |  |                      
|Alberta       |  |                      |  |           |  |                           |  |                |  |                |  |                      
|Calgary       |  | CHQR (QR77)          |  | AM        |  | News/Talk/Sports/Info     |  | A35+           |  | 3              |  | 10.4                 
|              |  | CKRY (Country 105)   |  | FM        |  | Country                   |  | A25-54         |  | 4              |  | 20.5                 
|              |  | CKIK (The Peak)      |  | FM        |  | Hot Adult Contemporary    |  | F18-44         |  | 1              |  | 18.7                 
|Edmonton      |  | CHQT (Cool 880)      |  | AM        |  | Oldies                    |  | A35-54         |  | N/A(4)         |  | N/A(4)               
|              |  | CHED (630 CHED)      |  | AM        |  | News/Talk/Sports/Info     |  | A35+           |  | 1              |  | 15.2                 
|              |  | CISN (Country 103.9) |  | FM        |  | Country                   |  | A25-54         |  | 6              |  | 12.5                 
|              |  | CKNG (Power 92)      |  | FM        |  | Contemporary Hit Radio    |  | F18-49         |  | 1              |  | 20.0                 
|Red Deer      |  | CKGY (KG Country)    |  | FM        |  | Country                   |  | A25-54         |  | 3              |  | 18.3                 
|              |  | CIZZ (ZED FM)        |  | FM        |  | Top 40/Rock               |  | A18-44         |  | 1              |  | 43.8                 
|B.C           |  |                      |  |           |  |                           |  |                |  |                |  |                      
|Vancouver     |  | CHMJ (MOJO 730)      |  | AM        |  | Talk Radio for Guys       |  | M25-49         |  | N/A(4)         |  | N/A(4)               
|              |  | CKNW (NW 980)        |  | AM        |  | News/Talk/Sports/Info     |  | A35+           |  | 1              |  | 19.8                 
|              |  | CFOX (The Fox)       |  | FM        |  | New Rock                  |  | A18-34         |  | 2              |  | 5.7                  
|              |  | CFMI (Rock 101)      |  | FM        |  | Classic Rock              |  | M25-49         |  | 1              |  | 11.4                 
|Manitoba      |  |                      |  |           |  |                           |  |                |  |                |  |                      
|Winnipeg      |  | CJOB (CJOB 680)      |  | AM        |  | News/Talk/Sports/Info     |  | A35+           |  | 1              |  | 20.3                 
|              |  | CJKR (Power 97)      |  | FM        |  | Rock                      |  | A18-34         |  | 1              |  | 12.4                 
|Ontario       |  |                      |  |           |  |                           |  |                |  |                |  |                      
|Barrie        |  | CIQB (B101)          |  | FM        |  | Adult Contemporary        |  | A25-54         |  | 1              |  | 29.6                 
|              |  | CHAY (Energy)        |  | FM        |  | Contemporary Hit Radio    |  | F18-34         |  | 1              |  | 20.1                 
|Burlington    |  | CING (Country 95.3)  |  | FM        |  | Country                   |  | A25-54         |  | N/A(4)         |  | N/A(4)               
|Cambridge     |  | CIZN (The Zone 92.9) |  | FM        |  | Hot Adult Contemporary    |  | A18-44         |  | 5              |  | 3.2                  
|Collingwood   |  | CKCB (The Peak)      |  | FM        |  | Adult Contemporary        |  | A25-54         |  | N/A(5)         |  | N/A(5)               
|Cornwall      |  | CFLG (Variety 104.5) |  | FM        |  | Adult Contemporary        |  | A25-49         |  | 1              |  | 55.6                 
|              |  | CJSS (Blaze 101.9)   |  | FM        |  | Contemporary Country      |  | A35-54         |  | 2              |  | 21.6                 
|              |  | CJUL (Jewel 1220)    |  | AM        |  | Nostalgia/Information     |  | A50+           |  | 1              |  | 22.8                 
|Guelph        |  | CJOY (CJOY)          |  | AM        |  | Full Service/Oldies       |  | A35+           |  | 1              |  | 44.3                 
|              |  | CIMJ (Magic 106.1)   |  | FM        |  | Adult Contemporary        |  | A25-49         |  | 1              |  | 55.7                 
|Hamilton      |  | CHML (AM 900)        |  | AM        |  | News/Talk/Sports/Info     |  | A35+           |  | 1              |  | 20.8                 
|              |  | CJXY (Y 108)         |  | FM        |  | Classic Rock              |  | M18-49         |  | 1              |  | 13.7                 
|Kingston      |  | CFFX (GT0 960)       |  | AM        |  | Oldies                    |  | A35+           |  | 4              |  | 8.4                  
|              |  | CFMK (Country 96)    |  | FM        |  | Country                   |  | F25-54         |  | 2              |  | 29.3                 
|London        |  | CFPL (AM 980)        |  | AM        |  | News/Talk/Sports/Info     |  | A35+           |  | 4              |  | 8.3                  
|              |  | CFPL (FM 96)         |  | FM        |  | Contemporary Album Rock   |  | M18-49         |  | 1              |  | 16.1                 
|              |  | CFHK (Energy)        |  | FM        |  | Top 40                    |  | F18-34         |  | 2              |  | 9.1                  
|Oshawa        |  | CKDO (AM 1350)       |  | AM        |  | News/Talk/Sports/Info     |  | M35+           |  | 2              |  | 6.4                  
|              |  | CKGE (Magic 94.9)    |  | FM        |  | Hot Adult Contemporary    |  | F18-44         |  | N/A(4)         |  | N/A(4)               
|Peterborough  |  | CKRU (980 Kruz)      |  | AM        |  | Oldies/Sports             |  | A35-64         |  | 1              |  | 24.6                 
|              |  | CKWF (The Wolf)      |  | FM        |  | Rock                      |  | M18-49         |  | 1              |  | 41.7                 
|Toronto       |  | CFYI (Mojo 640)      |  | AM        |  | Talk Radio for Guys       |  | M25-49         |  | 8              |  | 1.7                  
|              |  | CFNY (Edge 102)      |  | FM        |  | New Rock                  |  | M18-34         |  | 1              |  | 4.5                  
|              |  | CILQ (Q107)          |  | FM        |  | Classic Rock              |  | M25-49         |  | 1              |  | 6.9                  
|Woodstock     |  | CKDK (The Hawk)      |  | FM        |  | Classic Rock              |  | M25-49         |  | 2              |  | 7.6                  
|Quebec        |  |                      |  |           |  |                           |  |                |  |                |  |                      
|Amqui         |  | CFVM                 |  | AM        |  | Adult Contemporary        |  | A25-54         |  | N/A(5)         |  | N/A(5)               
|Drummondville |  | CJDM                 |  | FM        |  | Adult Pop Rock(6)         |  | A18-49         |  | 1              |  | 72.0                 
|Montmagny     |  | CFEL                 |  | FM        |  | Adult Contemporary(6)     |  | A25-54         |  | N/A(5)         |  | N/A(5)               
|Montreal      |  | CINW (940 News)      |  | AM        |  | All News                  |  | A25-54         |  | 5              |  | 4.2                  
|              |  | CINF (Info 690)      |  | AM        |  | All News(6)               |  | A25-54         |  | 7              |  | 2.2                  
|              |  | CFQR (Lite Rock Q92) |  | FM        |  | Adult Contemporary        |  | F25-54         |  | 1              |  | 27.6                 
|              |  | CKOO (98.5 Cool FM)  |  | FM        |  | Modern Rock(6)            |  | A18-34         |  | 5              |  | 3.2                  
|              |  | CKOI (CKOI-FM)       |  | FM        |  | Contemporary Hit Radio(6) |  | A18-49         |  | 1              |  | 16.4                 
|Rimouski      |  | CIKI                 |  | FM        |  | Contemporary Hit Radio(6) |  | A18-49         |  | 1              |  | 35.9                 
|              |  | CJOI                 |  | FM        |  | Adult Contemporary(6)     |  | A35-54         |  | 2              |  | 35.8                 
|St. Jean      |  | CFZZ                 |  | FM        |  | Adult Contemporary(6)     |  | A25-54         |  | 1              |  | 87.0                 
|St. Jerome    |  | CIME                 |  | FM        |  | Adult Contemporary(6)     |  | A25-54         |  | N/A(5)         |  | N/A(5)               



---

|(1) |  | Targeted demographic specifies male (M), female (F) or adult (A) and the
age range.
|--- |  | -----------------------------------------------------------------------------------
|   
|(2) |  | Based on cumulative weekly audience in the targeted demographic.                   

9



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|(3) |  | Share of hours tuned of commercial originating stations by listeners 12
years of age and older in that market.
|--- |  | --------------------------------------------------------------------------------------------------------------
|   
|(4) |  | This station has recently been reformatted and accordingly the results
are not meaningful.                    
|   
|(5) |  | This market was not in BBMs fall 2001 radio survey.                                                          
|   
|(6) |  | French language broadcast.                                                                                    

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The radio group derives the majority of its revenues from advertising sales.
Revenues for fiscal 2002 and 2001 were approximately $211 million and $209
million respectively.

Revenues from the radio group are derived from two types of advertising: (a)
advertising by local advertisers who are generally local merchants and who
operate in the trading area encompassed by the stations signal; and (b)
advertising by national businesses such as automotive manufacturers, breweries,
banks, fast food chains and similar operations which develop national
advertising campaigns. The extent to which our advertising revenues are from
local or national advertising depends on the given market, although, on
average, approximately 75% of the radio groups revenues were derived from
local advertising.

Each group of radio stations in a market has its own sales force, which is
responsible for acquiring and maintaining local advertising revenues. This
local sales force is paid primarily on a commission basis at a rate of
approximately 15% of the revenues from the advertising obtained. National
advertising is placed by advertising agency representatives. The commissions
paid to these agencies are approximately 6%. The rates that we charge are
determined in part by ratings, intensity of competition in the market, and
frequency and demographic characteristics.

Operating Strategy

We will continue to consolidate radio stations in major markets and grow
revenues and margins through research-driven programming decisions,
professional sales execution and highly efficient operations.

Our near-term strategy is focused on strengthening our domestic market
leadership by increasing our ratings and market share in the major metropolitan
markets in Canada, subject to CRTC limits on ownership, and continuing to have
Canadas largest audience reach and the highest operating margins. We now have
stations in eight of Canadas 10 largest markets by population.

In this regard, our radio stations aim 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. We
also have a clustering strategy pairing AM and FM radio stations to the limits
allowed by the CRTC for the given market. Such clustering improves operating
performance by expanding demographic coverage of the market, thereby providing
local and national advertisers with one stop shopping. Clustering also
provides opportunities to share costs between radio stations, thereby improving
operating margins.

TELEVISION

Our Television business is comprised of specialty television networks, pay
television services, three local television stations, and other media services.

Description of the Industry

According to the Canadian Cable Television Association, or CCTA, as of
September 2001, the Canadian television industry served approximately 11.6
million homes with televisions, of which 91.6% are passed by cable. We
estimate, based on public company disclosure, that there are approximately 8.3
million cable subscribers and 1.8 million direct-to-home satellite subscribers.
At the end of 2001, there were approximately 2.8 million digital subscribers,
up from 1.9 million a year earlier. In 2001, the four largest cable operators
controlled approximately 86% of total cable subscribers in Canada.

Specialty and Premium Television Networks

Specialty and premium television networks generated $1.5 billion of combined
advertising and subscriber revenues in 2001. Specialty and premium television
networks are available to those Canadians who subscribe to the service package
of a particular broadcasting distribution undertaking (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 are pay television
movie and special event services.

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Specialty and premium television networks each obtain revenues by charging a
monthly subscriber fee to cable and direct-to-home satellite operators. The
CRTC regulates subscriber fees if the network is included as part of the basic
cable service, 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 cable or direct-to-home satellite operator. Specialty and
premium television networks benefit from these recurring 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 cable or
direct-to-home satellite operator 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. The additional amount a subscriber
pays for a specialty or premium television network is the subscriber fee along
with the cable or direct-to-home satellite operators mark-up.

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

Unlike premium television networks, which are prevented by CRTC regulations
from obtaining advertising revenue, specialty television networks may obtain
both subscriber and national advertising revenues. Specialty television
networks appeal to advertisers seeking highly targeted markets. The CRTC does
not regulate advertising rates and specialty television networks are not
required to share a portion of their advertising revenues with the cable and
direct-to-home satellite operators. Television advertising comprised
approximately 24% or $2.5 billion of the total $10.3 billion spent on
advertising in Canada in 2000. Specialty television networks had approximately
a 33% share of total television viewership in 2000 but only received and 16%
share of total television advertising revenues, or approximately $381 million,
up from $304 million, or a 13% share of total television advertising revenues
in 1999.

Canadian specialty and premium television networks have experienced subscriber
growth over the past decade due to the advances in cable-based delivery systems
and the growth of direct-to-home satellite services. In November 2000, a number
of new digital specialty television network licenses were awarded by the CRTC
for launch commencing September 2001. Of these licenses, 21 were Category 1
and 262 were Category 2. Category 1 digital specialty television networks are
must carry services. Category 2 digital cable networks, on the other hand,
are not guaranteed any distribution rights by virtue of their license. However,
the CRTC requires a distribution undertaking to distribute five Category 2
services in which it or an affiliate does not own 10% of the equity for every
Category 2 service it distributes in which it or an affiliate owns more than
10% of the equity. Although a large number of Category 2 licenses were awarded
and continue to be licensed, as of December 31, 2001, only 42 Category 2
networks had been launched. It remains unclear how many, if any, of the
remaining Category 2 networks will be launched in the future. Category 2
networks may be competitive with one another but may not be directly
competitive with an existing licensed analog specialty television network or
premium television network or a Category 1 digital specialty television
network. As of December 31, 2001, there were 49 Canadian analog specialty
television networks and 63 digital specialty television networks in operation.

Local Television

Local television stations are licensed by the CRTC and provide over-the-air
television signals to viewers within a local geographical market or on a
network basis. The CRTC has licensed three English-language television
networks, two private commercial networks and one public network. The private
commercial networks are operated by CTV Television Network Inc. (CTV) and
Global Television Network (Global) with the Canadian Broadcasting Corporation
(CBC) operating the public broadcasting network. In addition to receiving
conventional television signals off-air, the majority of Canadian viewers have
access either directly or through cable television or direct-to-home services
(DTH), to the television signals of U.S. border stations which are generally
affiliated with one of the four U.S. commercial networks (ABC, NBC, CBS and
Fox) and a Public Broadcast System station. Canadian conventional television
stations generate revenue from advertising and receive no subscription
revenues. The number of commercial messages that a station may broadcast is
restricted to 12 minutes each hour. The success of conventional television is
dependent on the quality of

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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 Television Businesses

Digital audio services distribute music in a digital mode to homes and
commercial establishments. 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 or through a satellite downlink to a
business. 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.

Competition

Our specialty and premium television networks compete for subscriber fees with
other specialty and premium television network operators, including Bell Globe
Media, Alliance Atlantis Communications Inc., CHUM Limited and Astral Media
Inc. In 2001, the Canadian specialty television and premium television network
industries generated $1.5 billion of combined advertising and subscriber
revenues. Our 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. Our
conventional television stations compete principally for viewers and
advertisers with other television stations that broadcast in Toronto and
southern Ontario.

Business Overview

Corus had the following interests in specialty and premium television networks
in Canada as at October 31, 2002:

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

13



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Specialty Television Networks

Corus group of specialty television networks appeal particularly to kids,
teens and women, much-coveted target groups among Canadian marketers. Our
group of specialty networks had the largest viewing audience, based on Nielsen
Media Research People Meters Fall 2002 14-week data, and had the largest
aggregate number of subscribers, in Canada according to the November 2001
MediaStats report. Each of our analog specialty television networks is ranked
among the top three analog television networks that compete within its genre,
based on targeted demographic.

YTVis a specialty television network dedicated to programming for children and
youth aged two to 17. Based on the Nielsen fall 2001 survey, YTVbroadcast 24
of the top 30 childrens shows in Canada. This network reaches children beyond
the television with interactive events and initiatives including ytv.com,the
top Canadian kids web site. YTVis generally carried on the basic tier.

Treehouse TVis the only specialty service in Canada dedicated to preschoolers
(ages two to five). Treehouse TVoffers a commercial-free television
environment that reflects the interests and developmental levels of young
children.

W Networkwas acquired in November 2001, and is a specialty television service
dedicated to serving the needs and interests of women. On April 15, 2002, the
service, which was previously know as WTN, was rebranded, reformatted and
relaunched as W. Recent Nielsen statistics indicate a 30% growth in W18-34
weekly viewers and a 20% growth in W18-49 weekly viewers, over the same period
last year (comparing April 15/02  June 30/02 against same period in 2001).

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

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

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

On September 7, 2001, Corus launched five specialty television networks: The
Documentary Channel,featuring documentaries from Canada and around the world;
Discovery Kids,which offers children of all ages informative and entertaining
programming with an emphasis on action, adventure and the environment; SCREAM
TV,which offers a horror theme through a movie-rich schedule of classic and
modern thrillers, cult favorites and popular series; and Edge TV,based on our
popular Edgeradio station in Toronto, which is a music and entertainment
channel for young adults with a passion for alternative music. Country Canada,
a channel about rural issues and lifestyles, was also launched by Corus in
partnership with CBC. On July 24, 2002, Corus and the CBC announced an
agreement where CBC would purchase Corus 70% ownership stake in the service.
The transaction was completed effective October 30, 2002.

We also hold interests in the following specialty television networks:



| |  |  | 50% interest in The Locomotion Channel(Locomotion), an action-oriented
animation pay television service. Locomotion is our first international
venture, offering service in over 27 countries and seven million homes
throughout Latin America and Iberia (Spain and Portugal).
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| |  |  | A 40% interest in TELETOON,which is a Canadian specialty service
featuring a wide range of animation programming in all forms. TELETOON
is available in both an English language version and a French language
version.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | A 19.9% equity interest in The Food Network Canada,a specialty
service which provides information and entertainment programming related
to food and nutrition.                                                         

Revenues from our specialty television networks are derived primarily from
subscriber fees and advertising. In fiscal 2002, subscriber fees accounted for
46% and advertising accounted for 48% of total revenues from the specialty
television networks.

Premium Television Networks

Movie Central (previously SuperChannel)and Encore Avenue (previously Movie
Max)are the exclusive licensed providers of premium television services in
western Canada, featuring blockbuster movies, series and specials from diverse
genres on six distinct channels. Each channel broadcasts commercial-free 24
hours a day, seven days a week. The Movie Centralbrand was relaunched in
fiscal 2001 and consists of four thematic channels: Movie Central, Adrenaline
Drive, Shadow Laneand Heartland Road. The Encorebrand consists of two
thematic channels: Encore Avenueand Comic Strip. As at August 31, 2002, our
Movie Centralservice had over 609,000 subscribers, a 4% increase in
year-over-year subscribers, representing penetration of approximately 59% of
digital cable and direct-to-home satellite subscribers in western Canada.

Revenues from premium television networks have experienced tremendous growth
over the past few years as a result of increased direct-to-home satellite and
digital cable subscribers. Revenues were $87 million in fiscal 2002 compared to
$66 million in 2001.

Local Television

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

Revenues are almost exclusively derived from advertising. In fiscal 2002,
national agency directed clients accounted for 49% of revenues while local
advertisers comprised nearly 33%. CBC network affiliate payments amounted to
13% of revenues, with the remaining 5% originating from a variety of sources.

Cable Advertising Services

Digital ADventure primarily operates TV Listingschannels, providing viewers
with current and easily accessible listings for the local cable television
program lineup. Revenues for Digital ADventure are derived through advertising.
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. During fiscal 2002 we eliminated the
unprofitable real estate teleguide and streamlined our operations.

Operating Strategy

Corus plans will continue to focus on the high growth pay and specialty
segments of the television business while providing the highest levels of
customer service. Wherever efficiencies can be gained, we will consolidate
program buying and operations to maximize the margins across all of our
television services.

We intend to provide growth, diversification and synergistic benefits in our
television group by expanding our presence in the Canadian specialty television
and broadcasting market. In this regard, our strategy is to activate new
licenses that have already been granted by the CRTC and to selectively acquire
licenses which become available, in whole or in part, from existing owners. We
will also focus on generating higher audience ratings and new revenue streams
from our existing networks. On April 15, 2002, we re-branded W Network,
reformatted its programming to target a more youthful demographic and
relaunched the network. Advertiser response was very positive.

15



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

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

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

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

CONTENT

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

Description of the Industry

In recent years we have witnessed the launch of numerous segmented networks in
the North American television broadcasting industry providing viewers with
greater channel selection. This has also served to increase demand for
programming for specialty television networks. There are now numerous
television networks around the world that program dedicated childrens blocks
and other programming exclusively for children. Nelvanas content is seen in
more than 200 countries on over-the-air, analog and digital platforms.

Recently, the childrens animation market experienced significant change as a
result of media consolidation in the United States. Major production studios
and television networks are vertically integrated, as in the case of Warner
Brothers Studios with Cartoon Network and Kids WB; Disney with ABC Family, the
Disney Channel and ABC; Fox with Fox Kids; and Viacom with CBS, Nickelodeon,
Noggin and UPN. Further consolidation took the form of programming blocks on
major networks being leased to production companies. Fox Network leased their
kids programming block to 4Kids Entertainment; NBC leased theirs to Discovery.
This consolidation has reduced the number of potential buyers and the demand
for third party production.

On the international scene, the impact of several key program buyers faced with
financial difficulties has added to the over supply of animation in the market.
In Germany, two of the largest customers for animation production  Kirch
Media and RTV Family Entertainment AG  were forced to cancel all program
acquisition plans.

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



| |  |  | growth of the 3-D animation market;                                                                                                                             
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | the migration of animation to prime time and evening broadcast
schedules, thereby broadening the targeted demographics;                                         
|
| |  |  | the shift of audiences from traditional broadcast networks to cable
networks;                                                                                   
|
| |  |  | the growth of digital television services, providing a new platform
for additional cable and satellite services and thereby new programming
opportunities;      
|
| |  |  | continuing international expansion by all types of programming
services, including major U.S. broadcasters and domestic childrens
services;                    
|
| |  |  | the growth in advertising dollars devoted to the childrens sector on
a year-round basis as a result of the increase in broadcast hours
devoted to children; and
|
| |  |  | the growth in demand for content featuring recognizable characters on
the Internet.                                                                             

According to industry sources, total spending on filmed entertainment, which
includes feature films, video, television shows, animation and other
programming in the United States is expected to grow from an estimated US$59
billion in 2001 to US$79 billion in 2006. 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 2001
licensed retail sales in the United States and Canada were approximately
US$70.3 billion. All of Nelvanas character brands fall into the entertainment/character property type category, which, according to industry sources,
accounted for US$13.7 billion of retail sales in the United States and Canada
in 2001. The entertainment/character property type category is the second
largest category of licensed retail products, accounting for 19% of total sales
in the United States and Canada in 2001.

According to industry sources, in the United States alone, juvenile publishing
sales of paperbacks were approximately US$887.6 million in 2001.

Competition

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

Business Overview

Production and Distribution

Nelvana is an animation production and distribution company specializing in
childrens and youth programming for television. Nelvana distributes
programming to broadcasters in over 200 countries, including some of the
worlds leading networks, such as Nickelodeon, the Disney Channel, HBO, itv in
the United Kingdom and France 3. We have 36 television programs on the air in
Canada, and 27 in the United States. Nelvanas production facility in Toronto
houses state-of-the-art 2D and 3D animation technology as well as traditional
animations capabilities. Most productions are completed at the Toronto facility
and programming is distributed internationally through five sales/distribution
offices.

Over the past five years, Nelvana has grown its proprietary production
deliveries from 135 half-hour equivalent episodes in fiscal 1998 to 252 in
fiscal 2002, a compounded annual growth rate of 16.9%. However, the growth was
achieved with significant investment in the new programs. The Company has
committed Nelvana to reducing cash flow requirements with the goal of achieving
cash flow neutrality within the next year while continuing to grow its library.
In order to achieve this cash management plan, Nelvana will reduce its
production slate to 170 new episodes for fiscal 2003. This amount of
production maintains Nelvanas leadership

17



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position in the industry while
reducing cash flow requirements to produce the years slate. The following are
some highlights of the series produced and delivered in fiscal 2002:



| |  |  | 17 episodes of Braceface,a new girls animated teen series;                                                                                                
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | 12 episodes of Rolie Polie Olie,bringing cumulative library episodes
for this series to 77;                                                                
|
| |  |  | 14 episodes of The Berenstain Bears,a classically animated adaption of
one of the world most popular series of childrens books by Stan and Jan
Berenstain;
|
| |  |  | 27 episodes of Seven Little Monsters,bringing cumulative library
episodes for this series to 40; and                                                       
|
| |  |  | 27 episodes of George Shrinks,bringing cumulative library episodes for
this series to 40.                                                                  

In January 2002, Nelvana was granted the rights to develop, produce and
distribute episodic television series and individual programs based on The
Berenstain Bearsbrand. Also in January 2002, Nelvana acquired the television
distribution, video and DVD manufacturing and distribution, merchandising and
publishing rights to Beybladefor Canada, the United States, Europe (excluding
Italy, Greece and Turkey), Australia, New Zealand and certain other countries.

At August 31, 2002, Nelvanas program library totaled over 2,100 half-hour
equivalent episodes, comprising 54 animated television series, 14 specials, 12
animated feature length films and 13 live action series. Childrens animated
programs generally have longer life spans than those of live action programs
because they can typically be resold continually to new generations of
audiences around the world. The United States is the biggest market, accounting
for 41% of production and distribution revenues in fiscal 2002, compared to 19%
from the Canadian market and 40% from other countries.

Branded Consumer Products

Nelvanas merchandising business contains some of Nelvanas most popular
characters, including Little Bear, Franklinand Babar, which have achieved
recognition and popularity worldwide and have become valuable long-term
merchandising brands. Nelvanas merchandising efforts focus on marketing its
most popular brands and co-ordinating with retailers to promote its character
merchandise in North America and around the world. Nelvana acquires brands from
which it produces media content and becomes either the licensor or agent, on
behalf of the owner of the property, for most product categories, including
toys, plush, apparel, gifts, book publishing and interactive products. In
fiscal 2001, we secured a master toy license agreement with Hasbro Inc. for the
Japanese animé show Medabots,which premiered on Fox Kidsin the United States
in fall 2001. In January 2002, we entered into a master toy agreement with
Hasbro for the distribution of Beyblade, a property owned by d-rights, Inc.

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



| |  |  |  Franklin more than 50 book products, including hard and soft cover
Franklintitles with over 43 million books sold worldwide; books with
tapes and classic Franklintreasuries;
| |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  |  Elliot Moose seven books, with another two in production;                                                                                                                    
|
| |  |  |  Nursery Rhyme Board Books eight board books based on well-known
childrens nursery rhymes, with another four in production;                                                  
|
| |  |  |  Kids Can Do It! over 40 craft and activity books for children of all ages;                                                                                                   
|
| |  |  |  Memory Scrapbooks a new series of eight write-in scrapbooks and another four in production; and                                                                              
|
| |  |  |  Stevie Diamond Mysteries seven books from this classic mystery series.                                                                                                       

18



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Revenues from branded consumer products, excluding Klutz which was disposed of
during the year, have been a small but stable business with revenues increasing
to approximately $24 million in fiscal 2002.

19



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Operating Strategy

Our strategy is to build and manage our childrens brands, to acquire new
brands, and to exploit those brands across established and new distribution
channels and outlets. The key elements of the strategy include the following:



| |  |  | Dramatically increase merchandising and licensing revenue as a
percent of Nelvanas sales.                                                                                                              
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Continue to increase distribution internationally by obtaining or
creating programming blocks, specialty channels or thematics in key
territories.                                                      
|
| |  |  | Leverage library through DVD/home video and Video on Demand sales.                                                                                                                                      
|
| |  |  | Reduce the production cost per episode by reorganizing the production
process into creative teams by genre, rather than departments and by
developing and deploying state-of-the-art digital technology.
|
| |  |  | Achieve cash flow neutrality.                                                                                                                                                                           
|
| |  |  | Exploit synergies with the television group through cross-promotion to increase the value of our library.                                                                                               
|
| |  |  | Expand the merchandise business by actively growing existing classic
brands, increasing ownership percentage in existing brands and acquiring
brands with proven revenue streams.                       

GENERAL INFORMATION

Intellectual Properties

We use a number of trade-marks for our products and services as well as
trade-marks, logos and other representations of characters used in our
productions. Many of these trade-marks are registered by us, and those
trade-marks that are not registered are protected by common law. We have taken
affirmative legal steps to protect our trade-marks, and we believe our
trade-mark position is adequately protected.

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

Principal Properties

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

20



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The table below describes the purpose, location, area and interest of the
Companys principal properties as of August 31, 2002.

|                                         |  |                           |  |              |  |                
|---------------------------------------- |  | ------------------------- |  | ------------ |  | ---------------
|PURPOSE                                  |  | LOCATION                  |  | AREA (SQ FT) |  | OWNED OR LEASED
|                                         |  |                           |  |              |  |                
|Corporate Offices:                       |  |                           |  |              |  |                
|Executive Office  Corus                 |  | Toronto, ON               |  | 9,959        |  | Leased         
|Executive Office  Corus                 |  | Calgary, AB               |  | 20,893       |  | Leased         
|Various Offices  Administration         |  |                           |  |              |  |                
|Specialty Programming Studios & Offices: |  | Toronto, ON               |  | 23,480       |  | Leased         
|Specialty Channels                       |  | Toronto, ON               |  | 107,000      |  | Leased         
|Corus Premium                            |  | Edmonton, AB              |  | 30,000       |  | Leased         
|Radio Broadcasting Studios & Offices:    |  |                           |  |              |  |                
|CIZZ-FM, CKGY-AM                         |  | Red Deer, AB              |  | 10,500       |  | Owned          
|CHAY-FM/CIQB-FM                          |  | Barrie, ON                |  | 5,971        |  | Owned          
|CKDK-FM                                  |  | Woodstock, ON             |  | 5,300        |  | Owned          
|CFPL-AM, CFPL-FM, CFHK-FM                |  | London, ON                |  | 15,986       |  | Leased         
|CKNW-AM, CFMI-FM, CFOX-FM, CJNW-AM       |  | Vancouver, BC             |  | 34,800       |  | Leased         
|CKIK-FM, CHQR-AM, CKRY-FM                |  | Calgary, AB               |  | 17,500       |  | Leased         
|CKNG-FM, CHED-AM, CISN-FM, CHQT-AM       |  | Edmonton, AB              |  | 29,363       |  | Owned          
|CJKR-FM, CJOB-AM                         |  | Winnipeg, MB              |  | 15,381       |  | Owned          
|CJXY-FM, CHML-AM, CING-FM                |  | Hamilton, ON              |  | 22,409       |  | Leased         
|CILQ-FM, CFYI-AM, CFNY-FM                |  | Toronto, ON               |  | 17,371       |  | Leased         
|CKCB-FM                                  |  | Collingwood, ON           |  | 3,225        |  | Owned          
|CJOY-AM, CIMJ-FM                         |  | Guelph, ON                |  | 8,500        |  | Owned          
|CFFX-AM, CFMK-FM                         |  | Kingston, ON              |  | 10,000       |  | Owned          
|CIZN-FM                                  |  | Cambridge, ON             |  | 2,000        |  | Leased         
|CKRU-AM, CKWF-FM                         |  | Peterborough, ON          |  | 3,000        |  | Leased         
|CFEL-FM                                  |  | Montmagmy, QC             |  | 4,128        |  | Owned          
|CFVM-AM                                  |  | Amqui, QC                 |  | 4,500        |  | Owned          
|CFZZ-FM                                  |  | St.Jean-sur-Richelieu, QC |  | 2,600        |  | Leased         
|CJDM-FM                                  |  | Drummondville, QC         |  | 3,200        |  | Leased         
|CIKI-FM, CJOI-FM                         |  | Rimouski, QC              |  | 19,175       |  | Owned          
|CFQR-FM                                  |  | Montreal, QC              |  | 4,000        |  | Leased         
|CKOO-FM                                  |  | Montreal, QC              |  | 4,000        |  | Leased         
|CKOI-FM                                  |  | Montreal, QC              |  | 8,000        |  | Leased         
|CINW-AM/CINF-AM                          |  | Montreal, QC              |  | 6,600        |  | Leased         
|CIME-FM                                  |  | St. Jerome, QC            |  | 3,200        |  | Leased         
|CKDO-AM, CKGE-FM                         |  | Oshawa, ON                |  | 3,600        |  | Leased         
|CFLG-FM, CJSS-FM, CJUL-AM                |  | Cornwall, ON              |  | 6,000        |  | Owned          
|Max Trax and Digital ADventure:          |  |                           |  |              |  |                
|Various Offices                          |  | BC, AB, SK, MB, ON        |  | 22,194       |  | Owned & Leased 
|Conventional Television:                 |  |                           |  |              |  |                
|CHEX-TV                                  |  | Peterborough, ON          |  | 11,500       |  | Leased         
|CHEX-TV                                  |  | Oshawa, ON                |  | 4,781        |  | Leased         
|CKWS-TV                                  |  | Kingston, ON              |  | 19,634       |  | Owned          
|Ontario TV Management                    |  | Peterborough, ON          |  | 35,970       |  | Leased & Owned 
|Production & Distribution Facilities:    |  |                           |  |              |  |                
|Various facilities                       |  | Toronto, ON               |  | 83,000       |  | Owned          
|Various facilities                       |  | Toronto, ON               |  | 43,500       |  | Leased         
|Various facilities                       |  | International             |  | 13,101       |  | Leased         
|Publishing Facilities:                   |  |                           |  |              |  |                
|Kids Can Press                           |  | Toronto, ON               |  | 15,000       |  | Leased         

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

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

Employees

As at August 31, 2002, Corus had approximately 1,990 full-time employees. We
operate in a non-union environment except for 98 employees in conventional
television and radio, and 64 employees in our premium television operations who
are members of the Communications, Energy and Paperworkers Union of Canada
(CEP) and 72 employees in Quebec radio operations who are members of the
Syndicat Général de la Radio. We believe relations with our employees are
good.

Legal

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

Environmental

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

Controls and Procedures

As required by Section 302(a) of the Sarbanes-Oxley Act of 2002, Corus Chief
Executive Officer and Chief Financial Officer will be making certifications
related to the information in Corus annual report on Form 40-F. As part of
the such certification, the Chief Executive Officer and Chief Financial Officer
must certify that they are responsible for establishing and maintaining
disclosure controls and procedures to ensure material information with respect
to Corus and its subsidiaries is made known to them and that they have
evaluated the effectiveness of Corus disclosure controls and procedures as of
a date within 90 days prior to filing Corus annual report. Disclosure
controls and procedures ensure that information required to be disclosed by
Corus in its annual report is recorded, processed, summarized and reported,
within the time periods required. Corus has adopted or formalized such
controls and procedures as it believes are necessary and consistent with its
business and internal management and supervisory practices.

Evaluation of disclosure controls and procedures

The Companys Chief Executive Officer and Chief Financial Officer, after
evaluating the effectiveness of the Companys disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14(c) and
15d-14(c)) on October
31, 2002, have concluded that, as of such date, the Companys disclosure
controls and procedures were adequate and effective to ensure that material
information relating to the Company and its consolidated subsidiaries would be
made known to them by others within those entities.

Changes in internal controls

22



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There were no significant changes in the Companys internal controls or in
other factors that could significantly affect the Companys internal controls
subsequent to the date of their evaluation, nor were there any significant
deficiencies or material weaknesses in the Companys internal controls. As a
result, no corrective actions were required or undertaken.

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 certain broadcasting policy objectives set forth in the
Broadcasting Act.

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

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



| |  |  | promote an environment in which existing and new communications
services are available to Canadians;                                                             
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | ensure a strong Canadian presence in content that fosters creative
talent and reflects Canadian society, including its linguistic duality
and cultural diversity;
|
| |  |  | promote choice and diversity of high quality communications services; and                                                                                        
|
| |  |  | foster strong competitive and socially responsive communications industries.                                                                                     

Industry Canada

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

Restrictions on Non-Canadian Ownership

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

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

23



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Broadcasting Services

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

The license issued by the CRTC generally sets out the terms and conditions of
the broadcasters program offering, including Canadian content expenditures,
Canadian exhibition requirements and signal delivery terms for our specialty,
premium 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 expected to represent a financial contribution equal to
6% of the purchase price and for acquisitions of television, or specialty or
pay television network services, a financial contribution of 10% of the value
of transaction is expected.

The CRTCs regulations that apply to radio, conventional television and
specialty and premium 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 equity, of a broadcasting undertaking or of a person that
has, directly or indirectly, effective control of that broadcasting
undertaking.

Radio Undertakings

On April 30, 1998, the CRTC announced certain changes to its commercial radio
policy. The CRTC increased Canadian popular music content levels to 35% and
eased 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 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. In markets with
more than one FM station, FM licenses are required to broadcast at least 42
hours per week of local programming in order to access local advertising.

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 subscription and by regulation are required to be commercial
free. The CRTC generally requires cable and direct-to-home satellite
distributors to carry all licensed specialty and premium television networks
appropriate to the markets in which they are distributed with the exception of
Category 2 digital services as described below. The wholesale subscriber fee
payable to a specialty television network for carriage of its service is
regulated if it is carried as part of the basic service, but is

24



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not regulated
if it is carried on an extended or discretionary tier. Subscriber fees payable
to premium television network licensees are not regulated by the CRTC.

On November 24, 2000, the CRTC announced that it would license 16 new
English-language and five French-language digital programming services for
mandatory distribution on a digital basis known as Category 1
services. The CRTC stated that all Category 1 services must commence operation
on or before November 24, 2001, but subsequently extended this date until
September 30, 2002 for certain of the French-language Category 1 services. An
additional 262 Category 2 digital services were also approved by the CRTC for
distribution on a digital basis and continue to be licensed by the CRTC.
Category 2 services may be competitive with one another but may not be directly
competitive with an existing licensed analog specialty or premium television
network or a Category 1 digital service. Category 2 services have no guaranteed
distribution rights except that, if a cable or direct-to-home satellite
operator carries a Category 2 service in which it or an affiliate owns more
than 10% of the issued equity, it must distribute at least five non-related
Category 2 services for each related service carried. The Category 2 services
licensed in the fall of 2000 are required to implement service no later than
November 24, 2003, unless the CRTC approves an extension before that date.

Ownership of Specialty and Premium Television Networks

On June 7, 2001 the CRTC announced that it had decided to change its policy
with respect to ownership of analog specialty and premium television networks
by cable licensees or their affiliates. The CRTC decided that cable operators
and their affiliates will be allowed, as a matter of broadcasting policy, to
purchase ownership interest, including controlling interests, in Canadian
analog specialty and premium television networks, provided that certain
conditions are met.

As well, the CRTC amended its regulations to remove the prior approval
requirement that applies in situations in which a distributor or any person who
controls the distributor acquires 10% and up to 30% of the voting interests of
a specialty or premium television network.

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 or expectations that had been imposed on stations. As well, in a
departure from past practice, the renewal of all conventional television
licenses held by an ownership group will be considered at the same hearing.

Pay Audio Services

Pay audio musical programming services provided to residential Canadian
subscribers by broadcast distribution undertakings are licensed and regulated
by the CRTC. In 1996, the CRTC confirmed the terms of the four pay audio
licensing decisions it issued in 1995. By licensing four pay audio services,
the CRTC established an open licensing framework and imposed on each licensee
Canadian content and French-language selection requirements. Pay audio
services are subject to Canadian content requirements as well as
French-language service requirements. Canada originated pay audio channels may
be linked on a 1:1 basis with foreign originated channels.

25



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

Canadian Content Requirement for Broadcasters

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

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

Film and Television Tax Credits and Grants

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

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

International Treaty Co-Productions

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

Competition Act Requirements

The Commissioner of Competition has the authority pursuant to the Competition
Act(Canada) to inquire into mergers and apply to the Competition Tribunal for
remedial orders, including an order blocking a merger, where the Commissioner
determines the merger is or will likely prevent or lessen competition
substantially in a market. To facilitate the Commissioners review of mergers,
parties to a merger transaction are required to pre-notify the Commissioner of
Competition prior to completing the transaction when specified party and
transaction-size thresholds are satisfied. For example, in the case of an asset
purchase, a transaction is notifiable if the parties to the transaction,
together with their affiliates, have assets in Canada or annual gross revenues
from sales in, from or into Canada that exceed $400 million and if the
aggregate value of the Canadian assets to be acquired or annual gross revenues
from sales in or from Canada generated from those assets exceed $35 million.
The

26



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##### 



Competition Bureau is currently reviewing the $35 million transaction size
and is considering an increase to $50 million and $400 million respectively.

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

Investment Canada Act

Under the Investment Canada Act,or ICA, certain transactions which involve the
acquisition of control of a Canadian business by a non-Canadian require the
approval of the Canadian government. The Ministry of Industry (Canada) is
responsible for reviewing proposed acquisitions of control of Canadian
businesses by non-Canadians. However, where the Canadian business is a
cultural business, that 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 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, pay television and
pay audio undertakings rely upon licenses under the Copyright Act(Canada) in
order to make use of the music component of the programming distributed by
these undertakings. Under these licenses, Corus is required to pay royalties
established by the Copyright Board pursuant to the requirements of
theCopyright Actto collecting societies which represent the copyright owners in
such music component. These royalties are paid by these undertakings on a
monthly basis in the normal course of their business.

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

27



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##### 



SELECTED CONSOLIDATED FINANCIAL INFORMATION

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

|                                                                                    |                   |      |                                 |        |   |      |           |        |  |   |           |        | 
|----------------------------------------------------------------------------------- | ----------------- | ---- | ------------------------------- | ------ | - | ---- | --------- | ------ |  | - | --------- | ------ | 
|                                                                                    |                   |      | Financial Years Ended August 31
|(thousands of Canadian dollars                                                      |                   |     
|except per share data)                                                              |                   | 2002 |                                 | 2001   |   | 2000
|                                                                                    |                   |      |                                 |        |   |     
|Operations:                                                                         |                   |      |                                 |        |   |      |           |        |  |   |           |       
|Revenues                                                                            |                   | $    | 652,784                         |        |   | $    | 556,825   |        |  | $ | 229,230   |       
|EBITDA(1)                                                                           |                   | $    | 116,496                         |        |   | $    | 123,916   |        |  | $ | 65,536    |       
|Net income (loss):                                                                  |                   | $    | (166,037                        | )      |   | $    | 128,167   |        |  | $ | 155,984   |       
|                                                                                    | Per share basic   |      | $                               | (3.90  | ) |      | $         | 3.09   |  |   | $         | 4.67   | 
|                                                                                    | Per share diluted |      | $                               | (3.90  | ) |      | $         | 3.06   |  |   | $         | 4.61   | 
|Cash flow derived from operations:                                                  |                   | $    | 229,803                         |        |   | $    | 159,156   |        |  | $ | 54,304    |       
|                                                                                    | Per share basic   |      | $                               | 5.39   |   |      | $         | 3.83   |  |   | $         | 1.63   | 
|                                                                                    | Per share diluted |      | $                               | 5.39   |   |      | $         | 3.81   |  |   | $         | 1.60   | 
|Weighted average number of Class A Voting and
Class B Non-Voting shares (thousands)
|                                                                                    | Basic             |      |                                 | 42,621 |   |      |           | 41,539 |  |   |           | 33,379 | 
|                                                                                    | Diluted           |      |                                 | 42,621 |   |      |           | 41,819 |  |   |           | 33,870 | 
|Financial Position:                                                                 |                   |      |                                 |        |   |      |           |        |  |   |           |       
|Working capital                                                                     |                   | $    | 62,865                          |        |   | $    | 16,655    |        |  | $ | 389,864   |       
|Total assets                                                                        |                   | $    | 1,925,156                       |        |   | $    | 2,269,811 |        |  | $ | 1,429,003 |       
|Total long-term debt(2)                                                             |                   | $    | 649,005                         |        |   | $    | 710,301   |        |  | $ | 297,355   |       
|Shareholders equity                                                                |                   | $    | 851,015                         |        |   | $    | 1,167,607 |        |  | $ | 826,678   |       
|Stock Prices:                                                                       |                   |      |                                 |        |   |      |           |        |  |   |           |       
|Closing price at year-end                                                           |                   | $    | 20.25                           |        |   | $    | 29.87     |        |  | $ | 43.50     |       



---

|(1) |  | This measure is provided to assist investors in determining the
ability of the Company to generate cash from operations to cover financial
charges before income and expense items from investing activities, income taxes
and items not considered to be in the ordinary course of business. It is also
widely used for valuation purposes. A reconciliation of EBITDA and net income
is provided in the consolidated statements of income (loss) and retained
earnings (deficit). EBITDA is calculated as net income (loss) before minority
interest, equity earnings, income tax expense (recovery), goodwill and
intangible impairment loss, asset write-downs, hedge transaction loss,
restructuring charges, other income, gain on sale of investments, interest
expense, amortization and depreciation. A listing of these items is disclosed
in the consolidated statements of income (loss) and retained earnings
(deficit). These items are excluded in the determination of EBITDA as they are
non-cash in nature, pre-tax, financing charges, income or expense from
investing activities or are not considered to be in the ordinary course of
business. EBITDA should not be considered in isolation of or as a substitute
for (1) net income or loss, as an indicator of the Companys operating
performance, or (2) cash flow from operating, investing and financing
activities, as a measure of the Companys liquidity.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Long-term debt includes current portion of long-term debt, long-term debt
and securitized borrowings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

DIVIDEND POLICY

The decision to pay dividends on the Corus Class A or B shares is made by the
Board of Directors of Corus on the basis of earnings, financial requirements
and other considerations.

28



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MANAGEMENTS DISCUSSION AND ANALYSIS

For Managements Discussion and Analysis of Financial Condition and Results of
Operations (MD&A), see pages 19 to 38 of our 2002 Annual Report incorporated
herein by reference.

MARKET FOR SECURITIES

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

29



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DIRECTORS AND OFFICERS

The following are the names and municipalities of residence of the directors
and executive officers of the Company as of August 31, 2002, their positions
and offices within the Company and their principal occupations during the last
five years.

|                                                 |  |                                                 |  |                                                                                                                                                               
|------------------------------------------------ |  | ----------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name and Municipality of Residence               |  | Director/Officer                                |  | Position with Corus/Principal Occupation                                                                                                                      
|                                                 |  |                                                 |  |                                                                                                                                                               
|Pierre Béland
Montreal, Quebec                   |  | Director                                        |  | President, Metromedia Plus                                                                                                                                    
|                                                 |  |                                                 |  |                                                                                                                                                               
|Dennis M. Erker(2)(3)
Edmonton, Alberta          |  | Director                                        |  | Partner, The FE Advisory Group (a financial
and estate planning company)                                                                                      
|                                                 |  |                                                 |  |                                                                                                                                                               
|Clinton C. Forster(4)
Victoria, British Columbia |  | Director                                        |  | President, Forvest Investments Inc. (an
investment company)                                                                                                   
|                                                 |  |                                                 |  |                                                                                                                                                               
|David Jensen(1)
Englewood, Colorado              |  | Director                                        |  | Vice President, Liberty Media                                                                                                                                 
|                                                 |  |                                                 |  |                                                                                                                                                               
|David Koff
Englewood, Colorado                   |  | Director                                        |  | Senior Vice President, Liberty Media                                                                                                                          
|                                                 |  |                                                 |  |                                                                                                                                                               
|Wendy A. Leaney(1)
Toronto, Ontario              |  | Director                                        |  | President, Wyoming Associates Ltd.                                                                                                                            
|                                                 |  |                                                 |  |                                                                                                                                                               
|Dorothy Zolf McDonald, PhD(4)
Toronto, Ontario   |  | Director                                        |  | Corporate Director, former Associate
Professor, Graduate Program in Communication
Studies, University of Calgary and Visiting
Professor, University of Alberta
|                                                 |  |                                                 |  |                                                                                                                                                               
|Catherine Roozen(3)
Edmonton, Alberta            |  | Director                                        |  | Director and Corporate Secretary of Cathton
Holdings. Ltd.                                                                                                    
|                                                 |  |                                                 |  |                                                                                                                                                               
|Terrance E. Royer(1)(2)
Calgary, Alberta         |  | Director                                        |  | Executive Vice Chairman, Royal Host Corp.
(a hotel management company)                                                                                        
|                                                 |  |                                                 |  |                                                                                                                                                               
|Heather A. Shaw(2)(3)
Calgary, Alberta           |  | Executive Chair and Director                    |  | Executive Chair, Corus Entertainment                                                                                                                          
|                                                 |  |                                                 |  |                                                                                                                                                               
|Julie M. Shaw(4)
Calgary, Alberta                |  | Director                                        |  | Vice President, Facilities, Design and
Management, Shaw Communications, and
Secretary, Shaw Foundation                                                        
|                                                 |  |                                                 |  |                                                                                                                                                               
|John M. Cassaday(2)
Toronto, Ontario             |  | President, Chief Executive
Officer and Director |  | President and Chief Executive Officer,
Corus Entertainment                                                                                                    
|                                                 |  |                                                 |  |                                                                                                                                                               
|Michael Hirsh
Toronto, Canada                    |  | Director and Officer                            |  | Chief Executive Officer of Nelvana Limited                                                                                                                    
|                                                 |  |                                                 |  |                                                                                                                                                               
|Thomas C. Peddie C.A.
Toronto, Ontario           |  | Officer                                         |  | Senior Vice President and Chief Financial
Officer, Corus Entertainment                                                                                        
|                                                 |  |                                                 |  |                                                                                                                                                               
|Paul W. Robertson
Toronto, Ontario               |  | Officer                                         |  | President, Television, Corus Entertainment                                                                                                                    
|                                                 |  |                                                 |  |                                                                                                                                                               
|John P. Hayes
Toronto, Ontario                   |  | Officer                                         |  | President, Radio, Corus Entertainment                                                                                                                         
|                                                 |  |                                                 |  |                                                                                                                                                               
|Kathleen C. McNair
Toronto, Ontario              |  | Officer                                         |  | Vice President, Business & Regulatory Affairs,
General Counsel, Corus Entertainment                                                                           
|                                                 |  |                                                 |  |                                                                                                                                                               
|Judy Adam C.A.
Oakville, Ontario                 |  | Officer                                         |  | Vice President, Controller, Corus Entertainment                                                                                                               
|                                                 |  |                                                 |  |                                                                                                                                                               
|Hal Blackadar
Oakville, Ontario                  |  | Officer                                         |  | Vice President, Human Resources, Corus
Entertainment                                                                                                          

30



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|                                          |  |                  |  |                                                             
|----------------------------------------- |  | ---------------- |  | ------------------------------------------------------------
|Name and Municipality of Residence        |  | Director/Officer |  | Position with Corus/Principal Occupation                    
|                                          |  |                  |  |                                                             
|Pierre Arcand
Town of Mount Royal, Quebec |  | Officer          |  | President, Quebec Radio                                     
|                                          |  |                  |  |                                                             
|John R. (Jack) Perraton
Calgary, Alberta  |  | Secretary        |  | Partner, Field Atkinson, Perraton, Barristers
and Solicitors



---

|(1) |  | Member of the Audit Committee               
|--- |  | --------------------------------------------
|   
|(2) |  | Member of the Executive Committee           
|   
|(3) |  | Member of the Human Resources Committee     
|   
|(4) |  | Member of the Corporate Governance Committee

Each director named above, except for Pierre Beland, was appointed a director
on December 11, 2001 and will hold office until the annual meeting of
shareholders scheduled to be held on December 10, 2002. 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. Mr.
Beland was appointed on July 25, 2002.

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 January, 1999, Terrance E. Royer was President and Chief
Executive Officer of Royco Hotels and Resorts Ltd.; prior to September, 1999,
Heather A. Shaw was President, DMX Canada and Shaw Advertising Services and
Vice President of Shaw Communications Inc.; prior to September, 1999, John M.
Cassaday was President and Chief Executive Officer, Shaw Media and prior to
September, 1997, was President and Chief Executive Officer of CTV Television
Network Ltd.; prior to September 1999, Thomas C. Peddie was President and Chief
Executive Officer, WIC and prior to July, 1998, was a communications and
broadcasting consultant and acting President, Senior Vice President, Operations
and Chief Financial Officer of CTV Television Network Ltd.; prior to September,
1999, Paul Robertson was President, YTV and prior to January, 1997 was
President of Baton Broadcast Sales; prior to July, 2001, John P. Hayes was
Chairman and CEO of RadioAmp and prior to 2000, he was a consultant to Goldman
Sachs International, and prior to 1998, he was CEO and President of Alliance
Broadcasting LP; prior to September, 1999, Judy Adam was Director, Finance of
WIC Connexus Inc. and prior to April, 1996, was the Corporate Controller of WIC
Western International Communications Ltd.; Kathleen McNair was Vice President
and General Counsel for Salter Street Films Limited prior to January, 2000, and
prior to May, 1999 she was a Partner at the communications law firm Johnston &
Buchan; Kerry Morgan was Director of Public Relations for the Canadian
Broadcasting Corporation prior to November 2000; Hal Blackadar was the General
Manager of Corus Radio Ontario prior to June, 2002; Pierre Béland was the
President of Corus Radio Quebec prior to July 25, 2002 and was President of
Metromedia CMR prior to August 31, 2000; and prior to July 25, 2002, Pierre
Arcand was Executive Vice President of Metromedia CMR.

As of August 31, 2002, the directors and executive officers of the Company
beneficially owned, directly or indirectly, or exercised control or direction
over 1,794,712 Class A participating shares and 40,846,420 Class B non-voting
participating shares, representing 9.78% and 2.37% of the issued and
outstanding Class A participating shares and Class B non-voting participating
shares, respectively.

31



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ADDITIONAL INFORMATION

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



|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 person who is not a security
holder of the Company.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Additional information including directors and officers remunerations and
indebtedness, principal holders of the Company securities, options to
purchase securities and interests of insiders in material transactions, where
applicable, is contained in the Companys Information Circular dated December
10, 2002. Additional financial information is provided in the Companys
comparative 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

32



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##### 



(CORUS ENTERTAINMENT LOGO)

33



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##### 



UNDERTAKING AND CONSENT TO SERVICE OF PROCESS

A. Undertaking

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

B. Consent to Service of Process

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





---



##### 



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.

DATED at Toronto, Ontario as of the 20th day of January, 2003.



| | CORUS ENTERTAINMENT INC.
| | ------------------------



| | 
| | 



| | By: /s/ THOMAS C. PEDDIE
Name: Thomas C. Peddie
Title: Senior Vice President and
Chief Financial Officer
| | --------------------------------------------------------------------------------------------------------





---



##### 



CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, John M. Cassaday, principal executive officer of Corus Entertainment Inc.,
certify that:

1.     I have reviewed this annual report on Form 40-F of Corus Entertainment Inc.;

2.     Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is
being prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):



| | a) |  | all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and                                                                                                                                        





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##### 



6.     The registrants other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

|                       |  |                                                                                
|---------------------- |  | -------------------------------------------------------------------------------
|Date: January 20, 2003 |  | By: /s/ John M. Cassaday
John M. Cassaday
President and Chief Executive Officer





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##### 



CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002

I, Thomas C. Peddie, principal financial officer of Corus Entertainment Inc.,
certify that:

1.     I have reviewed this annual report on Form 40-F of Corus Entertainment Inc.;

2.     Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is
being prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):



| | a) |  | all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and                                                                                                                                        





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##### 



6.     The registrants other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

|                       |  |                                                                                            
|---------------------- |  | -------------------------------------------------------------------------------------------
|Date: January 20, 2003 |  | By: /s/ Thomas C. Peddie
Thomas C. Peddie
Senior Vice President and Chief
Financial Officer





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##### 



EXHIBIT INDEX

|            |  |                                                                                                                
|----------- |  | ---------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                    
|            |  |                                                                                                                
|1           |  | Audited consolidated financial statements of the Registrant as
at and for the three years ended August 31, 2002
|2           |  | Managements Discussion and Analysis                                                                           
|3           |  | Consent of Ernst & Young LLP