---

UNITED STATES SECURITIES AND EXCHANGE
COMMISSIONWashington, DC 20549

FORM 20-F

[   ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)
or (g) OF THE SECURITIESEXCHANGE ACT OF 1934.

OR

[X] ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.

For the fiscal year ended**December 31, 2007**

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from 
_____________________________

OR

[   ] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report _________

Commission file number: 0-30942

STREAM COMMUNICATIONS NETWORK & MEDIA
INC.(Exact name of registrant as specified in its
charter)

Not Applicable(Translation of
registrants name into English)

British Columbia, Canada(Jurisdiction
of incorporation or organization)

Goraszewska 6 StreetWarsaw, 02-910
Poland(Address of principal executive offices)

---

Securities to be registered pursuant to Section 12(b) of the
Act. None.

Securities registered pursuant to Section 12(g) of the Act.

Common Shares, without par value.(Title of
Class)

Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act. None.

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.

81,596,491 common shares at December 31, 2007

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes:
[X]No: [   ]

Indicate by checkmark which financial statement item the
registrant has elected to follow: Item 17 [X]Item 18 [   ]

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule405 of the Securities Act.Yes:
[   ]  No: [X]

If this report is an annual or transition report, indicate by
check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934.Yes:
[   ]  No: [X]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of accelerated filer and large accelerated filer in Rule 12b-2
of the Exchange Act.Large Accelerated Filer [  
]         Accelerated
Filer [   ]        
Non-Accelerated Filer [X]

If this is an annual report, indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).Yes: [   ]  No: [X]

II

---

FORM 20-F

INDEX

|CONVERSION TABLE                                                     | 4                                                                                                                                                                                                                    
|-------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                     |                                                                                                                                                                                                                      
|GLOSSARY OF NAMES AND TERMS                                          | 4                                                                                                                                                                                                                    
|                                                                     |                                                                                                                                                                                                                      
|FORWARD-LOOKING STATEMENTS                                           | 7                                                                                                                                                                                                                    
|                                                                     |                                                                                                                                                                                                                      
|PART 1                                                               | 7                                                                                                                                                                                                                    
|                                                                     |                                                                                                                                                                                                                      
|Item 1  Identity of Directors, Senior Management
      and Advisers | 7                                                                                                                                                                                                                    
|                                                                     |                                                                                                                                                                                                                      
|Item 2 - Offer Statistics and Expected Timetable                     | 7                                                                                                                                                                                                                    
|                                                                     |                                                                                                                                                                                                                      
|Item 3  Key Information                                             | 7                                                                                                                                                                                                                    
|A.                                                                   | Selected Financial Data                                                                                                                                                                                              
|                                                                     | Financial Highlights                                                                                                                                                                                                 
|                                                                     | Exchange Rates                                                                                                                                                                                                       
|B.                                                                   | Capitalization and Indebtedness                                                                                                                                                                                      
|C.                                                                   | Risk Factors                                                                                                                                                                                                         
|                                                                     | All operations are done through Stream Poland and its subsidiaries                                                                                                                                                   
|                                                                     | We have a history of losses, likelihood of future losses
      and dependence on additional financing                                                                                                                
|                                                                     | We may encounter difficulties in future acquisitions of
      new cable television and Internet access businesses                                                                                                    
|                                                                     | We operate in a market that is open to widespread competition
      and rapid changes in technology                                                                                                                  
|                                                                     | Termination of agreements with Telekomunikacja Polska S.A.
      (TPSA) could prevent our access to its network, and significant expenditures
      could result                                                     
|                                                                     | Failure to replace key management and operating personnel
      could negatively affect our business                                                                                                                 
|                                                                     | Changes in regulations and permitting requirements could
      pose a threat to our operations                                                                                                                       
|                                                                     | Risks resulting from amendments to the Polish Copyright
      Act could lead to reduced programme offerings and increased costs or subscriber
      fees                                                             
|                                                                     | If foreign exchange rates fluctuate significantly, our profitability
      may decline                                                                                                                               
|                                                                     | Dilution of share capital from the exercise of stock options
      and warrants could affect our market price and deter future equity financing                                                                      
|                                                                     | Holders of a large number of shares may be able to exert
      significant influence on our business, with the ability to effect change
      that may not be in line with the interests of the minority shareholders
|                                                                     | Shareholders rights are different in Canadian corporations                                                                                                                                                          
|                                                                     | Holders of our shares may not be able to obtain enforcement
      of civil liabilities                                                                                                                               
|                                                                     | We are subject to Canadian taxation                                                                                                                                                                                  
|                                                                     | We have found material weaknesses in our internal controls
      that require remediation                                                                                                                            

-- Form20-FR----
StreamCommunications Network & Media, Inc.--

---

|Item 4 - Information on the Company                        | 14                                                       
|---------------------------------------------------------- | ---------------------------------------------------------
|                                                           | General                                                  
|                                                           | Office Space in Canada                                   
|                                                           | Stream Communications Sp. z o.o.                         
|                                                           |                                                          
|                                                           |                                                          
|                                                           |                                                          
|                                                           |                                                          
|                                                           |                                                          
|                                                           |                                                          
|                                                           | Streams Cable Television Services                       
|                                                           | Streams Cable Television Program                        
|                                                           | Table: List of programs licensed by Stream               
|                                                           | Streams data services                                   
|                                                           | Streams VoIP service                                    
|                                                           | Marketing and sales                                      
|                                                           | Overview of the Polish cable television industry         
|                                                           |                                                          
|                                                           |                                                          
|                                                           |                                                          
|                                                           |                                                          
|                                                           |                                                          
|                                                           |                                                          
|                                                           |                                                          
|                                                           |                                                          
|                                                           | IEWS (formerly: International Eco-Waste Systems) S.A.    
|                                                           | Streamline Media (formerly: Polvoice.com) Sp. z o.o.     
|                                                           |                                                          
|Item 4A  SEC Comments                                     | 29                                                       
|                                                           |                                                          
|Item 5  Operating and Financing Review and Prospects      | 29                                                       
|                                                           | Overview                                                 
|                                                           | Results of Operations                                    
|                                                           | Liquidity, Capital Resources and Subsequent Events       
|                                                           | Trend Information                                        
|                                                           | Contractual Obligations and Loans payable                
|                                                           | Off-Balance Sheet Arrangements                           
|                                                           | Canadian and US GAAP differences                         
|                                                           | Critical Accounting Estimates                            
|                                                           | Changes in Accounting Policies including Initial Adoption
|                                                           | Related Party Transactions                               
|                                                           | Financial Instruments and Other Instruments              
|                                                           |                                                          
|ITEM 6  Directors, Senior Management and Employees        | 36                                                       
|                                                           | Directors and Senior Management                          
|                                                           | Executive Compensation                                   
|                                                           |                                                          
|ITEM 7  Major Shareholders and Related Party Transactions | 41                                                       
|                                                           | Major Shareholders                                       
|                                                           |                                                          
|ITEM 8  Financial Information                             | 41                                                       
|                                                           | Legal Proceedings                                        

ii

---

iii

|ITEM 9 
      The Offer and Listing                                                         | 41                                                                                          
|-------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------
|                                                                                             | Nature of Trading Market                                                                    
|                                                                                             | Trading on the OTC BB and
      Pink Sheets                                                 
|                                                                                             |                                                                                             
|Item 10 
      Additional Information                                                       | 43                                                                                          
|                                                                                             | Share Capital                                                                               
|                                                                                             | Memorandum and Articles                                                                     
|                                                                                             | Exchange Control and Other Limitations Affecting
      Security Holders                     
|                                                                                             | Taxation - Certain Canadian
      Federal Income Tax Consequences to United States Investors
|                                                                                             | Taxation in Poland                                                                          
|                                                                                             |                                                                                             
|Item 11 - Quantitative and
      Qualitative Disclosures about Market Risk                   | 48                                                                                          
|                                                                                             | Currency and Exchange Rate
      Risk                                                       
|                                                                                             |                                                                                             
|Item 12 
      Description of Securities Other than Equity Securities                       | 49                                                                                          
|                                                                                             | Warrants                                                                                    
|                                                                                             |                                                                                             
|PART II                                                                                      | 50                                                                                          
|                                                                                             |                                                                                             
|ITEM 13  Defaults,
      Dividends, Arrearages and Delinquencies                            | 50                                                                                          
|                                                                                             |                                                                                             
|ITEM 14  Material Modifications
      to the Rights of Security Holders and Use of Proceeds | 50                                                                                          
|                                                                                             |                                                                                             
|ITEM 15T - Controls and Procedures                                                           | 50                                                                                          
|                                                                                             |                                                                                             
|ITEM 16A - AUDIT COMMITTEE
      FINANCIAL EXPERT                                            | 53                                                                                          
|                                                                                             |                                                                                             
|ITEM 16B - CODE OF ETHICS                                                                    | 54                                                                                          
|                                                                                             |                                                                                             
|ITEM 16C - PRINCIPAL ACCOUNTANT
      FEES AND SERVICES                                      | 54                                                                                          
|                                                                                             |                                                                                             
|PART III                                                                                     | 54                                                                                          
|                                                                                             |                                                                                             
|ITEM 17 - FINANCIAL STATEMENTS                                                               | 54                                                                                          
|                                                                                             |                                                                                             
|ITEM 18 - FINANCIAL STATEMENTS                                                               | 54                                                                                          
|                                                                                             |                                                                                             
|ITEM 19  FINANCIAL
      STATEMENTS                                                         | 54                                                                                          
|                                                                                             |                                                                                             
|EXHIBITS                                                                                     | 89                                                                                          
|                                                                                             | 12.1 Certification pursuant
      to Section 404 of the Sarbanes-Oxley Act by CEO           
|                                                                                             | 12.2 Certification pursuant to Section 404
      of the Sarbanes-Oxley Act by CFO           
|                                                                                             | 13.1 Certification pursuant
      to Section 906 of the Sarbanes-Oxley Act by CEO           
|                                                                                             | 13.2 Certification pursuant to Section 906
      of the Sarbanes-Oxley Act by CFO           
|                                                                                             |                                                                                             
|SIGNATURE PAGE                                                                               | **90**                                                                                      

| | -- Form 20-F--                                         | iii
| | ------------------------------------------------------ | ---
| | -- Stream Communications
      Network & Media, Inc.-- |    

---

CONVERSION TABLE

For ease of reference, the following conversion factors are
provided:

1 mile = 1.6093 kilometres
    1 metric ton (tonne) = 2,205
      pounds1 foot = 0.305 metres
    1 troy ounce = 31.103 grams1 acre = 0.4047 hectare
    1 imperial gallon = 4.546
      litres1 long ton = 2,240 pounds
    1 imperial gallon = 1.2010 U.S. gallons


GLOSSARY OF NAMES AND TERMS

|Broadband           | Broadband refers to telecommunication that provides
      multiple channels of data over a single communications medium, typically
      using some form of frequency or wave division.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|CATV                | Community Antenna Television, the original name for Cable
      TV.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Coaxial cable       | Coaxial cable is called "coaxial" because it includes one
      physical channel that carries the signal surrounded (after a layer of
      insulation) by another concentric physical channel, both running along the
      same axis. The outer channel serves as a ground. Many of these cables or
      pairs of coaxial tubes can be placed in a single outer sheathing and, with
      repeaters, can carry information for a great distance.                                                                                                                                                                                                                                                                                                            
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Czestochowa         | A city of southern Poland north of Katowice. It is
      heavily industrialized. Population: 251,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Digital             | Describes any system based on discontinuous data or
      events. Computers are digital machines because at their most basic level
      they can distinguish between just two values, 0 and 1, or off and on.
      There is no simple way to represent all the values in between, such as
      0.25. All data that a computer processes must be encoded digitally, as a
      series of zeroes and ones. The opposite of digital is analog. A typical
      analog device is a clock in which the hands move continuously around the
      face. Such a clock is capable of indicating every possible time of day. In
      contrast, a digital clock is capable of representing only a finite number
      of times (every tenth of a second, for example).
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|EU (European Union) | An economic association of European countries founded by
      the Treaty of Rome in 1957 as a common market for six nations. It was
      known as the European Community until January 1, 1994 and since 1 May 2004
      comprises 25 European countries. Its goals are a single market for goods
      and services without any economic barriers, and a common currency with one
      monetary authority. The 25 countries are Austria, Belgium, the Czech
      Republic, Cyprus, Denmark, Estonia, Finland, France, Germany, Greece,
      Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta,
      Netherlands, Poland, Portugal, Slovenia, Slovakia, Spain, Sweden and the
      United Kingdom.                                         
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Euro                | The basic unit of currency among 12 European Union
      countries.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|GSM                 | Global System for Mobile communications. A world standard
      for                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

4

---

|         | digital cellular communications using narrowband TDMA
      (Time Division Multiple Access), which allows up to eight calls at a time
      on 900 MHz and 1800 MHz frequencies. Introduced in 1991, it is the
      standard most commonly used in Europe and Asia, but not in the United
      States.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Headend  | A headend is the originating point of a signal in a cable
      television system (distribution center). Headend equipment receives
      satellite and local broadcast TV signals and converts them to a form that
      can travel down coaxial cable to subscribers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|HFC      | A hybrid fibre coaxial (HFC) network is a
      telecommunication technology in which optical fibre (glass or plastic
      wire) cable and coaxial cable are used in different portions of a network
      to carry broadband content (such as video, data, and voice). Using HFC, a
      local CATV company installs fibre optic cable from the cable head- end to
      serving nodes located close to business and residential users and from
      these nodes uses coaxial cable to individual businesses and homes. An
      advantage of HFC is that some of the characteristics of fibre optic cable
      can be brought close to the user without having to replace the existing
      coaxial cable that is installed all the way to the home and business. Both
      cable TV and telephone companies are using HFC in new and upgraded
      networks and, in some cases, sharing the same infrastructure to carry both
      video and voice conversations in the same system.
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|ISDN     | Integrated Services Digital Network, a fast method of
      service access and transferring data world-wide and an international
      communications standard for sending voice, video, and data over digital
      telephone lines or normal telephone wires.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Katowice | A city of southern Poland 50 miles west-northwest of
      Krakow. Chartered in 1865, it is an important mining and industrial
      center. Population: 314,550.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Krakow   | A city of southern Poland on the Vistula River
      south-southeast of Warsaw. Founded in the eighth century A.D., it was the
      national capital from 1305 to 1595. Population: 756,267.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|KRRiT    | National Council for Radio and Television in Poland.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|MDU      | Multiple dwelling units                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Penta    | CYFOCA Holdings Limited owned by Penta Investments Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|PIKE     | The Polish Cable Communications Chamber of Commerce with
      headquarters in Warsaw unites 136 companies. Its members are cable TV
      operators representing over 80% of the domestic cable TV market as well as
      manufacturers and distributors of equipment and services used by operators
      in their business activity. Services rendered by operators - members of
      the Chamber - are used by 4.5 million households in the whole country.
      PIKE is a member of the National Economic Chamber and the European Cable
      Communication Association.                                                                                                                                                                                                                                                                                                                                                                                                              
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Rzeszów  | A city, capital of Podkarpackie Province in southeastern
      Poland. Population: 163,508.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Silesia  | Region in Southwest Poland bordering on the Sudety
      Mountains                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

| | -- Form 20-F--                                         | 5
| | ------------------------------------------------------ | -
| | -- Stream Communications Network
      & Media, Inc.-- |  

---

|UKE        | Office of Electronic Communications in Poland.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|---------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|UOKiK      | Office of Competition and Consumer Protection in Poland.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Voice mail | A computerized system for receiving, recording, and
      sometimes forwarding audio messages. A voice mail system plays a pre-
      recorded message to the caller when the line is not answered, and may
      provide choices such as paging, talking to an operator, or selecting a
      number by touchtone to choose between message boxes.                                                                                                                                                                                                                                                              
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|VoIP       | An acronym for Voice Over Internet Protocol. An emerging
      technology, voice delivered using the Internet Protocol, is a term used in
      IP telephony for a set of facilities for managing the delivery of voice
      information using the Internet Protocol (IP). In general, this means
      sending voice information in digital form in discrete packets rather than
      in the traditional circuit committed protocols of the public switched
      telephone network. A major advantage of VOIP and Internet telephony is
      that it avoids the tolls charged by ordinary telephone service.
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Warsaw     | The capital of Poland, in the east-central part of the
      country on the Vistula River. Founded in the 13th century, it replaced
      Kraków as Poland's capital in 1596. Warsaw was ruled by Russia as an
      independent kingdom (18151917) and became capital of Poland again in
      1918. Warsaw was rebuilt after 1945 and is today a major cultural,
      commercial, and industrial center. Population: 1,702,139.                                                                                                                                                                              
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Wroclaw    | A city of southwest Poland on the Oder River, assigned to
      Poland by the Potsdam Conference (1945). Population: 634,630.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

6

---

FORWARD-LOOKING STATEMENTS

Stream Communications Network & Media Inc. (we, us and
our, as the context requires) (the Company) cautions you that certain
important factors (including without limitation those set forth in our Form
20-F) may affect our actual results and could cause such results to differ
materially from any forward-looking statements that may be deemed to have been
made in this Form 20-F annual statement, or that are otherwise made by us or on
our behalf. For this purpose, any statements contained in this annual statement,
that are not statements of historical fact may be deemed to be forward-looking
statements. Without limiting the generality of the foregoing, words such as
may, except, believe, anticipate, intend, could, estimate, or
continue, or the negative or other variations of comparable terminology, are
intended to identify forward-looking statements.

PART 1

Item 1  Identity of Directors, Senior Management and
Advisers

Not applicable

Item 2 - Offer Statistics and Expected
Timetable

Not applicable

Item 3  Key Information

A. Selected Financial Data

Financial Highlights

The following table sets forth our selected consolidated
financial data for the five year period ended December 31, 2007, prepared in
accordance with Canadian generally accepted accounting principles (Canadian
GAAP). The table also summarizes certain corresponding information prepared in
accordance with United States generally accepted accounting principles (U.S.
GAAP). This selected consolidated financial data include the accounts of the
Company and our subsidiaries.

Year ended December
      31
    Year ended December
      31
    Year ended December
      31,
    Year ended December
      31
    Year ended
      December 31,2007
    2006
    2005
    2004
    2003$CDN
    $CDN
    $CDN
    $CDN
    $CDNRevenues
    7,376,978
    6,472,905
    5,826,112
    4,415,461
    3,700,160Net loss from continuing operationsCanadian GAAP
    (3,107,320)
    (4,485,893)
    (5,811,359)
    (6,564,715)
    (6,254,620)US GAAP
    (3,107,320)
    (4,444,561)
    (4,977,876)
    (4,533,705)
    (8,064,275)Loss per share basic and diluted




| | -- Form 20-F--                                         | 7
| | ------------------------------------------------------ | -
| | -- Stream Communications Network
      & Media, Inc.-- |  

---

Canadian GAAP
    (0.04)
    (0.08)
    (0.14)
    (0.22)
    (0.21)US GAAP
    (0.04)
    (0.05)
    (0.12)
    (0.15)
    (0.27)Total assetsCanadian GAAP
    16,619,743
    14,622,107
    13,112,108
    14,131,087
    10,204,158US GAAP
    16,619,743
    14,622,107
    13,112,108
    14,131,087
    10,204,158Long-term debt(1)
    7,132,787
    5,756,570
    5,174,126
    916,237
    132,509Capital stock
    44,515,479
    43,941,186
    41,129,499
    36,005,421
    33,209,455Weighted average number of common
      shares outstanding
    79,808,820
    59,629,483
    42,953,922
    30,027,489
    29,333,427


(1) Including current portion of long-term debt

Exchange Rates

In this report, unless otherwise specified, all dollar amounts
are expressed in Canadian dollars (CDN). Equivalents will be given in U.S.
dollars (USD) or Polish zloty (PLN), or Canadian dollars where the first
currency stated indicates that a contract, a fee or agreement was made pursuant
to a currency other than the Canadian dollar.

Since June 1, 1970, the Government of Canada has permitted a
floating exchange rate to determine the value of the Canadian dollar against the
U.S. dollar. The high and low exchange rates, the average rates (average of the
exchange rates on the last day of each month during the period) and the end of
the period rates for Canadian dollars, expressed in U.S. dollars, from January
1, 2003 to December 31, 2007 was as follows:

U.S. DOLLARS PER $1.00 (CDN)

Year ended December
      31, 2007
    Year ended December
      31, 2006
    Year ended December
      31, 2005
    Year ended December
      31, 2004
    Year ended December
      31, 2003High
    1.1038
    .9134
    .8748
    .8532
    .7747Low
    0.8420
    .8479
    .7851
    .7138
    .6327Average
    0.9356
    .8806
    .8262
    .7701
    .7163End of Period
    1.0194
    .8569
    .8580
    .8303
    .7727


In this report, several references are made to business in
Poland and the Polish currency, the zloty. The high and low exchange rates, the
average rates (average of the exchange rates on the last day of each month
during the period) and the end of the period rates for Polish zloty (PLN),
expressed in U.S. dollars, from January 1, 2003 to December 31, 2007 were as
follows:

8

---

U.S. DOLLARS PER 1 POLISH ZLOTY (PLN)

Year ended December
      31, 2007
    Year ended December
      31, 2006
    Year ended December
      31, 2005
    Year ended December
      31, 2004
    Year ended December
      31, 2003High
    .4130
    .3506
    .3442
    .3366
    .2825Low
    .3246
    .3042
    .2877
    .2453
    .2428Average
    .3633
    .3230
    .3099
    .2757
    .2577End of Period
    .4090
    .3442
    .3070
    .3339
    .2665


B.Capitalizationand Indebtedness

N/A

C. Risk Factors

All operations are done through Stream Poland and its
subsidiaries

All operations of Stream Communications Network & Media
Inc. are done through Stream Poland Sp. z o. o. (Stream Poland) and its
subsidiaries in Poland. There is an inherent risk exposure to a Company
operating in a highly competitive emerging market:

| | The political environment has historically been stable
      despite Poland being an emerging market. Any risk associated with the
      countrys political stability has by far been mitigated though its
      accession to the European Community, which among other things has forced
      Poland to adapt a legislation aligned to the European Communitys.                 
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                                                                     
| | The business environment in Poland is volatile,
      competitive and sensitive to the overall development of both the US and
      European economy. Further, the market segment of Stream Poland is highly
      competitive with large local and international operators who at any time
      can adapt an aggressive business strategy affecting Stream Poland
      adversely.
|  |                                                                                                                                                                                                                                                                                                                                                                                     
| | New technical development of alternatives to Stream
      Polands core business (Cable TV and Internet) can have an adverse impact
      on the company. Historically, the Central and Eastern European countries
      have been faster than the Western European countries to adapt new
      technologies.                                                                      

We have a history of losses, likelihood of future losses
and dependence on additionalfinancing

We have not been profitable in the past. The aggregate of our
net losses (accumulated deficit) of $49,994,299 to December 31, 2007, has been
financed by debt, private placements of equity securities, equity issued on
settlement of debt and the exercise of stock options and warrants. We may not be
profitable in the future.

In addition, our future prospects must be considered in light
  of the risks, expenses and difficulties frequently encountered in establishing
  new businesses, which can be characterised by intense competition and rapidly
  changing events. Our auditors have included an explanatory paragraph disclosing
  substantial doubt regarding our ability to continue as a going concern, as also
  disclosed in the notes to the financial statements for the year ended December
  31, 2007. The financial statements have been prepared on a going concern basis
  as we are confident that we will be able to continue as a going concern.

| | -- Form 20-F--                                         | 9
| | ------------------------------------------------------ | -
| | -- Stream Communications Network
      & Media, Inc.-- |  

---

There can be no assurance however that our financial plans will
be achieved.

We may encounter difficulties in future acquisitions of
new cable television andInternet access
businesses

The completion of acquisitions and the integration of acquired
cable television and Internet access businesses constitute a material part of
our growth strategy. Before acquiring a new network or operator, we endeavor to
perform a detailed analysis of integration-related costs and technical
requirements, the financial standing of the business to be acquired, and our own
capacity to finance the additional development of the acquired networks. We may
encounter difficulties in the future in acquiring new businesses that meet
growth and profitability criteria or difficulties in integrating acquired
businesses, which may result in additional costs and in the frustration of our
development strategy. We cannot rule out the possibility that future
acquisitions of other cable television operators may be more time-consuming than
originally assumed. Furthermore, we may not be able to acquire cable operators
on terms and conditions that are advantageous. While we seek to mitigate these
risks, any of the foregoing may adversely affect our business and financial
performance.

We operate in a market that is open to widespread
competition and rapid changes intechnology

We operate in markets that are open to a variety of
competitors, including large, well-established companies in the cable, satellite
(the so called, digital platforms) and Internet access businesses, among others.
The current legal environment makes it possible for competitors to build
parallel and competing networks in the same regions in which we operate.

Currently, based on our own research, less than 20% of our
aggregate networks are overbuilt by competitors. These competitors are typically
not wiring the same subscribers as we do. However, if competitors are willing to
significantly overbuild our networks and are able to obtain programming that is
appealing to subscribers at reasonable costs and we are unable to do so, our
business may be materially adversely affected.

In addition, the cable television and Internet access
businesses are subject to rapid and significant changes in technology.
Currently, no single method of television signal transmission or internet access
dominates in Poland. We use flexible and modern technology which enables us to
adjust to technological changes with relative ease, but we cannot predict the
effect of technological changes. We anticipate that the role of cable in the
transmission of television signals and data will continue to grow. However, the
introduction of other methods of transmission may adversely affect our business.
Rapid technological changes and the profitability of transmission technology
other than cable may adversely affect our business.

In addition, should competitors with better access to funding
sources prove to be quicker in adjusting to technological changes than us, it
may adversely affect our business.

We also face competition from other means of television and
Internet distribution, including television direct-to-home satellite TV and
terrestrial broadcasting, and from alternative forms of entertainment and
information provision.

Termination of agreements with Telekomunikacja Polska
S.A. (TPSA) could prevent ouraccess to its network, and
significant expenditures could result

Approximately 30% of our network has been constructed using
pre-existing conduits of the Polish national telephone company, TPSA. Compared
to most of our competitors, this represents a relatively small portion of our
network. Agreements with TPSA provide that we may use TPSA conduits to offer
services over our network and gain access to the conduits to upgrade, repair,
and maintain the network.

Our agreements with TPSA permit TPSA to terminate these
agreements without penalty at any time, either immediately (upon the occurrence
of certain conditions relating principally to

10

---

substantial breaches of the agreement, misuse of conduits or a change in control) or upon three to six months notice (without cause). TPSA is the top provider of Internet access services in Poland; it is, therefore, a competitor to us.  We
believe that it is unlikely that a termination of these agreements will occur. Nevertheless, if these agreements were terminated, we could, at least for a period of time, be prevented from accessing its network, in which case we would have to incur
significant expenditures to build or lease alternative conduits to continue providing our services.

Failure to replace key management and operating personnel
  could negatively affectour business

We compete with other cable television providers for qualified operating, sales, marketing, administrative and technical personnel. Our success will significantly depend upon our ability to hire and retain such personnel. We may not be able to
attract, recruit and retain sufficient qualified personnel. Furthermore, we are currently managed by a small number of key management and operating personnel. Our business success depends significantly on the efforts and abilities of these
individuals. If we were to lose the services of key management and operating personnel, our business could be negatively affected unless suitable replacements were found.

Changes in regulations and permitting requirements could
  pose a threat to ouroperations

Cable television operators in Poland are regulated by various regulatory bodies and are required to comply with laws providing for, among other things, intellectual property rights protections.

Cable operators are required to register at the Polish telecommunications regulatory (the UKE, The Telecommunication and Post Regulation Office).  UKE has the right to verify the technical quality of the networks.

Our program channels have to be registered at the National Council for Radio and Television (the KRRiT). A registration is valid for the periods ranging from one year to indefinite. The channels have either valid registration or
appropriate application for registration have been made. KRRiT has the authority to reject applications to extend existing registrations for program channels if any such channels violate the Radio and Television Broadcasting Act.  Our applications
to register or extend the registration of the registration of program channels have never been rejected. In the unlikely event that a regulatory body was to refuse the extension of or amendment to our telecommunication approval, the extension of
existing program registrations or the approval of additional program registrations, our business could be materially adversely affected.

The president of the Office of Competition and Consumer Protection (UOKiK) has broad powers to sanction companies in the interests of consumer protection by ordering companies to comply and by levying fines against companies that act
against consumer interests. Polish law does not clearly define the extent of the powers of this agency. We believe we have not engaged in any activity that might subject us to such sanctions. However, because of the broad powers of this agency, it
is possible that our business may be adversely affected in the future by consumer protection related sanctions imposed against us or by sanctions directed at other businesses that in turn would indirectly affect how we conduct our business.

We cannot be sure that existing laws and regulations affecting our operations, or the interpretation or enforcement thereof, will not change.  Some changes, including the implementation of new provisions in connection with Polands accession to
the European Union, might have an adverse effect on our business. Changes could include rules restricting the prices that we may charge for cable television subscriptions or Internet access, or regulations concerning the level of fees we may be
required to pay to organizations for collective copyright administration and protection.

Risks resulting from amendments to the Polish Copyright
  Act could lead to reducedprogramme offerings and increased
  costs or subscriber fees

Before May 1, 2004 (i.e. the date of Polands accession
  to the European Union), cable operators in Poland, including us, re-transmitted
  works that were broadcast by radio and television stations in a

| | -- Form 20-F--                                         | 11
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

given area pursuant to a so-called statutory licence. In
order to be effective, the statutory licence required the cable operator to
broadcast all programmes simultaneously and integrally with the primary
broadcast. With an effective statutory licence, it was possible to show such
works without being required to enter into separate agreements with their
primary broadcasters, except in the case of encoded programmes.

The amendments to the Polish Copyright Act made on July 25,
2003 removed the statutory licence scheme, making it necessary for cable
operators to enter into separate agreements with broadcasters. These amendments
became effective on May 1, 2004. As a result, we are required to possess
agreements with the broadcasters of all radio and television programmes which
are broadcast on Streams networks. Time and market pressure might adversely
affect the terms and conditions of the agreements negotiated with these
broadcasters, potentially resulting in higher fees payable by us to them. Our
operating costs and costs per viewer may be significantly increased, and our
programming offerings containing its most expensive programming may be
curtailed. In addition, if broadcasters are not granted the right to broadcast
their programmes within Poland, they will not be able to enter into agreements
with us, also causing curtailment of our programme offerings. Reduced programme
offerings or increased costs or subscriber fees may harm our business.

In addition, we are required to enter into agreements with
organisations responsible for the collective management of copyrights and to pay
through them remuneration to authors for our rebroadcasting of the authors
works. Pursuant to such agreements, we are obliged to pay remuneration at the
rates specified in tariffs approved by the government-appointed Copyright
Commission. Polish law does not impose a ceiling on remuneration to be collected
by such organisations.

Polish law at present does not contemplate cable operators
entering into one agreement for each programme channel covering the copyrights
of all material broadcast over that channel. Instead, Polish cable operators,
including us, must negotiate licence agreements with the associations
responsible for the collective management of copyrights of a certain category,
e.g. of directors, actors, composers (in exchange for a fee set by tariff). Even
if we enter into a licence agreement with an association for a given category,
we cannot be assured that such an agreement will fully cover all copyrights and
related rights with respect to such category.

We expect that any cost increase resulting from these
additional fees paid to broadcasters and organisations responsible for the
collective management of copyrights will be offset by the reduction of other
operating costs as a result of the anticipated increase in the number of its
subscribers. However, there is no certainty that we will be able to offset these
costs. If our costs increase as a result of this uncertainty, we expect that the
costs of our competitors also will increase for the same reasons. The
legislative process with respect to this issue is ongoing.

If foreign exchange rates fluctuate significantly, our
profitability may decline

We do not hedge currency risk. Our revenues are generated in
PLN, while our programming costs (constituting 18.2% of our revenues in 2007 and
our expenditures for technical equipment purchases, among certain other costs,
are denominated in foreign currencies. Accordingly, significant fluctuations of
the PLN in relation to those currencies may adversely affect our business and
our financial results.

Dilution of share capital from the exercise of stock
options and warrants could affectour market price and
deter future equity financing

As at December 31, 2007, the company has issued a total of
81,596,491 shares. There are unexercised options to purchase a total of 865,000
of our shares, and unexercised warrants to purchase an additional 13,150,832
shares (14,015,832 shares in total). If all of these options and warrants were
exercised, shares issued as a result of such exercise would constitute 17.17% of
all of our outstanding shares. The exercise of these options and warrants and
the resale of the resulting shares on a public market may adversely affect the
market price of our shares and our ability to raise future equity financing upon
favourable terms.

12

---

As of December 2007, our constituent documents authorise the
issuance of up to 150,000,000 shares of common stock. Consistent with our
strategy, we may issue some or all of such shares to acquire one or more
businesses or other types of property or to provide additional financing. In
addition, we may grant additional options and issue additional warrants in the
future. The issuance of those shares may result in a reduction of the market
price of our outstanding shares. The issuance of any additional shares will
cause a reduction in the proportionate ownership and voting power of all other
shareholders. Further, any such issuance may result in a change of our voting
control.

Holders of a large number of shares may be able to exert
significant influence on ourbusiness, with the ability to
effect change that may not be in line with the interests ofthe minority shareholders

It is possible that a holder of a large number of our shares
will be able to control (individually or jointly with others) our activities or
exert a significant influence on our governing bodies or our business, including
the ability to effect changes to our constituent documents and other material
issues.

We believe that there presently is no shareholder able to
exercise such control. However, the concentration of share ownership in the
hands of a few shareholders in the future may make it impossible, without the
consent of such shareholders, to effect a change in control or to appoint or
remove a director. Possible conflicts among shareholders holding large numbers
of our shares and possible conflicts between such shareholders and minority
shareholders may adversely affect us.

Shareholders rights are different in Canadian
corporations

We are a corporation incorporated under the laws of British
Columbia, Canada. The rights of holders of our shares are governed by the laws
of the province of British Columbia and the federal laws of Canada and by our
constituent documents. These rights may differ in certain respects from the
rights of shareholders in the United States.

Holders of our shares may not be able to obtain
enforcement of civil liabilities

While most of our assets are located in Poland, a majority of
the members of our board of directors and officers are not permanent residents
of Poland. As a result, it may be more difficult for holders of our shares to
effect service of process on us, our directors and our officers and to enforce
against us, our assets or these persons any judgements in civil and commercial
matters. In addition, a Canadian court may not permit holders of our shares to
enforce in Canada a judgement by a non-Canadian court related to claims under
securities or other laws or otherwise related to their ownership of our shares.
Canada is not a signatory to the Lugano Convention on Jurisdiction and
Enforcement of Judgements in Civil and Commercial Matters.

We are subject to Canadian taxation

As a British Columbia corporation, income and dividend payments
to shareholders are subject to Canadian tax laws and regulations. Depending on
the jurisdiction of residence of our investors and on tax treaties, laws and
regulations applicable to them, our investors may be subject, directly or
indirectly, to various Canadian tax laws and regulations. We advise our
investors to contact their tax advisors to determine how the tax laws and
regulations of Canada and other jurisdictions applicable to them apply to them
and their investments in us.

We have found material weaknesses in our internal
controls that require remediation

As we disclose in Part II, Item 15, Controls and Procedures
  of this Form 20-F, our Chief Executive Officer and Chief Financial Officer have
  concluded that our disclosure controls and procedures and internal control over
  financial reporting were not effective as of December 31, 2007. While we are
  in the process of correcting our internal control weaknesses, the material weaknesses
  in internal control over financial reporting that have been identified will
  not be remediated until numerous

| | -- Form 20-F--                                         | 13
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

internal controls are implemented and operate for a period of
time, are tested, and we are able to conclude that such internal controls are
operating effectively. Pending the successful completion of such implementation
and testing of the internal controls, we will perform additional procedures to
reduce the risk that material weaknesses in internal control over financial
reporting result in material errors to the financial statements. We cannot
provide assurance that these procedures will be successful in identifying
material errors that may exist in the financial statements. Any failure to
implement and maintain the improvements in the internal controls over our
financial reporting, or difficulties encountered in the implementation of these
improvements in our controls, could result in errors in the financial statements
that would not be prevented or detected, or cause us to fail to meet our
reporting obligations. We cannot assure you that we will not identify additional
material weaknesses in our internal controls in the future. Any failure to
improve the identified material weakness or any identification of any additional
material weaknesses could cause investors to lose confidence in our reported
financial information which could have a negative impact on the trading price of
our stock.

Item 4 - Information on the Company General

We have business interests in the country of Poland. Our
principal business is providing cable TV and high-speed Internet access.

We were incorporated on March 28, 1979 under the name of Clear
Mines Ltd. by registration of its Memorandum and Articles under the Company Act
of British Columbia, Canada (the British Columbia Company Act). We
consolidated our shares on a one new for 3.9 old shares basis and changed our
name to Redwood Resources Inc. on August 16, 1985. We again consolidated our
shares on a one new for three old shares basis and changed our name to Trooper
Explorations Ltd. on May 29, 1992.

On May 4, 1995 we changed our name to Trooper Technologies
Inc. and on October 19, 2001 we changed our name to Stream Communications
Network, Inc.. On August 9, 2004 we changed our name to Stream Communications
Network & Media Inc. (Stream). We changed our year-end from October 31 to
December 31 in 2001.

Our authorized capital is 150,000,000 common shares without par
value.

Our registered office is Suite 1500  1055 West Georgia Street,
P.O. Box 11117 Vancouver, British Columbia, V6E 4N7, Canada. Our principal
offices are located at Goraszewska 6 Street, Warsaw, 02-910, Poland, telephone
+48- 22-842-7666.

We have the following operating subsidiary companies:

| | 1. | Stream Communications Sp. z o.o. (Stream Poland) was
      incorporated on October 26, 1999, under the laws of Poland. At December
      31, 2007, we own a 100% interest in Stream Poland which is in the business
      of operating cable television and high-speed Internet in Poland. Stream
      Polands growth is being accomplished through acquisitions of small,
      independent cable TV and high-speed Internet providers and through its own
      marketing efforts. Stream Poland is located at al. 29 Listopada 130,
      31-406 Krakow, Poland. On February 22, 2008, we entered into an agreement
      with Penta, that will allow Penta to acquire a majority stake (51%) in
      Stream Poland.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 2. | Streamline Media Sp. z o.o., (formerly Polvoice.com,
      Streamline) is a wholly owned subsidiary of our Company, being organized
      on August 11, 1999, under the laws of Poland. Streamline is acting for and
      on behalf of Stream Poland acquiring Cable TV System, which subsequently
      are re-organized and transferred to Stream Poland as an integral part to
      existing Cable TV Systems. On January 22, 2008, Streamline changed its
      name to Streamline Investments Sp. z o.o.                                                                                                                                                                                                           

The following company is a subsidiary, but no longer has an
operating business. We are currently in the process to liquidate this Company,
as the business purpose is no longer in line with our

14

---

corporate strategy. The liquidation of the company commenced in
the second half of 2007 and is expected to be completed by the end of 2008.

| | 1. | IEWS S.A. (formerly International Eco-Waste Systems
      IEWS) is a wholly owned subsidiary of our Company being incorporated on
      September 24, 1996 under the laws of Poland.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We are a reporting issuer in the Province of British Columbia,
Canada and our common shares are listed for trading on the OTCBB Pink Sheets
under the trading symbol SCNWF. Our shares also trade on the Frankfurt
exchange under the symbol TPJ.

Office Space in Canada

Until October 2007, we utilized about 1,000 square feet of
office space in Vancouver, British Columbia. Our rent was $1,700 per month. In
addition, we paid approximately $1,500 per month for office support that
includes a photocopier, telephones, a fax machine, computers, printers,
scanners, secretarial services, reception services and consumables.

As at October 2007, the lease for the premises in Canada has
been cancelled; however the company will continue to be registered in Canada.

Stream Communications Sp. z o.o.

Overview

Stream provides cable television services and high-speed
Internet access in the Polish districts of Slaskie, Malopolskie, Swietokrzyskie
and Podkarpackie through its hybrid fibre coax (HFC) networks. Recently, it
has also begun offering limited Internet telephony services based on Voice over
Internet Protocol (VoIP). Stream Poland provides its customers with a high
quality product by employing modern, reliable networks, a broad selection of
programmes, professional management and customer service.

We own and control business activities in Poland through a
group of companies, in particular through our wholly owned subsidiary Stream
Communications Sp. z o.o. (Stream Poland) with a registered office in Krakow,
ul. Aleja 29 Listopada 130, 31-406 Krakow, and indirectly, through the following
subsidiaries of Stream Poland:

Bielsat.com Sp. z o.o. (Bielsat)

Telewizja Kablowa Gimsat Sp. z o.o.
(Gimsat)

ASK Stream Sp. z o.o. (ASK)

Vega Sp. z o.o. (Vega)

Business Description

Stream Communications Network & Media Inc. and Stream
Poland are collectively referred to as Stream. Stream provides cable
television services and high-speed Internet access in the Polish districts of
Slaskie, Malopolskie, Swietokrzyskie, and Podkarpackie through its hybrid fibre
coax (HFC) networks. Recently, it has also begun offering limited Internet
telephony services based on Voice over Internet Protocol (VoIP).

Stream conducts its business in Southern Polands most densely
populated region, which, as per data from the Main Statistical Office (GUS), has
approximately 11.5 million inhabitants and 3.2 million television homes and
according to the estimates by PIKE 1 about 1.1 million cable
subscribers. Stream originally targeted this area of Poland because of the
number of mid-sized cities which at that time remained underserved by larger
cable operators. Stream has funded its growth and operations principally through
debt and equity issuances. Streams management

___________________________________
  1 Polish Chamber of Electronic Communication

| | -- Form 20-F--                                         | 15
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

possesses cable-business expertise and experience and, in
particular, knowledge of its local target markets.

Most of Streams networks have an 862 MHz bandwidth and
potentially are able to transmit up to 94 analogue television channels and 68
radio stations. A portion of Streams networks can already be used for two-way
transmission, which is necessary for Internet access and other interactive
services. Streams policy is to upgrade the networks it has acquired, including
for the provision of two-way data transmission.

Stream Poland has made a number of cable television
acquisitions, all of which have been successfully integrated into its business.
These acquisitions include:

Date
    Name of acquisition
    Region of operationSeptember2007
    ASK II
    SosnowiecApril 2005
    Vega
      II
    CzestochowaApril 2005
    Internet in Bytom
    BytomOct
      2004
    98% of
      Vega
    CzestochowaSept
      2004
    Miechowice
    BytomMay
      2004
    60% of
      ASK
    SosnowiecMarch 2004
    Channel 69
    SosnowiecJune
      2001
    100%
      of Gimsat
    Jaslo,
      Sanok, BrzozowJuly
      2001
    MTK
    CzestochowaA portion of the assets of AZART S.C.:July 2001
    AZART SC Telekom
    KielceAZART TK Trybinowski
    Busko,
      ZdrojSeptember
    A portion of the assets of2000
    Elektromontaz Rzeszow S.A. El-
    Rzeszow, Bochnia, SankomierzRzeszow TelekabA portion of the assets of Bister Sp.August 2000
    
    Jaworzno, Czechowice-DziedziceZ o.o.A portion of the assets of TelemediaJuly 2000
    
    CzestochowaSp. Z
      o.o.July
      2000
    A
      portion of the assets of Marsat S.C.
    CzestochowaBeilsko-Biala, Czechowice-June 2000
    51% of the shares of Bielsat
    Dziedzice


On February 22, 2008, we entered into an agreement with Penta,
that will allow Penta to acquire a majority stake (51%) in Stream Poland.

Bielsat

Stream Poland is one of the founders of Bielsat and since
Bielsat was incorporated on March 8, 2000, has held 51% of its shares. PPUH
Bielsat owns the remaining 49% of its shares.

Stream Poland has an option to acquire the outstanding 49% in
Bielsat, of which the option is valid until 2009. In the same period there is a
drag-along clause whereby PPUH Bielsat is obliged to sell its shares in
Bielsat to Stream Poland, should Stream Canada decide to dispose of Stream
Poland.

16

---

Gimsat

Stream Poland owns 100% of Gimsat, having made the final
payment in May 2004.

ASK

ASK was initially purchased on May 5, 2004, wherein we paid
$200,000 for a 60% interest in share capital of ASK. The remaining 40% was
acquired on September 30, 2007 for cash consideration of $222,124.

Vega

A 98% interest in Vega was purchased in October 2004 by Stream
Poland and outstanding 2% was acquired in 2005.

Our operating companies consist primarily of highly penetrated,
mature broadband systems that generate stable cash flow. We also operate a
number of earlier stage broadband businesses. Our primary goal in the majority
of these regions is to capitalize on the opportunity to increase revenues and
cash flows through the introduction of new and expanded programming and the
delivery of Internet access services and telephony over our cable communications
networks.

Streams Cable Television Services

Stream Poland currently offers four programme packages:

Bronze (Lifeline Tier):
targeted to reach up to 8 channels for most subscribers, including all four
Polish public television channels and Stream Poland's own information
channel;

Silver (Intermediate
Tier): targeted to reach up to 18 channels for most subscribers,
including all Basic Tier channels, plus Polish terrestrial channels and channels
received free-of-charge;

Gold (Basic Tier):
targeted to reach up to 45 channels for most subscribers, including all
Intermediate Tier channels and certain pay channels including e.g. Viasat
History and Explorer, Eurosport, National Geographic, Fox Kids, BBC Prime,
Polsat Sport and three music channels of VIVA;

Live (Premium Tier):
targeted to reach up to 45 channels for most subscribers, including all Top Tier
channels and premium channels Canal+. Canal+ Film and Canal+ Sport;

The different programming packages are designed to attract the
maximum number of subscribers in a given franchise area, in order to obtain the
highest possible penetration. Stream markets to subscribers of lower priced
tiers to encourage them to move to higher priced tiers. In the future Stream
intends to offer add-on premium channel packages of additional channels.

Because Stream has acquired its cable television networks
through acquisitions, the exact channels in program packages offered to
customers vary across the network. One of Streams strategic goals is to unify
channel offerings, which it has already begun doing. Over the longer term,
Stream also intends to unify pricing structures across its networks. To the
extent Stream has so far unified programs and prices, it has not experienced
high levels of customer churn.

Because regulatory authorities in Poland do not currently set
or oversee retail prices for either cable television subscriptions or Internet
access services, Stream is free to charge a market price for these services.

Stream performs regular audits of customer installations to prevent
  piracy and maintains technology to help minimize potential signal piracy. Stream
  does not believe that its signals are pirated extensively enough to have a material
  adverse effect on its business.

| | -- Form 20-F--                                         | 17
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

Streams Cable Television Program

Polish cable television operators have more than 200 channels
from which to choose when building their program offerings. These channels are
transmitted via satellites, the most popular of which are the Eutelsat and Astra
satellites. When deciding which channels to offer its subscribers, Stream takes
into account program demand analysis, subscribers opinions, and cost. Most of
the license agreements that Stream has entered into relating to program
purchases will be in effect for the next three to five years and may be
extended. Most of these license agreements also provide that as Streams
subscriber base increases, Stream may be able to modify the agreements to obtain
more favorable terms.

Streams programming providers are: (a) Polish public
television; (b) Polish privateterrestrial television stations licensed
by KRRiT; (c) Polish and foreign satellite program providers; and (d) local
program producers.

The table below contains the list of programs for which Stream
has signed license agreements or obtained broadcasting permits from program
providers.

Table: List of programs licensed by Stream

ChannelNo.
    Name
    Characteristics
    Language1
    TVP 1
    Public television
    Polish2
    TVP 2
    Public television
    Polish3
    TVP POLONIA
    Public television
    Polish4
    TVP 3
    Public television
    Polish5
    POLSAT
    Private terrestrial
    Polish6
    TVN
    Private terrestrial
    Polish7
    TVN 7
    Entertainment
    Polish8
    POLSAT 2
    Entertainment
    Polish9
    TV 4
    Private terrestrial
    Polish10
    TV Puls
    General
    Polish11
    Polonia 1
    Entertainment
    Polish12
    Tele 5
    Entertainment
    Polish13
    TV Trwam
    Catholic
    Polish14
    BBC World
    Information
    English15
    BBC Prime
    Entertainment
    English16
    POLSAT Sport
    Sport
    Polish17
    TVN Meteo
    Weather
    Polish18
    TVN Turbo
    Cars
    Polish19
    TVN 24
    Information
    Polish20
    Explorer
    Science
    Polish21
    History
    Science
    Polish22
    MINI MINI
    Children
    Polish23
    Kino Polska
    Movies
    Polish


18

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ChannelNo.
    Name
    Characteristics
    Language24
    TVN Style
    Entertainment
    Polish25
    Ale Kino!
    Movies
    Polish26
    Zig Zap
    Children
    Polish27
    National Geographic
    Science
    Polish28
    Planete
    Documentary
    Polish29
    VIVA PL
    Music
    Polish30
    VIVA
    Music
    German31
    VIVA+
    Music
    German32
    RTL
    Entertainment
    German33
    RTL 2
    Entertainment
    German34
    SAT 1
    Entertainment
    German35
    VOX
    Entertainment
    German36
    Club
    Entertainment
    Polish37
    Jetix
    Children
    Polish38
    Discovery
    Science/Documentary
    Polish39
    Animal Planet
    Science
    Polish40
    Superstacja
    Entertainment
    Polish41
    Eurosport
    Sport
    Polish42
    Canal+
    Entertainment
    English43
    Canal+ sport
    Entertainment
    English44
    Canal+ film
    Entertainment
    English


For most subscribers, Channels 1-6 are available in Streams
Lifeline Tier and Channels 1-14 are available in Streams Intermediate Tier.
Stream includes all these programs in its Top Tier offering. These offerings are
subject to change as Stream effects the licensing changes required under the
recent amendments to the Polish Copyright Act.

In compliance with Polish law, Stream carries the Polish
terrestrial television channels for its subscribers. Stream is currently
involved in discussions to obtain rights to new channels. Stream is not
dependent on any one program provider.

Streams data services

Data transmission over HFC networks is much faster and more
reliable than over telephone lines. Stream intends to upgrade 100% of its
network to make high-speed Internet access available to all individual and
business customers.

Streams VoIP service

These services offer substantial decreases in the costs of long
  distance and international calls as well as calls to mobile networks due to
  sound compression and the use of VoIP for transmission instead of standard voice
  channels. At this time Stream has some VoIP customers and will continue to offer
  VoIP services based on demand.

| | -- Form 20-F--                                         | 19
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

Marketing and sales

Most of the cable television providers that Stream has acquired
did not advertise or market their services. Stream does advertise and market its
services in order to both retain its subscriber base and to add more
subscribers.

Streams marketing and sales strategy is currently delivered
through the use of professionally trained salespeople working at eight permanent
customer care and marketing offices and through periodicpromotions of
its services. Stream also uses a preview channel, an information channel,
promotional material mailed with monthly invoices and its website
(www.stream.pl) to inform its customers of existing and new programs and
services. Stream undertakes a number of additional marketing initiatives,
including market research, radio advertising, newspaper advertising, and
subscriber contests. All these efforts are aimed at limiting customer churn,
moving customers into more expensive tiers of service and helping Stream gain
market acceptance.

Stream has registered its trademark, its logo, and the names of
its cable television programme packages.

Overview of the Polish cable television industry

Poland has approximately 38.1 2 million inhabitants
and 12.5 3 million households with a TV set of which 4.5 million are
cable TV subscribers. Prior to 1989, during the Communist political regime, the
Polish government controlled and regulated the television industry. All
frequencies and channel offerings were limited principally to government
broadcast programs. In the early years of the post-Communist era, there was no
effective regulatory authority. This led to a proliferation of small cable
operators building low-cost, poorly constructed cable systems in densely
populated urban areas of Poland.

In more recent years, due in part to Polands economic
development and the introduction of cable industry regulations, Polands cable
industry has developed rapidly. In addition, large cable operators, such as
@Entertainment (later: UPC; United Pan-Europe Communications), have constructed
high-quality cable systems and offered numerous programming choices.

Despite these developments, the Polish cable television market
remains underdeveloped. According to PIKE4, there were at December
31, 2007, 600 cable TV operators with 1,086 networks providing services to 4.5
million of the countrys 12.5 million TV-homes, of which 70% are passed by
cable.

Stream believes that there is significant potential for further
consolidation among Polish cable television providers. Stream believes that
currently the top 10 operators (including Stream) control approximately 65% of
the built-out market, with the remaining 35% serviced by about 600 operators.
Stream expects consolidation among these providers, particularly as smaller
operators face the regulatory compliance burdens of being required to meet
minimum cable television network technical standards and pay for programming
produced by others.

Stream believes that there are several reasons why Poland
represents a favorable market for the provision of multi-channel cable services.

First, Poland is one of the largest single-language markets in
Central Europe.

Second, watching television is a significant leisure activity
in Poland, partly because cable television provides relatively inexpensive
entertainment. Latest research by PIKE, indicates that each Polish household
watches an average of 252 minutes of television per day.

Third, middle-income families living in multiple dwelling
units, or MDUs, account for approximately 70% of residential housing in Polish
cities. This high housing density results in

_______________________________2 Central
Statistical Office: Population Size and Structure by Territorial Division
(December 31, 2006) 3 Polish Chamber of Electronic Communication
(PIKE): Proprietary Research 4 Polish Chamber of Electronic
Communication

20

---

comparatively low costs for building cable television networks.
Currently Streams average network density is about 320 homes passed per
kilometer of cable plant. By comparison, the average housing density in the
United States is 48 homes per kilometer of cable plant.

Fourth, in Poland the right to build cable television networks
reaching MDUs is acquired through agreement with the owner of the MDU and does
not require any permits from regulatory telecommunications authorities. Under
such agreements, the operator is allowed to connect all apartments located in a
given building to its network. Stream has entered into such agreements with
renewable terms varying from ten to twenty years.

Technology

One of the most important aspects of Stream Polands strategy
is the acquisition of other cable television networks from various operators.
These networks have different organisational structures and marketing policies
and use differing equipment of varying capabilities. Valid telecommunications
permits are in place for all acquired networks.



At a technical level, the acquired systems are all well suited
to the transmission of television and radio programmes, and about nine per cent
of them (the networks in Jaslo, Sosnowiec and Bytom) are already capable of
providing the two-way transmission necessary for the provision of Internet
access services. Because Stream Poland plans to increase its revenues by selling
premium programme packages and data transmission services throughout its
network, further modernisation of Stream Polands network will be necessary.

A modern CATV network generally follows the scheme at left.
Networks that are constructed as in this scheme have a hybrid structure based on
both fibre-optic and coaxial cables and are referred to as HFC, or hybrid fibre
coax, networks.

When acquiring systems from other cable operators, Stream
Poland also acquires the existing infrastructures of those systems. When
evaluating these infrastructures, Stream Poland focuses particularly on the
number of subscribers connected to each headend, the configuration of the
existing network, the configuration of the network within subscribers buildings
and the network transmission bandwidth.

So far, the operators that Stream Poland has acquired have been
small, and it is inherent in small cable network systems that subscribers
plug-ins are in close proximity to the headends. Because of their proximity,
small cable networks usually do not use fibre optic cables to connect headends
with plug-ins. In the context of the figure above, this would be illustrated by
replacing the headend with a fibre optic node.

As a result of past acquisitions, Stream Poland now has more
headends than are required to meet its current subscriber demand. The benefits
of reducing the number of headends include a substantial decrease in network
maintenance costs and in the costs of adapting headends when introducing new
services.

The process of merging headends is related to the construction
  of new fibre optic cables, which, to the extent possible, are laid in a ring
  as shown in the diagram above. In this process, a part of the network and headends
  are being replaced with fibre optic nodes. This will allow the number of series
  or cascade amplifiers to be reduced, leading to improved signal quality and
  reduced line maintenance costs. Additionally, whilst modernising the network,
  Stream Poland intends to replace

| | -- Form 20-F--                                         | 21
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

local power sources with a smaller number of power supplies
equipped with stand-by power capability. This will help eliminate power failure
as the principal reason for network disruption.

Almost all of the network installations at subscribers'
premises have already been modernised and now possess a "radial" structure. A
radial structure allows for the simultaneous powering of subscriber plug-ins,
which both removes signal disturbance and allows Stream Poland to disconnect
subscribers more easily should the need arise.

The frequency spectrum is divided into different bands that are
allocated by the applicable Polish regulatory body (UKE) for the use of
telecommunications operators. The following bands are available to cable
television operators:

- 5.0 - 60.0 MHz for path return;
- 87.5 - 108.0 MHz for radio channels; and
- 110.0 - 862.0 MHz for television channels.

The nominal capacity of Stream Polands networks is 68 radio
channels with a bandwidth of 0.3 MHz and 94 television channels with a
(European) bandwidth of 8.0 MHz. The actual capacity of the networks is smaller
because some frequencies are used by governmental bodies, mobile telephone
operators and terrestrial radio and television operators.

At present, 81% of Stream Polands networks are engineered
  for the 862 MHz bandwidth, 14% operate at the 606 MHz bandwidth and 5% operate
  at 550 MHz. Stream Poland estimates that, by the end of 2008, 95% of its networks
  will have been upgraded to the maximum 862 MHz bandwidth.

As part of Stream Polands efforts to adopt a common set of
programme offerings across its network, all channels are processed at 720 MHz
and the higher band is reserved for future transmission of a digital signal.

The cable television networks purchased by Stream Poland
consist of equipment of varying quality, age and manufacturers. Stream Poland
constructs and upgrades the networks using equipment of recognised
manufacturers. The growth of cable television in Poland has led to the presence
of representatives in Poland of the leading manufacturers of such equipment,
including Scientific Atlanta, Motorola, Cisco and Times Fibre. As it increases
the size of its networks, Stream Poland expects to be able to negotiate better
prices for future equipment purchases.

Stream Polands customer base and market share

Stream Poland has a stable subscriber base in the territories
serviced by the company, indicating that the company has reached a mature status
in these areas. As of December 31, 2007 the company had 60,700 Cable TV
subscribers, 7,684 Internet subscribers and 51 VOIP subscribers.

Nearly all of Stream Polands customers are in MDUs.

Stream Polands primary market is located in south-eastern
Poland and includes the following districts: Slaskie, Malopolskie,
Swietokrzyskie and Podkarpackie. The map below illustrates the locations of
Stream Polands cable television networks.

22

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Locations of Stream Polands cable television
networks



Stream Polands market has approximately 11.5 million people,
3.2 million television households and 1.1 million cable television
subscribers5. Streams market locations are the most densely
populated in Poland, containing roughly 30% of the nations population. There
are 92 towns with more than 50,000 inhabitants in all of Poland and 35 of them
are located in this region.

Competition among cable television operators is not as strong
in Stream Polands market as in the largest Polish towns, where the market is
relatively mature and where competing networks often overlap. Stream Poland
believes that there are good acquisition opportunities in its market because the
operators who initially moved into this market were, and generally remain, small
and independent.

Competition

In general, the cable television market in Poland is not
overbuilt. At present, Stream Polands competitors have overbuilt only
approximately 20% of Stream Polands network area. The following is a list of
major cable television operators in Poland, who together hold approximately 50%
of the Polish cable television market but currently have limited presence in the
markets where Stream Poland focuses its business. They may, however enter Stream
Polands markets in the future, and also may compete with Stream Poland in
acquiring network assets. They are:

- UPC Telewizja Kablowa6, a subsidiary of the
  European cable television operator UGC Europe Inc. (formerly United Pan-Europe
  Communications) with more than 1,000,000 subscribers in eight out of the ten
  of largest cities in Poland.
- Vectra7, with approximately 643,000 subscribers
  in Poland and operates in Wroclaw, Walbrzych, Bielsko Biala, Elblag, Olsztyn,
  Slupsk, Bialystok, Radom, Zabrze, and 80 other Polish cities.
- Aster8,a subsidiary of a consortium of
  investments funds, with 416,000 subscribers in Warsaw (Aster), Krakow
  (Autocom) and Zielona Gora (ZTP).

____________________________________
  5 Source: Stream Polands own market research 6 Source: UPC Poland information released on their web-site 7 Source: Vectras information released on their web-site 8 Source: Asters own information released on their web-site

| | -- Form 20-F--                                         | 23
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

- Multimedia Polska9,with approximately
  601,000 subscribers in Poland, mainly in Kalisz, Szczecin, Gorzow
  Wielkopolski, Lublin, Rzeszow, Gdynia, Torun and Plock.

Direct-to-home satellite television (the so-called digital
platform), which is widely accessible in Poland, also competes with cable
television. Two entities provide high quality direct-to-home satellite services
in Poland:

- Cyfra+, which has approximately 850,000 subscribers, and
- Polsat Cyfrowy10, which has approximately
  1,500,000 subscribers.

There are up to six terrestrial channels available in Poland
that also competes with cable television. However, in most cases the reception
of aerial signals is generally so poor that, with the exception of the largest
cities, most viewers are only able to receive some of these channels. The
majority of viewers require access to cable television in order to receive even
these six channels.

In the course of 2007, Stream is facing new challenges and
competition from other operators as Stream has pursued its triple-play strategy
(TV, Internet and Telephony) expecting to become a one-stop-shopping for the
subscribers.

|- | Telephony was launched by Stream in the autumn of 2007
      with the expectation of fast penetration and ramp-up of subscribers and
      revenue, given the discount price model offered.                                                                                                                       
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  | A significant competition was encountered from Mobile
      Telephony Operators, offering prices lower than that offered by Stream,
      while offering the convenience of mobile telephony and SKYPE (www.skype.com), as well as launching a fixed
      price-policy (below Streams) for calls to fixed lines.
|  |                                                                                                                                                                                                                                                                                                                   
|- | Internet was launched on several of Streams network in
      2007 with the expectation of fast penetration though attractive pricing of
      services.                                                                                                                                                          
|  | The incumbent Telco launched a campaign giving away Dell
      Notebooks to all new internet subscribers; Mobile Telephony Operators
      decreased the price on mobile internet to the same price level of internet
      solutions offered by CATV Operators and Fixed line telephony.                         

Regulation of Stream Polands servicesRadio and Television Act

The Polish Radio and Television Act regulates the broadcasting
of radio and television programmes and of cable channels. The Radio and
Television Act established the National Radio and Television Council (KRRiT).
KRRiTs mandate is to support freedom of speech in radio and television, to
support the independence of broadcasting organisations, to protect viewers
interests and to ensure the open and pluralistic nature of radio and television.
KRRiT also seeks to prevent steps aimed at the establishment of a monopoly in
radio and television, to eliminate censorship and to ensure, through its
licencing policy, the pluralistic nature of the audio-visual mass media. KRRiT
also functions as the oversight authority for all activities of broadcasting
organisations.

The Radio and Television Act ensures the independence of
broadcasting organisations as they transmit information, entertainment, cultural
and artistic events and other ideas by imposing on broadcasters norms and
conditions for their programming structures and by allocating broadcasting time
to specific programme items. Such norms also apply to advertising, tele-shopping
and sponsoring. In order to enforce such restrictions, KRRiT is entitled to
monitor the contents and reception of all radio and television programmes
broadcast in Poland.

The Radio and Television Act requires cable operators to obtain
a licence to produce and broadcast radio and television programmes. In addition,
cable operators who distribute entire channels of a

____________________________________9 Source:
Multimedias own information released on their web-site 10
Source: Polsat Cyfrowys own information released on their web-site

24

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domestic or foreign broadcasting organisation must register such channels in the register kept by the Chairman of KRRiT. The Chairman of KRRiT is authorised to issue such licences and to register channels. The registration requirement applies to all
channels, except for nation-wide public radio and television and other programmes of domestic broadcasting organisations which can be received within such cable operators area with common aerial reception equipment.

The application for registration of a channel must be filed no later than two months prior to the start of distribution. A cable operator may commence transmission two months after the filing of the application for registration unless the Chairman
of KRRiT has denied the registration within that time. After the registration of a channel, a cable operator is obliged to notify KRRiT within 14 days if the contents of such channel have materially changed.

KRRiT may refuse to register a channel if a cable operator does not have a valid broadcasting licence or otherwise is not in material compliance with applicable law. KRRiT may also refuse to register a channel if the content of the channel itself is
in violation of applicable law.

A broadcasting organisation is also obliged to introduce its channels into the network in a specified order.  The Chairman of KRRiT may allow for a different sequence than indicated by law under justifiable circumstances.

The Radio and Television Act also provides for the possibility that the broadcasting of a particular channel may be prohibited if such broadcasting would violate any provisions of the Radio and Television Act or if the cable operator fails to
broadcast its channels in the prescribed order, introduces changes to a channel, or fails to broadcast such channel in full or simultaneously.

At present, the Polish legislature is in the process of reviewing the Radio and Television Act. Proposed modifications would be applicable to cable network operators, specifically concerning the registration of channels, the statutory channel
sequence, the contents of channel registration applications and the criteria on which denial of registration or the prohibition of a channel offering would be based.

Copyrights

Cable operators broadcast the works of authors whose rights are protected by copyrights. The Copyright Act protects such copyrights.

Under the Copyright Act, cable operators may broadcast protected works only pursuant to an agreement with an organisation responsible for the collective management of copyrights or related rights. Cable operators are required to pay a fee for the
use of such works as specified in tariffs approved by the Copyright Commission, which in turn is appointed by the Minister of Culture and National Heritage. At present, Polish law does not limit the amount payable to authors under such agreements.
The Arbitration Commission of the Copyright Commission settles any disputes arising from the tariffs applied and, as of 1 May 2004, also settles disputes arising from agreements entered into by cable operators and the organisations responsible for
the collective management of copyrights.

Although it has been assumed that the latest amendments to the Copyright Act would fully conform its provisions to EU law, Polish law does not reflect EU law completely. For instance, there is no clear provision for so-called general
contracts whereby copyrights as well as related rights are collectively managed.  General contracts are permitted in EU countries to ensure that cable operators can acquire all rights associated with a work. Consequently, the lack of such
regulation in Poland means that many agreements may have to be negotiated with organisations responsible for the collective management of copyrights without a cable operator being able to ascertain that such agreements would fully cover all
copyrights and related rights.

The amended Copyright Act, which became effective as of 1
  May 2004, removed a statutory licence that enabled cable operators to broadcast
  the works broadcast by other radio and television broadcasters in a given area
  provided the programme was broadcasted simultaneously and integrally with the
  primary broadcast, it being understood that the initial broadcaster retained
  its

| | -- Form 20-F--                                         | 25
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

right to remuneration. The removal of the statutory licence
follows from the approximation of the Copyright Act to EU law, in particular to
the provisions of Directive No. 93/83 on the Co-ordination of Certain Rules
Concerning Copyright and Rights Related to Copyright Applicable to Satellite
Broadcasting and Cable Broadcasting of 27 September 1993.

As the statutory licence is no longer available, it is now
necessary for cable operators, including Stream Poland, to enter into agreements
with all broadcasters, organisations responsible for the collective management
of copyrights and television organisations for related rights protecting
programmes produced by them.

Telecommunications law

All Polish telecommunications activities are regulated under
the Polish Telecommunications Act, which took effect on September 3, 2004. The
Telecommunications Act imposes regulations on telecommunications activities and
technical requirements for equipment to be used for telecommunications
activities. The term telecommunications activity is defined as business
activity consisting in the provision of telecommunications services, the
provision of telecommunications networks or associated facilities. Moreover, the
Telecommunications Act contains detailed provisions concerning
telecommunications permits, radio permits, frequency usage, telecommunications
secrecy, the connection of networks, the co-operation of operators,
telecommunications infrastructure and the functioning and organization of the
Office of Electronic Communications (UKE), among other provisions. The
Telecommunications Act replaced provisions concerning telecommunications
activities contained in the Communications Act of July 21, 2000.

Under the Telecommunications Act, a permit is required to use
the public telephone network. To operate a public network to broadcast or
retransmit radio or television programmes a registration application is
required, solely. The Telecommunications Act does not contain any detailed
prohibitions or restrictions on the area of telecommunications activity or the
kind of services a cable operator may provide.

The Telecommunications Act does not separately regulate
Internet telephony services, because these services are considered data
transmission services rather than the operation of a public telephone network.
As described above, Stream Poland needs only to notify UKE that it is providing
such services.

Competition and consumer protection

The Polish Competition Protection Act regulates, among other
things, conditions that further competition, procedures for counteracting
competition-restraining practices and the violation of consumer interests. The
governmental office responsible for enforcing the Act is the President of the
Office of Competition and Consumer Protection (UOKiK). Detailed provisions
applicable to entities operating in the telecommunications industry, and in
particular relating to dominant or significant market positions, are also
contained in the Telecommunications Act.

Competition Protection Act

The threshold question of whether the Competition Protection
Act applies turns on whether the entity in question holds a dominant market
position. A dominant market position typically exists if the entity is able to
prevent efficient competition in a given market by being able to operate to a
large extent independently of its competitors, business partners and consumers.
The Competition Protection Act assumes that an entity holds a dominant position
when its market share exceeds 40%. The Competition Protection Act prohibits any
activities that are designed to restrict competition through the acquiring or
strengthening of a dominant position in the relevant market. Therefore, the
Competition Protection Act prohibits specific activities aimed at the
elimination or the restriction of competition; a list of such activities is
contained in the Competition Protection Act.

Activities related to the concentration of entities are also
subject to regulation. The Competition Protection Act imposes an obligation to
notify the President of UOKiK of specific transactions,

26

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including any intended merger, share exchange, acquisition, or
other transaction having a consolidating effect. The President of UOKiK may
prohibit such business combinations if, following such a transaction, the
entities involved would acquire or strengthen a dominant position in the
affected market that would substantially restrict competition. If an entity
fails to notify the UOKiK or takes other steps that violate the Competition
Protection Act, UOKiK may levy fines against all parties participating in the
combination and the individual members of their governing bodies.

The above notification requirement with regard to intended
mergers applies to all entities whose total sales in the financial year
preceding the year of notification exceed an equivalent of EUR 50,000,000.
However, the notification requirement does not apply if the turnover of the
proposed target did not exceed the equivalent of EUR 10,000,000 in the two
financial years preceding the notification. In addition, no notification is
required if the combined market share of both entities does not exceed 20% or if
the concentration is affected by entities belonging to the same capital group.
According to an official interpretation of UOKiK, transactions among foreign
entities that exert influence on market conditions in Poland may also be
required to file a notification with the President of UOKiK.

Competition and the Telecommunications Act

The Telecommunications Act contains several provisions
applicable to entities that hold a dominant or significant market position.
Whether a public operator holds a dominant position in a given market is
determined under the provisions of the Competition Protection Act. In order to
establish whether a cable operator holds a significant market position in a
given market, a cable operator must have a market share of at least 25%. On the
basis of certain criteria, it is also possible to establish that a cable
operator whose market share is less than 25% holds a significant market
position. The President of UKE, acting jointly with the President of UOKiK,
decides whether a cable operator in a given area holds a dominant or significant
market position.

The Telecommunications Act imposes several obligations on cable
operators that hold dominant or significant market positions. Such obligations,
depending on the position of such operator, may include submission to the review
of common services agreements (and amendments thereto) or of bylaws for the
provision of common services (and amendments thereto). Such obligations may also
include following certain procedures to establish rates for common services or
that require that services be provided in accordance with certain rules. In
connection with such obligations, the President of UKE may use several means of
enforcement against operators holding a significant market position.

The President of UKE publishes a list of operators that hold a
significant and dominant position once a year. Stream is not yet on this list.

Special obligations in exceptional situations

Under the Telecommunications Act, operators are required to
take into consideration, while planning, constructing, developing, using or
merging telecommunications networks, the possibility of force majeure events,
such as the imposition of martial or emergency laws or natural calamities.
Special obligations in such situations include, among other obligations,
co-operating with officials, securing networks and telecommunications equipment,
maintaining continuity of operation and ensuring access for emergency services
and governmental officials to telecommunications equipment.

Certain special limitations are also imposed by the Act on Common
  Duty to Defend the Republic of Poland (Defence Act) of November
  21, 1967 (Journal of Laws 1992, No. 4, item, 16). In the event of operational
  reviews conducted by the armed forces, military drills, training in civil defence
  or common self-defence in peacetime, as well as in the event of an announcement
  of army mobilisation or at time of war, operators may be obliged to provide
  material services to the armed forces, such as renting real property and movables
  to the armed forces or to further state defence.

| | -- Form 20-F--                                         | 27
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

Stream Polands Organization, Management and
Personnel

As a Polish limited liability company, Stream Poland has two
levels of management:

Management Board; and

Supervisory Board

The Management Board has the responsibility of making all
executive management decisions, while the Supervisory Board has the
responsibility of periodically monitoring and approving the activities of the
Management Board.

The Supervisory Board directors of Stream Poland are elected by
the shareholders of the Parent Company at each annual general meeting, or, in
the event of a vacancy, they are appointed by the Supervisory Board of Directors
then in office, to serve until the next annual general meeting or until their
successors are elected and ratified.

Management Board:

Stream Polands Management Board was changed in December 2007
and was in a transition period at year end:

Adam Ilczuk (President and CEO) resigned in December 2007 and
was replaced by Andrzej Strehlau.

Krzysztof Czwartkiewicz (Director) resigned in December 2007
and was replaced by Vladimir Petrzilka.

Zbigniew Tragarz (Director) resigned in December 2007.

Supervisory Board:

Stream Polands Supervisory Board currently comprises of the
following members on December 31, 2007 and was changed in 2008 as a result of
the investment agreement with Penta:

|Supervisory Board 2007 | Supervisory Board 2008
|---------------------- | ----------------------
|                       |                       
|Jan S. Rynkiewicz      | Jan S. Rynkiewicz     
|                       |                       
|Iwona Kozak            | Michal Tomanek        
|                       |                       
|Przemyslaw Aussenberg  | Jan Evan              

Stream Poland Locations

Stream Poland currently rents 8,000 square feet in an office
building, close to the centre of Krakow and is considered adequate for the
companys head office needs for the foreseeable future. The customer database
and the call centre (to manage customer calls) are also located here.

Stream Poland also maintains small separate offices in Rzeszów,
Bielsko-Biala, Jaslo, Sanok, Sosnowiec and Czestochowa to act as a base for
local customer service and sales representatives. These local offices are
connected with the head-office in Kraków and are able to access its database
on-line.

Office

Stream Poland utilizes about 8,000 square feet of office space
in Krakow, Poland. Stream Polands rent is approximately $17,512 per month. The
lease of the premises expires in 2010.

28

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IEWS (formerly: International Eco-Waste Systems) S.A.

IEWS was in the business of constructing and operating rendering plants in Poland. IEWS is inactive and currently does not have any rendering plants in operation.

In view of developments and uncertainty with BSE (Bovine Spongiform Encephalopathy or mad cow disease) issues and as a result of our focus on cable TV and the operations of Stream Poland, we decided that the operations of IEWS did not
fit with our current objectives.

As at December 31, 2007, Stream owns 100% of shares of IEWS. During the second half of 2007, Stream began the process to liquidate he business affairs of IEWS and intends to launch new activities compatible with the telecommunication services.  The
liquidation is expected to be completed by the end of 2008.

Streamline Media (formerly: Polvoice.com) Sp. z o.o.

Since October of 1999, Polvoice had been working on the development of software to offer Internet services in Poland. In November of 1999, Polvoice applied to the Ministry for Telecommunication in Poland for a license that is essential for Polvoice
to operate in that sector in Poland. Polvoice received its telecommunications license as of August 22, 2000.

Streamlines business objective was to become an Internet, data transmission, and VoIP provider in Poland. Streamlines services included VoIP services, data transmission, teleconferencing, web site development, and maintenance.

Streamline was re-activated in 2006, and started preparing market research on potential acquisition targets on the polish cable TV market, with the view that Streamline will be acting as an agent for and on behalf of Stream Poland
acquiring new cable TV systems.

In January 2008, Streamline changed its name to Streamline Investments Sp. z o.o.

Item 4A  SEC Comments

The Company is not subject to any unresolved SEC issues, comments or disputes.

Item 5  Operating and Financing Review and ProspectsOverview

We prepare our financial statements in Canadian dollars. Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) in Canada, or Canadian GAAP, with reconciliation to US GAAP.

Our core business is considered to be our cable TV operations. From the beginning of our operations in Poland until December 31, 2007 approximately $20 million had been spent on the acquisition and modernization of cable television network
equipment and on the acquisition of licenses and subscribers. Our future business growth is expected to consist of buying subscribers from independent operators, building networks in areas where existing operators are unwilling to sell us their
subscribers, buying interests in existing cable operations and reconstructing old systems by preparing them for the transmission of new services, including pay-per-view, internet, and video-on-demand.

In this annual report on Form 20F we use Adjusted EBITDA,
  which we define as operating earnings before amortization and loss on disposal
  of capital assets. Adjusted EBITDA is a non-GAAP measure, and is not a measure
  of performance under Canadian GAAP or US GAAP. We have included Adjusted EBITDA
  in this Form 20F because we believe that, in addition to net income, Adjusted
  EBITDA provides readers with a basis to evaluate our operating performance.
  To evaluate Adjusted EBITDA, the components of Adjusted EBITDA, such as net
  income and interest and the variability of such components over time, should
  also be considered. Readers should be cautioned, however, that Adjusted EBITDA
  should not be constructed as an alternative to net income (loss) (as determined
  in accordance with Canadian GAAP or US GAAP) as an indicator of our operating
  performance. Our method of calculating Adjusted EBITDA may differ from the methods
  used by other companies and,

| | -- Form 20-F--                                         | 29
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

as a result, Adjusted EBITDA measures presented in the From 20F
may not be comparable to other similar titled measures disclosed by other
companies.

OPERATING RESULT FOR PERIOD ENDED DECEMBER 31

2007
    2006
    2005
    2007/2006
    2006/2005Revenue
    7,376,978
    6,472,905
    5,826,112
    14%
    11%Loss from Operations
    (3,418,085)
    (3,117,236)
    (5,197,894)
    (10)%
    (41)%Add
      back:Amortization
    2,159,233
    2,388,716
    2,650,139Restructuring Expenses
    -
    209,523
    -Loss on Disposal of Assets
    3,053
    16,013
    -Adjusted EBITDA
    (1,255,799)
    (502,984)
    (2,547,755)
    150%
    (80)%


Results of Operations

Year ended December 31, 2007 compared to the year ended
December 31, 2006

Stream Communications Network & Media, Inc. is reporting a
negative Adjusted EBITDA of $(1,255,799) for the year ended December 31, 2007
(2006 - $(502,984); 2005 - $(2,547,755)). The deterioration of Adjusted EBITDA
in 2007 from 2006 is a result of transactions with advisors engaged by the
company to assist in the completion of the transaction with Penta.

Revenue increased by 14% in the current year as compared
to 2006, as result of actively promoting internet services to subscribers for
the network modernized in 2006 as well as focused direct sales efforts to
upgrade existing subscribers to premium service packages. The rates for services
increased in 2007 by 14% to off-set the increased costs for programming and
system lease expenses.

Operating Expenses increased by 13% from December 31,
2006 to December 31, 2007 as a result of the company engaging professional
advisors to support the management at raising funds, and in particular to
provide advisory services to management in the finalization of the terms on the
agreement entered into with Penta on their investment in Stream Poland.

Programming and System lease expenses increased by 13% from
December 31, 2006 to December 31, 2007, due to higher penetration of internet
services and therefore a need to purchase additional bandwidth. The upgrade of
subscribers to premium programming packages has also increased the cost of
programming.

Management and professional fees as well as Travel and
Entertainment increased by 119% and 48% respectively in 2007 compared to 2006,
as a result of the companys effort to raise financing which was successfully
completed with the investment of Penta in Stream Poland.

Amortization the amortization charge for the year was
$2,159,233 compared to $2,388,716 in 2006, a decrease of 10%, since the cable TV
systems acquired in 2003 and earlier are fully amortized.

Other Operating Expenses (Income) as of December 31,
2007 was positively affected by the weak US-dollar and strong Canadian dollar
and Polish zloty, resulting in an unrealized foreign exchange gain of $837,153
on the Companys long term debt outstanding at December 31, 2007. The
restructuring expenses incurred in 2006 were a non-recurring item and therefore
did not impact the companys operating results in 2007.

Financial and Other Items: In 2007, the company had
other expenses of $648,737 versus $1,021,140 in 2006. This decrease is due to
three main items: (1) all costs for the Standby Guarantee were incurred in 2006
($798,289) (2) incremental financing expenses of $231,743 were incurred in 2007

30

---

related to the bond issue at Stream Poland, and (3) increased
interest expenses of $145,869 due to the bond issue in Stream Poland.

Income Taxes decreased in 2007 as a result of future
income tax assets created at the Polish operational level for non-deductible
expenses.

All together, the Company ended 2007 with a net loss of
$3,107,320 versus a net loss of $4,485,893 in 2006.

Although the company ended 2007 with a working capital
deficiency of $9,871,755 compared to $1,787,498 in 2006, this is not a
reflection of the companys financial position subsequent to December 31, 2007,
as $6,166,566 of the working capital deficiency at December 31, 2007 is linked
directly to the investment of Penta, causing existing long-term debt to become
payable upon completion of the transaction. Had the company not concluded the
transaction with Penta, the working capital deficiency in 2007 would have been
comparable to 2006.

Quarter ended December 31, 2007 compared to Quarter ended
December 31, 2006

In the fourth quarter of 2007, revenue increased by 1.7%
compared to the same period in 2006, as a result of seasonal sales promotions
launched in the last quarter of 2007.

Operating expenses increased in the same period by 23.1%,
mainly a result of the external advisors and management costs resulting from
financing and negotiations with Penta, which were successfully completed in the
last days of December 2007.

Loss from operations in the last quarter amounted to $2,070,792
against $1,574,859 caused by incremental expenses related to the transaction
with Penta.

Year ended December 31, 2006 compared to the year ended
December 31, 2005

Stream Communications Network & Media, Inc. is reporting a
negative Adjusted EBITDA of $(502,984) for the year ended December 31, 2006
compared to $(2,547,755) in 2005. The improved Adjusted EBITDA is a result of
increased revenue and decreased operating expenses following a corporate
restructuring, moving all corporate functions from Canada to Poland.

Revenue increased by 11% in 2006 as compared to 2005, as
result of a focused effort to increase rates for cable TV services, as well as
launch of internet services to Cable TV Subscribers on recently modernized part
of the networks. The number of Cable TV internet subscribers increased by 110%
from December 31, 2005 to December 31, 2006.

The company actively sought to increase the sales of added
services (internet and telephony) and launched a program modernizing existing
networks, to be able to provide such services. The program was launched in the
2nd half of 2006 and by December 31, 2006 approximated 50% of the
networks were able to provide triple-play capability. As a result thereof it was
possible to offer internet service to a broader audience and increase
subscribers.

Operating Expenses decreased 15% from December 31, 2005
to December 31, 2006 following a corporate restructuring moving nearly all
corporate functions from Canada to Poland.

Programming and System lease expenses increased by effective by
120% from December 31, 2005 to December 31, 2006, however the effective increase
was 22% as the company recorded all expenses in respect of Programming and
System lease as such  and not as in previous years recording part of the
expense as Office Expenses. The Company has not restated previous years in
that respect. The effective increase of 22% was primarily a result of:

|- | Improved program offering following the price increase of
      cable TV services, and new government imposed requirements; and                                
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|- | The launch of internet services requiring the company to
      purchase incremental internet access to provide our subscribers with a
      quality experience.

| | -- Form 20-F--                                         | 31
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

The most significant cost decrease was Investor relations
which decreased by 92%. In 2005, the company made a large effort to raise new
capital, creating significant awareness about Stream Communications Network
& Media Inc. allowing the company to follow the leads generated through the
2005 Campaign.

Amortization the amortization charge for the year was
$2,388,716 compared to $2,650,139 in 2005, a decrease of 10% as the cable TV
systems acquired in 2002 and earlier are fully amortized.

Other Operating Expenses (Income) as of December 31,
2006 the company had incurred a restructuring expense of $209,523 with respect
to severance pay and similar costs resulting from moving our headquarters from
Canada to Poland.

Financial and Other Items: In 2006, the company had
expense of $1,021,140 versus $516,899 in 2005. This increase is due to three
main items: (1) a Standby Guarantee of $5,826,826 the company obtained from two
shareholders at the expense of $798,289, (2) in 2005 the company reversed an
accrual for the IPO expenses related to a potential listing on the Warsaw Stock
Exchange, and (3) sufficient equity was raised to repay the loan from Quest
Capital Corp as well as other supplier debts.

Income Taxes increased in 2006 as a future income tax
asset of $315,315 relating to accumulated losses of the Non-Canadian operations
that were reversed as the losses expired.

All together, the Company ended 2006 with a net loss of
$4,485,893 versus a net loss of $5,811,359 in 2005.

Although the company ended 2006 with a working capital
deficiency of $1,787,498 in 2006 it was a significant improvement over prior
year where the company had a negative working capital of $2,552,174.

Liquidity, Capital Resources and Subsequent Events

Our working capital deficiency as at December 31, 2007 was
$9,871,755, compared to the working capital deficiencies at December 31, 2006
and 2005, which was $1,787,498 and $2,552,174 respectively. The deficiency at
December 31, 2007 is significantly higher than in prior years, however a result
of the pending transaction with Penta where the company had obtained short-term
financing from Penta rather than mid-term bonds.

In the fourth quarter of 2007, the Management of Stream focused
on securing an investment agreement with Penta. This delayed the bond offering
and limited the Companys possibility to finance its operations and investments
through vendor financing.

The bond offering was executed in November 2007 to manage cash
flow until the investment agreement with Penta was completed. Stream Poland
therefore executed a bond offering, for which the bond was repaid within 2
months after issue, at an expense of $157,120 (USD $160,000).

Following the preliminary investment agreement with Penta
signed in December 2007 and finalized in February 2008, both Stream Canada and
Stream Poland have repaid all external debt, and provided the Company with
sufficient cash to finance its new venture in Streamline (Greenfield CATV
Network in Suwalki), and Stream Poland has been recapitalized providing capital
and liquidity to the Companys operations.

Trend Information

Stream Communications Network & Media Inc. is actively
focusing on the roll-out of internet services throughout its networks and is
scheduling a launch of telephony on a commercial scale in 2008. Being able to
offer three services (Television, Internet and Telephony) to all its clients
will allow the company to increase revenue generating units (RGU) while only
marginally increasing costs, as the same infrastructure is used to provide all
three services.

In the course of 2007, Stream Poland has noted a
neutral-positive development in the subscriber base in the existing networks,
despite the launch of new services. This is a result of the cable TV

32

---

market in Poland maturing. However, with a transparent service
offering, internet and telephony are still new markets with room to grow.
Competition from Telcos and other players are still visible however, and it is
expected to lead to lower rates in this market segment.

Intense competition on the three core services, leading to
decreasing prices, combined with higher expectations for subscribers to quality
and service (HD TV, VOD etc) required significant investment in infrastructure,
which only the largest Cable TV Operators can do in a profitable manner.

Subsequent to December 31, 2007 a majority stake in Stream
Poland was acquired by Penta providing the company with the required financial
backing to acquire other cable operators in Poland. In 2008 the company has
concluded two term-sheets with the aim at acquiring approximately 40,000 new
subscribers; however neither of those has been finalized as due diligence is
still ongoing.

Contractual Obligations and Loans payable

Contractual obligations at December 31, 2007 are as follows:

Total
    Less than 1 year
    1-3 years
    3-5 years
    More than 5 yearsLong-term debt
    $447,494
    nil
    447,494
    Nil
    nilShort-term debt
    $6,486,990
    6,486,990
    Nil
    nil
    nilCapital lease obligations
    $198,303
    77,209
    121,094
    nil
    nilTOTAL
    $7,132,787
    6,564,199
    568,588
    Nil
    nil


In the first quarter of 2008, Stream repaid debt obligations
totalling $6,934,484; Capital and Operating leases remained, as the contractual
repayment of these obligations will result in significant penalties.

The Company has an obligation to acquire and develop two
Greenfield cable TV networks, of which Suwalki was acquired through Streamline
Investments (previously Streamline Media) in April 2008 for a total amount of
$2,124,248 (PLN 5,300,000), including taxes.

The company will be financing both ventures using the proceeds
from the sale of shares in Stream Poland to Penta.

Programming Commitments The Company does not have any
fixed programming commitments. All programming contracts are, although
long-term, variable as a function of number of subscribers.

Off-Balance Sheet Arrangements

The Company has not entered into any off-balance sheet
arrangements.

Canadian and US GAAP differences

The company is maintaining its accounting records in accordance
with general accepted accounting principles (GAAP) in Canada, with
reconciliation to US GAAP for financial reporting purposes.

When reconciling the consolidated financial statements to US
GAAP, there are no differences in 2007, however the Company records the
following differences in previous years:

|- | Stock-Based Compensation which under Canadian GAAP is an
      expense to the Company is excluded from the Statement of Operations under
      US GAAP.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------

| | -- Form 20-F--                                         | 33
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

|- | Under Canadian GAAP, a proportionate amount of the
      cumulative foreign currency translation account is recognized in net
      income on a partial realization or disposition of an investment in a
      self-sustaining subsidiary. Under US GAAP such recognition occurs only
      when there has been a substantially complete realization of the
      investment.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Critical Accounting Estimates

Management has made certain judgments and estimates that affect
the reported amount and other disclosure in our financial statements.

Loss Contingencies. Our estimates of our loss
contingencies for legal proceedings are based on various management judgments
and assumptions regarding the potential resolution or disposition of the
underlying and associated costs.

Valuation of Long-Lived Assets. On an annual basis, we
review the long-lived assets held and used by us (primarily Cable TV Equipment
and Conduit) for impairment. Assessing the appropriate valuation of the affected
assets requires us to make judgments, assumptions and estimates. In general,
write-downs for impairment are recognized when book values exceed our estimate
of undiscounted future net cash flows associated with the assets. We review the
carrying value of our capital assets, including construction in progress and
believe that our reported values are reasonable based on current circumstances.

Amortization. Amortization of property, plant and
equipment is principally based on a declining balance method where the cost of
equipment is amortized evenly over the conservative estimate of its useful life,
salvage, or residual value.

Future Income Taxes. We record future income tax assets,
including potential tax benefit for operating loss carry-forwards and future
income tax liabilities. The amount that we record for these assets and
liabilities are based upon various management judgments, assumptions and
estimates. These include judgments regarding the tax rates that will be
applicable to the future income tax amount and the likelihood that we will
generate sufficient taxable income or gains to utilize future income tax assets.
Due to the numerous variables associated with our judgments, assumptions and
estimates relating to the valuation of our future income tax assets and
liabilities, and the effects of changes in circumstances affecting these
valuations, both the precision and reliability of the resulting estimates are
subject to uncertainties and, as additional information becomes known, we may
change our estimates.

Subscriber Base. Subscriber Base is recognized at the
acquisition of new cable TV or LAN systems. On an annual basis, we review the
carrying value of Subscriber Base for impairment. Assessing the appropriate
valuation of the affected assets requires us to make judgments, assumptions and
estimates. In general, write-downs for impairment are recognized when book
values exceed our estimate of undiscounted future net cash flows associated with
the assets. We estimated the carrying value of our Subscriber Base in 2006 and
believe that our reported values are reasonable based on current circumstances.

Intangible Assets.Intangible assets that are deemed to
have an indefinite life are tested for impairment on an annual basis, and
otherwise when indicators of impairment are determined to exist by applying a
fair value based test. The process of evaluating the potential impairment of
goodwill is highly subjective and requires significant judgments at many points
during the analysis. In testing for potential impairment, the estimated fair
value of the reporting unit, as determined based upon discounted cash flow
forecasts, is compared to the book value of the reporting unit.

Changes in Accounting Policies including Initial Adoption

Under Canadian GAAP, on January 1, 2007, the Company adopted
new accounting policies for financial instruments by adopting the following new
standards of the Canadian Institute of Chartered Accountants (CICA): Handbook
Section 1530  Comprehensive Income; Handbook Section 3251 
Equity; Handbook Section 3855  Financial Instruments  Recognition
and Measurement; Handbook Section 3861  Financial Instruments 
Disclosure and Presentation; and Handbook Section 3865  Hedges.
These new standards have been applied retrospectively without prior period
restatement, except for the presentation of the cumulative unrealized effect of
foreign currency translation of foreign operations on the consolidated balance
sheet as a

34

---

component of accumulated other comprehensive income or loss.
The change in accounting policies had no other material impact on the Companys
consolidated financial statements at January 1, 2007.

In July 2006, the FASB issued FASB Interpretation No. 48 (FIN
48), Accounting for Uncertainty in Income Taxes, an interpretation of FASB
Statement No. 109, which clarifies the accounting for uncertainty in income
taxes recognized in financial statements in accordance with FASB Statement No.
109, Accounting for Income Taxes. This Interpretation provides guidance
on the financial statement recognition and measurement of a tax position taken
or expected to be taken in a tax return. In addition, FIN 48 provides guidance
on de-recognition, classification, interest and penalties, accounting in interim
periods, disclosure, and transition. Under FIN 48, the impact of an uncertain
tax position on the income tax return must be recognized at the largest amount
that is more-likely-than-not to be sustained upon audit by the relevant taxing
authority. An uncertain income tax position will not be recognized if it has
less than a 50% likelihood of being sustained. Under US GAAP, the Company
adopted the provisions of FIN 48 on January 1, 2007. The new standard did not
have a material impact on the Companys consolidated financial statements.

There were no other changes in accounting policies in 2007.

Related Party Transactions

| | (a) | Loan from Top Consulting                                                                                                                                                                                                                                                                                                                                                                             
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | Mr. Dziublowski (Non-executive Director) made a loan to
      Stream Canada from his company Top Consulting for the amount of $245,500
      (US $250,000). The Loan bears an annual interest of 9%.                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                      
| | (b) | Advertising Agency                                                                                                                                                                                                                                                                                                                                                                                   
| |     | In 2006, Stream Poland, a subsidiary of the Company,
      appointed Media Forum Sp. z o. o. as Advertising Agency for the Companys
      Polish operations. During 2007, Media Forum Sp. z o. o. rendered services
      for the amount of $97,680 (Pln 252,077) (2006 - $58,498; 2005 - $nil). The
      Director and Owner of Media Forum Sp. z o. o. is a related party to Mr.
      Rynkiewicz.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                      
| | (c) | Lease Commitments                                                                                                                                                                                                                                                                                                                                                                                    
| |     | The Companys subsidiary has a building lease outstanding
      with Media Forum Sp z o.o. Lease payments expensed during the year were
      $15,500 (Pln 40,000) (2006 & 2005 - $nil). The Director and Owner of
      Media Forum Sp. z o. o. is a related party to Mr. Rynkiewicz.                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | The Company has an automobile lease outstanding with
      Media Forum Sp. z o. o, an enterprise that is under common management of
      the Company. Lease payments expensed during the year were approximately
      $7,700 (2006 & 2005 - $nil). The director and owner of Media Forum Sp.
      z o. o is a related party to Mr. Rynkiewicz.                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                      
| | (d) | Standby Guarantee                                                                                                                                                                                                                                                                                                                                                                                    
| |     | On June 12, 2006, the Company arranged for Standby
      Guarantee of $4,910,000 (US $5,000,000), which can be exercised on or
      after March 1, 2007, provided the company has not managed to raise a
      minimum of $4,910,000 (US $5,000,000) in financing by way of debt and of
      equity before March 1, 2007.                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | There were no costs or payments associated with the
      Standby Guarantee during the year 2007. During 2006, the Company paid a
      total commission for the Standby Guarantee to:                                                                                                                                                                                                               
| |     | •    Trasco Sp. z o. o. and Mr.
        Rynkiewicz: $441,900 (US $450,000)                                                                                                                                                                                                                                                                                                                           
| |     | •    Blueagle Investments and Mr.
        Tomaszewski, a related party to Ms. Kozak who is a director of the Company:
        $294,600 (US $300,000)                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                      
| | (e) | Advisory Services                                                                                                                                                                                                                                                                                                                                                                                    
| |     | Mr. Tomaszewski received a fee of $117,840 (US $120,000)
      in 2007 as advisor to the board. Mr. Tomaszewski is a related party to Ms.
      Kozak, a director of the Company.                                                                                                                                                                                                                    

| | -- Form 20-F--                                         | 35
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

| | (f) | Finders Fee                                                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | Top Consulting received a finders fee of $116,053 (Pln
      428,533) incurred with respect to the transaction with Penta. Top
      Consulting is a related party of Mr. Dziublowski (Non- executive
      Director).                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (g) | Private Placement                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | Mr. Harvey-Bathurst, director of the Company, purchased
      5,000,000 shares through a private placement at a purchase price of $0.117
      per share. The transaction was fully paid for, with no amount outstanding
      at December 31, 2007.                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | Mr. Tomaszewski, a related party of the Company, also
      purchased 1,700,000 shares at a purchase price of $0.116 per share. The
      transactions were fully paid for, with no amount outstanding at December
      31, 2007.                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | Each unit comprised one common share and one-half common
      share purchase warrant, which shall entitle the holder thereof with two
      warrants to purchase one common share at an exercise price of US$0.150
      until March 2, 2009. Both Mr. Harvey-Bathurst and Mr. Tomaszewski were
      granted 2,500,000 and 850,000 warrants from the private placement,
      respectively.                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (h) | Management Fees                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | Management fees of $528,000 (2006 - $203,868; 2005 -
      $351,780) and bonuses of $500,000 (2006 - $500,000; 2005 - $362,398) were
      paid during the year to certain directors and executives of the Company.
      Of this amount, the Company paid remuneration in the amount of $184,691
      owing to Mr. Rynkiewicz to Trasco Sp. z o. o., an enterprise that is under
      common management of Mr. Rynkiewicz.

Financial Instruments and Other Instruments

The fair values of cash and cash equivalents, accounts
receivable, accounts payable and accrued liabilities and long-term debt
approximate their carrying values due to the short term or demand nature of
these instruments. It is management's opinion that the Company is not exposed to
significant interest or credit risks arising from these financial
instruments.

ITEM 6  Directors, Senior Management and
Employees

Our board of directors is elected by our shareholders as
indicated in our Articles. Directors receive directors fees (see Directors
Fees under Executive Compensation). Our executive officers are appointed by our
board of directors and have service agreements with us. The normal notice period
for executive officers is 12 months. In the case of Stream Poland, both the
Supervisory Board and the Management Board are elected by the General Meeting of
Shareholders (in practice  by the only shareholder i.e. the Parent Company).
The following sets out our directors and officers.

Directors and Senior Management

Stream Communications Network & Media, Inc.

|Robert Wussler     | Chairman of the Board, Director
|------------------ | -------------------------------
|Jan S. Rynkiewicz  | President, Director            
|Iwona Kozak        | Director                       
|Robert Dziublowski | Non-Executive Director         
|George H. Bathurst | Non-Executive Director         

Robert Wusslerwas appointed on May 4, 2004. Bringing an
impressive background in broadcasting and telecommunications to the company, Mr.
Wussler is currently President and Chief Executive Officer of Ted Turner
Pictures and Ted Turner Documentaries. An acknowledged leader in the

36

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television industry for over three decades, he has been
responsible for groundbreaking advances in news production at CBS News and CNN.
The former President of both CBS Sports and the CBS Television Network, Mr.
Wussler was a co-founder of CNN, TNT and WTBS, and Senior Executive Vice
President of Turner Broadcasting. Bringing an extraordinary background in cable
telecommunications to his work with Stream, Mr. Wussler was also President and
CEO of Comsat Video Enterprises, where he led the company through unprecedented
growth.

Jan Rynkiewiczbecame a Director of the Company on
January 18, 2006, having previously been a director from April 24, 1998 to
February 1, 2002 and from May 29, 2003 to May 31, 2004. A graduate of the School
of Banking and Insurance in Warsaw, Jan Rynkiewicz moved to the UK in 1974,
residing there for the next sixteen years. In 1977, he founded Courtfield
Construction Ltd., a London-based building construction company. From 1986
through 1993, Mr. Rynkiewicz became an associate of Invesco in Poland and serves
as Chair of the Board of Directors of Castle holding Ltd. of Warsaw, a
consulting company with expertise in facilitating development of Polish industry
privatization. Mr. Rynkiewicz was notably President of Zywiec S.A. (one of
Polands brewing group) during a period when this company successfully undertook
an expansion program, secured Heineken as a major strategic investor, and became
a capitalized company on The Warsaw Stock Exchange.

Iwona Kozak since 1 March 1996 has been a Director and
Vice President for Corporate Affairs and since 23 April 1999 she has been its
Secretary. She graduated from the British Columbia Institute of Technology with
a diploma in marketing. She has a broad experience in the area of marketing and
public relations. She perfected her managerial and business skills as the
co-founder and president of a division of the Canadian Polish Chamber of
Commerce in British Columbia. In the years 1993-1995 she published a magazine
dedicated to economics called Partners with Poland (Partnerstwo z Polska)
and provided advisory services to Canadian companies in the area of investments
in Polish markets.

George H. BathurstMr. HarveyBathurst is a graduate of
Eton College and the Royal Military Academy Sandhurst. Mr. Harvey-Bathurst has
been a director of a family company, Eastnor Castle Estates Co. for 35 years. He
is a private property investor and since 1984 has been a private equity investor
in Poland.

Robert Dziublowski brings over 15 years of experience in
investing, consulting and management and has advised a number of international
companies on doing business, building a Central European presence or making
acquisitions in Poland and Central Europe. His clients have included Nasdaq and
Eiffage Construction, one of the largest construction groups in Europe. He has
advised leading Polish companies in acquisitions in the insurance, media and
telecommunications sectors. His clients have included Wussler Group, a partner
of company of Ted Turner Pictures, WPI, a U.S. telecommunications group, and
Grupa PZU, a leading Polish financial services firm. He has served on the boards
of a number of companies traded on the Warsaw Stock Exchange, and currently
serves on the board of Mobiltek, a company he launched in 2002. Mr. Dziublowski
received an M.A. in Political Science from Warsaw University in 1988 and an M.
A. in International Relations from University of Hawaii in Honolulu in 1990.

Executive Compensation

For the purpose of this annual statement, the following words
and phrases shall have the following meanings:

Equity security means securities of a company that
carry a residual right to participate in earnings of that company and, upon
liquidation or winding up of that company, its assets;

Option means all options, share purchase warrants
  and rights granted by a company or any of its subsidiaries (if any) as compensation
  for services rendered or otherwise in connection with office or employment;

| | -- Form 20-F--                                         | 37
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

LTIP means a long-term incentive plan, which is any
plan providing compensation intended to serve as incentive for performance to
occur over a period longer than one financial year, whether the performance is
measured by reference to financial performance of the company or an affiliate of
the company, the price for the companys securities, or any other measure, but
does not include Option or SAR plans or plans for compensation through
restricted shares or restricted share units.

The following table details the compensation paid to our
executive officers for the year ended December 31, 2007

Summary
        Compensation TableName
      Salary 
        ($CDN)
      Bonus
        ($)
      All
        Other and  annual 
        Compensation 
        and LTIP 
        Payouts 
        ($CDN)
      Securities
         under 
        Option
      Restricted
         Shares or 
        Restricted 
        Share UnitsJan Rynkiewicz
      360,000
      250,000
      N/A
      Nil
      NilIwona Kozak
      168,000
      100,000
      163,300(*)
      250,000
      Nil


Management Contracts

|Jan Rynkiewicz | has been appointed for a 5 year period commencing on June
      12, 2006 at a basic annual remuneration of $120,000, payable monthly in
      equal parts. Mr. Rynkiewiczs contract has been renewed for four years
      commencing February 1, 2007 at a basic salary of $360,000 per annum
      payable monthly in equal parts. In addition Mr. Rynkiewicz is entitled to
      the use of a vehicle of the value not exceeding $900 per month including
      lease and operating expenses.
|-------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|               | As a Supervisory Board member in Stream Poland and
      subsidiaries, Mr. Rynkiewicz received a remuneration of PLN 228,000 (USD
      $91,299) annually, paid in equal monthly installments until December 31,
      2007.                                                                                                                                                                                                                                                                     
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|               | As a director of the Board, Mr. Rynkiewicz receives USD
      $15,000 per annum, payable quarterly.                                                                                                                                                                                                                                                                                                                                                                                              
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|               | Mr. Rynkiewicz is entitled to participate and receive
      bonus, stock options and other long-term incentive schemes the company may
      provide to its employees.                                                                                                                                                                                                                                                                                                                           
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Iwona Kozak    | A new management contract was entered into on June 15,
      2006. Ms. Kozak continued to serve as a director in 2007 at the Company
      and received the same compensation as a non-executive director throughout
      the year, which was a basic remuneration of $168,000 per annum payable
      monthly in equal parts. This remuneration includes directors fees for
      serving on the Board of Directors of the Company.                                                           
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|               | (*)Ms. Kozak received a one-time payment of $150,000 as a
      relocation bonus for her move from the Companys Vancouver office to the
      Warsaw office. In addition, Ms. Kozak received approximately CAD $13,300
      during the year in moving costs for moving to Poland, to cover costs such
      as a housing allowance, car allowance and airfare from Vancouver to
      Warsaw.                                                                                                  

38

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Directors fees

Independent directors are paid an annual fee of USD $15,000 as
a base directors fee and an additional fee of USD $1,500 per board meeting held
outside their place of residency. The Chairman is paid a base directors fee of
USD $35,000.

Long-term Incentive Plans - Awards in most recently
completed financial period

During our most recently completed financial year, and for the
two previously completed financial years, we have not awarded or instituted any
LTIP's in favour of our executive officers.

Defined Benefit Plans

We do not have, and at no time during our most recently
completed financial year have we had, any defined benefit or actuarial plans in
respect of which any of our executive officers were eligible to participate.

Options to Purchase Securities from Our Company

In order to create a mechanism for the recruiting of and
providing incentives to certain persons and to recognise and reward their
contributions to our growth, the Board of Directors adopted the Stock Option
Plan (Plan). The purpose of the Plan is to encourage such persons to acquire
our shares and perceive such transaction as a long-term investment. Options to
purchase shares under the Plan are granted to Directors, employees and
affiliates of the foregoing.

The Board of Directors is entitled, at its own discretion, to
determine which persons will be granted options under the Plan. If the Board of
Directors grants any options, it will specify the number of shares that may be
purchased pursuant to the option.

While the decision to grant options is in the sole discretion
of the Board of Directors, they may base decisions to grant options on the
following factors: the annual remuneration of the person in relation to the
total of the remuneration paid by us, the duration of employment of such person
and the quality of work done by such person, amongst other factors.

As a confirmation of the option grant, the option holder is
issued a certificate specifying the date, number of the shares allocated, share
purchase price, and the period of time during which the option may be exercised.
The Plan and the granting of options constitute neither a guarantee to potential
option holders that they will continue to perform their functions nor a
guarantee that we will continue to employ such persons.

The Plan was amended at the Annual General Meeting of the
shareholders held on June 30, 2004 where the shareholders authorized the
directors to issue up to 5,941,135 stock options to directors, employees and
consultants. At the Annual General Meeting to be held on June 29, 2005, the
shareholders are being asked to amend the Plan to the maximum number of stock
options allowable to 7,992,212. Other than the maximum number of shares
allowable for distribution there are no other changes to the Plan. In summary
the basic restrictions are:

(a) One person may not receive more than 5% of the outstanding
shares;

(b) Options granted to one person in a given year may not
exceed 5% of the outstanding shares;

(c) Shares allocated to all persons employed in contacts with
investors may not exceed 2% of the outstanding shares; and

(d) Shares earmarked for consultants may not exceed 2% of the
outstanding shares.

In the event that an option has lapsed for any reason whatsoever
  without having been exercised in full, the shares with respect to which the
  option has lapsed may again be issued for the purposes of the Plan. The expiration
  date of an option is the date determined by the Board of Directors with

| | -- Form 20-F--                                         | 39
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

respect to individual options, which date, however, may not be
later than ten years after the option was granted.

The Board of Directors is also exclusively entitled to
determine the purchase price of shares by option holders.

The board of Directors have, in accordance with the SEC
guidelines, established the following an Audit, Compensation and Corporate
Governance Committee. The members of each committee are appointed by at the
Annual Shareholders meeting of the company for a period until the next Annual
Shareholders meeting.

Committees of the Board of Directors

Our board of directors has established an audit committee. Our
audit committee will recommend a firm to be appointed as independent auditors to
audit financial statements and to perform services related to the audit, review
the scope and results of the audit with the independent auditors, review with
management and the independent auditors our annual operating results and
consider the adequacy of the internal accounting procedures and the effect of
the procedures relating to the auditors' independence. In addition, the audit
committee will monitor the board's corporate governance practices, propose
nominees annually for election to the board, make recommendations as to the
composition of the committees of the board and review the functioning of the
board and the powers, mandates and performance of the committees.

Audit Committee Members:

| | 1. | Robert Dziublowski  independent director with financial
      experience    
| | -- | -----------------------------------------------------------------------------
| | 2. | Jan Rynkiewicz                                                               
| | 3. | George Harvey-Bathurst  independent director with
      financial experience

Our board of directors has established a compensation committee
to review remuneration paid to senior officers of the Company.

Compensation Committee Members:

| | 1. | Iwona Kozak   
| | -- | --------------
| | 2. | Jan Rynkiewicz
| | 3. | Robert Wussler

Our board of directors has established a corporate governance
committee to (1) identify and select qualified individuals to serve as directors
of the Company and nominate such individuals for election as directors at the
Companys annual meeting of shareholders (2) develop and establish corporate
governance policies and procedures for the Company and (3) administer the Code
of Ethics adopted by the Company.

Corporate Governance Committee Members:

| | 1. | Jan Rynkiewicz        
| | -- | ----------------------
| | 2. | George Harvey-Bathurst
| | 3. | Robert Dziublowski    

Employees

The average number of employees was as follows:

Year ended December 31, 2007
    Year ended December 31, 2006
    Year ended December 31, 2005Canada
    2
    3
    3Poland
    81
    81
    81


40

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ITEM 7  Major Shareholders and Related Party
Transactions

Major Shareholders

To the best of our knowledge, we are not owned or controlled,
directly or indirectly, by another corporation or by any foreign government.

As at the date of this annual statement the following persons
or groups are known to us to each own more than 10% of our issued and
outstanding common shares, which as of December 31, 2007 was:

Name and Address of Shareholder
    Number of Securities owned
    Percentage of Securities ownedCDS & Co NCI Account 25 The
      Esplanade Toronto, Ontario, M5W1G5, Canada (Canadian
      depository for brokerage houses)
    22,521,586 Common shares
    27.88%Jan Rynkiewicz 23 Ross Close
      Lincoln, UK, LN2 4WQ
    14,135,307 Common shares
    17.32%


ITEM 8  Financial Information

Legal Proceedings

The Company has received invoices from a creditor for amounts
due for work performed in regards to an IPO on the Warsaw exchange in 2003. The
amount claimed is USD $3,145,885 of which $NIL has been accrued at December 31,
2007 (December 31, 2006 - $NIL). The Company is of the opinion that these
amounts are due if the IPO on the Warsaw Exchange is completed.

The Company is defending an action pursuant to certain alleged
unpaid legal invoices. The lawsuit demands the sum of $280,245 of which $NIL has
been accrued at December 31, 2007 (December 31, 2006 - $NIL). The Company is of
the opinion that these legal costs related to the IPO on the Warsaw Exchange
were not directed by the Company or on its behalf.

ITEM 9  The Offer and Listing

Nature of Trading Market

Our common shares were listed on the OTC BB Exchange in the
United States, under the symbol SCNWF. We started trading on the OTC BB on
March 11, 2004. On July 17, 2007, the company was moved to the Pink Sheets
trading under the same symbol.

Trading on the OTC BB and Pink Sheets

| | -- Form 20-F--                                         | 41
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---



42

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The following table sets forth the high and low sale prices on
the OTC BB for our common shares for each monthly period in the past 21 months.

Period
    Volume
    High
    Low2008-07
    153,200
    0.090
    0.0602008-06
    206,200
    0.150
    0.0852008-05
    447,400
    0.200
    0.1452008-04
    468,600
    0.200
    0.0852008-03
    180,100
    0.160
    0.1202008-02
    167,100
    0.240
    0.1502008-01
    486,300
    0.280
    0.1502007-12
    540,300
    0.275
    0.1702007-11
    536,800
    0.320
    0.1802007-10
    3,274,000
    0.265
    0.1402007-09
    596,100
    0.160
    0.1202007-08
    398,800
    0.180
    0.0502007-07
    591,900
    0.215
    0.1302007-06
    1,034,400
    0.210
    0.1102007-05
    1,398,600
    0.200
    0.1102007-04
    3,031,800
    0.255
    0.1602007-03
    2,165,600
    0.330
    0.2002007-02
    3,567,000
    0.300
    0.1452007-01
    1,682,900
    0.169
    0.1002006-12
    854,279
    0.150
    0.1202006-11
    1,078,330
    0.160
    0.1002006-10
    1,783,806
    0.270
    0.1402006-09
    896,669
    0.240
    0.1302006-08
    657,920
    0.290
    0.2252006-07
    585,494
    0.349
    0.2252006-06
    2,558,232
    0.330
    0.1702006-05
    752,100
    0.190
    0.1702006-04
    1,010,600
    0.260
    0.1902006-03
    1,424,500
    0.250
    0.1602006-02
    2,203,500
    0.200
    0.1602006-01
    1,709,600
    0.210
    0.1702005-12
    2,059,600
    0.160
    0.140


Item 10  Additional Information

Share Capital

Our authorized share capital as at December 31, 2007 was
150,000,000 common shares without par value. At December 31, 2007 our issued and
outstanding share capital was 81,596,491.

In the course of 2007, the Company issued shares as follows:

- Fund Raising through Private Placements
    10,200,000 Shares10,200,000 SharesOutstanding Shares per December 31, 2006
    71,396,491SharesOutstanding Shares per December 31, 2007
    81,596,491Shares


All of our shares, issued and unissued, are common shares of
  the same class and rank equally as to dividends, voting powers and participation
  in assets upon liquidation. At any general meeting, subject to the restrictions
  on joint registered owners of our common shares, on a show of hands every shareholder
  who is present in person and entitled to vote has one vote and on a poll every

| | -- Form 20-F--                                         | 43
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

shareholder has one vote for each share of which he or she is
the registered owner and may exercise such vote either in person or by proxy.
Our directors may, from time to time, declare and authorize payment of
dividends. No common shares have been issued subject to call or assessment.
There are no pre-emptive or conversion rights. There are no provisions for
surrender, sinking or purchase funds. There are no issued and outstanding escrow
or performance shares.

Options to acquire common shares granted to our directors and
officers are described under Item 6  Directors, Senior Management and
Employees  Executive Compensation.

Memorandum and Articles

We are registered in British Columbia, Canada, certificate of
incorporation No. 188691. We do not have any stated "objects" or "purposes" as
the Company Act of the Province of British Columbia does not require it. Our
memorandum (Memorandum) has authorized 150,000,000 common shares without par
value.

Pursuant to the laws of British Columbia, the province has
enacted the Business Corporations Act. We registered our transition documents
with the registrar of companies, we obtained shareholder approval at the June
30, 2004 Annual General Meeting to change to the provisions of the new company
act and we filed on August 9, 2005 to be registered under the new company act.
Our new articles (Articles) contain the following provisions:

Voting Rights

| | (i) | Shareholders shall have the right to receive notice of,
      to attend and to vote at all general meetings. Except as otherwise
      provided in the Articles of Association, on a show of hands each holder of
      shares present in person and entitled to vote shall have one vote and upon
      a poll each such holder who is present in person or by proxy and entitled
      to vote shall have one vote in respect of every share held by
  him.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Variation of Class Rights and
Alteration of Capital

| | (i)  | We may by ordinary resolution increase the share capital,
      and cancel any shares which at the date of the passing of the resolution
      have not been taken or agreed to be taken by any person.                         
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                 
| | (ii) | By special resolution that requires a three-fourths
      majority, we may consolidate and divide all or any of the share capital
      into shares of larger amount, sub-divide the shares into shares of smaller
      amount.

Transfer of Shares

| | (i) | Any member can transfer shares by delivering an
      instrument of transfer to our transfer agent.
| | --- | ---------------------------------------------------------------------------------------------------

Directors

| | (i)  | Our business is managed by the Directors who may exercise
      all powers subject to the provisions of the Articles of Association and
      the Company Act of British Columbia.                                                                                                                                                                                  
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                     
| | (ii) | The number of Directors shall be not less than three. At
      our last annual general meeting, the number of directors was five. A
      Director shall not be required to hold any shares in the capital of our
      Company. At each annual general meeting of our Company, all of the board
      of directors retire and our shareholders elect a new
  board.

44

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| | (iii) | A Director shall not vote but can be counted in the
      quorum present on any motion in respect of any contract, arrangement,
      transaction or any other proposal in which he has an interest that is to
      his knowledge a material interest.                                
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                        
| | (iv)  | The Directors shall be paid for their services as
      Directors such sums (if any) as the Directors may from time to time
      determine.                                                                                                                                           
| |       |                                                                                                                                                                                                                                                                                        
| | (v)   | The Directors may be paid all reasonable travelling,
      hotel and other expenses properly incurred by them in attending and
      returning from meetings of the Directors or any committee of the Directors
      or general meetings or otherwise in connection with our
business.
| |       |                                                                                                                                                                                                                                                                                        
| | (vi)  | Directors can vote to remove a director at a directors
      meeting.                                                                                                                                                                                                                  

Borrowing Powers

| | (i) | The Directors may exercise all of the powers to borrow
      money and to mortgage or charge its undertakings, properties, assets and
      uncalled capital, or any part thereof, and, subject to the provisions of
      the Articles of Association, to issue debentures, debenture stock and
      other securities whether outright or as security for any debt, liability
      or obligation of us or of any third party.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Dividends and Distributions on
Liquidation to Shareholders

| | (i)   | The Directors may declare dividends, and need not give
      notice to any member. Subject to any priority, preference or special
      rights, all dividends shall be declared and paid according to the number
      of shares held on a specified date with respect of the period of which the
      dividend is paid.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                          
| | (ii)  | The Directors may pay such interim dividends as they may
      determine.                                                                                                                                                                                                                                                
| |       |                                                                                                                                                                                                                                                                                                                          
| | (iii) | No dividend shall bear interest.                                                                                                                                                                                                                                                                                         

General Meetings

| | (i)  | Each year we hold a general meeting as the annual general
      meeting in addition to any other meetings in that year, and not more than
      13 months shall elapse between the date of one annual general meeting and
      that of the next. The annual general meeting shall be held at such time
      and place, as the Directors shall appoint.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                         
| | (ii) | All general meetings other than annual general meetings
      are extraordinary general meetings. The Directors may, whenever they think
      fit, convene an extraordinary general meeting.                                                                                                                                                           

Exchange Control and Other Limitations Affecting Security
Holders

There is no law or government decree of regulation in Canada
that restricts the export or import of capital, or that affects the remittance
of dividends, interest or other payments to a non-resident holder of common
shares, other than withholding tax requirements.

There is no limitation imposed by Canadian law or by the
articles or other charter documents of a company on the right of a non-resident
to hold or vote common shares of a company, other than as provided in the
Investment Canada Act, as amended (the Investment Act).

The Investment Act generally prohibits implementation of a reviewable
  investment by an individual, government, corporation, partnership, trust or
  joint venture that is non-Canadian unless the minister responsible for the Investment
  Act is satisfied that the investment is likely to be of net benefit to Canada.
  If an investment by a non-Canadian is not a reviewable investment, it requires
  the filing of a short notice.

| | -- Form 20-F--                                         | 45
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

An investment in common shares of a company by a non-Canadian
that is a WTO investor would be reviewable if the value of the assets
of the Company equalled or exceeded $184 million, the threshold established for
1999. In subsequent years, the threshold amount may be increased or decreased in
accordance with the provisions of the Investment Act. A WTO investor is a member
of the World Trade Organization, current members of which include the European
Community, Germany, Japan, Mexico, the United Kingdom and the United States, or
a WTO investor-controlled entity, as defined in the Investment Act.

An investment in common shares of a company by a non-Canadian,
other than a WTO investor, would be reviewable under the Investment Act if it
were an investment to acquire control of a company and the value of the assets
were $5.0 million.

The Investment Act would not apply to certain transactions in
relation to our common shares, including:

An acquisition of common shares of a
  company by any person made in the ordinary course of that persons business as a
  trader or dealer in securities;

An acquisition of control of a company by an
  amalgamation, merger, consolidation or corporate reorganization following which
  the control of the Company remains unchanged.

A company with foreign share holdings formed in Poland is under
Polishlaw andtreated in the same manner as a company with Polish
share holdings. Full repatriation of after-tax profits and capital is allowed,
and companies with 100% foreign participation are permitted. Capital introduced
into Poland by foreign investors may be freely withdrawn. Full repatriation of
profits and divided payments is allowed without obtaining a permit. Companies
must account for withholding tax to the Polish Tax authorities on any
distributed dividends unless a treaty provided otherwise. To avoid double
taxation, Poland has devised tax treaties with more than 60 countries.

Taxation - Certain Canadian Federal Income Tax Consequences
to United States Investors

This section is to make United States persons aware and caution
them as to some of the consequences of investing in the Company (a Canadian
company). Taxation of our Company in Poland from a business perspective is
discussed in the immediately following section.

A brief description of certain provisions of the tax treaty
between Canada and the United States is included below. The consequences of
state and local taxes are not considered. The following information is general
and security holders should seek the advice of their own tax advisors.

TAXATION
  OF DIVIDENDS

A holder of a common share who is not resident in Canada for
purposes of the Income Tax Act will be subject to Canadian withholding tax on
dividends paid or credited to the holder of the common share. The rate of
withholding tax on dividends is 25% of the amount of the dividend. This rate may
be reduced under the provisions of an international tax treaty to which Canada
is a party. Under the tax treaty that Canada has entered into with the United
States, the rate of Canadian withholding tax is generally reduced to 15%, or 5%
in the case of a corporate holder which owns 10% or more of the voting shares. A
foreign tax credit for the tax withheld may be available to a holder resident in
the United States against U.S. federal income taxes.

DISPOSITION OF COMMON SHARES

A non-resident holder of a common share will not be subject to
tax under the Income Tax Act in respect of a capital gain realized on the
disposition of a common share unless the common share is a "taxable Canadian
property" (as defined in the Income Tax Act). Shares of a corporation that are
listed on a prescribed stock exchange are generally not considered to be taxable
Canadian property. Taxable Canadian property includes any common share held by a
non-resident if used in carrying on a business (other than an insurance
business) in Canada. A non-resident whose common shares constitute taxable
Canadian property will realize upon disposition, a capital gain (or a capital
loss).

One-half of any capital gain realized by a holder (a taxable
capital gain) will be included in computing the holder's income.

46

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Non-residents are advised to consult their tax advisers with
regard to the availability of a treaty exemption and their own particular
circumstances.

Passive Foreign Investment Company

A foreign corporation with one or more U.S. shareholders is a
PFIC if 75% or more of its income is passive income or if at least 50% of its
assets would be invested in instruments which produce interest, dividends and/or
capital gains. Unlike a controlled foreign corporation or a foreign personal
holding company, there is no minimum percentage ownership by U.S. shareholder to
trigger application of the PFIC rules. If a foreign corporation has a high
enough percentage of passive income or assets, it is a PFIC as regards any U.S.
shareholder no matter how small their ownership percentage of the foreign
corporation and regardless of whether the U.S. shareholders, individually or in
the aggregate, have the ability to control the business or investments of the
foreign corporation.

If a person owns shares in a PFIC and sells them for a profit,
that person must generally pro-rate its profit over all the years it held the
shares in the PFIC, pay U.S. income tax on the profit allocated to each year at
the highest U.S. rate in effect for that year, and pay interest on all the prior
years tax, computed from the tax return due date for the year to which the
income is attributable.

The above rule may not apply if a person elects to treat its
investment as a "Qualified Electing Fund" (QEF). This election is made by
attaching Form 8621 to the annual tax return. This will permit the annual
inclusion of the QEF in a persons pro-rata share of ordinary income and
long-term capital gains.

We do not believe the Company was a passive foreign investment
company during the fiscal period ended December 31, 2007 or any other year.

Future Developments

The foregoing discussion is based on existing provisions of the
United States tax laws, existing and proposed regulations thereafter, and
current administrative rulings and court decisions, all of which are subject to
change. Any such changes could affect the validity of this discussion. In
addition, the implementation of certain aspects of the PFIC rules requires the
issuance of regulations which in many such instances have not yet been
promulgated and which may have retroactive effect. Furthermore, legislation has
been proposed which would replace the PFIC provisions with a consolidated
anti-deferral regime. While this legislation was vetoed, it may be re-introduced
in subsequent years.

ALL PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF PURCHASING THE COMMON
SHARES.

Taxation in Poland

The Polish tax system has been modernized in recent years. In
1992, corporate income tax and personal income tax were introduced, followed by
value-added tax (VAT) in 1993. Poland also taxes real property, transport
vehicles, inheritance and gifts.

Corporate Profits Tax

Polish resident companies are subject to corporate income tax
on their worldwide income, while non-residents are subject to corporate income
tax only on income derived in the territory of Poland. Worldwide income is a tax
base for business entities with registered offices or seats or places of
management in Poland. Other entities are taxed on profits earned in Poland only.
Corporations are subject to corporate income tax at a rate of 19% in 2007, 2006,
and 2005.

Depreciation and depletion

Tax depreciation is carried out in accordance with the
Corporate Income Tax Act. Tax depreciation generally follows the straight - line
method, although accelerated depreciation may be available in some
circumstances.

Net operating losses

A Polish corporate has the right to carry forward a loss incurred
  in an accounting period by deducting the loss from its taxable income over the
  next five years to a maximum of 50% in any one year. No loss carry backs are
  allowed.

| | -- Form 20-F--                                         | 47
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

Payments to foreign affiliates

A Polish corporate can deduct royalties, management services
and interest charges paid to foreign affiliates, provided exchange control
regulations and transfer-pricing restrictions are observed.

Deduction for taxes paid

Taxes on income are not deductible. However, input VAT is
deductible for corporate income tax purposes if it cannot be offset against the
company's output VAT. Other taxes that are part of expenses are deductible in
full.

Non-deductible expenditures

A Polish corporate may not deduct certain expenditures,
including the following:

Costs of assets subject to
depreciation,

Expenditure borne on abandoned
investments,

Unrealised foreign exchange losses,

Non-public advertising costs in excess
of 0.25 percent of turnover.

Value-Added Tax

VAT applies to the goods sold and the services provided. The
standard rate is 22% and may be reduced to rate of 7% for e.g. food products,
children's clothing, and other goods and services. Exports are not taxed;
however a number of conditions must be met for export of services to have zero
tax rates. Exempt from VAT are e.g. agricultural products and finance and
insurance services.

Cable television services were subject to 22% VAT till 30
  April 2004. Since 1 May 2004, cable television services are subject to 7% VAT.

Internet services were subject to 7% VAT till 30 April 2004.
Since 1 May 2004, Internet services were either exempt from VAT for individual
subscribers or subject to 22% VAT for the other subscribers. Since 1 March 2005,
all Internet services are subject to 22% VAT.

Item 11 - Quantitative and Qualitative Disclosures about
  Market Risk

Currency and Exchange Rate Risk

We are exposed to changes in financial market conditions as a
result of transacting in various foreign currencies and funding of foreign
operations.

We determine our market risk utilizing sensitivity analysis,
which measures the potential losses in fair value resulting from one or more
selected hypothetical changes in foreign currency exchange rates.

We do not hedge currency risk. The functional currency of the
Company is the Canadian dollar. All of the business operations are in Poland and
the Stream Polands functional currency is the Polish Zloty.

If there were a large fluctuation in the exchange rates between
Poland and Canada this will impact on the operating results of the company. This
could impact in a positive or negative manner. If the Canadian dollar increased
against the zloty, then any Canadian funds invested in Poland would be exchanged
for a larger number of zloty, thereby making more money available in Poland for
the businesses. The converse would create a shortfall of funding. We have no
control over currency rates and the results of operations will be subject to the
swings in currency rate changes. In the case of funding either for acquisition
or building out, it is important to minimize the time interval from when the
money is raised and when it is spent to avoid issues of being short as a result
of currency swings. The Company intends to grow by acquisition, so this aspect
of funding is important where funds are raised other than in zloty.

We do not
  presently believe we have material exposure to potential change in fair value of
  market sensitive instruments, near-term losses in future earnings and/or cash
  flows from reasonably possible near-term changes in market rates.

48

---

We did not have any foreign currency derivatives outstanding at
December 31, 2007. Accordingly, no market risk existed for such instruments at
this date.

Stream is exposed to the risk of exchange rate fluctuations.
Programming costs, which constituted about 18.2% of revenue in 2007, are
incurred primarily in US dollars, while all revenues are realised in Polish
zlotys. Certain other costs such as head office costs are incurred in Canadian
dollars. Under its subscription agreements, Stream may modify its subscription
rates to adjust for major fluctuations of currency exchange rates. However, high
increases in subscription rates could decrease demand for Streams services.
Most of Streams technical equipment is purchased locally, but some prices in
Poland tend to be indexed in US dollars.

The table below reflects changes in the exchange rates of the
currencies in which Stream conducts its operations as at the end of and as
average during each year.

Exchange Rates in the years 2006-2007

December 31, 2007
    Average Rate for 2007
    December 31, 2006
    Average Rate for 2006PLN/USD
    2.4480
    2.7688
    2.9125
    3.1077PLN/EUR
    3.6262
    3.7925
    3.8565
    3.9055PLN/CND
    2.4954
    2.5807
    2.4992
    2.7409CND/USD
    0.9820
    1.0744
    1.1664
    1.1346


The effect of foreign currency fluctuations has affected the
book value of property, plant and equipment and intangibles. The operations of
the Company are situated in the country of Poland along with most of its assets.
The foreign exchange rates for the Canadian dollar and the Polish zloty are as
follows:

|     | Rate at the end of | Average rate for
|---- | ------------------ | ----------------
|     | the
      year     | the
      year  
|2007 | 2.4954             | 2.5807          
|2006 | 2.4992             | 2.7409          
|2005 | 2.8033             | 2.6757          
|2004 | 2.4898             | 2.8049          

Item 12  Description of Securities Other than Equity
Securities

Warrants

In the past, we issued warrants as part of our private
placements. The terms and conditions governing these warrants are provided for
in applicable subscription agreements and warrant certificates. Shares that will
be issued pursuant to these warrants contain certain restrictions, including
resale restrictions. The following table shows the number of shares to which
each warrant holder is entitled after exercise of the warrants:

Shares issued upon exercise of a warrant may not be resold
until the hold period on the private placement has ended. There are no hold
periods on the above-mentioned warrants.

Number of Warrants
    Weighted average exercise price
      ($)
    Fair value of warrants ($)Balance, December 31, 2005
    1,698,310
    0.72
    2,439,684Granted
    1,183,333
    0.32
    209,532Granted
    866,667
    0.33
    153,194Granted
    1,200,000
    0.25
    190,771


| | -- Form 20-F--                                         | 49
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

Granted
    2,234,165
    0.25
    614,634Granted
    166,667
    0.25
    45,017Granted
    2,400,000
    0.26
    172,816Balance, December 31, 2006
    9,749,142
    0.35
    3,825,648Granted
    5,100,000
    0.13
    616,735Expired
    (1,698,310)
    (0.72)
    (2,439,684)Balance, December 31, 2007
    13,150,832
    0.23
    2,002,699


PART II

ITEM 13  Defaults, Dividends, Arrearages and
Delinquencies

Not applicable

ITEM 14  Material Modifications to the Rights of
  Security Holders and Use of Proceeds

Not applicable

ITEM 15T - Controls and Procedures

All internal control systems, no matter how well designed, have
inherent limitations. Therefore, even those systems determined to be effective
can only provide reasonable assurances with respect to financial statement
preparation and presentation. In addition, any evaluation of effectiveness for
future periods are subject to the risk that controls may become inadequate
because of changes in conditions in the future.

Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
by the issuer in the reports that it files or submits under the Act is recorded,
processed, summarized and reported, within the time periods specified in the
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by an issuer in the reports that it files or submits
under the Act is accumulated and communicated to the issuer's management,
including its principal executive and principal financial officers, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required disclosure.

The Company has evaluated, under the supervision and with the
participation of management, including the Chief Executive Officer and Chief
Financial Officer, the effectiveness of its disclosure controls and procedures,
as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of December
31, 2007. Based on that evaluation, the Chief Executive Officer and Chief
Financial Officer have concluded that the Companys disclosure controls and
procedures were not effective as of December 31, 2007, due to the material
weaknesses in the Companys internal control over financial reporting described
below in Managements Report on Internal Control over Financial Reporting.

Managements Report on Internal Control over Financial
Reporting

Management of the Company is responsible for establishing and
maintaining adequate internal control over financial reporting and for the
assessment of the effectiveness of internal controls over financial reporting.
Internal control over financial reporting is a process designed by, or under the
supervision of, the CEO and CFO, or persons performing similar functions, and
effected by the

50

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issuer's board of directors, management and other personnel, to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles.

As of the end of the period covered by this report, the
Companys management, including the principal executive officer and principal
financial officer, completed our evaluation of the effectiveness of our internal
control over financial reporting, which we had been conducting based on the
criteria for effective internal control over financial reporting described in
Internal Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treasury Commission (COSO).

Management completed its assessment of internal control over
financial reporting (ICFR), and has identified certain material weaknesses
that existed in the design or operation of our internal control over financial
reporting. The Public Company Accounting Oversight Board has defined a material
weakness as a deficiency, or combination of deficiencies, in internal control
over financial reporting, such that there is a reasonable possibility that a
material misstatement of the companys annual or interim financial statements
will not be prevented or detected on a timely basis. The following material
weaknesses were identified in our 2007 assessment:

- Ineffective Controls at the Entity Level -As evidenced by the
  material weaknesses described below, the Company determined that entity-level
  controls related to the control environment, risk assessment, monitoring
  function and dissemination of information and communication activities did not
  operate effectively, resulting in material weaknesses in each of these
  respective COSO Internal Control  Integrated Framework components. The
  deficiency in each of these individual COSO components represents a separate
  material weakness. These material weaknesses contributed to the other material
  weaknesses and an environment where there is a reasonable possibility that a
  material misstatement of the interim and annual financial statements could
  occur and not be prevented or detected.
- Insufficient staffing in Accounting and Finance, leading to an
  Ineffective Internal Control Environment & Failure to retain
  evidence supporting Managements Testing We did not have a sufficient
  number of accounting personnel with an appropriate level with the necessary
  expertise within its accounting and finance function. The lack of sufficient
  staff did not allow the Company to maintain an effective internal control
  environment. Specifically, management concluded that the deficiencies in the
  control environment contributed to the Companys inability to document and
  retain evidence supporting our tests of design and operations of all controls
  over our ICFR as at and for the year ending December 31, 2007.
- Implementing GAAP-Compliant Accounting Policies -We did not have a
  formalized process for monitoring, updating, disseminating, and implementing
  GAAP-compliant accounting policies and procedures, resulting in the issuance
  of interim financial statements that were not in compliance with new CICA
  Handbook Accounting Standards for Financial Instruments: Handbook Section 1530
   Comprehensive Income; Handbook Section 3251  Equity; Handbook
  Section 3855  Financial Instruments  Recognition and Measurement;
  Handbook Section 3861  Financial Instruments  Disclosure and
  Presentation; and Handbook Section 3865 - Hedges.
- Ineffective Controls over the Financial Close and Reporting Process -The Companys design and operation of controls with respect to the process
  of preparing and reviewing the annual and interim financial statements are
  ineffective. The material weakness includes failures in the design and
  operating effectiveness of controls which would ensure (i) preparation of
  interim and annual financial statements on a timely basis; (ii) account
  analyses, summaries and reconciliations are prepared, reviewed and approved;
  (iii) subsidiary ledgers are reconciled to the general ledger, including check
  registers, accounts receivable ledgers, fixed asset ledgers and accounts
  payable ledgers; (iv) journal entries are reviewed and approved; (v) analysis
  of non-routine transactions performed; (vi) analysis of intercompany activity
  performed; and (vii) application of accounting standards under Canadian and US
  GAAP, including also the accuracy and completeness of the financial statement
  disclosures and presentation. These control deficiencies could result in a
  material misstatement of the

| | -- Form 20-F--                                         | 51
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

- Inadequate controls related to the expenditure cycle:The internal
      controls were not adequately designed or operating in a manner to effectively
      support the requirements of the expenditure cycle. This material weakness
      is the result of aggregate deficiencies in internal control activities. The
      material weakness includes the design and operating effectiveness of controls
      which would ensure (i) purchase requisitions and related vendor invoices are
      reviewed and approved; (ii) reconciliations of related bank accounts and accounts
      payable subsidiary ledgers are prepared, reviewed and approved; (iii) changes
      to vendor master files are reviewed and approved and (iv) adequate segregation
      of duties related to check signing, invoice processing and invoice approval.
      These control deficiencies could result in a material misstatement of operating
      expenses, accounts payable and accrued liabilities that would not be prevented
      or detected.
- Inadequate controls related to the payroll cycle:The internal controls
      were not adequately designed or operating in a manner to effectively support
      the requirements of the payroll cycle. This material weakness is the result
      of aggregate deficiencies in internal control activities. The material weakness
      includes failures in the design and operating effectiveness of controls which
      would ensure (i) employee withholdings are complete and accurate; (ii) access
      to payroll system files is adequately restricted; and (iii) review and approval
      of changes to the payroll master and employee files. These control deficiencies
      could result in a material misstatement of payroll and related expenses, and
      accrued compensation and benefits (included in accounts payable and accrued
      liabilities) that would not be prevented or detected.
- Inadequate controls related to the income tax cycle:The internal
      controls were not adequately designed or operating in a manner to effectively
      support the requirements of the income tax cycle. This material weakness is
      the result of aggregate deficiencies in the internal control activities. The
      material weakness includes failures in the design and operating effectiveness
      of controls which would ensure that (i) the income tax provision is determined
      using a methodology and related assumptions consistently across the entity
      and accounting periods, (ii) relevant, sufficient and reliable data necessary
      to record, process and report the income tax provision and related income
      tax accounts is captured, (iii) application of the Companys accounting
      policies to the tax provision and related accounts is performed timely, appropriately
      documented and independently reviewed for appropriateness, (iv) financial
      statement disclosure and presentation is in accordance with GAAP and the Companys
      accounting and disclosure policies, and (v) significant estimates and judgments
      are based on the latest available information and managements understanding
      of the Companys operations. These control deficiencies could result
      in a material misstatement of income taxes and related tax accounts that would
    not be prevented or detected.
- Inadequate controls related to the treasury cycle:The internal controls
      were not adequately designed or operating in a manner to effectively support
      the requirements of the treasury cycle. This material weakness is the result
      of aggregate deficiencies in the internal control activities. The material
      weakness includes failures in the design and operating effectiveness of controls
      which would ensure that (i) the fair value of warrants issued on private placements
      is appropriate and (ii) financial statement disclosure and presentation is
      in accordance with GAAP and the Companys accounting and disclosure policies.
      These control deficiencies could result in a material misstatement of warrants,
      stock based compensation, bank, leasing and other financing, and related accounts
      that would not be prevented or detected.
- Inadequate general computer controls:The Companys internal
    controls were not adequately operating in a manner to support the information
    technology environment. This material weakness is the result of aggregate
    deficiencies in internal control activities. The material weakness includes
    failures in the operating effectiveness of controls which would

52

---

> ensure the security of the information
>     technology environment and that (i) access to financial applications is granted
>     to appropriate personnel, (ii) passwords contain sufficient restrictions and
>     (iii) systems are configured with appropriate security monitoring capabilities.
>     Additionally, controls designed to ensure appropriate change management of
>     financial applications were not operating adequately to ensure (i) system
>     conversions were tested and validated prior to implementation, (ii) data was
>     converted accurately from legacy systems and (iii) access to vendor-supported
>     systems was restricted and monitored. These control deficiencies result in more
>     than a remote likelihood that a material misstatement of the interim and annual
>     consolidated financial statements could occur and not be prevented or detected.

This annual report does not include an attestation report of
our independent registered chartered accountants regarding the effectiveness of
internal control over financial reporting. The effectiveness of internal control
over financial reporting was not subject to attestation by the Companys
independent chartered accountants pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only managements
report in this annual report.

Remediation of Material Weakness

We have started to formulate a program for which we intend to
remediate the material weaknesses described above.

We have appointed a new Chief Financial Officer who is more
experienced in accounting and finance functions. We are reviewing and revising
our internal accounting policies and procedures, increasing the training of our
accounting personnel in the application of Canadian and U.S. GAAP, and, as
appropriate, expanding the resources allocated to our accounting department,
including hiring new personnel experienced in the financial reporting and the
financial control function.

We will continue these efforts until we are satisfied that all
material weaknesses have been eliminated. We expect that resolution of all of
these issues will take several months.

Changes in Internal Control over Financial Reporting

Except as set forth above, there have been no changes in our
internal control over financial reporting that occurred during the twelve months
ended December 31, 2007 that have materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting.

ITEM 16A - AUDIT COMMITTEE FINANCIAL EXPERT

The chairman of our audit committee is Mr. Robert Dziublowski.
Mr. Dziublowski is an independent director of the Company. His attributes as an
audit committee expert are:

(1) An understanding of US generally accepted accounting
principles and financial statements;

(2) The ability to assess the general application of such
principles in connection with the accounting for estimates, accruals and
reserves;

(3) Experience preparing, auditing, analysing or evaluating
financial statements;

(4) An understanding of internal controls and procedures for
financial reporting; and

(5) An understanding of audit committee functions.

| | -- Form 20-F--                                         | 53
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

ITEM 16B - CODE OF ETHICS

Our Principal Executive Officer, Chief Financial Officer, and
other senior executives and principal accounting officers are bound to adhere to
the companys Code of Ethics, which applies to Senior Financial Officers and all
employees.

A copy of the Code of Ethics is available upon request.

ITEM 16C - PRINCIPAL ACCOUNTANT FEES AND SERVICES

During the financial years ended 2005 to 2007 we employed the
following auditing firms. Their remuneration and services performed are as
follows:

Year ended December 31, 2007

Firm
    Services
    FeesDeloitte & Touche LLP Independent Registered Chartered
      Accountants
    Audit fees Disbursements
    $234,840 $ -


Year ended December 31, 2006

Firm
    Services
    FeesDeloitte & Touche LLP Independent Registered Chartered
      Accountants
    Audit fees Disbursements
    $201,408 $9,100


Year ended December 31, 2004

Firm
    Services
    FeesMacKay LLP, Chartered Accountants
    Audit fees Disbursements
    $65,000 $5,031


No other audit related, tax or other fees were paid by the
company.

PART III

ITEM 17 - FINANCIAL STATEMENTS

See Consolidated Financial Statements attached hereto.

ITEM 18 - FINANCIAL STATEMENTS

Not applicable.

ITEM 19  FINANCIAL STATEMENTS

54

---

|1. | Report of Independent Registered Chartered
      Accountants                                                                                  
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------
|2. | Consolidated Statement of Operations and Deficit for each
      of the years ended December 31, 2007, 2006 and 2005                           
|3. | Consolidated Statement of Shareholders Equity and
      Comprehensive Loss for each of the years ended December 31, 2007, 2006 and
      2005
|4. | Consolidated Balance Sheets for the years ended December
      31, 2007 and 2006                                                              
|5. | Consolidated Statement of Cash Flows for each of the
      years ended December 31, 2007, 2006 and 2005                                       
|6. | Notes to the Consolidated Financial
  Statements                                                                                              







| | -- Form 20-F--                                         | 55
| | ------------------------------------------------------ | --
| | -- Stream Communications Network
      & Media, Inc.-- |   

---

Report of Independent Registered Chartered
Accountants

To the Shareholders and Board of Directors ofStream
Communications Network & Media Inc.

We have audited the consolidated balance sheets of Stream
Communications Network & Media Inc. as at December 31, 2007 and 2006 and the
consolidated statements of operations and deficit, shareholders equity and
comprehensive loss and cash flows for each of the years in the two year period
ended December 31, 2007. These financial statements are the responsibility of
the Companys management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with Canadian generally
accepted auditing standards and the standards of the Public Company Accounting
Oversight Board (United States). These standards require that we plan and
perform an audit to obtain reasonable assurance whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, these consolidated financial statements present
fairly, in all material respects, the financial position of the Company as at
December 31, 2007 and 2006 and the results of its operations and its cash flows
for each of the years in the two year period ended December 31, 2007 in
accordance with Canadian generally accepted accounting principles.

The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the Companys internal control
over financial reporting. Accordingly, we express no such opinion.

The consolidated financial statements of the Company for the
year ended December 31, 2005, prior to adjustments for changes to the United
States generally accepted accounting principles reconciliation as disclosed in
Note 23 to the Companys December 31, 2006 consolidated financial statements,
were audited by other auditors whose report, dated March 27, 2006 except for
Notes 15 and 16 dated June 5, 2006, expressed an unqualified opinion on those
statements. We have audited the adjustments to the December 31, 2005 financial
statements, and in our opinion, such adjustments, in all material respects, are
appropriate and have been properly applied.

(Signed) Deloitte & Touche LLP

Independent Registered Chartered Accountants Vancouver,
Canada August 11, 2008

56

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Comments by Independent Registered Chartered
Accountants on Canada-United States of America Reporting Difference

The standards of the Public Company Accounting Oversight Board
(United States) require the addition of explanatory paragraphs (following the
opinion paragraph) when the financial statements are affected by conditions and
events that cast substantial doubt on the Companys ability to continue as a
going concern, such as those described in Note 1 to the financial statements,
and when there are changes in accounting principles that have a material effect
on the comparability of the Companys financial statements, such as the changes
described in Note 3 to the financial statements. Although we conducted our
audits in accordance with both Canadian generally accepted auditing standards
and the standards of the Public Company Accounting Oversight Board (United
States), our report to the Shareholders and Board of Directors, dated August 11,
2008, is expressed in accordance with Canadian reporting standards which do not
require a reference to such conditions and changes in accounting principles in
the auditors report when these are adequately disclosed and the change is
properly accounted for and adequately disclosed in the financial statements.

(Signed) Deloitte & Touche LLP

Independent Registered Chartered Accountants Vancouver,
Canada August 11, 2008

57

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CHARTEREDACCOUNTANTSMacKay LLP
    1100  1177 West Hastings Street Vancouver,
      BC V6E 4T5 Tel: 604-687-4511 Fax: 604-687-5805 Toll Free:
      1-800-351-0426 www.MacKayLLP.ca


Report of Independent Registered Chartered Accountants

To the Shareholders ofStream Communications
Network & Media Inc.

We have audited the consolidated balance sheet of Stream
Communications Network & Media Inc. as at December 31, 2005 and the
consolidated statements of operations and deficit, and cash flows for the year
ended December 31, 2005. These financial statements are the responsibility of
the company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted
auditing standards in Canada and the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and
perform an audit to obtain reasonable assurance whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.

In our opinion, these consolidated financial statements present
fairly, in all material respects, the financial position of the company as at
December 31, 2005 and the results of its operations and its cash flows for the
year ended December 31, 2005 in accordance with Canadian generally accepted
accounting principles.



|                                 | MacKay LLP         
|-------------------------------- | ---------------------
|Vancouver, Canada.               | Chartered Accountants
|March 27, 2006, except for notes |                      
|15 and 16 dated June 5, 2006     |                      

Comments by Auditors for U.S. Readers on Canada  United
States Reporting Differences

In the United States, reporting standards for auditors require
the addition of an explanatory paragraph (following the opinion paragraph) when
the financial statements are affected by conditions and events that cast
substantial doubt on the Companys ability to continue as a going concern, such
as those described in Note 1 to the consolidated financial statements. Our
report to the shareholders is expressed in accordance with Canadian reporting
standards which do not permit a reference to such events and conditions in the
auditors report when they are adequately disclosed in the financial
statements.



|                                 | MacKay LLP         
|-------------------------------- | ---------------------
|Vancouver, Canada                | Chartered Accountants
|March 27, 2006, except for notes |                      
|15 and 16 dated June 5, 2006     |                      

58

---

Stream Communications Network & Media Inc.Consolidated statement of operations and deficityear ended December 31,(Expressed in Canadian
dollars)

|                                         |  | 2007        |   |  | 2006        |   |  | 2005        |  
|---------------------------------------- |  | ----------- | - |  | ----------- | - |  | ----------- | -
|                                         |  | $           |   |  | $           |   |  | $           |  
|                                         |  |             |   |  |             |   |  |             |  
|                                         |  |             |   |  |             |   |  |             |  
|Revenues                                 |  | 7,376,978   |   |  | 6,472,905   |   |  | 5,826,112   |  
|                                         |  |             |   |  |             |   |  |             |  
|Operating expenses                       |  |             |   |  |             |   |  |             |  
|Programming and system lease             |  | 2,723,157   |   |  | 2,408,716   |   |  | 1,092,913   |  
|Payroll and related                      |  | 2,685,838   |   |  | 2,363,858   |   |  | 2,319,329   |  
|Amortization                             |  | 2,159,233   |   |  | 2,388,716   |   |  | 2,650,139   |  
|Management and professional
      fees   |  |             |   |  |             |   |  |             |  
|(Note 21)                                |  | 1,694,504   |   |  | 777,036     |   |  | 388,531     |  
|Office expenses                          |  | 532,852     |   |  | 328,242     |   |  | 1,154,785   |  
|Travel and entertainment                 |  | 432,040     |   |  | 292,364     |   |  | 329,712     |  
|Occupancy costs                          |  | 289,217     |   |  | 276,486     |   |  | 496,390     |  
|Advertising and marketing                |  | 181,327     |   |  | 178,525     |   |  | 219,861     |  
|Investor relations                       |  | 93,842      |   |  | 118,076     |   |  | 1,498,363   |  
|Loss on disposal of assets               |  | 3,053       |   |  | 16,013      |   |  | -           |  
|Stock-based compensation (Note
      13) |  | -           |   |  | 232,586     |   |  | 873,983     |  
|Restructuring expenses (Note 16)         |  | -           |   |  | 209,523     |   |  | -           |  
|                                         |  | 10,795,063  |   |  | 9,590,141   |   |  | 11,024,006  |  
|                                         |  |             |   |  |             |   |  |             |  
|Loss from operations                     |  | (3,418,085  | ) |  | (3,117,236  | ) |  | (5,197,894  | )
|Other income (expense)                   |  |             |   |  |             |   |  |             |  
|Standby guarantee (Note 15)              |  | -           |   |  | (798,289    | ) |  | -           |  
|Recovery of IPO expenses                 |  | -           |   |  | -           |   |  | 525,596     |  
|Financing (expense) income               |  | (231,743    | ) |  | 196         |   |  | (540,987    | )
|Interest expense                         |  | (443,721    | ) |  | (297,852    | ) |  | (501,508    | )
|Other income                             |  | 26,727      |   |  | 74,805      |   |  | -           |  
|Foreign exchange gain (loss)             |  | 837,153     |   |  | 93,582      |   |  | (69,605     | )
|                                         |  |             |   |  |             |   |  |             |  
|Loss before income taxes                 |  | (3,229,669  | ) |  | (4,044,794  | ) |  | (5,784,398  | )
|Income tax (recovery) expense            |  |             |   |  |             |   |  |             |  
|(Note
      14)                          |  | (162,809    | ) |  | 398,398     |   |  | 15,156      |  
|                                         |  |             |   |  |             |   |  |             |  
|Loss before non-controlling interest     |  | (3,066,860  | ) |  | (4,443,192  | ) |  | (5,799,554  | )
|Non-controlling interest (Note 12)       |  | 40,460      |   |  | 42,701      |   |  | 11,805      |  
|                                         |  |             |   |  |             |   |  |             |  
|Net loss for the year                    |  | (3,107,320  | ) |  | (4,485,893  | ) |  | (5,811,359  | )
|Deficit, beginning
      of year         |  | (46,886,979 | ) |  | (42,401,086 | ) |  | (36,589,727 | )
|Deficit, end of year                     |  | (49,994,299 | ) |  | (46,886,979 | ) |  | (42,401,086 | )
|                                         |  |             |   |  |             |   |  |             |  
|Basic and diluted loss per common share  |  |             |   |  |             |   |  |             |  
|(Note
      17)                          |  | (0.04       | ) |  | (0.08       | ) |  | (0.14       | )
|                                         |  |             |   |  |             |   |  |             |  
|Basic and diluted weighted average       |  |             |   |  |             |   |  |             |  
|number of common shares                  |  |             |   |  |             |   |  |             |  
|(Note
      17)                          |  | 79,808,820  |   |  | 59,629,483  |   |  | 42,953,922  |  

See accompanying notes to the consolidated financial
statements.

---

StreamCommunications Network& Media Inc.Consolidated statement of
shareholders' equity and comprehensive loss(Expressed in Canadian
dollars)

AccumulatedPrivate
      
      
      
      
      
      other
      
      
      
      
      
      TotalCommon
        shares
      
      Warrants
      
      
      Contributed
      
      
      placement
      
      
      Accumulated
      
      
      comprehensive
      
      
      Comprehensive
      
      
      shareholders'Number
      
      
      Amount
      
      Number
      
      
      Amount
      
      
      surplus
      
      
      subscriptions
      
      
      deficit
      
      
      income
      
      
      loss
      
      
      equity$
      
      
      
      
      $
      
      
      $
      
      
      $
      
      
      $
      
      
      $
      
      
      $
      
      
      $(Note 3
      (a))Balance at December 31, 2004
      37,833,800
      
      
      36,005,421
      
      2,976,579
      
      
      2,025,447
      
      
      2,167,551
      
      
      -
      
      
      (36,589,727
      )
      
      944,701
      
      
      -
      
      
      4,553,393Net loss for the year
      -
      
      
      -
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (5,811,359
      )
      
      -
      
      
      -
      
      
      (5,811,359
      )Foreign currency translation gain
      -
      
      
      -
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (1,103,560
      )
      
      -
      
      
      (1,103,560
      )Settlement of debts
      2,032,000
      
      
      914,980
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      914,980Private placement subscriptions
      -
      
      
      -
      
      -
      
      
      -
      
      
      -
      
      
      291,455
      
      
      -
      
      
      -
      
      
      -
      
      
      291,455Shares issued on privateplacement
      7,396,614
      
      
      2,524,572
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      2,524,572Warrants issued on privateplacement
      -
      
      
      (414,237
      )
      1,698,310
      
      
      414,237
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -Warrants expired during the year
      -
      
      
      -
      
      (2,976,579
      )
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -Guarantees by directors for loans
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      -payable
      400,000
      
      
      271,524
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      271,524Services
      810,258
      
      
      533,166
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      533,166Acquisition of subsidiary
      2,140,229
      
      
      878,647
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      878,647Stock options exercised
      340,000
      
      
      251,366
      
      -
      
      
      -
      
      
      (164,060
      )
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      87,306Fair value of stock optionsgranted
      -
      
      
      -
      
      -
      
      
      -
      
      
      873,983
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      873,983Fair value of stock optionsexercised
      -
      
      
      164,060
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      164,060Restructuring expenses
      (3,000,000
      )
      
      -
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -Balance at December 31, 2005
      47,952,901
      
      
      41,129,499
      
      1,698,310
      
      
      2,439,684
      
      
      2,877,474
      
      
      291,455
      
      
      (42,401,086
      )
      
      (158,859
      )
      
      -
      
      
      4,178,167Net loss for the year
      -
      
      
      -
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (4,485,893
      )
      
      -
      
      
      -
      
      
      (4,485,893
      )Foreign currency translation gain
      -
      
      
      -
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      1,438,047
      
      
      -
      
      
      1,438,047Settlement of debts
      885,000
      
      
      225,635
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      225,635Shares issued on privateplacement
      16,101,664
      
      
      2,641,246
      
      -
      
      
      -
      
      
      -
      
      
      (291,455
      )
      
      -
      
      
      -
      
      
      -
      
      
      2,349,791Warrants issued on privateplacement
      -
      
      
      (1,385,964
      )
      8,050,832
      
      
      1,385,964
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -Standby guarantee
      3,807,107
      
      
      798,289
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      798,289Stock-based compensation
      2,099,819
      
      
      456,103
      
      -
      
      
      -
      
      
      232,586
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      688,689Restructuring expenses
      550,000
      
      
      76,378
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      76,378Balance at December 31, 2006
      71,396,491
      
      
      43,941,186
      
      9,749,142
      
      
      3,825,648
      
      
      3,110,060
      
      
      -
      
      
      (46,886,979
      )
      
      1,279,188
      
      
      -
      
      
      5,269,103Net loss for the year
      -
      
      
      -
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (3,107,320
      )
      
      -
      
      
      (3,107,320
      )
      
      (3,107,320
      )Foreign currency translation gain
      -
      
      
      -
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      140,479
      
      
      140,479
      
      
      140,479Issued on private placement
      10,200,000
      
      
      1,191,028
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      1,191,028Warrants issued on privateplacement
      -
      
      
      (616,735
      )
      5,100,000
      
      
      616,735
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -Warrants expired
        during the year
      -
      
      
      -
      
      (1,698,310
      )
      
      (2,439,684
      )
      
      2,439,684
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -Balance at December 31, 2007
      81,596,491
      
      
      44,515,479
      
      13,150,832
      
      
      2,002,699
      
      
      5,549,744
      
      
      -
      
      
      (49,994,299
      )
      
      1,419,667
      
      
      (2,966,841
      )
      
      3,493,290


See accompanying notes to the consolidated financial
statements.

---

Stream Communications Network & Media
Inc.Consolidated balance sheetas at December 31,(Expressed in Canadian dollars)

|                                                  |  | 2007        |   |  | 2006        |  
|------------------------------------------------- |  | ----------- | - |  | ----------- | -
|                                                  |  | $           |   |  | $           |  
|Assets                                            |  |             |   |  |             |  
|Current assets                                    |  |             |   |  |             |  
|Cash and cash equivalents
      (Note 4)          |  | 682,859     |   |  | 764,544     |  
|Short-term investments                            |  | 29,048      |   |  | 27,921      |  
|Accounts receivable, net (Note
      5)           |  | 256,146     |   |  | 271,282     |  
|GST and VAT receivables                           |  | 311,998     |   |  | 125,946     |  
|Prepaid expenses and other
      assets (Note 6)  |  | 195,948     |   |  | 125,702     |  
|Future income tax assets (Note 14)                |  | 286,586     |   |  | 24,837      |  
|                                                  |  | 1,762,585   |   |  | 1,340,232   |  
|                                                  |  |             |   |  |             |  
|Property, plant and equipment, net (Note 7)       |  | 12,894,445  |   |  | 11,741,717  |  
|Cable TV subscriber base (Note 8)                 |  | 379,801     |   |  | 1,281,108   |  
|Other intangible assets (Note 9)                  |  | -           |   |  | 78,992      |  
|Non-current advances (Note 10)                    |  | 180,332     |   |  | 180,058     |  
|Deposit on acquisition (Note 22)                  |  | 1,402,580   |   |  | -           |  
|                                                  |  | 16,619,743  |   |  | 14,622,107  |  
|                                                  |  |             |   |  |             |  
|Liabilities                                       |  |             |   |  |             |  
|Current liabilities                               |  |             |   |  |             |  
|Accounts payable and accrued liabilities          |  | 5,066,512   |   |  | 2,607,720   |  
|Deferred revenue                                  |  | 3,629       |   |  | 2,792       |  
|Bank,
      leasing and other financing (Note 11) |  | 6,549,352   |   |  | 517,218     |  
|                                                  |  | 11,619,493  |   |  | 3,127,730   |  
|                                                  |  |             |   |  |             |  
|Bank, leasing and other financing (Note 11)       |  | 583,435     |   |  | 5,239,352   |  
|                                                  |  | 12,202,928  |   |  | 8,367,082   |  
|                                                  |  |             |   |  |             |  
|Non-controlling
      interest (Note 12)          |  | 923,525     |   |  | 985,922     |  
|                                                  |  |             |   |  |             |  
|Shareholders' equity                              |  |             |   |  |             |  
|Common shares (Note 13 (b))                       |  |             |   |  |             |  
|Authorized                                        |  |             |   |  |             |  
|150,000,000
      common shares of no par value   |  |             |   |  |             |  
|Issued and fully paid                             |  | 44,515,479  |   |  | 43,941,186  |  
|Contributed surplus                               |  | 5,549,744   |   |  | 3,110,060   |  
|Warrants (Note 13 (c))                            |  | 2,002,699   |   |  | 3,825,648   |  
|Accumulated other comprehensive income            |  | 1,419,667   |   |  | 1,279,188   |  
|Accumulated
      deficit                         |  | (49,994,299 | ) |  | (46,886,979 | )
|                                                  |  | 3,493,290   |   |  | 5,269,103   |  
|                                                  |  | 16,619,743  |   |  | 14,622,107  |  
|                                                  |  |             |   |  |             |  
|Continuing operations (Note 1)                    |  |             |   |  |             |  
|Commitments and contingencies (Note 20)           |  |             |   |  |             |  
|Subsequent events (Note 22)                       |  |             |   |  |             |  

Approved by the Board

|(Signed) Jan
      S. Rynkiewicz |  | (Signed) Iwona Kozak 
|-------------------------------- |  | ---------------------
|Jan S. Rynkiewicz, Director      |  | Iwona Kozak, Director

See accompanying notes to the consolidated financial
statements.

---

Stream Communications Network & Media
Inc.Consolidated statement of cash flowsyear ended December 31,(Expressed in Canadian
dollars)

|                                                           |  | 2007       |   |  | 2006       |   |  | 2005       |  
|---------------------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
|                                                           |  | $          |   |  | $          |   |  | $          |  
|                                                           |  |            |   |  |            |   |  |            |  
|Operating activities                                       |  |            |   |  |            |   |  |            |  
|Net loss for the year                                      |  | (3,107,320 | ) |  | (4,485,893 | ) |  | (5,811,359 | )
|Items not involving cash                                   |  |            |   |  |            |   |  |            |  
|Amortization                                               |  | 2,159,233  |   |  | 2,388,716  |   |  | 2,650,139  |  
|Loss on disposal
      of property, plant                  |  |            |   |  |            |   |  |            |  
|and equipment                                              |  | 3,053      |   |  | 16,013     |   |  | -          |  
|Unrealized
      foreign exchange (gain) loss              |  | (775,333   | ) |  | (11,916    | ) |  | 208,404    |  
|Stock-based compensation                                   |  | -          |   |  | 232,586    |   |  | 873,983    |  
|Restructuring
      expenses                               |  | -          |   |  | 76,378     |   |  | -          |  
|Issuance of shares for services                            |  | -          |   |  | 681,738    |   |  | 1,057,573  |  
|Non-controlling
      interest                             |  | 40,460     |   |  | 42,701     |   |  | 11,805     |  
|Issuance of shares for standby
      guarantee fee         |  | -          |   |  | 798,289    |   |  | -          |  
|Change in non-cash working
      capital                   |  |            |   |  |            |   |  |            |  
|Accounts receivable                                        |  | (170,315   | ) |  | 54,968     |   |  | (215,744   | )
|Prepaid expenses
      and other assets                    |  | (197,454   | ) |  | (158,164   | ) |  | (30,178    | )
|Accounts payable and accrued
      liabilities             |  | 1,280,830  |   |  | (617,434   | ) |  | 555,777    |  
|Future income
      taxes                                  |  | (261,711   | ) |  | (37,823    | ) |  | 11,577     |  
|Deferred revenue                                           |  | 833        |   |  | (14,515    | ) |  | 15,430     |  
|                                                           |  | (1,027,724 | ) |  | (1,034,356 | ) |  | (672,593   | )
|                                                           |  |            |   |  |            |   |  |            |  
|Investing activities                                       |  |            |   |  |            |   |  |            |  
|Purchase of property, plant and equipment                  |  | (2,202,639 | ) |  | (1,499,949 | ) |  | (1,729,926 | )
|Sale of property, plant and
      equipment                |  | 109,629    |   |  | 32,193     |   |  | -          |  
|Purchase of short-term investments                         |  | -          |   |  | (27,921    | ) |  | -          |  
|Acquisition of subsidiaries,
      net of cash acquired    |  |            |   |  |            |   |  |            |  
|(Note 12)                                                  |  | (319,145   | ) |  | -          |   |  | (646,289   | )
|                                                           |  | (2,412,155 | ) |  | (1,495,677 | ) |  | (2,376,215 | )
|                                                           |  |            |   |  |            |   |  |            |  
|Financing activities                                       |  |            |   |  |            |   |  |            |  
|Issuance of shares and warrants for cash                   |  | 1,191,028  |   |  | 2,349,791  |   |  | 3,018,162  |  
|Subscriptions received for
      private placement         |  | -          |   |  | -          |   |  | 291,455    |  
|Proceeds from loans and leasing contracts                  |  | 6,885,410  |   |  | 855,213    |   |  | 210,190    |  
|Repayments of loans and leasing contracts                  |  | (4,823,484 | ) |  | (378,715   | ) |  | (736,138   | )
|                                                           |  | 3,252,954  |   |  | 2,826,289  |   |  | 2,783,669  |  
|                                                           |  |            |   |  |            |   |  |            |  
|Foreign exchange
      effect on cash and cash equivalents |  | 105,240    |   |  | 28,351     |   |  | 64,768     |  
|                                                           |  |            |   |  |            |   |  |            |  
|(Decrease) increase in cash and cash equivalents           |  | (81,685    | ) |  | 324,607    |   |  | (200,371   | )
|Cash and cash equivalents, beginning of year               |  | 764,544    |   |  | 439,937    |   |  | 640,308    |  
|Cash and cash
      equivalents, end of year               |  | 682,859    |   |  | 764,544    |   |  | 439,937    |  
|                                                           |  |            |   |  |            |   |  |            |  
|Accrued deposit on acquisition (Note 22)                   |  | 1,402,580  |   |  | -          |   |  | -          |  
|                                                           |  |            |   |  |            |   |  |            |  
|Supplemental cash flow information                         |  |            |   |  |            |   |  |            |  
|Interest received                                          |  | 13,622     |   |  | 10,195     |   |  | 6,683      |  
|Interest paid                                              |  | (223,260   | ) |  | (405,688   | ) |  | (330,422   | )
|Income taxes paid                                          |  | (100,541   | ) |  | (55,564    | ) |  | (24,175    | )

| | -- Form 20-F--                                         | 
| | ------------------------------------------------------ | 
| | -- Stream Communications Network
      & Media, Inc.-- | 

---

|1. | Continuing operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Stream Communications Network & Media Inc. (Stream
      or the Company) provides cable television (TV) and high-speed internet
      access in Poland through its subsidiaries. The Company was incorporated on
      March 28, 1979 by registration of its Memorandum and Articles under the
      Company Act of British Columbia, Canada. On October 19, 2001 the Company
      changed its name from Trooper Technologies Inc. to Stream Communications
      Network, Inc. and on August 9, 2004 to Stream Communications Network &
      Media Inc.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | These financial statements have been prepared on a going
      concern basis which assumes that the Company will be able to realize its
      assets and discharge its liabilities in the normal course of business for
      the foreseeable future. The Company has recurring operating losses, an
      accumulated deficit of $49,994,299 and negative working capital of
      $9,856,908 at December 31, 2007. The continuing operations of the Company
      are dependent upon its ability to commence profitable operations in the
      future.       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company is actively pursuing additional funding to
      continue its current projects. The availability of such funding may be on
      terms that require a significant reduction in scope of operations or
      disposal of assets (Note 22). Management continues efforts to develop the
      Companys operating capabilities in order to improve cash flow from
      operations.                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Management has prepared these financial statements on the
      basis that it will be able to continue as a going concern. Accordingly,
      these financial statements do not reflect adjustments to the carrying
      value of assets and liabilities, the reported revenues and expenses and
      balance sheet classifications used that would be necessary if the going
      concern assumption were not appropriate. Such adjustments could be
      material.                                                                                        

|2. | Significant accounting policies                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | These consolidated financial statements and accompanying
      notes have been prepared in accordance with generally accepted accounting
      principles (GAAP) applicable in Canada. Canadian GAAP differs in certain
      respects from accounting principles generally accepted in the United
      Stated (US GAAP) as explained in Note 23. A summary of the significant
      accounting policies are as follows:
|   |                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                              

Country of
      Percentage
        ownershipincorporation
      2007
      2006
      2005Stream Communication Sp. z o. o.(Stream Poland)
      Poland
      100%
      100%
      100%Gimsat Sp. Z o. o. (Gimsat)
      Poland
      100%
      100%
      100%Vega Sp. z o. o. (Vega)
      Poland
      100%
      100%
      100%Bielsat.com Sp. z o. o. (Bielsat)
      Poland
      51%
      51%
      51%Ask Stream Sp. z o. o. (Ask)
      Poland
      100%
      60%
      60%Streamline Media Sp. z o. o. (Streamline)
      Poland
      100%
      100%
      100%IEWS SA (IEWS)
      Poland
      100%
      100%
      100%


| | -- Form 20-F--                                         | 
| | ------------------------------------------------------ | 
| | -- Stream Communications Network
      & Media, Inc.-- | 

---

|2. | Significant accounting policies
  (continued)
|-- | ---------------------------------------------
|   |                                              
|   | (b)                                          
|   |                                              
|   |                                              
|   |                                              
|   | (c)                                          
|   |                                              
|   |                                              
|   |                                              
|   | (d)                                          
|   |                                              
|   |                                              

Automobiles
    20 - 30% per annumComputer software
    20 - 100% per annumCable television network equipment and
      conduit
    4.5 - 45% per annumFurniture, fixtures and equipment
    20 - 30% per annum


| |     | Plant construction-in-progress consists of assets not yet
      used and accordingly no amortization is recorded. No interest is
      capitalized in construction-in-progress. When the asset is substantially
      complete and ready for use, the cost are transferred to their respective
      asset class and amortized.                                                                                                                                                                                                                                                                                                     
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | Property, plant and equipment are carried at cost, net of
      accumulated depreciation. Property, plant and equipment are tested for
      recoverability whenever events or changes in circumstances indicate that
      their carrying amounts may not be recoverable and an impairment loss is
      measured as the amount by which their carrying amounts exceed their fair
      value using the estimated future undiscounted cash flows. Any resulting
      write-downs to fair value are charged to the results of operations. No
      such losses have been recorded in these consolidated financial
      statements.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (e) | Intangible assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | The Companys intangible assets consist primarily of
      cable TV subscribers. Intangible assets are amortized over the estimated
      useful life ranging from two to five years. Judgment is used to estimate
      an intangible assets useful life and is based on an analysis of all
      pertinent factors, including expected use of the intangible asset,
      contractual provisions that enable renewal or extension of the intangible
      assets legal or contractual life without substantial cost, and renewal
      history.                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | Intangible assets are tested for impairment whenever
      events or changes in circumstances indicate that the carrying value of an
      asset may not be recoverable. An impairment loss is recognized when the
      carrying value of a long-lived asset intended for use exceeds the sum of
      the undiscounted cash flows expected from its use and eventual
      disposition. The impairment loss is measured as the excess of the carrying
      value of the asset over its fair value.                                                                                                                               

64

---

|2. | Significant accounting policies (continued)
|-- | -------------------------------------------
|   |                                            
|   | (e)                                        
|   |                                            
|   |                                            
|   |                                            
|   | (f)                                        
|   |                                            
|   |                                            
|   |                                            
|   | (g)                                        
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   | (h)                                        
|   |                                            
|   |                                            

| | -- Form 20-F--                                         | 
| | ------------------------------------------------------ | 
| | -- Stream Communications Network
      & Media, Inc.-- | 

---

|2. | Significant accounting policies
  (continued)
|-- | ---------------------------------------------
|   |                                              
|   | (h)                                          
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   | (i)                                          
|   |                                              
|   |                                              
|   |                                              
|   | (j)                                          
|   |                                              
|   |                                              
|   |                                              
|   | (k)                                          
|   |                                              
|   |                                              
|   |                                              
|   | (l)                                          
|   |                                              
|   |                                              

66

---

|2. | Significant accounting policies (continued)
|-- | -------------------------------------------
|   |                                            
|   | (m)                                        
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            

| | -- Form 20-F--                                         | 
| | ------------------------------------------------------ | 
| | -- Stream Communications Network
      & Media, Inc.-- | 

---

|2. | Significant accounting policies
  (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|3. | Change in accounting policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On January 1, 2007, the Company adopted new accounting
      policies for financial instruments by adopting the following new standards
      of the Canadian Institute of Chartered Accountants (CICA): Handbook
      Section 1530  Comprehensive Income; Handbook Section 3251
                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Equity; Handbook Section 3855  Financial
      Instruments  Recognition and Measurement; Handbook Section 3861 
      Financial Instruments  Disclosure and Presentation; and Handbook
      Section 3865  Hedges. These new standards have been applied
      retrospectively without prior period restatement, except for the
      presentation of the cumulative unrealized effect of foreign currency
      translation of foreign operations on the consolidated balance sheet as a
      component of accumulated other comprehensive loss. The change in
      accounting policies had no other material impact on the Companys
      consolidated financial statements at January 1, 2007.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

68

---

|3. | Change in accounting policies
(continued)
|-- | -----------------------------------------
|   |                                          
|   | (b)                                      
|   |                                          
|   |                                          

| | Cash                                     | Held-for-trading     
| | ---------------------------------------- | ---------------------
| | Cash equivalents                         | Held-for-trading     
| | Accounts receivable                      | Loans and receivables
| | Accounts payable and accrued liabilities | Other liabilities    
| | Bank, leasing and other financing        | Other liabilities    

| | (i)   | Held-for-trading                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |       | Financial instruments classified as held-for-trading are
      measured at fair value with the realized and unrealized changes in fair
      value recognized each reporting period through financing (expense) income
      on the consolidated statement of operations and deficit. The Company had
      no transition adjustments at January 1, 2007 for held-for-trading
      financial instruments.                                                                                                                                                                                                                                                                                                                   
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (ii)  | Available-for-sale                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |       | Financial assets classified as available-for-sale are
      measured at fair value with the unrealized changes in fair value recorded
      each reporting period in OCI. Investments in equity instruments classified
      as available-for-sale that do not have a quoted price in an active market
      are recorded at cost. Each reporting period, available-for-sale assets are
      written down to fair value through financing expense (income) on the
      consolidated statement of operations and deficit to reflect impairments
      that are considered to be other than temporary. The Company had no
      transition adjustments at January 1, 2007 for available-for-sale financial
      instruments.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (iii) | Held-to-maturity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |       | Financial instruments classified as held-to-maturity are
      measured at amortized cost using the effective interest method. The
      Company had no transition adjustments at January 1, 2007 for
      held-to-maturity financial instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (iv)  | Loans and receivables and other liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |       | Financial instruments classified as loans and receivables
      and other liabilities are measured at amortized cost. Transaction costs of
      the loans and receivables and other liabilities are expensed directly into
      income on the consolidated statement of operations and deficit. The
      Company had no transition adjustments at January 1, 2007 for loans and
      receivables or other liabilities.                                                                                                                                                                                                                                                                                                   

| | (c) | Embedded derivatives                                                                                                                                                                                
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                     
| |     | The Company assessed the existence of embedded
      derivatives in its financial instruments. The Company does not have any
      material embedded derivatives that require separate
  accounting.

| | -- Form 20-F--                                         | 
| | ------------------------------------------------------ | 
| | -- Stream Communications Network
      & Media, Inc.-- | 

---

|3. | Change in accounting policies
(continued)
|-- | -----------------------------------------
|   |                                          
|   | (d)                                      
|   |                                          
|   |                                          
|   |                                          
|4. | Cash and cash
equivalents                

| |                  |  | 2007    |  |  | 2006    | 
| | ---------------- |  | ------- |  |  | ------- | 
| |                  |  | $       |  |  | $       | 
| |                  |  |         |  |  |         | 
| | Cash in bank     |  | 671,359 |  |  | 753,044 | 
| | Cash equivalents |  | 11,500  |  |  | 11,500  | 
| |                  |  | 682,859 |  |  | 764,544 | 

|   | Cash equivalents are guaranteed investment
      certificates.                                            
|-- | ----------------------------------------------------------------------------------------------------------
|   |                                                                                                           
|   | At December 31, 2007 the Company did not hold any cash
      equivalents in asset-backed commercial paper.
|   |                                                                                                           
|5. | Accounts receivable                                                                                       

| |                                       |  | 2007     |   |  | 2006     |  
| | ------------------------------------- |  | -------- | - |  | -------- | -
| |                                       |  | $        |   |  | $        |  
| |                                       |  |          |   |  |          |  
| | Accounts receivable                   |  | 536,875  |   |  | 464,262  |  
| | Provision for
      doubtful accounts |  | (280,729 | ) |  | (192,980 | )
| |                                       |  | 256,146  |   |  | 271,282  |  

|6. | Prepaid expenses and other
assets
|-- | ---------------------------------

| |                           |  | 2007    |  |  | 2006    | 
| | ------------------------- |  | ------- |  |  | ------- | 
| |                           |  | $       |  |  | $       | 
| |                           |  |         |  |  |         | 
| | Prepayment                |  | 74,851  |  |  | 116,000 | 
| | Capital spare
      parts |  | 121,097 |  |  | 9,702   | 
| |                           |  | 195,948 |  |  | 125,702 | 

Stream Communications makes prepayments
for services, goods and property, plant and equipment purchases.

The Company policy is to keep only the
most basic parts and inventory supplies on hand, as equipment suppliers in
general are able to deliver ordered parts within 48 hours. At the end of 2007,
the Company commenced an upgrade program of existing networks.

70

---

|7. | Property, plant and
equipment
|-- | -----------------------------

| |                                |  |            |  |  |              |  |  | 2007       | 
| | ------------------------------ |  | ---------- |  |  | ------------ |  |  | ---------- | 
| |                                |  |            |  |  | Accumulated  |  |  | Net book   | 
| |                                |  | Cost       |  |  | amortization |  |  | value      | 
| |                                |  | $          |  |  | $            |  |  | $          | 
| |                                |  |            |  |  |              |  |  |            | 
| | Automobiles                    |  | 557,384    |  |  | 249,514      |  |  | 307,870    | 
| | Cable TV equipment and conduit |  | 18,046,081 |  |  | 6,413,091    |  |  | 11,632,990 | 
| | Furniture and fixtures         |  | 424,810    |  |  | 408,935      |  |  | 15,875     | 
| | Software                       |  | 76,880     |  |  | 76,880       |  |  | -          | 
| | Construction-in-progress       |  | 937,710    |  |  | -            |  |  | 937,710    | 
| |                                |  | 20,042,865 |  |  | 7,148,420    |  |  | 12,894,445 | 

| |                                |  |            |  |  |              |  |  | 2006       | 
| | ------------------------------ |  | ---------- |  |  | ------------ |  |  | ---------- | 
| |                                |  |            |  |  | Accumulated  |  |  | Net book   | 
| |                                |  | Cost       |  |  | amortization |  |  | value      | 
| |                                |  | $          |  |  | $            |  |  | $          | 
| |                                |  |            |  |  |              |  |  |            | 
| | Automobiles                    |  | 458,950    |  |  | 152,114      |  |  | 306,836    | 
| | Cable TV equipment and conduit |  | 16,542,175 |  |  | 5,605,700    |  |  | 10,936,475 | 
| | Furniture and fixtures         |  | 433,973    |  |  | 417,654      |  |  | 16,319     | 
| | Software                       |  | 83,784     |  |  | 83,522       |  |  | 262        | 
| | Construction-in-progress       |  | 481,825    |  |  | -            |  |  | 481,825    | 
| |                                |  | 18,000,707 |  |  | 6,258,990    |  |  | 11,741,717 | 

|8. | Cable TV subscriber
base
|-- | ------------------------

| |                 |  |           |  |  |              |  |  | 2007     | 
| | --------------- |  | --------- |  |  | ------------ |  |  | -------- | 
| |                 |  |           |  |  | Accumulated  |  |  | Net book | 
| |                 |  | Cost      |  |  | amortization |  |  | value    | 
| |                 |  | $         |  |  | $            |  |  | $        | 
| |                 |  |           |  |  |              |  |  |          | 
| | Subscriber base |  | 5,771,926 |  |  | 5,392,125    |  |  | 379,801  | 

| |                 |  |           |  |  |              |  |  | 2006      | 
| | --------------- |  | --------- |  |  | ------------ |  |  | --------- | 
| |                 |  |           |  |  | Accumulated  |  |  | Net book  | 
| |                 |  | Cost      |  |  | amortization |  |  | value     | 
| |                 |  | $         |  |  | $            |  |  | $         | 
| |                 |  |           |  |  |              |  |  |           | 
| | Subscriber base |  | 5,652,718 |  |  | 4,371,610    |  |  | 1,281,108 | 

| | -- Form 20-F--                                         | 
| | ------------------------------------------------------ | 
| | -- Stream Communications Network
      & Media, Inc.-- | 

---

|9. | Other intangible
assets
|-- | -----------------------

| |          |  |         |  |  |              |  |  | 2007     | 
| | -------- |  | ------- |  |  | ------------ |  |  | -------- | 
| |          |  |         |  |  | Accumulated  |  |  | Net book | 
| |          |  | Cost    |  |  | amortization |  |  | value    | 
| |          |  | $       |  |  | $            |  |  | $        | 
| |          |  |         |  |  |              |  |  |          | 
| | Licenses |  | 187,887 |  |  | 187,887      |  |  | -        | 

| |          |  |         |  |  |              |  |  | 2006     | 
| | -------- |  | ------- |  |  | ------------ |  |  | -------- | 
| |          |  |         |  |  | Accumulated  |  |  | Net book | 
| |          |  | Cost    |  |  | amortization |  |  | value    | 
| |          |  | $       |  |  | $            |  |  | $        | 
| |          |  |         |  |  |              |  |  |          | 
| | Licenses |  | 173,178 |  |  | 94,186       |  |  | 78,992   | 

|10. | Non-current advances
|--- | --------------------

| |                      |  | 2007    |  |  | 2006    | 
| | -------------------- |  | ------- |  |  | ------- | 
| |                      |  | $       |  |  | $       | 
| |                      |  |         |  |  |         | 
| | Non-current advances |  | 180,332 |  |  | 180,058 | 

|    | In 2001, the Company made an advance payment to PPHU
      Bielsat Sp. z o. o. of $180,332 (Pln 450,000) for an option to purchase
      the outstanding 49% of shares in Bielsat. The advance will be deducted
      from the purchase price when the option is executed. The purchase price of
      the outstanding shares in Bielsat has not yet been established.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                       
|11. | Bank, leasing and other
financing                                                                                                                                                                                                                                                                                                                                     

| |                   |  | 2007      |  |  | 2006      | 
| | ----------------- |  | --------- |  |  | --------- | 
| |                   |  | $         |  |  | $         | 
| | Bank financing    |  |           |  |  |           | 
| | Current           |  | -         |  |  | 357,176   | 
| | Non-current       |  | -         |  |  | 830,108   | 
| |                   |  | -         |  |  | 1,187,284 | 
| |                   |  |           |  |  |           | 
| | Leasing contracts |  |           |  |  |           | 
| | Current           |  | 77,209    |  |  | 160,043   | 
| | Non-current       |  | 121,094   |  |  | 129,625   | 
| |                   |  | 198,303   |  |  | 289,668   | 
| |                   |  |           |  |  |           | 
| | Other financing   |  |           |  |  |           | 
| | Current           |  | 6,472,143 |  |  | -         | 
| | Non-current       |  | 462,341   |  |  | 4,279,618 | 
| |                   |  | 6,934,484 |  |  | 4,279,618 | 
| |                   |  | 7,132,787 |  |  | 5,756,570 | 

72

---

|11. | Bank, leasing and other financing
    (continued)
|--- | -------------------------------------------------
|    |                                                  
|    | Outstanding balances are as
follows:             

| |                                                         |  | 2007      |  |  | 2006      | 
| | ------------------------------------------------------- |  | --------- |  |  | --------- | 
| |                                                         |  | $         |  |  | $         | 
| | Bank loan of $721,327 (Pln 1,800,000) secured by        |  |           |  |  |           | 
| | the fixed assets of the
      Company.                  |  | -         |  |  | 419,912   | 
| | Revolving bank loan of $240,442 (Pln 600,000)           |  |           |  |  |           | 
| | secured by the fixed assets of
      the Company.       |  | -         |  |  | 149,288   | 
| | Revolving bank loan of $581,069 (Pln 1,450,000)         |  |           |  |  |           | 
| | secured by the fixed assets of
      the Company.       |  | -         |  |  | 557,433   | 
| | Bank loan of $80,147 (Pln 200,000) secured by the       |  |           |  |  |           | 
| | fixed assets of the
      Company.                      |  | -         |  |  | 60,651    | 
| | Automotive and equipment leasing contracts secured      |  |           |  |  |           | 
| | by the asset being leased. The
      leasing contracts  |  |           |  |  |           | 
| | bear an average annual interest rate of
      15.65%.   |  |           |  |  |           | 
| | Maturity dates vary from June
      2007 to June 2011.  |  | 198,303   |  |  | 289,668   | 
| | A bridge loan provided by CYFOCA Holdings Limited       |  |           |  |  |           | 
| | ("Penta"). The principal
      amount due is $2,542,710 |  |           |  |  |           | 
| | (Pln 6,343,341), and is secured by
      assets and     |  |           |  |  |           | 
| | shares in Stream Poland. The
      loan is convertible  |  |           |  |  |           | 
| | into share capital of Stream Poland on closing
      of |  |           |  |  |           | 
| | the investment.                                         |  | 2,542,710 |  |  | -         | 
| | Private loan of $245,500 (US$250,000) at a rate         |  |           |  |  |           | 
| | of 9% per annum. The loan is
      to be repaid by      |  |           |  |  |           | 
| | August 29, 2009 or converted to equity at a
      price |  |           |  |  |           | 
| | of US$0.13 per share (Note 21
      (a)).               |  | 245,500   |  |  | -         | 
| | Private loan of $294,600 (US$300,000) at a rate         |  |           |  |  |           | 
| | of 9% per annum. The loan is
      to be repaid by      |  |           |  |  |           | 
| | December 31, 2008 or converted to equity at a           |  |           |  |  |           | 
| | price of US$0.15 per share.                             |  | 294,600   |  |  | -         | 
| | Private loan of $198,358 (US$200,000) at a rate         |  |           |  |  |           | 
| | of 9% per annum. The loan is
      to be repaid by      |  |           |  |  |           | 
| | December 31, 2009 or converted to equity at a           |  |           |  |  |           | 
| | price of US$0.13 per share.                             |  | 198,358   |  |  | -         | 
| | Private loan of $29,460 (US$30,000) at a rate           |  |           |  |  |           | 
| | of 9% per annum. The loan is
      to be repaid by      |  |           |  |  |           | 
| | December 31, 2007 or converted to equity at a           |  |           |  |  |           | 
| | price of US$0.15 per share.                             |  | 29,460    |  |  | -         | 
| | A loan bearing interest at 5%, compounded annually.     |  |           |  |  |           | 
| | The principal amount due is
      $3,623,856            |  |           |  |  |           | 
| | (US$3,690,281). The loan is secured by the
      shares |  |           |  |  |           | 
| | in Stream Poland. Maturity
      date is January 31,    |  |           |  |  |           | 
| | 2008
      (Note 22 (e)).                               |  | 3,623,856 |  |  | 4,279,618 | 
| |                                                         |  | 7,132,787 |  |  | 5,756,570 | 

| | -- Form 20-F--                                         | 
| | ------------------------------------------------------ | 
| | -- Stream Communications Network
      & Media, Inc.-- | 

---

|11. | Bank, leasing and other financing
    (continued)              
|--- | ---------------------------------------------------------------
|    |                                                                
|    | The bank, leasing and other financing matures as
      follows:

| |      |  | Leasing   |  |  | Other     |  |  |           | 
| | ---- |  | --------- |  |  | --------- |  |  | --------- | 
| |      |  | contracts |  |  | financing |  |  | Total     | 
| |      |  | $         |  |  | $         |  |  | $         | 
| |      |  |           |  |  |           |  |  |           | 
| | 2008 |  | 77,209    |  |  | 6,472,143 |  |  | 6,549,352 | 
| | 2009 |  | 56,805    |  |  | 462,341   |  |  | 519,146   | 
| | 2010 |  | 42,053    |  |  | -         |  |  | 42,053    | 
| | 2011 |  | 22,236    |  |  | -         |  |  | 22,236    | 
| |      |  | 198,303   |  |  | 6,934,484 |  |  | 7,132,787 | 

|12. | Non-controlling interests                                          
|--- | -------------------------------------------------------------------
|    |                                                                    
|    | (a)                                                                
|    |                                                                    
|    |                                                                    
|    |                                                                    
|    | (b)                                                                
|    |                                                                    
|    |                                                                    
|    |                                                                    
|    | The non-controlling interests are comprised of the
      following:

| |                                                      |  | $        |  
| | ---------------------------------------------------- |  | -------- | -
| |                                                      |  |          |  
| | Balance, December 31, 2004                           |  | 710,445  |  
| | Non-controlling interests' share of income           |  | 11,805   |  
| | Foreign exchange related to non-controlling interest |  | (31,572  | )
| | Balance, December 31, 2005                           |  | 690,678  |  
| | Non-controlling interests' share of income           |  | 42,701   |  
| | Foreign exchange related to non-controlling interest |  |          |  
| | and reclassification (Note 10)                       |  | 252,543  |  
| | Balance, December 31, 2006                           |  | 985,922  |  
| | Non-controlling interests' share of income           |  | 40,460   |  
| | Acquisition of Ask                                   |  | (102,857 | )
| | Balance, December 31, 2007                           |  | 923,525  |  

74

---

|12. | Non-controlling interests (continued)                                                                                                                                                                                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                          
|    | In April 2004, the Company acquired 60% of the shares in
      Ask for an amount of $201,853 (Pln 503,705), and in September 2007, the
      remaining 40% of the shares of Ask were acquired for total cash
      consideration of $222,124 (Pln 554,289). The fair value of the
      consideration paid has been allocated as
follows:

| |                           |  |         |  |  |         |  |  | Total   | 
| | ------------------------- |  | ------- |  |  | ------- |  |  | ------- | 
| |                           |  | $       |  |  | $       |  |  | $       | 
| |                           |  | 60%     |  |  | 40%     |  |  | 100%    | 
| |                           |  |         |  |  |         |  |  |         | 
| | Cash consideration        |  | 201,853 |  |  | 222,124 |  |  | 423,977 | 
| | Net assets
      acquired |  | 125,468 |  |  | 105,741 |  |  | 231,209 | 
| | Intangibles               |  | 76,385  |  |  | 116,383 |  |  | 192,768 | 

|    | The intangibles recorded on the acquisition of shares in
      Ask is included in cable TV subscriber base on the consolidated balance
      sheet.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                    
|13. | Share capital                                                                                                                                      
|    |                                                                                                                                                    
|    | (a)                                                                                                                                                
|    |                                                                                                                                                    
|    |                                                                                                                                                    
|    |                                                                                                                                                    
|    | (b)                                                                                                                                                
|    |                                                                                                                                                    
|    |                                                                                                                                                    
|    |                                                                                                                                                    
|    |                                                                                                                                                    
|    |                                                                                                                                                    
|    |                                                                                                                                                    

| |                         |  | 2006   |  |  | 2005  | 
| | ----------------------- |  | ------ |  |  | ----- | 
| |                         |  |        |  |  |       | 
| | Expected life (years)   |  | 5.00   |  |  | 4.76  | 
| | Expected volatility     |  | 154.1% |  |  | 85.6% | 
| | Risk free interest rate |  | 4.36%  |  |  | 3.60% | 

| | -- Form 20-F--                                         | 
| | ------------------------------------------------------ | 
| | -- Stream Communications Network
      & Media, Inc.-- | 

---

|13. | Share capital (continued)
|--- | -------------------------
|    |                          
|    | (b)                      
|    |                          
|    |                          

2007
    
    
    
    
    
    2006
    
    
    
    
    
    2005Weighted
    
    
    
    
    
    Weighted
    
    
    
    
    
    Weightedaverage
    
    
    
    
    
    average
    
    
    
    
    
    averageexercise
    
    
    
    
    
    exercise
    
    
    
    
    
    exerciseOptions
    
    
    price
    
    
    Options
    
    
    price
    
    
    Options
    
    
    priceUS$
    
    
    
    
    
    $
    
    
    
    
    
    $Outstanding,beginningof year
    
    1,370,000
    
    
    0.60
    
    
    3,060,000
    
    
    0.60
    
    
    2,490,000
    
    
    0.60Granted
    
    -
    
    
    -
    
    
    900,000
    
    
    0.60
    
    
    1,870,000
    
    
    0.60Exercised
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    340,000
    
    
    0.60Forfeited
    
    505,000
    
    
    0.60
    
    
    2,590,000
    
    
    0.60
    
    
    960,000
    
    
    0.60Outstanding,end of year
    
    865,000
    
    
    0.60
    
    
    1,370,000
    
    
    0.60
    
    
    3,060,000
    
    
    0.60


Options outstanding and exercisable at
December 31, 2007 are as follows:

Weightedaverage
    
    
    Weighted
    
    
    
    
    
    WeightedNumber of
    
    
    remaining
    
    
    average
    
    
    Number of
    
    
    averageExercise
    
    options
    
    
    contractual
    
    
    exercise
    
    
    options
    
    
    exerciseprice
    
    outstanding
    
    
    life
      (years)
    
    
    price
    
    
    exercisable
    
    
    priceUS$
    
    
    
    
    
    
    
    $
    
    
    
    
    
    $0.60
    
    175,000
    
    
    0.76
    
    
    0.60
    
    
    175,000
    
    
    0.600.60
    
    100,000
    
    
    1.29
    
    
    0.60
    
    
    100,000
    
    
    0.600.60
    
    495,000
    
    
    2.18
    
    
    0.60
    
    
    495,000
    
    
    0.600.60
    
    95,000
    
    
    2.72
    
    
    0.60
    
    
    95,000
    
    
    0.60865,000
    
    
    
    
    
    
    
    
    865,000


| |     | During the year ended December 31, 2007, the total
      compensation expense related to the fair value of stock options was $Nil
      (2006 - $232,586; 2005 - $873,983). The entire amount of compensation
      expense in 2005 and 2006 was related to employees and directors.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                     
| | (c) | Warrants                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                     
| |     | The Company is issuing warrants together with private
      placement, whereby a subscriber will receive the same amount of warrants
      as shares. The warrants expire two years from issue and are eligible to
      acquire half a share per one warrant.                      
| |     |                                                                                                                                                                                                                                                                                     
| |     | The fair values of the warrants issued by the Company
      were estimated using the following weighted average
  assumptions:                                                                                                                                                      

| |                         |  | 2007    |  |  | 2006    |  |  | 2005    | 
| | ----------------------- |  | ------- |  |  | ------- |  |  | ------- | 
| |                         |  |         |  |  |         |  |  |         | 
| | Expected life (years)   |  | 2       |  |  | 2       |  |  | 2       | 
| | Expected volatility     |  | 192.47% |  |  | 144.20% |  |  | 109.10% | 
| | Risk free interest rate |  | 3.7%    |  |  | 3.6%    |  |  | 3.1%    | 

76

---

|13. | Share capital
(continued)
|--- | -------------------------

| | (c) | Warrants (continued)
| | --- | --------------------

| |                       |  |            |   |  |            |   |  | Weighted |  |  |            |  
| | --------------------- |  | ---------- | - |  | ---------- | - |  | -------- |  |  | ---------- | -
| |                       |  |            |   |  |            |   |  | average  |  |  | Fair       |  
| |                       |  | Number of  |   |  | Number of  |   |  | exercise |  |  | value of   |  
| |                       |  | shares     |   |  | warrants   |   |  | price    |  |  | warrants   |  
| |                       |  |            |   |  |            |   |  | $        |  |  | $          |  
| | Balance, December 31, |  |            |   |  |            |   |  |          |  |  |            |  
| | 2004                  |  | 3,126,579  |   |  | 2,976,579  |   |  | 1.84     |  |  | 2,025,447  |  
| | Granted               |  | 2,052,600  |   |  | 1,026,300  |   |  | 0.98     |  |  | 287,851    |  
| | Granted               |  | 1,344,014  |   |  | 672,010    |   |  | 0.33     |  |  | 126,386    |  
| | Expired               |  | (3,126,579 | ) |  | (2,976,579 | ) |  | 1.84     |  |  | -          |  
| | Balance, December 31, |  |            |   |  |            |   |  |          |  |  |            |  
| | 2005                  |  | 3,396,614  |   |  | 1,698,310  |   |  | 0.72     |  |  | 2,439,684  |  
| | Granted               |  | 2,366,666  |   |  | 1,183,333  |   |  | 0.32     |  |  | 209,532    |  
| | Granted               |  | 1,733,334  |   |  | 866,667    |   |  | 0.33     |  |  | 153,194    |  
| | Granted               |  | 2,400,000  |   |  | 1,200,000  |   |  | 0.25     |  |  | 190,771    |  
| | Granted               |  | 4,468,330  |   |  | 2,234,165  |   |  | 0.25     |  |  | 614,634    |  
| | Granted               |  | 333,334    |   |  | 166,667    |   |  | 0.25     |  |  | 45,017     |  
| | Granted               |  | 4,800,000  |   |  | 2,400,000  |   |  | 0.26     |  |  | 172,816    |  
| | Balance, December 31, |  |            |   |  |            |   |  |          |  |  |            |  
| | 2006                  |  | 19,498,278 |   |  | 9,749,142  |   |  | 0.35     |  |  | 3,825,648  |  
| | Granted               |  | 10,200,000 |   |  | 5,100,000  |   |  | 0.13     |  |  | 616,735    |  
| | Expired               |  | (3,396,614 | ) |  | (1,698,310 | ) |  | 0.72     |  |  | (2,439,684 | )
| | Balance, December 31, |  |            |   |  |            |   |  |          |  |  |            |  
| | 2007                  |  | 26,301,664 |   |  | 13,150,832 |   |  | 0.23     |  |  | 2,002,699  |  

Outstanding warrants at December 31,
2007 are as follows:

Weighted
    
    
    Weightedaverage
    
    
    average
    
    
    FairNumber of
    
    
    Number of
    
    
    exercise
    
    
    exercise
    
    
    value ofshares
    
    
    warrants
    
    
    price
    
    
    price
    
    
    warrantsUS$
    
    
    $
    
    
    $Expiry dateFebruary 27, 2008
    
    2,366,666
    
    
    1,183,333
    
    
    0.28
    
    
    0.28
    
    
    209,532March 24, 2008
    
    1,733,334
    
    
    866,667
    
    
    0.28
    
    
    0.28
    
    
    153,194May 8, 2008
    
    2,400,000
    
    
    1,200,000
    
    
    0.23
    
    
    0.23
    
    
    190,771June 15, 2008
    
    4,468,330
    
    
    2,234,165
    
    
    0.23
    
    
    0.23
    
    
    614,634June 29, 2008
    
    333,334
    
    
    166,667
    
    
    0.23
    
    
    0.23
    
    
    45,017December 11, 2008
    
    1,800,000
    
    
    900,000
    
    
    0.15
    
    
    0.15
    
    
    64,806December 18, 2008
    
    3,000,000
    
    
    1,500,000
    
    
    0.15
    
    
    0.15
    
    
    108,010March 2, 2009
    
    10,200,000
    
    
    5,100,000
    
    
    0.15
    
    
    0.15
    
    
    616,735


Subsequent to December 31, 2007, 5,650,832
  warrants expired unexercised.

| | -- Form 20-F--                                         | 
| | ------------------------------------------------------ | 
| | -- Stream Communications Network
      & Media, Inc.-- | 

---

|14. | Income taxes
|--- | ------------

| | (a) | Income tax expense is as
follows:
| | --- | ---------------------------------

| |                                  |  | 2007     |   |  | 2006    |  |  | 2005   | 
| | -------------------------------- |  | -------- | - |  | ------- |  |  | ------ | 
| |                                  |  | $        |   |  | $       |  |  | $      | 
| |                                  |  |          |   |  |         |  |  |        | 
| | Current income tax expense       |  | 90,257   |   |  | 398,398 |  |  | 15,156 | 
| | Future income tax
      recovery |  | (253,066 | ) |  | -       |  |  | -      | 
| |                                  |  | (162,809 | ) |  | 398,398 |  |  | 15,156 | 

| | (b) | The Company has tax losses in Canadian dollars available
      for offset against future taxable income for the following approximate
      amounts:
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------

| |        |  | $          | 
| | ------ |  | ---------- | 
| |        |  |            | 
| | Canada |  | 19,917,713 | 
| | Poland |  | -          | 

Tax losses expire as follows:

| |            |  | $          | 
| | ---------- |  | ---------- | 
| |            |  |            | 
| | 2008       |  | 345,500    | 
| | 2009       |  | 3,073,000  | 
| | 2010       |  | 2,208,000  | 
| | 2011       |  | -          | 
| | 2012       |  | -          | 
| | Thereafter |  | 14,291,213 | 
| |            |  | 19,917,713 | 

78

---

|14. | Income taxes (continued)
|--- | ------------------------
|    |                         
|    | (c)                     

| |                                                    |  | 2007       |   |  | 2006       |   |  | 2005       |  
| | -------------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
| |                                                    |  | $          |   |  | $          |   |  | $          |  
| |                                                    |  |            |   |  |            |   |  |            |  
| | Statutory rates in Canada                          |  | 34.12%     |   |  | 34.10%     |   |  | 34.10%     |  
| |                                                    |  |            |   |  |            |   |  |            |  
| | Recovery of income taxes at Canadian               |  |            |   |  |            |   |  |            |  
| | statutory rates                                    |  | (1,101,963 | ) |  | (1,379,275 | ) |  | (1,972,479 | )
| | Effect of tax rates in foreign
      jurisdictions |  | (71,826    | ) |  | 44,156     |   |  | 215,511    |  
| | Provision for income taxes on                      |  |            |   |  |            |   |  |            |  
| | non-deductible expenses                            |  | 593,668    |   |  | 268,610    |   |  | 313,587    |  
| | Tax benefit not recognized in the year             |  |            |   |  |            |   |  |            |  
| | the loss arose                                     |  | 433,684    |   |  | 1,488,243  |   |  | 1,458,537  |  
| | Benefit of previously unrecognized losses          |  | (20,448    | ) |  | -          |   |  | -          |  
| | Non-taxable income                                 |  | -          |   |  | (23,336    | ) |  | -          |  
| | Other                                              |  | 4,076      |   |  | -          |   |  | -          |  
| | Current and future tax expenses                    |  | (162,809   | ) |  | 398,398    |   |  | 15,156     |  
| |                                                    |  |            |   |  |            |   |  |            |  
| | Future income tax assets (liabilities)             |  |            |   |  |            |   |  |            |  
| | Tax losses                                         |  | 6,795,924  |   |  | 6,341,790  |   |  | 5,645,721  |  
| | Property, plant and equipment                      |  | -          |   |  | -          |   |  | (39,592    | )
| | Intangible assets                                  |  | -          |   |  | -          |   |  | 265,208    |  
| | Timing difference in tax treatment                 |  |            |   |  |            |   |  |            |  
| | in other jurisdictions                             |  | 286,586    |   |  | 24,836     |   |  | -          |  
| | Future income tax assets                           |  | 7,082,510  |   |  | 6,366,626  |   |  | 5,871,337  |  
| | Valuation
      allowance                          |  | (6,795,924 | ) |  | (6,341,790 | ) |  | (5,871,337 | )
| | Net future income tax assets                       |  | 286,586    |   |  | 24,836     |   |  | -          |  

|15. | Standby guarantee                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                            
|    | On June 12, 2006, the Company arranged for standby
      guarantee of $4,910,000 (US$5,000,000), which could be exercised on or
      after March 1, 2007, provided the Company has not managed to raise a
      minimum of $4,910,000 (US$5,000,000) in financing by way of debt and of
      equity before March 1, 2007.
|    |                                                                                                                                                                                                                                                                                                                            
|    | The standby guarantee has been issued by Trasco Sp. z o.
      o. and Jan S. Rynkiewicz (a director of the Company) in the amount of
      $2,946,000 (US$3,000,000) and Blueagle Investments and Miroslaw
      Tomaszewski (a related party) in the amount of $1,964,000
      (US$2,000,000).                           
|    |                                                                                                                                                                                                                                                                                                                            
|    | The Company paid a fee of $736,500 (US$750,000) to the
      guarantors of the standby guarantee. The fee was by way of 3,807,107
      shares at a price of $0.2097 (US$0.197) per share.                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                            
|    | The standby guarantee provides that the guarantor will be
      providing the Company with financing as follows:                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                            
|    | (a)                                                                                                                                                                                                                                                                                                                        

| | -- Form 20-F--                                         | 
| | ------------------------------------------------------ | 
| | -- Stream Communications Network
      & Media, Inc.-- | 

---

|15. | Standby guarantee (continued)                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                             
|    | (b)                                                                                                                                                                                                         
|    |                                                                                                                                                                                                             
|    | The standby guarantee has not yet been
  exercised.                                                                                                                                                         
|    |                                                                                                                                                                                                             
|    | There were no costs or payments associated with the
      standby guarantee during 2007.                                                                                                                    
|    |                                                                                                                                                                                                             
|16. | Restructuring expenses                                                                                                                                                                                      
|    |                                                                                                                                                                                                             
|    | In 2006, the Company went through a corporate
      restructuring following a decision to relocate all corporate functions to
      Poland and minimize the presence in Canada.                             
|    |                                                                                                                                                                                                             
|    | The Company incurred the following expenses related to
      severance payments to staff in Canada and in Poland. As at December 31,
      2006, all amounts resulting from the restructuring had been
paid.
|    |                                                                                                                                                                                                             
|    | There were no restructuring expenses incurred in
    2007.                                                                                                                                                  

| |                      |  | 2006    | 
| | -------------------- |  | ------- | 
| |                      |  | $       | 
| | Severance payment in |  |         | 
| | Cash                 |  | 133,145 | 
| | Shares               |  | 76,378  | 
| |                      |  | 209,523 | 

|17. | Basic and diluted loss per common share                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                    
|    | The calculation of the basic and diluted loss per share
      attributable to common shareholders is based on the following
  data:

| |                            |   | 2007       |   |   | 2006       |   |   | 2005       |  
| | -------------------------- | - | ---------- | - | - | ---------- | - | - | ---------- | -
| | Net loss (A)               | $ | (3,107,320 | ) | $ | (4,485,893 | ) | $ | (5,811,359 | )
| | Weighted average number of |   |            |   |   |            |   |   |            |  
| | common shares (B)          |   | 79,808,820 |   |   | 59,629,483 |   |   | 42,953,922 |  
| | Basic and diluted loss per |   |            |   |   |            |   |   |            |  
| | common share (A/B)         | $ | (0.04      | ) | $ | (0.08      | ) | $ | (0.14      | )

In a period where there is a net loss,
the diluted weighted average number of common shares is equivalent to the basic
weighted average number of common shares, as the effect of the conversion of
options and warrants would be anti-dilutive to the loss per common share.

80

---

|18. | Segmented information                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                             
|    | The Company operates primarily in one segment, being
      cable TV services and in two geographic locations, being Canada and
      Poland.
|    |                                                                                                                                             
|    | Geographic information (revenues are attributed to
      countries based on location of customer)                                           

| |                                     |  | 2007       |  |  | 2006       |  |  | 2005       | 
| | ----------------------------------- |  | ---------- |  |  | ---------- |  |  | ---------- | 
| |                                     |  | $          |  |  | $          |  |  | $          | 
| | Revenue                             |  |            |  |  |            |  |  |            | 
| | Canada                              |  | -          |  |  | -          |  |  | -          | 
| | Poland                              |  | 7,376,978  |  |  | 6,472,905  |  |  | 5,826,112  | 
| |                                     |  | 7,376,978  |  |  | 6,472,905  |  |  | 5,826,112  | 
| |                                     |  |            |  |  |            |  |  |            | 
| | Interest expense                    |  |            |  |  |            |  |  |            | 
| | Canada                              |  | 206,582    |  |  | 215,708    |  |  | 423,710    | 
| | Poland                              |  | 284,010    |  |  | 82,144     |  |  | 85,525     | 
| |                                     |  | 490,592    |  |  | 297,852    |  |  | 509,235    | 
| |                                     |  |            |  |  |            |  |  |            | 
| | Amortization of property, plant and |  |            |  |  |            |  |  |            | 
| | equipment and intangibles           |  |            |  |  |            |  |  |            | 
| | Canada                              |  | 646        |  |  | 1,498      |  |  | 3,991      | 
| | Poland                              |  | 2,158,587  |  |  | 2,387,218  |  |  | 2,646,148  | 
| |                                     |  | 2,159,233  |  |  | 2,388,716  |  |  | 2,650,139  | 
| |                                     |  |            |  |  |            |  |  |            | 
| | Total expenditures for property,    |  |            |  |  |            |  |  |            | 
| | plant and equipment                 |  |            |  |  |            |  |  |            | 
| | Canada                              |  | -          |  |  | -          |  |  | 5,783      | 
| | Poland                              |  | 2,295,392  |  |  | 2,303,610  |  |  | 1,208,417  | 
| |                                     |  | 2,295,392  |  |  | 2,303,610  |  |  | 1,214,200  | 
| |                                     |  |            |  |  |            |  |  |            | 
| | Total expenditures for intangibles  |  |            |  |  |            |  |  |            | 
| | Canada                              |  | -          |  |  | -          |  |  | 1,523,174  | 
| | Poland                              |  | 223,208    |  |  | 18,786     |  |  | 304,381    | 
| |                                     |  | 223,208    |  |  | 18,786     |  |  | 1,827,555  | 
| |                                     |  |            |  |  |            |  |  |            | 
| | Property, plant, equipment and      |  |            |  |  |            |  |  |            | 
| | intangibles                         |  |            |  |  |            |  |  |            | 
| | Canada                              |  | -          |  |  | 2,259      |  |  | 9,606      | 
| | Poland                              |  | 13,274,244 |  |  | 13,099,559 |  |  | 12,263,290 | 
| |                                     |  | 13,274,244 |  |  | 13,101,818 |  |  | 12,272,896 | 

| | -- Form 20-F--                                         | 
| | ------------------------------------------------------ | 
| | -- Stream Communications Network
      & Media, Inc.-- | 

---

|19. | Financial instruments        
|--- | -----------------------------
|    |                              
|    | (a)                          
|    |                              
|    |                              
|    |                              
|    | (b)                          
|    |                              
|    |                              
|    |                              
|    | (c)                          
|    |                              
|    |                              
|    |                              
|20. | Commitments and contingencies
|    |                              
|    | (a)                          
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    | (b)                          
|    |                              
|    |                              
|    |                              
|    |                              

82

---

|21. | Related party transactions                                           
|--- | ---------------------------------------------------------------------
|    |                                                                      
|    | The Company undertook the following related party
      transactions:
|    |                                                                      
|    | (a)                                                                  
|    |                                                                      
|    |                                                                      
|    |                                                                      
|    | (b)                                                                  
|    |                                                                      
|    |                                                                      
|    |                                                                      
|    | (c)                                                                  
|    |                                                                      
|    |                                                                      
|    |                                                                      
|    |                                                                      
|    |                                                                      
|    | (d)                                                                  
|    |                                                                      
|    |                                                                      
|    |                                                                      
|    |                                                                      

| | • | Trasco Sp. z o. o. and Mr.
      Rynkiewicz: $441,900 (US$450,000)                                                                  
| | - | ------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                     
| | • | Blueagle Investments and Mr. Tomaszewski, a related party
      to Ms. Kozak who is a director of the Company: $294,600 (US$300,000)

| | (e) | Advisory services                                                                                                                                                               
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                 
| |     | Mr. Tomaszewski received a fee of $117,840 (US$120,000)
      in 2007 as advisor to the board. Mr. Tomaszewski is a related party to Ms.
      Kozak, a director of the Company.

---

|21. | Related party transactions (continued)                                                                                                                                                       
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                              
|    | (f)                                                                                                                                                                                          
|    |                                                                                                                                                                                              
|    |                                                                                                                                                                                              
|    |                                                                                                                                                                                              
|    | (g)                                                                                                                                                                                          
|    |                                                                                                                                                                                              
|    |                                                                                                                                                                                              
|    |                                                                                                                                                                                              
|    |                                                                                                                                                                                              
|    |                                                                                                                                                                                              
|    |                                                                                                                                                                                              
|    |                                                                                                                                                                                              
|    |                                                                                                                                                                                              
|    |                                                                                                                                                                                              
|    | (h)                                                                                                                                                                                          
|    |                                                                                                                                                                                              
|    |                                                                                                                                                                                              
|    |                                                                                                                                                                                              
|    | These related party transactions were recorded at the
      exchange amount, which is the amount of consideration paid or received as
      established and agreed to by the related parties.
|    |                                                                                                                                                                                              
|22. | Subsequent events                                                                                                                                                                            
|    |                                                                                                                                                                                              
|    | (a)                                                                                                                                                                                          
|    |                                                                                                                                                                                              
|    |                                                                                                                                                                                              
|    |                                                                                                                                                                                              
|    |                                                                                                                                                                                              

84

---

|22. | Subsequent events (continued)
|--- | -----------------------------
|    |                              
|    | (a)                          
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    | (b)                          
|    |                              
|    | (c)                          
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    | (d)                          
|    |                              
|    |                              
|    |                              
|    |                              
|    |                              
|    | (e)                          
|    |                              
|    |                              

| | -- Form 20-F--                                         | 
| | ------------------------------------------------------ | 
| | -- Stream Communications Network
      & Media, Inc.-- | 

---

|23. | Differences between Canadian and United States
      generally accepted accounting principles                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The Companys consolidated financial statements have been
      prepared in accordance with Canadian generally accepted accounting
      principles (Canadian GAAP), which differ from those principles that the
      Company would have followed had its consolidated financial statements been
      prepared in accordance with generally accepted accounting principles in
      the United States (US GAAP).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Material variations between financial statement items
      under Canadian GAAP and the amounts determined under US GAAP are presented
      in the following reconciliation.                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Consolidated statement of operations and comprehensive
      income For the year ending December 31,                                                                                                                                                                                                                                                                                                                  

| |                                        |  | 2007       |   |  | 2006       |   |  | 2005       |  
| | -------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
| |                                        |  | $          |   |  | $          |   |  | $          |  
| |                                        |  |            |   |  |            |   |  |            |  
| | Net loss under Canadian GAAP           |  | (3,107,320 | ) |  | (4,485,893 | ) |  | (5,811,359 | )
| | Stock-based compensation (Note 23 (a)) |  | -          |   |  | -          |   |  | 833,483    |  
| | Foreign exchange loss (Note 23 (b))    |  | -          |   |  | 41,332     |   |  | -          |  
| | Net loss under US
      GAAP           |  | (3,107,320 | ) |  | (4,444,561 | ) |  | (4,977,876 | )
| |                                        |  |            |   |  |            |   |  |            |  
| | Basic and diluted
      loss per share |  | (0.04      | ) |  | (0.05      | ) |  | (0.12      | )

Consolidated statement of cash flows

For the year ending December 31,
2007, 2006 and 2005

There are no differences in each of the
total operating, investing and financing activities as reported in the
consolidated statement of cash flows between Canadian and US GAAP.

Notes to the reconciliation between
Canadian and US GAAP as at and for the year ended December 31, 2007 and 2006

| | (a) | Stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | Prior to 2006, under Canadian GAAP, the Company applied
      the fair value method of accounting for all stock option awards,
      recognizing compensation expense that was recorded as a charge against
      earnings. Under US GAAP, the Company accounted for those awards under the
      recognition and measurement provisions of APB No. 25,                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | Accounting for Stock Issued to Employees(APB
      25), and its related interpretations. During 2005, the Company granted
      options to consultants, of which stock-based compensation expense was
      recorded pursuant to APB 25.                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | Effective January 1, 2006, the Company adopted SFAS No.
      123 (Revised 2004), Share-Based Payment(SFAS No. 123(R)), using
      the modified-prospective application transition method. Results for prior
      periods have not been restated. Because the fair value recognition
      provisions of SFAS No. 123, Stock-Based Compensation, and SFAS No.
      123(R) were materially consistent under our equity plans, the adoption of
      SFAS No. 123(R) did not have a significant impact on our financial
      position or our results of operations.

86

---

|23. | Differences between Canadian and United States
      generally accepted accounting principles (continued)
|--- | ---------------------------------------------------------------------------------------------------------
|    |                                                                                                          
|    | (b)                                                                                                      
|    |                                                                                                          
|    |                                                                                                          
|    |                                                                                                          
|    | (c)                                                                                                      
|    |                                                                                                          
|    |                                                                                                          
|    |                                                                                                          
|    | (d)                                                                                                      
|    |                                                                                                          
|    |                                                                                                          
|    |                                                                                                          
|    |                                                                                                          

| | -- Form 20-F--                                         | 
| | ------------------------------------------------------ | 
| | -- Stream Communications Network
      & Media, Inc.-- | 

---

|23. | Differences between Canadian and United States
      generally accepted accounting principles (continued)
|--- | ---------------------------------------------------------------------------------------------------------
|    |                                                                                                          
|    | (d)                                                                                                      
|    |                                                                                                          
|    |                                                                                                          
|    |                                                                                                          
|    |                                                                                                          
|    |                                                                                                          
|    |                                                                                                          
|    |                                                                                                          
|    |                                                                                                          
|    |                                                                                                          
|    |                                                                                                          

88

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EXHIBITS

|12.1 | Certification pursuant to
        Section 404 of the Sarbanes-Oxley Act by CEO
|---- | ------------------------------------------------------------------------------
|     |                                                                               
|12.2 | Certification pursuant to
        Section 404 of the Sarbanes-Oxley Act by CFO
|     |                                                                               
|13.1 | Certification pursuant to
        Section 906 of the Sarbanes-Oxley Act by CEO
|     |                                                                               
|13.2 | Certification pursuant to
        Section 906 of the Sarbanes-Oxley Act by CFO









| | -- Form 20-F--                                         | 
| | ------------------------------------------------------ | 
| | -- Stream Communications Network
      & Media, Inc.-- | 

---

SIGNATURE PAGE



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



Dated: August 21, 2008

ON BEHALF OF THE COMPANY,STREAM COMMUNICATIONS NETWORK & MEDIA INC.

Per:

/s/ Jan S.
Rynkiewicz      Jan
S. Rynkiewicz       Chief Executive
Officer and President

90

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