FORM 20-F/A



United States Securities and Exchange Commission





[



OR



[x ]







OR



[







OR



[



Date of event requiring this shell company report _________





Commission file number:





STREAM COMMUNICATIONS NETWORK & MEDIA INC.



Not Applicable



British Columbia, Canada



Goraszewska 6 Street





(Address of principal executive offices)



---



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







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







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









Indicate the number of outstanding shares of each of the issuer







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:



Indicate by checkmark which financial statement item the registrant has elected to follow:



Item 17



Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes:



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:



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of

Large Accelerated Filer    Accelerated Filer   Non-Accelerated Filer ü



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:



II



---

FORM 20-F/A



INDEX



|EXPLANATORY NOTE                                             | 4 
|------------------------------------------------------------ | --
|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.
|                                                             |   
|                                                             |   
|                                                             | B.
|                                                             | C.
|                                                             |   
|                                                             |   
|                                                             |   
|                                                             |   
|                                                             |   
|                                                             |   
|                                                             |   
|                                                             |   
|                                                             |   
|                                                             |   
|                                                             |   
|                                                             |   
|                                                             |   
|                                                             |   
|                                                             |   



---







|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



---







|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 StatesInvestors
|                                                                                     | 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                                                                                   
|1.                                                                                   | CONTINUING OPERATIONS                                                                
|EXHIBITS                                                                             | 89                                                                                   
|                                                                                     | 12.1                                                                                 
|                                                                                     | 12.2                                                                                 
|                                                                                     | 13.1                                                                                 
|                                                                                     | 13.2                                                                                 
|SIGNATURE PAGE                                                                       | 90                                                                                   





iii



---

EXPLANATORY NOTE



This Amended Form 20-F for the fiscal year ended December 31, 2007, is being filed at the request of the Securities Exchange Commission solely for the purpose of amending Item 15T on page 53 so as to confirm our management



Except for the certifications, this Amended Form 20-F speaks as of the original filing date of the Form 20-F. Other than the amendment to Item 15T described above, this Amended Form 20-F does not, and does not purport to, amend, update or restate the information in the original Form 20-F as filed.



CONVERSION TABLE



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





|1 mile = 1.6093 kilometres | 1 metric ton (tonne) = 2,205 pounds    
|-------------------------- | ---------------------------------------
|1 foot = 0.305 metres      | 1 troy ounce = 31.103 grams            
|1 acre = 0.4047 hectare    | 1 imperial gallon = 4.546 litres       
|1 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).

4



---





|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 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

5



---





|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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|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.                                                                                                                                                                                                                                                                                                                                                                                                                                                







---



FORWARD-LOOKING STATEMENTS

Stream Communications Network & Media Inc. (



PART 1





Not applicable





Not applicable









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 (



|                                    | Year endedDecember 31 | Year endedDecember 31 | Year endedDecember 31, | Year endedDecember 31 | Year endedDecember 31,
|----------------------------------- | --------------------- | --------------------- | ---------------------- | --------------------- | ----------------------
|                                    | 2007                  | 2006                  | 2005                   | 2004                  | 2003                  
|                                    | $CDN                  | $CDN                  | $CDN                   | $CDN                  | $CDN                  
|Revenues                            | 7,376,978             | 6,472,905             | 5,826,112              | 4,415,461             | 3,700,160             
|Net loss from continuing operations |                       |                       |                        |                       |                       
|Canadian 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    |                       |                       |                        |                       |                       

7



---





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



(1)





In this report, unless otherwise specified, all dollar amounts are expressed in Canadian dollars (



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 endedDecember 31,2007 | Year endedDecember 31,2006 | Year endedDecember 31,2005 | Year endedDecember 31,2004 | Year endedDecember 31,2003
|------------- | -------------------------- | -------------------------- | -------------------------- | -------------------------- | --------------------------
|High          | 1.1038                     | .9134                      | .8748                      | .8532                      | .7747                     
|Low           | 0.8420                     | .8479                      | .7851                      | .7138                      | .6327                     
|Average       | 0.9356                     | .8806                      | .8262                      | .7701                      | .7163                     
|End 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 endedDecember 31,2007 | Year endedDecember 31,2006 | Year endedDecember 31,2005 | Year endedDecember 31,2004 | Year endedDecember 31,2003
|------------- | -------------------------- | -------------------------- | -------------------------- | -------------------------- | --------------------------
|High          | .4130                      | .3506                      | .3442                      | .3366                      | .2825                     
|Low           | .3246                      | .3042                      | .2877                      | .2453                      | .2428                     
|Average       | .3633                      | .3230                      | .3099                      | .2757                      | .2577                     
|End of Period | .4090                      | .3442                      | .3070                      | .3339                      | .2665                     





N/A





All operations of Stream Communications Network & Media Inc. are done through Stream Poland Sp. z o. o. (

- The political environment has historically been stable despite Poland being an emerging market. Any risk associated with the country







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.

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





---

We may encounter difficulties in future acquisitions of new cable television and Internet 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 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.



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 substantial breaches of the agreement, misuse of conduits or a change in control) or upon three to six months





---

Failure to replace key management and operating personnel could negatively affect our 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.



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

Our program channels have to be registered at the National Council for Radio and Television (the

The president of the Office of Competition and Consumer Protection (

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



Before May 1, 2004 (i.e. the date of Poland

11



---

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

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 re-broadcasting of the authors

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.



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.



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.



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.



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.



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.



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.





As we disclose in Part II, Item 15,







---

Item 4 - Information on the Company



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

On May 4, 1995 we changed our name to

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

Our registered office is Suite 1500

We have the following operating subsidiary companies:

1. Stream Communications 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 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.

14



---

1. IEWS S.A. (formerly International Eco-Waste Systems

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



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 provides cable television services and high-speed Internet access in the Polish districts of Slaskie, Malopolskie, Swietokrzyskie and Podkarpackie through its hybrid fibre coax (

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. (

Bielsat.com Sp. z o.o. (

Telewizja Kablowa Gimsat Sp. z o.o. (

ASK Stream Sp. z o.o.  (

Vega Sp. z o.o. (



Stream Communications Network & Media Inc. and Stream Poland are collectively referred to as

Stream conducts its business in Southern Poland

____________________________1Polish Chamber of Electronic Communication

15



---

Most of Stream

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 operation                
|-------------------- | ------------------------------------------------------------------------- | -----------------------------------
|September 2007       | ASK II                                                                    | Sosnowiec                          
|April 2005           | Vega II                                                                   | Czestochowa                        
|April 2005           | Internet in Bytom                                                         | Bytom                              
|Oct 2004             | 98% of Vega                                                               | Czestochowa                        
|Sept 2004            | Miechowice                                                                | Bytom                              
|May 2004             | 60% of ASK                                                                | Sosnowiec                          
|March 2004           | Channel 69                                                                | Sosnowiec                          
|June 2001            | 100% of Gimsat                                                            | Jaslo, Sanok, Brzozow              
|July 2001            | MTK                                                                       | Czestochowa                        
|July 2001            | A portion of the assets of AZART S.C.:                                    |                                    
|AZART SC Telekom     | Kielce                                                                   
|AZART TK Trybinowski | Busko, Zdroj                                                             
|September 2000       | A portion of the assets of Elektromontaz Rzeszow S.A. El-Rzeszow"Telekab" | Rzeszow, Bochnia, Sankomierz       
|August 2000          | A portion of the assets of Bister Sp.     Z o.o.                          | Jaworzno, Czechowice-Dziedzice     
|July 2000            | A portion of the assets of Telemedia Sp. Z o.o.                           | Czestochowa                        
|July 2000            | A portion of the assets of Marsat S.C.                                    | Czestochowa                        
|June 2000            | 51% of the shares of Bielsat                                              | Beilsko-Biala, Czechowice-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.



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





---

Gimsat

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



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.



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 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

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.





---

Stream

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

Stream

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









|Channel No. | Name         | Characteristics     | Language
|----------- | ------------ | ------------------- | --------
|1           | TVP 1        | Public television   | Polish  
|2           | TVP 2        | Public television   | Polish  
|3           | TVP POLONIA  | Public television   | Polish  
|4           | TVP 3        | Public television   | Polish  
|5           | POLSAT       | Private terrestrial | Polish  
|6           | TVN          | Private terrestrial | Polish  
|7           | TVN 7        | Entertainment       | Polish  
|8           | POLSAT 2     | Entertainment       | Polish  
|9           | TV 4         | Private terrestrial | Polish  
|10          | TV Puls      | General             | Polish  
|11          | Polonia 1    | Entertainment       | Polish  
|12          | Tele 5       | Entertainment       | Polish  
|13          | TV Trwam     | Catholic            | Polish  
|14          | BBC World    | Information         | English 
|15          | BBC Prime    | Entertainment       | English 
|16          | POLSAT Sport | Sport               | Polish  
|17          | TVN Meteo    | Weather             | Polish  
|18          | TVN Turbo    | Cars                | Polish  
|19          | TVN 24       | Information         | Polish  
|20          | Explorer     | Science             | Polish  
|21          | History      | Science             | Polish  
|22          | MINI MINI    | Children            | Polish  
|23          | Kino Polska  | Movies              | Polish  

18



---







|Channel No. | Name                | Characteristics     | Language
|----------- | ------------------- | ------------------- | --------
|24          | TVN Style           | Entertainment       | Polish  
|25          | Ale Kino!           | Movies              | Polish  
|26          | Zig Zap             | Children            | Polish  
|27          | National Geographic | Science             | Polish  
|28          | Planete             | Documentary         | Polish  
|29          | VIVA  PL            | Music               | Polish  
|30          | VIVA                | Music               | German  
|31          | VIVA+               | Music               | German  
|32          | RTL                 | Entertainment       | German  
|33          | RTL 2               | Entertainment       | German  
|34          | SAT 1               | Entertainment       | German  
|35          | VOX                 | Entertainment       | German  
|36          | Club                | Entertainment       | Polish  
|37          | Jetix               | Children            | Polish  
|38          | Discovery           | Science/Documentary | Polish  
|39          | Animal Planet       | Science             | Polish  
|40          | Superstacja         | Entertainment       | Polish  
|41          | Eurosport           | Sport               | Polish  
|42          | Canal+              | Entertainment       | English 
|43          | Canal+ sport        | Entertainment       | English 
|44          | Canal+ film         | Entertainment       | English 



For most subscribers, Channels 1-6 are available in Stream

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.



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.



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.





---

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

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



Poland has approximately 38.12

In more recent years, due in part to Poland

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

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

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.

____________________________2Central Statistical Office: Population Size and Structure by Territorial Division (December 31, 2006)







---

Third, middle-income families living in multiple dwelling units, or MDU

Fourth, in Poland the right to build cable television networks reaching MDU



One of the most important aspects of Stream Poland

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

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

So far, the operators that Stream Poland has acquired have been small, and it is inherent in small cable network systems that subscribers

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 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.

21



---

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

At present, 81% of Stream Poland

As part of Stream Poland

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 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

Stream Poland

22



---

Locations of Stream Poland



Stream Poland

Competition among cable television operators is not as strong in Stream Poland



In general, the cable television market in Poland is not overbuilt. At present, Stream Poland

- 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



23



---





- MultimediaPolska9, 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

- 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 (





Radio 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.

____________________________9 Source: Multimedia's own information released on their web-site10 Source: Polsat Cyfrowy's own information released on their web-site



24



---

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 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

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

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 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.

25



---

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.





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



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 (

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.

26



---

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, 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 (





---

Stream Poland

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

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 currently rents 8,000 square feet in an office building, close to the centre of Krakow and is considered adequate for the company

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.



Stream Poland utilizes about 8,000 square feet of office space in Krakow, Poland. Stream Poland





---

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

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.



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

Streamline was

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





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







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



29



---

OPERATING RESULT FOR PERIOD ENDED DECEMBER 31

|                           | 2007        | 2006        | 2005        | 2007/2006 | 2006/2005
|-------------------------- | ----------- | ----------- | ----------- | --------- | ---------
|Revenue                    | 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   | 2,650,139   |           |          
|Restructuring Expenses     | -           | 209,523     | -           |           |          
|Loss on Disposal of Assets | 3,053       | 16,013      | -           |           |          
|Adjusted EBITDA            | (1,255,799) | (502,984)   | (2,547,755) | 150%      | (80)%    









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



Operating Expenses



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



Amortization



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:



30



---

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



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



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.



31



---

The most significant cost decrease was



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



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.





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



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







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.



32



---

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 market in Poland maturing. However, with a transparent service offering, internet and telephony are still new markets with room to grow.  Competition from Telco



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 at December 31, 2007 are as follows:



|                          | Total      | Less than 1 year | 1-3 years | 3-5 years | More than 5 years
|------------------------- | ---------- | ---------------- | --------- | --------- | -----------------
|Long-term debt            | $447,494   | nil              | 447,494   | Nil       | nil              
|Short-term debt           | $6,486,990 | 6,486,990        | Nil       | nil       | nil              
|Capital lease obligations | $198,303   | 77,209           | 121,094   | nil       | nil              
|TOTAL                     | $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 has not entered into any off-balance sheet arrangements.







The company is maintaining its accounting records in accordance with general accepted accounting principles (



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:

33



---



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







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.







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 (



34



---

In July 2006, the FASB issued FASB Interpretation No. 48 (



There were no other changes in accounting policies in 2007.









(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.



35



---

(f)   Finders Fee

Top Consulting received a finder



(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.







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.









Our board of directors is elected by our shareholders as indicated in our Articles. Directors receive directors









Stream Communications Network & Media, Inc.





|Robert WusslerJan S. RynkiewiczIwona KozakRobert DziublowskiGeorge H. Bathurst | Chairman of the Board, DirectorPresident, DirectorDirectorNon-Executive DirectorNon-Executive Director
|------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------



36



---

Robert Wussler was 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 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 Rynkiewicz became 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





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



George H. Bathurst



Robert Dziublowski









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



"



"

37



---



"



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





|Summary Compensation Table
|--------------------------
|Name                      
|Jan Rynkiewicz            
|Iwona Kozak               



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



---

Directors



Independent directors are paid an annual fee of USD $15,000 as a base director



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



39



---

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







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



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, 2005
|------ | ---------------------------- | ---------------------------- | ----------------------------
|Canada | 2                            | 3                            | 3                           
|Poland | 81                           | 81                           | 81                          









---

ITEM 7







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 owned
|-------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------------------------
|CDS & CoNCI Account25 The EsplanadeToronto, Ontario, M5W 1G5, Canada(Canadian depository for brokerage houses) | 22,521,586Common shares    | 27.88%                        
|Jan Rynkiewicz23 Ross CloseLincoln, UK, LN2 4WQ                                                                | 14,135,307Common shares    | 17.32%                        













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.











Our common shares were listed on the OTC BB Exchange in the United States, under the symbol







41



---









42



---



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  | Low  
|------- | --------- | ----- | -----
|2008-07 | 153,200   | 0.090 | 0.060
|2008-06 | 206,200   | 0.150 | 0.085
|2008-05 | 447,400   | 0.200 | 0.145
|2008-04 | 468,600   | 0.200 | 0.085
|2008-03 | 180,100   | 0.160 | 0.120
|2008-02 | 167,100   | 0.240 | 0.150
|2008-01 | 486,300   | 0.280 | 0.150
|2007-12 | 540,300   | 0.275 | 0.170
|2007-11 | 536,800   | 0.320 | 0.180
|2007-10 | 3,274,000 | 0.265 | 0.140
|2007-09 | 596,100   | 0.160 | 0.120
|2007-08 | 398,800   | 0.180 | 0.050
|2007-07 | 591,900   | 0.215 | 0.130
|2007-06 | 1,034,400 | 0.210 | 0.110
|2007-05 | 1,398,600 | 0.200 | 0.110
|2007-04 | 3,031,800 | 0.255 | 0.160
|2007-03 | 2,165,600 | 0.330 | 0.200
|2007-02 | 3,567,000 | 0.300 | 0.145
|2007-01 | 1,682,900 | 0.169 | 0.100
|2006-12 | 854,279   | 0.150 | 0.120
|2006-11 | 1,078,330 | 0.160 | 0.100
|2006-10 | 1,783,806 | 0.270 | 0.140
|2006-09 | 896,669   | 0.240 | 0.130
|2006-08 | 657,920   | 0.290 | 0.225
|2006-07 | 585,494   | 0.349 | 0.225
|2006-06 | 2,558,232 | 0.330 | 0.170
|2006-05 | 752,100   | 0.190 | 0.170
|2006-04 | 1,010,600 | 0.260 | 0.190
|2006-03 | 1,424,500 | 0.250 | 0.160
|2006-02 | 2,203,500 | 0.200 | 0.160
|2006-01 | 1,709,600 | 0.210 | 0.170
|2005-12 | 2,059,600 | 0.160 | 0.140













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 Shares
|-------------------------------------------------------------------------------- | ----------------------------------
|Outstanding Shares per December 31, 2006Outstanding Shares per December 31, 2007 | 71,396,491Shares81,596,491Shares  



43



---

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 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







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 (



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 (



Voting Rights



1. 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



1. 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.
2. 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









Directors











44



---



















Borrowing Powers









Dividends and Distributions on Liquidation to Shareholders

















General Meetings

















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

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.

45



---

An investment in common shares of a company by a non-Canadian that is a

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

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.



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



---

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

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

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.



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.

47



---

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.









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

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

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 Ratefor 2007 | December 31, 2006 | Average Ratefor 2006
|------- | ------------------ | -------------------- | ----------------- | --------------------
|PLN/USD | 2.4480             | 2.7688               | 2.9125            | 3.1077              
|PLN/EUR | 3.6262             | 3.7925               | 3.8565            | 3.9055              
|PLN/CND | 2.4954             | 2.5807               | 2.4992            | 2.7409              
|CND/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 ofthe year | Average rate forthe year
|---- | -------------------------- | ------------------------
|2007 | 2.4954                     | 2.5807                  
|2006 | 2.4992                     | 2.7409                  
|2005 | 2.8033                     | 2.6757                  
|2004 | 2.4898                     | 2.8049                  









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                                | 2,439,684                 
|Granted                    | 1,183,333          | 0.32                                | 209,532                   
|Granted                    | 866,667            | 0.33                                | 153,194                   
|Granted                    | 1,200,000          | 0.25                                | 190,771                   
|Granted                    | 2,234,165          | 0.25                                | 614,634                   
|Granted                    | 166,667            | 0.25                                | 45,017                    
|Granted                    | 2,400,000          | 0.26                                | 172,816                   
|Balance, December 31, 2006 | 9,749,142          | 0.35                                | 3,825,648                 
|Granted                    | 5,100,000          | 0.13                                | 616,735                   
|Expired                    | (1,698,310)        | (0.72)                              | (2,439,684)               
|Balance, December 31, 2007 | 13,150,832         | 0.23                                | 2,002,699                 





PART II







Not applicable









Not applicable









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



Management

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 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.

50



---

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").  Based on this evaluation, our management has concluded that our internal control over financial reporting was not effective during the fiscal period ending December 31, 2007.

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 financial statements due to the significance of the financial closing and reporting process to the preparation of reliable financial statements and the potential pervasiveness of the deficiencies to the significant account balances and disclosures.



51



---

- Inadequate controls related to the expenditure cycle:
- 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.

52



---

- Inadequate general computer controls:

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



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.







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.







---







Our Principal Executive Officer, Chief Financial Officer, and other senior executives and principal accounting officers are bound to adhere to the company

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







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                | Fees       
|----------------------------------------------------------------- | ----------------------- | -----------
|Deloitte & Touche LLPIndependent Registered Chartered Accountants | Audit feesDisbursements | $234,840$ -



Year ended December 31, 2006



|Firm                                                              | Services                | Fees          
|----------------------------------------------------------------- | ----------------------- | --------------
|Deloitte & Touche LLPIndependent Registered Chartered Accountants | Audit feesDisbursements | $201,408$9,100



Year ended December 31, 2004



|Firm                              | Services                | Fees         
|--------------------------------- | ----------------------- | -------------
|MacKay LLP, Chartered Accountants | Audit feesDisbursements | $65,000$5,031



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





PART III









See Consolidated Financial Statements attached hereto.







Not applicable.







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



















55



---

Report of Independent Registered Chartered Accountants





To the Shareholders and Board of Directors of 
Stream 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 LLPIndependent Registered Chartered Accountants
Vancouver, Canada
August 11, 2008

56



---

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 LLPIndependent Registered Chartered Accountants
Vancouver, Canada
August 11, 2008



57



---









|CHARTEREDACCOUNTANTSMacKay LLP | 1100-1177 West Hastings StreetVancouver, BC   V6E 4T5Tel:  604-687-4511Fax: 604-687-5805Toll Free: 1-800-351-0426www.MacKayLLP.ca | 
|------------------------------ | --------------------------------------------------------------------------------------------------------------------------------- | 



|Report of Independent Registered Chartered AccountantsTo the Shareholders of
Stream 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.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Vancouver,  Canada.
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 DifferencesIn 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Vancouver, Canada
March 27, 2006, except for notes
15 and 16 dated June 5, 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      





58



---



59



---



60



---



61



---



62



---

1.          Continuing operations



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



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.



These consolidated financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles (



(a)



These consolidated financial statements include the accounts of the Company and the following subsidiaries. All significant intercompany transactions and balances have been eliminated.



|                                                  | Country of    | Percentage ownership
|------------------------------------------------- | ------------- | --------------------
|                                                  | incorporation | 2007                
|                                                  |               |                     
|Stream Communication Sp. z o. o.("Stream Poland") | Poland        | 100%                
|Gimsat Sp. Z o. o. ("Gimsat")                     | Poland        | 100%                
|Vega Sp. z o. o. ("Vega")                         | Poland        | 100%                
|Bielsat.com Sp. z o. o. ("Bielsat")               | Poland        | 51%                 
|Ask Stream Sp. z o. o. ("Ask")                    | Poland        | 100%                
|Streamline Media Sp. z o. o. ("Streamline")       | Poland        | 100%                
|IEWS SA ("IEWS")                                  | Poland        | 100%                



63



---



2.



(b)



The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions which affect the reported amounts of accounts receivable recoverability, useful lives of property, plant and equipment, intangibles and related depreciation, fair value of stock-based compensation and warrants, accounts payable and accrued liabilities, income taxes, fair value of net assets acquired in business combinations and the disclosure of contingent assets and liabilities at the date of the financial statements and expenses for the periods reported.  Actual results could differ from those estimates.



(c)



Cash and cash equivalents include cash and liquid investments with an original maturity of three months or less.



(d)



Property, plant and equipment are recorded at cost less accumulated amortization. Amortization is provided for using the declining-balance method at the following rates per annum:





|Automobiles                                    | 20 - 30% per annum 
|---------------------------------------------- | -------------------
|Computer software                              | 20 - 100% per annum
|Cable television network equipment and conduit | 4.5 - 45% per annum
|Furniture, 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)



The Company



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.



(e)



The intangible assets impairment test had no impact on the Company



(f)



Transaction costs directly attributable to the acquisition or issue of a financial asset or financial liability are expensed directly into income and are included in financing (expense) income on the consolidated statement of operations and deficit.



(g)



(i)



Comprehensive income comprises the Company



(ii)



All derivative instruments are recorded on the balance sheet at fair value.  At December 31, 2007, the Company does not have any derivative instruments designated as hedging instruments.



(iii)



Derivatives may be embedded in other financial instruments (host instruments).  Embedded derivatives are treated as separate derivatives when their economic characteristics and risks are not closely related to those of the host instrument, the terms of the embedded derivative are the same as those of a stand-alone derivative, and the combined contract is not classified as held-for-trading.  These embedded derivatives are measured at fair value on the balance sheet with subsequent changes in fair value recognized in income.  The Company has not identified any material embedded derivatives that are required to be accounted for separately from the host contract.



(h)



The Company



65



---



2.



(h)



Transactions that are denominated in foreign currency are initially recorded at the rate of exchange prevailing at the date of the transaction.  Thereafter, monetary assets and liabilities are adjusted to reflect the exchange rate in effect at the balance sheet dates.  Gains and losses resulting from the adjustment are included in operations.



For the year ended December 31, 2007, the Company recorded an unrealized translation gain of $1,419,667 (2006 - $1,438,087; 2005 - loss of $1,103,560) resulting from the strengthening of the Polish Zloty relative to the Canadian dollar.



(i)



Substantially all revenues are derived from cable TV and internet subscriber fees.  Subscriber fees are recorded as revenue in the period the service is provided. Funds received in advance are deferred.  At present initial hook-up fees are nominal and are recorded as revenue when charged.



(j)



The Company applies the fair value method of accounting for all stock option awards.  Under this method, the Company recognizes compensation expense for stock options awarded using the Black-Scholes model based on the fair value of the options at the later of the date of grant or the date of shareholder approval of any new share option plan from which options were granted.  The fair value of the options is expensed over the expected life of the options.



(k)



The Company follows the asset and liability method of accounting for income taxes whereby future income taxes are recognized for the future income tax consequences attributable to differences between the financial statement carrying values and their respective income tax bases (temporary differences) and loss carryforwards.  Future income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. To the extent that the Company does not consider it more likely than not that a future tax asset will be recovered, it provides a valuation allowance against the excess. Future income tax assets and liabilities are adjusted for changes in tax laws and rates on the date of the enactment or substantive enactment.



(l)



Basic loss per common share is calculated using the weighted average number of common shares outstanding during the period.  Diluted earnings per common share are presented using the treasury stock method and are calculated by dividing net earnings applicable to common shares by the sum of the weighted average number of common shares outstanding and all additional common shares that would have been outstanding if potentially dilutive common shares had been issued.  For all periods presented, the effect of the assumed conversion of stock options and warrants was anti-dilutive.



66



---



2.



(m)



In December 2006, the CICA issued Handbook Section 1535, Capital Disclosures.  The new standard requires disclosure of qualitative and quantitative information that enables users of financial statements to evaluate the Company



In December 2006, the CICA issued Handbook Sections 3862, Financial Instruments



In March 2007, the CICA issued Handbook Section 3031, Inventories, which has replaced Section 3030 with the same title.  The new Section establishes that inventories should be measured at the lower of cost and net realizable value, with guidance on the determination of cost.  These recommendations are effective for the Company



In June 2007, the CICA issued changes to Section 1400, General Standards of Financial Statement Presentation.  Section 1400 has been amended to include requirements to assess and disclose an entity



In February 2008, the CICA released Section 3064 Goodwill and Intangible Assets which supersedes Section 3062 Goodwill and Other Intangible Assets and Section 3450 Research and Development.  This new section establishes standards for the recognition, measurement and disclosure of goodwill and intangible assets.  This section applies to interim and annual reporting periods beginning January 1, 2009.  The Company does not expect the adoption of this standard to have a material impact on its financial statements.



67



---



2.



(m)



In January 2006, the CICA Accounting Standards Board (





3.



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 (



(a)



CICA Handbook Section 1530 introduces comprehensive income, which consists of net earnings on the consolidated statements of earnings (loss) and other comprehensive income (loss) (



(b)



CICA Handbook Sections 3855 and 3861 establish standards for the recognition, measurement, presentation and disclosure of financial instruments.  Financial instruments are initially recognized at fair value.  The fair value of a financial instrument is the amount of consideration that would be agreed upon in an arm



68



---



3.



(b)



The following summarizes the Company





|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)



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)



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)



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)



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)



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.



69



---



3.



(d)



As specified in CICA Handbook Section 1530, since transition on January 1, 2007, the Company presented the unrealized effect of foreign currency translation of foreign operations as a component of accumulated OCI for the current and prior periods.





4.



Cash equivalents are guaranteed investment certificates.



At December 31, 2007 the Company did not hold any cash equivalents in asset-backed commercial paper.





5.





6.



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.







8.







71



---



9.







10.



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.



72



---



11.



Outstanding balances are as follows:





73



---



11.



The bank, leasing and other financing matures as follows:







12.



(a)



The Company acquired 60% of Ask during 2004 and the remaining 40% on September 30, 2007.  This step acquisition was accounted for by the purchase method.



(b)



Stream formed a new company, Bielsat.com Sp z.o.o., during the year ended October 31, 2000.  Stream owns 51% of Bielsat



The non-controlling interests are comprised of the following:



74



---



12.



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:



The intangibles recorded on the acquisition of shares in Ask is included in cable TV subscriber base on the consolidated balance sheet.





13.



(a)



Stream Communications Network & Media, Inc. has an authorized share capital of 150,000,000 common shares having no par value.  The Company has issued 81,596,491 common shares as at December 31, 2007 (2006 - 71,396,491; 2005 - $43,941,186).



(b)



The directors are authorized to issue stock options from time to time to employees, officers, consultants and directors of the Company up to 7,992,212 common shares of the Company at the time of such issue, at the minimum price allowed under the applicable securities laws.



The fair values of stock options granted were determined using the Black-Scholes option pricing model.  The Company



The fair values of the Company



75



---



13.



(b)



Activity under the option plan during the years ended December 31, 2007, 2006 and 2005 was as follows:



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





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)



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:





76



---



13.



(c)



Outstanding warrants at December 31, 2007 are as follows:





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

77



---



14.



(a)





(b)



Tax losses expire as follows:







78



---



14.



(c)







15.



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)

79



---



15.



(b)



The standby guarantee has not yet been exercised.



There were no costs or payments associated with the standby guarantee during 2007.





16.



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.





17.



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



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.



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)







81



---



19.



(a)



Financial instruments consist of cash and cash equivalents, short term investments, accounts receivable, accounts payable and accrued liabilities, deferred revenue, and loans payable and leasing contracts, the fair value of which are considered to approximate their carrying value due to their short-term maturities or ability of prompt liquidation.



(b)



The Company is exposed to credit risk only with respect to uncertainties as to the timing and amount of collecting of accounts receivable.  The Company mitigates credit risk through standard credit and reference checks.



(c)



The Company is exposed to financial risk arising from fluctuations in foreign exchange rates and the degree of volatility of these rates.  The Company does not use derivative instruments to reduce its exposure to foreign currency risk.





20.



(a)



(i)



(ii)



(iii)



At December 31, 2007, the Company has a commitment of $1,402,580 (Pln 3,500,000) for Suwalki to be paid prior to finalization of the agreement (Note 22), and a commitment of $160,295 (Pln 400,000) for Lubin, which is to be paid by April 30, 2009.



(b)



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 US$3,145,885 of which $Nil has been accrued at December 31, 2007 (2006 - $Nil).  The Company is of the opinion that these amounts are due only if the

IPO on the Warsaw Exchange is completed.



The Company is defending an action pursuant to certain alleged unpaid services, demanding the sum of $280,245.  The Company is of the opinion that these amounts are due only if the IPO on the Warsaw Exchange is completed.

82



---



21.



The Company undertook the following related party transactions:



(a)



Mr. Dziublowski (non-executive director) made a loan to Stream Canada from a company controlled by him, Top Consulting, for the amount of $245,500 (US$250,000).  The loan bears an annual interest of 9%.



(b)



In 2006, Stream Poland, a subsidiary of the Company, appointed Media Forum Sp. z o. o. as advertising agency for the Company



(c)



The Company



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 - $Nil; 2005 - $Nil).  The director and owner of Media Forum Sp. z o. o. is a related party to Mr. Rynkiewicz.



(d)



On June 12, 2006, the Company arranged for a 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 (Note 15).



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:















(e)



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.



83



---



21.



(f)



Top Consulting received a finder



(g)



(i)



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. Bathurst and Mr. Tomaszewski were granted 2,500,000 and 850,000 warrants from the private placement, respectively.



(ii)



(h)



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, during 2007 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.



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.



(a)



In December 2007, the Company entered into a preliminary share purchase and subscription agreement with Penta, that will allow Penta to acquire a majority stake in Stream Poland.



The agreement permits Penta to invest up to $60,110,604 (Pln 150,000,000) in Stream Poland.  This investment will be used to finance the acquisition of new networks and modernization of existing networks.

84



---



22.



(a)



On February 22, 2008 (the completion date), the transaction between the Company and Penta was finalized, resulting in Penta owning 51% of Stream Poland.  This was achieved by way of two transactions:



(1)



(2)



At any time following the third anniversary of the completion date, Penta has the option to purchase the remaining 49% of the shares of the Company at fair market value (as predefined in the purchase and sale agreement), if the Company fails to obtain an offer for acquisition of these shares by an independent third party.



The Company used $5,755,710 of the proceeds from the transaction to repay its existing debt facilities.



Following the transaction with Penta, the Company is a minority shareholder in Stream Poland and will be using the remaining proceeds from the transaction to continue to repay existing debt facilities, and develop greenfield Cable TV Networks in second tier cities in Poland.  The nature of the operations of Stream Poland and its approximate impact on the financial position of the Company are disclosed in the segmented information (Note 18).



(b)



(c)



On December 15, 2006, Streamline entered into an agreement to acquire a cable subscriber network for which the Company paid a deposit totalling $1,402,580.



In April 2008, Streamline acquired the title to the network in Suwalki for the amount of $2,124,248 (Pln 5,300,000) (Note 20 (a)).



(d)



In June 2008, Stream Poland, the subsidiary jointly controlled by the Company and Penta, has entered into a preliminary agreement with a cable operator in Poland.  This acquisition is scheduled to close in January 2009.  At closing, Stream Poland will take ownership of the acquired network.



In February 2008, Stream Poland entered into a preliminary agreement with Broker Service Sp. z o. o, a cable operator located in Poland.  On July 31, 2008, the Company closed on the acquisition for $22,039,600 (Pln 44,000,000).  On closing, Stream Poland took ownership of the acquired network.



(e)



In February 2008, the Company repaid the loan to Barrington Wedgewood LLC outstanding as at December 31, 2007 (Note 11) at a discount of approximately $500,000, satisfying all obligations of the Company pursuant to the loan agreement.

85



---



23.



The Company



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,



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)



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 (



Effective January 1, 2006, the Company adopted SFAS No. 123 (Revised 2004), Share-Based Payment (



86



---



23.



(b)



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



(c)



In July 2006, the FASB issued FASB Interpretation No. 48 (



(d)



In December 2007, the FASB issued Statement of Financial Accounting Standards 141(R), Business Combinations(



In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (

87



---



23.



(d)



In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, The Fair Value Option for Financial Assets and Financial Liabilities



In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160, Non-Controlling Interest in Consolidated Financial Statements (



This standard requires net income and comprehensive income to be displayed for both the controlling and the non-controlling interests.  Additional required disclosures and reconciliations include a separate schedule that shows the effects of any transactions with the non-controlling interests on the equity attributable to the controlling interests.



The Statement is effective for periods beginning on or after January 1, 2009. SFAS 160 will be applied prospectively to all non-controlling interests, including any that arose before the effective date.  The Company does not expect the adoption of SFAS 160 to materially affect its consolidated financial statements.



Under US GAAP, the Company does not currently recognize embedded derivatives arising from its own stock, warrants or options.  This issue is currently under review by a working committee of the Emerging Issues Task Force of the FASB (





88



---













12.1Certification pursuant to Section 404 of the Sarbanes-Oxley Act by CEO























89



---











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:



ON BEHALF OF THE COMPANY,







90