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|Stream Communications Network & Media Inc.    
|(formerly Stream Communications Network, Inc.)
|                                              
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|Consolidated Financial Statements             
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|For the year ended December 31, 2004          
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[usstatements002.gif]





Auditors' Report



To the Shareholders of

Stream Communications Network, Inc.



We have audited the consolidated balance sheet of Stream Communications Network, Inc. as at December 31, 2004 and 2003 and the consolidated statements of operations and deficit, and cash flows for the years then ended.  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 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, 2004 and 2003 and the results of its operations and its cash flows for the years then ended in accordance with Canadian generally accepted accounting principles.











MacKay LLP

Vancouver,  Canada.

Chartered Accountants

April 25, 2005, except for notes

19 and 20 dated June 24, 2005



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[usstatements004.gif]







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



In the United States, reporting standards for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when the financial statements are affected by conditions and events that cast substantial doubt on the Companys ability to continue as a going concern, such as those described in Note 1 to the consolidated financial statements.  Our report to the shareholders is expressed in accordance with Canadian reporting standards which do not permit a reference to such events and conditions in the auditors report when they are adequately disclosed in the financial statements.  Canadian generally accepted accounting principles vary in certain significant respects from accounting principles generally accepted in the United States. Application of accounting principles generally accepted in the United States would have affected results of operations for the year ended December 31, 2003 as summarized in note 20 to the consolidated financial statements.







MacKay LLP

Vancouver, Canada

Chartered Accountants

April 25, 2005, except for notes

19 and 20 dated June 24, 2005







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|Stream Communications Network & Media Inc.
|------------------------------------------
|Consolidated Balance Sheets               
|(in Canadian dollars)                     
|                                          
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|ASSETS                                    
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|LIABILITIES                               
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|SHAREHOLDERS' EQUITY                      
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|Stream Communications Network & Media Inc.       
|-------------------------------------------------
|Consolidated Statements of Operations and Deficit
|For the year ended December 31                   
|(in Canadian dollars)                            
|                                                 
|                                                 
|Revenues                                         
|Expenses                                         
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|Loss before undernoted items                     
|                                                 
|Amortization of property, plant and equipment    
|Amortization of intangibles                      
|                                                 
|Loss before other items                          
|Other items                                      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|Loss before non-controlling interest             
|Non-controlling interest                         
|Loss from continuing operations                  
|Loss from discontinued operations (note 7)       
|Net loss for the year                            
|                                                 
|Deficit, beginning of year                       
|                                                 
|Deficit, end of year                             
|Loss per share, basic and diluted                
|                                                 
|                                                 
|                                                 
|                                                 
|Weighted average number of shares                
|                                                 
|                                                 
|                                                 



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|Stream Communications Network & Media Inc.    
|----------------------------------------------
|Consolidated Statements of Cash Flows         
|For the year ended December 31                
|(in Canadian dollars)                         
|                                              
|                                              
|Operating Activities                          
|                                              
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|Financing Activities                          
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|Investing Activities                          
|                                              
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|Foreign exchange effect on cash (note 11)     
|                                              
|Change in cash and cash equivalents           
|                                              
|Cash and cash equivalents at beginning of year
|                                              
|Cash and cash equivalents at end of year      
|                                              
|                                              
|                                              





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Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)



|1. | NATURE OF OPERATIONS & GOING CONCERN                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                    |  |        |        
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------- |  | ------ | -------
|   | Stream Communications Network & Media Inc. (Stream or the Company) mainly provides cable television services and high-speed internet access.                                                                                                                                                                                                                                                                                                                                 
|   | The Company was incorporated on March 28, 1979  by registration of its Memorandum and Articles under the Company Act of British Columbia, Canada.  On October 19, 2001 the Company changed its name from Trooper Technologies Inc. to Stream Communications Network, Inc. and on August 9, 2004 to Stream Communications Network & Media Inc.                                                                                                                                    
|   | These financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.  The continuing operations of the Company are dependent upon its ability to continue to raise adequate financing and to commence profitable operations in the future.                                                                        
|   | The Company is actively pursuing additional funding to continue its current projects (note 19). Management continues to develop the Companys operating capabilities in order to improve cash flow from operations.                                                                                                                                                                                                                                                              
|   | Although there is no assurance that the Company will be successful in these actions, management is confident that it will be able to continue as a going concern. Accordingly, these financial statements do not reflect adjustments to the carrying value of assets and liabilities, the reported revenues and expenses and balance sheet classifications used that would be necessary if the going concern assumption were not appropriate. Such adjustments could be material.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                    |  |        |        
|2. | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                    |  |        |        
|   | Basis of presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                    |  |        |        
|   | These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles. A summary of the significant accounting policies are as follows:                                                                                                                                                                                                                                                                                
|   | Consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                    |  |        |        
|   | These consolidated financial statements include the accounts of the Company and the following subsidiaries. All intercompany transactions and balances have been eliminated.                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                    |  |        |        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | EES Waste solutions Limited                        |  | Cyprus | 100.00%
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | International Eco-Waste Systems S.A. ("Eco-Waste") |  | Poland | 100.00%
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Stream Communications Sp. z o.o. ("Stream")        |  | Poland | 100.00%
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Gimsat Sp. z o.o. ("Gimsat")                       |  | Poland | 100.00%
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Polvoice.com Sp. z o.o. ("PolVoice")               |  | Poland | 100.00%
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Bielsat.com Sp. z o.o. ("Bielsat")                 |  | Poland | 51.00% 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | ASK Stream ("ASK", note 3)                         |  | Poland | 60.00% 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Vega Sp. z o.o. ("Vega")                           |  | Poland | 98.00% 
|   | Use of estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                    |  |        |        
|   | The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities 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.                                                          
|   | Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                    |  |        |        
|   | Cash and cash equivalents consist of cash and highly liquid investments with maturities of less than three months.                                                                                                                                                                                                                                                                                                                                                               
|   | Property, plant and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                    |  |        |        
|   | Property, plant and equipment are stated at cost less accumulated amortization. Amortization is provided for using the declining-balance method at the following rates per annum:                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Automobiles                                        |  |        |        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Buildings, offices                                 |  |        |        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Computer software                                  |  |        |        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Cable television network equipment                 |  |        |        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Furniture, fixtures and equipment                  |  |        |        
|   | Plant construction-in-progress consists of assets not yet in use and accordingly no amortization is recorded.                                                                                                                                                                                                                                                                                                                                                                    



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Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)



|2. | SIGNIFICANT ACCOUNTING POLICIES (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |  |  | 
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
|   | Revenue recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |  |  | 
|   | Substantially all revenues are derived from cable TV 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 minimal. If this policy should change the Company will limit initial hook-up revenue to the extent of direct selling costs and amortize the remainder over the estimated period that subscribers are expected to remain connected to the network.                                                                                                                                                                                                                                                                                                                     
|   | Foreign currency translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |  |  | 
|   | The Companys significant assets, revenues and expenses are in Poland; accordingly, the Companys functional currency is the Polish Zloty. The Company follows the current rate method of translation which translates foreign assets and liabilities, into Canadian dollar equivalents, at the rate of exchange at the balance sheet date.  Revenues and expenses are translated into Canadian dollar equivalents at the average rate of exchange throughout the period.  Gains and losses arising from translation of the financial statements are disclosed as a separate component of shareholders' equity.                                                                                                                                                                                        
|   | 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 earnings.                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Loss per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |  |  | 
|   | The Company uses the treasury stock method to compute the dilutive effect of options, warrants and similar instruments.  Under this method the dilutive effect on loss per share is recognized on the use of the proceeds that could be obtained upon exercise of options, warrants and similar instruments.  It assumes that the proceeds would be used to purchase common shares at the average market price during the period. For all periods presented, the effect of the assumed conversion of stock options and warrants was anti-dilutive.                                                                                                                                                                                                                                                     
|   | Basic loss per share is calculated using the weighted-average number of shares outstanding during the period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |  |  | 
|   | 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).  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.  The effect on future income tax assets and liabilities of a change in tax rates is included in income in the period in which the change occurs.  The amount of future income tax assets recognized is limited to the amount that is more likely than not to be realized.
|   | Acquisitions, intangible assets and goodwill                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |  |  | 
|   | All business combinations use the purchase method of accounting.  Also,  the Company follows an impairment-only approach for the accounting for goodwill and other intangible assets that have an indefinite life.  The Company performed an initial benchmark test of impairment within six months of adoption, and annual tests of impairment at the reporting unit level.  If the carrying value of goodwill and other intangible assets of a reporting unit exceeds the fair value of the reporting unit, the carrying value of the asset must be written down to fair value.                                                                                                                                                                                                                      
|   | For the year ended December 31, 2004, the Company has reported an impairment charge of $NIL (2003 - $1,960,000) to reflect the decrease in the carrying value of its goodwill and other intangibles.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Company has determined that the cable TV licences have an indefinite life.  The Company has evaluated its existing intangible assets  and concluded that no provisions for impairment were required. Subscriber base is amortized using the straight-line method at a rate of 20% for the current year. Previously a rate of 5% was used.                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  |  | 
|   | The Company uses the fair value method for accounting for stock-based compensation as defined by accounting principles generally accepted in Canada. Stock-based compensation awards expense is calculated using the Black-Scholes option pricing model and is charged to operations with an offsetting credit to contributed surplus.                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Option pricing models require the input of highly subjective assumptions including the expected price volatility.  Changes in the subjective input assumptions can materially affect the fair value estimate, and therefore the existing models do not necessarily provide a reliable single measure of the fair value of the Companys stock options.                                                                                                                                                                                                                                                                                                                                                                                                                                                 



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Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)



|3. | ACQUISITIONS                                                                                                                                                                                                                                                                                                                  |                                          |  |  |  |                   |                     
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------- |  |  |  | ----------------- | --------------------
|   | The Company has completed the acquisition of 60% of ASK. The acquisition was accounted for by the purchase method.  The effective date of the acquisition was May 5, 2004,  after which the operations of ASK are included in these consolidated financial statements. ASK has cable TV networks in Sosnowiec, Poland.       
|   | At the time of acquisition the fair value of the assets and liabilities of ASK were:                                                                                                                                                                                                                                          |                                          | 
|   |                                                                                                                                                                                                                                                                                                                               | Cash and cash equivalents                |  |  |  |                   | $         122,027   
|   |                                                                                                                                                                                                                                                                                                                               | Accounts receivable                      |  |  |  |                   |                     
|   |                                                                                                                                                                                                                                                                                                                               | Property, plant and equipment            |  |  |  |                   | 113,740             
|   |                                                                                                                                                                                                                                                                                                                               | Intangible assets (subscriber base)      |  |  |  |                   | 92,622              
|   |                                                                                                                                                                                                                                                                                                                               | Accounts payable and accrued liabilities |  |  |  | (94,856)         
|   |                                                                                                                                                                                                                                                                                                                               | Minority interest                        |  |  |  |                   |                     
|   |                                                                                                                                                                                                                                                                                                                               | Purchase price                           |  |  |  |                   |                     
|   |                                                                                                                                                                                                                                                                                                                               |                                          |  |  |  |                   |                     
|   |                                                                                                                                                                                                                                                                                                                               | Consideration paid in cash               |  |  |  |                   | $          202,308  
|   |                                                                                                                                                                                                                                                                                                                               |                                          |  |  |  |                   |                     
|   | The Company has completed the acquisition of 98% of Vega. The acquisition was accounted for by the purchase method.  The effective date of the acquisition was October 2, 2004,  after which the operations of Vega are included in these consolidated financial statements. Vega has cable TV networks in Sosnowiec, Poland.
|   | At the time of acquisition the fair value of the assets and liabilities of Vega were:                                                                                                                                                                                                                                         |                                          | 
|   |                                                                                                                                                                                                                                                                                                                               | Cash and cash equivalents                |  |  |  |                   | $              3,273
|   |                                                                                                                                                                                                                                                                                                                               | Accounts receivable                      |  |  |  |                   |                     
|   |                                                                                                                                                                                                                                                                                                                               | Property, plant and equipment            |  |  |  |                   | 51,165              
|   |                                                                                                                                                                                                                                                                                                                               | Intangible assets (subscriber base)      |  |  |  |                   | 913,377             
|   |                                                                                                                                                                                                                                                                                                                               | Accounts payable and accrued liabilities |  |  |  | (52,735)         
|   |                                                                                                                                                                                                                                                                                                                               | Current portion of long term debt        |  |  |  |                   | (6,748)             
|   |                                                                                                                                                                                                                                                                                                                               | Long term debt                           |  |  |  |                   |                     
|   |                                                                                                                                                                                                                                                                                                                               | Minority interest                        |  |  |  |                   |                     
|   |                                                                                                                                                                                                                                                                                                                               | Purchase price                           |  |  |  |                   |                     
|   |                                                                                                                                                                                                                                                                                                                               |                                          |  |  |  |                   |                     
|   |                                                                                                                                                                                                                                                                                                                               | Consideration paid in cash               |  |  |  |                   | $          923,042  
|4. | ACCOUNTS RECEIVABLE                                                                                                                                                                                                                                                                                                           |                                          |  |  |  |                   |                     
|   |                                                                                                                                                                                                                                                                                                                               |                                          |  |  |  |                   | December 31, 2004   
|   |                                                                                                                                                                                                                                                                                                                               | Accounts receivable                      |  |  |  |                   | $          464,012  
|   |                                                                                                                                                                                                                                                                                                                               | Allowance for doubtful accounts          |  |  |  | (196,992)         | (155,384)           
|   |                                                                                                                                                                                                                                                                                                                               | Accounts receivable - net                |  |  |  | $         267,020 | $          154,792  



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Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)



|5. | PROPERTY, PLANT AND EQUIPMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                    |  |      |                          |                         
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------- |  | ---- | ------------------------ | ------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | December 31, 2004                  |  |      | Cost                     | Accumulated amortization
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Automobiles                        |  |      |                          | $          444,227      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Buildings, offices                 |  |      |                          | 298,630                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Cable television network equipment |  |      | 13,454,046               | 3,711,930               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Furniture and fixtures             |  |      | 412,360                  | 377,992                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Computer software                  |  |      |                          | 82,288                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Plant construction-in-progress     |  |      | 1,926                    | -                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                    |  |      |                          | $     14,693,477        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                    |  |      |                          |                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | December 31, 2003                  |  |      | Cost                     | Accumulated amortization
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Automobiles                        |  |      |                          | $          294,435      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Buildings, offices                 |  |      |                          | 209,983                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Cable television network equipment |  |      | 9,354,130                | 2,646,339               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Furniture and fixtures             |  |      | 350,298                  | 278,466                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Computer software                  |  |      |                          | 72,291                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Plant construction-in-progress     |  |      | 120,796                  | -                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                    |  |      |                          | $      10,401,933       
|6. | INTANGIBLE ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                    |  |      |                          |                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | December 31, 2004                  |  | Cost | Accumulated amortization | Impairment              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Cable TV licences                  |  |      | $          148,781       | $            78,774     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Subscriber base                    |  |      | 6,436,897                | 1,470,666               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                    |  |      | $       6,585,678        | $       1,549,440       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | December 31, 2003                  |  | Cost | Accumulated amortization | Impairment              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Cable TV licences                  |  |      | $            95,625      | $            49,520     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Subscriber base                    |  |      | 4,670,366                | 536,341                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                    |  |      | $       4,765,991        | $          585,861      
|7. | DISCONTINUED OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                    |  |      |                          |                         
|   | During 2001, the company commenced planned operations in providing cable TV and related cable services. The previous business of meat waste rendering was interrupted when  the European Commission imposed a ban on meat and bone meal products due to the risk of Bovine Spongiform Encephalopathy ("BSE") spread by these products. The Company changed direction in regards to the meat rendering business to avoid liability and uncertainty from the fallout from BSE and applied to change its hazardous waste licence to an incinerator licence. The Company was intending to utilize this licence to start operations in the hazardous waste business, but the company decided to discontinue this business, as it did not fit with its cable service business.
|   | As at December 31, 2004, the company has not sold Eco-Waste to an arm's length buyer, as originally intended. The net assets were written off during the 2002 fiscal year and the Company disposed of any remaining assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | As at December 31, 2002 the net assets related to Eco-Waste were written down to their net realizable value of nil, consequently there are no assets or liabilities included in the consolidated balance sheet as at December 31, 2004 and December 31, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | In view of the Companys main business and objectives directed towards cable TV, it was decided to discontinue the operations of PolVoice. In this manner, the Company is focused on one business objective. The operations of PolVoice were discontinued and written off in 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      



---

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)



|7.  | DISCONTINUED OPERATIONS continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                  |           |                         |                      |                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------- | --------- | ----------------------- | -------------------- | --------------------
|    | The statements of operations for the discontinued business operations are:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | For the year ended December 31, 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | PolVoice                         | Eco-Waste | Total                  
|    | Sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                  |           |                         | $                  - | $                  -
|    | Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                  |           |                         | -                    | -                   
|    | Write-down of net assets to net realizable value                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                  | -         | -                       | -                   
|    | Foreign exchange loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                  |           |                         | -                    | -                   
|    | Loss from discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                  |           | $                  -    | $                  - | $                  -
|    | For the year ended December 31, 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | PolVoice                         | Eco-Waste | Total                  
|    | Sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                  |           |                         | $                  - | $                  -
|    | Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                  |           |                         | -                    | -                   
|    | Write-down of net assets to net realizable value                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                  | -         | -                       | -                   
|    | Foreign exchange loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                  |           |                         | -                    | -                   
|    | Loss from discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                  |           | $                  -    | $                 -  | $                  -
|    | For the year ended December 31 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | PolVoice                         | Eco-Waste | Total                  
|    | Sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                  |           |                         | $                  - | $                  -
|    | Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                  |           |                         | -                    | -                   
|    | Write-down of net assets to net realizable value                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                  | -         | (2,362,877)             | (2,362,877)         
|    | Foreign exchange gain                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                  |           |                         | -                    | -                   
|    | Loss from discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                  |           | $                     - | $    (2,362,877)     | $    (2,362,877)    
|8.  | LOAN PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                  |           |                         |                      |                     
|    | Loan from Quest Capital Corp. in the amount of $650,000 repayable on or before June 30, 2005, interest bearing at 12% per annum, compounded monthly, payable monthly on the last day of each month. In consideration of the loan, the Company granted a security interest in favour of the lender over all of the Company's present and after-acquired personal property preceded by bank loans and due to related party amount. The lender received a non-refundable bonus payment of 175,000 free-trading common shares of the Company. The loan was jointly and personally guaranteed by three directors/officers ("Guarantors") of the Company. In addition, one of the Guarantors pledged and granted the lender 3,000,000 free trading shares in the capital of the Company. The Company has issued replacement shares to that Guarantor - see note 12. When the loan is repaid 3,000,000 shares will be returned to treasury.
|9.  | LONG-TERM DEBT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                  |           |                         |                      |                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                  |           |                         |                      |                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Loan balances, current portion   |           |                         |                      | $         101,530   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Loan balances, long term portion |           |                         |                      | 814,707             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Total                            |           |                         |                      |                     
|    | Bank loans are secured by the fixed assets of the Company repayable monthly at a rate of $5,376 per month. Interest is charged at the prime rate in Poland plus 1⁄2% per annum.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Principal repayments due in the next five years are:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                  |           | 2005                    | $          101,530   |                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                  |           | 2006                    | $            86,827  |                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                  |           | 2007                    | $            69,744  |                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                  |           | 2008                    | $            61,129  |                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                  |           | 2009                    | $            45,847  |                     
|10. | DUE TO RELATED PARTY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                  |           |                         |                      |                     
|    | The amount due to related party, a former director, bears interest at 5%, compounded annually. The lender agreed in writing that the loan will not be repaid before December 31, 2005.  The total amount due (including accrued interest) is $3,516,054 USD (equivalent to $4,236,302 CAD) of which $2,000,000 USD  was secured by various cable TV networks, with  the remaining debt being unsecured. The Company accrued $113,333 interest in USD (equivalent to $136,544 CAD) at December 31, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                             



---

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)



|11. | CUMULATIVE TRANSLATION ACCOUNT                                                                                                                                                                                                          |                                                                                                                      |             |                      |                                          |                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------- | ----------- | -------------------- | ---------------------------------------- | ------------------------------------------------------
|    | The operations of the Company are situated in the country of Poland along with most of its assets. The foreign exchange rates for the Canadian dollar and the Polish zloty are as follows:                                             
|    |                                                                                                                                                                                                                                         |                                                                                                                      |             |                      | Rate at the end of the year              | Average rate for the year                             
|    |                                                                                                                                                                                                                                         | 2004                                                                                                                 |             |                      |                                          | 2.4898                                                
|    |                                                                                                                                                                                                                                         | 2003                                                                                                                 |             |                      |                                          | 2.9029                                                
|    |                                                                                                                                                                                                                                        
|    | The following table shows the effect of the change in exchange rates and the resulting change in the cumulative translation account for the year ended December 31, 2004, and the foreign exchange effect on cash and cash equivalents:
|    |                                                                                                                                                                                                                                         |                                                                                                                      |             |                      |                                          |                                                       
|    |                                                                                                                                                                                                                                         |                                                                                                                      |             |                      | December 31, 2003 balance (Polish zloty) | December 31, 2003 balance ($CDN) at 2003 exchange rate
|    |                                                                                                                                                                                                                                         | Rate: Polish zloty to Canadian dollars                                                                               |             |                      | 2.9029                                   | 2.4898                                                
|    |                                                                                                                                                                                                                                         | Accounts receivable                                                                                                  |             |                      | zl         407,082                       | $         140,233                                     
|    |                                                                                                                                                                                                                                         | Inventory                                                                                                            |             |                      | 24,138                                   | 8,315                                                 
|    |                                                                                                                                                                                                                                         | Prepaid expenses and advances                                                                                        |             | 70,982               | 24,452                                   | 28,509                                                
|    |                                                                                                                                                                                                                                         | Deposits                                                                                                             |             |                      | 449,999                                  | 155,017                                               
|    |                                                                                                                                                                                                                                         | Property, plant and equipment                                                                                        |             | 20,954,915           | 7,218,614                                | 8,416,305                                             
|    |                                                                                                                                                                                                                                         | Intangibles                                                                                                          |             |                      | 6,444,815                                | 2,220,130                                             
|    |                                                                                                                                                                                                                                         | Accounts payable and accrued liabilities                                                                             | (7,875,886) | (2,713,110)          | (3,163,261)                              | 450,151                                               
|    |                                                                                                                                                                                                                                         | Current portion of long-term debt                                                                                    |             | (187,272)            | (64,512)                                 | (75,216)                                              
|    |                                                                                                                                                                                                                                         | Long-term debt                                                                                                       |             |                      | (197,388)                                | (67,997)                                              
|    |                                                                                                                                                                                                                                         | Non-controlling interest                                                                                             |             | (1,994,945)          | (687,225)                                | (801,247)                                             
|    |                                                                                                                                                                                                                                         | Total exchange gain on translation                                                                                   |             |                      |                                          |                                                       
|    |                                                                                                                                                                                                                                         | Deduct: Cumulative translation account, beginning of year                                                            |             |                      | 371,841                                 
|    |                                                                                                                                                                                                                                         | Cumulative translation account, end of year                                                                          |             |                      |                                          | 944,701                                               
|    |                                                                                                                                                                                                                                         | Foreign exchange effect                                                                                              |             |                      |                                          |                                                       
|12. | CAPITAL STOCK                                                                                                                                                                                                                           |                                                                                                                      |             |                      |                                          |                                                       
|    | (a) Authorized                                                                                                                                                                                                                          |                                                                                                                      |             |                      |                                          |                                                       
|    |                                                                                                                                                                                                                                         | 150,000,000 common shares of no par value                                                                            |             |                      |                                          |                                                       
|    | (b) Issued                                                                                                                                                                                                                              |                                                                                                                      |             |                      |                                          |                                                       
|    |                                                                                                                                                                                                                                         |                                                                                                                      |             |                      |                                          | Number of Shares                                      
|    |                                                                                                                                                                                                                                         | Balance - December 31, 2002                                                                                          |             |                      | 29,003,149                               | -                                                     
|    |                                                                                                                                                                                                                                         | Warrants exercised                                                                                                   | 702,526     | $               1.80 | 1,264,542                               
|    |                                                                                                                                                                                                                                         | Fair value of warrants expired                                                                                       |             |                      | -                                        | -                                                     
|    |                                                                                                                                                                                                                                         | Fair value of warrants exercised                                                                                     |             |                      |                                          | -                                                     
|    |                                                                                                                                                                                                                                         | Balance - December 31, 2003                                                                                          |             |                      | 29,705,675                               |                                                       
|    |                                                                                                                                                                                                                                         | Shares issued for business development                                                                               |             | 500,000              | 0.98                                     | 487,557                                               
|    |                                                                                                                                                                                                                                         | Shares issued for loan security                                                                                      |             |                      | 3,000,000                                | -                                                     
|    |                                                                                                                                                                                                                                         | Financial expenses                                                                                                   |             |                      |                                          | 1,275,000                                             
|    |                                                                                                                                                                                                                                         | Issued for services                                                                                                  |             |                      |                                          | 78,125                                                
|    |                                                                                                                                                                                                                                         | Issued for services                                                                                                  |             |                      |                                          | 275,000                                               
|    |                                                                                                                                                                                                                                         | TV programming and content development                                                                               |             | 3,000,000            | 0.49                                     | 1,481,904                                             
|    |                                                                                                                                                                                                                                         | Balance - December 31, 2004                                                                                          |             |                      | 37,833,800                               |                                                       
|    |                                                                                                                                                                                                                                         | 3,000,000 shares were issued to a director and guarantor to replace shares pledged  to Quest Capital Corp. - note 8.



---

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)



|12. | CAPITAL STOCK continued                                                                                                                                                                                                                                                                                                                                                                                                |                                                                         |                                                   |                                                     |                                                  |                                             
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------- | ------------------------------------------------- | --------------------------------------------------- | ------------------------------------------------ | --------------------------------------------
|    | (c) Options                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                         |                                                   |                                                     |                                                  |                                             
|    | In the Annual General Meeting held on June 30, 2004,  the shareholders approved the amendment to the stock option plan whereby the directors  are  authorized  to  issue  stock  options from time to time to employees,  officers, consultants and directors of the Company up to 5,941,135 common shares of the Company at the time of such issue,  at a minimum price allowed under the applicable securities laws.
|    | Common share purchase options are issued to directors, officers, employees and non-employees of the company with exercise prices which approximate market values at the time the option is granted.                                                                                                                                                                                                                   
|    | Summary of directors' and employees' stock options, warrants and convertible securities outstanding:                                                                                                                                                                                                                                                                                                                   |                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                         |                                                   |                                                     |                                                  | Shares                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        | Balance of options at December 31, 2003                                 |                                                   | 4,370,000                                           | $                1.88                            |                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        | Granted                                                                 |                                                   |                                                     |                                                  | 2,490,000                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        | Cancelled                                                               |                                                   |                                                     |                                                  | (4,370,000)                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        | Balance of options at December 31, 2004                                 |                                                   |                                                     |                                                  | 2,490,000                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                        
|    | The following table summarizes information about fixed stock options outstanding at December 31, 2004:                                                                                                                                                                                                                                                                                                                 |                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                         |                                                   | Options Outstanding                                 |                                                  | Options Exercisable                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        | Range of exercise prices (USD$)                                         | Number outstanding at December 31, 2004           | Weighted average remaining contractual life (years) | Weighted average    exercise        price (USD$) | Number exercisable at December 31,      2004
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        | $                        0.60                                           |                                                   | 2,490,000                                           | 4.8                                              | $                0.60                       
|    | Stock-based compensation expense                                                                                                                                                                                                                                                                                                                                                                                       |                                                                         |                                                   |                                                     |                                                  |                                             
|    | Pursuant to the granting the options in the current period, stock-based compensation expenses has been determined using a Black-Scholes option pricing model assuming no dividends were paid, a weighted average volatility of 56.6% over an expected life of five years and a weighted average annual risk free rate of 3.93%.                                                                                       
|    | Based on the above assumptions the average fair value for each option is $0.83193 ; accordingly $2,071,510 of stock-based compensation has been recorded in the statement of operations.                                                                                                                                                                                                                              
|    | (d) Warrants                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                         |                                                   |                                                     |                                                  |                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        | The changes in warrants were as follows:                                | Number of common shares permitted to be purchased |                                                     |                                                  |                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                         |                                                   | Number of warrants                                  | Weighted average price per share                 | Expiry date                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        | Outstanding December 31, 2003                                           | 3,126,579                                         | 2,976,579                                           | $                1.84                            | 28-Dec-05                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        | Expired                                                                 |                                                   | -                                                   | -                                                | -                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        | Exercised                                                               |                                                   | -                                                   | -                                                | -                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        | Total Balance December 31, 2004                                         | 3,126,579                                         | 2,976,579                                           | $                1.84                            |                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        | Outstanding December 31, 2004:                                          |                                                   |                                                     |                                                  |                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                         |                                                   | 300,000                                             | 150,000                                          | $              1.80                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                         |                                                   | 2,701,579                                           | 2,701,579                                        | 1.80                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                         |                                                   | 125,000                                             | 125,000                                          | 2.25 USD                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        | Total Balance December 31, 2004                                         | 3,126,579                                         | 2,976,579                                           |                                                  |                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        | The expiry date of the warrants has been extended to December 28, 2005. |                                                   |                                                    



---

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)



|13. | SEGMENTED INFORMATION                                                                                                            |                                                                     |                                      |                                      |                                     |                     
|--- | -------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------- | ------------------------------------ | ------------------------------------ | ----------------------------------- | --------------------
|    | The Company operates primarily in one segment, being cable TV services and in two geographic locations, being Canada and Poland.
|    | Geographic information                                                                                                           |                                                                     |                                      |                                      |                                     |                     
|    |                                                                                                                                  | Revenues are attributed to countries based on location of customer. | For the year ended December 31, 2004 | For the year ended December 31, 2003 | For the year ended December 31 2002
|    |                                                                                                                                  | Revenues                                                            |                                      |                                      |                                    
|    |                                                                                                                                  |                                                                     |                                      | Canada                               |                                     | $                  -
|    |                                                                                                                                  |                                                                     |                                      | Poland                               |                                     | 4,415,461           
|    |                                                                                                                                  |                                                                     |                                      |                                      |                                     | $       4,415,461   
|    |                                                                                                                                  | Interest expense                                                    |                                      |                                      |                                     |                     
|    |                                                                                                                                  |                                                                     |                                      | Canada                               |                                     | $         148,777   
|    |                                                                                                                                  |                                                                     |                                      | Poland                               |                                     | 176,914             
|    |                                                                                                                                  |                                                                     |                                      |                                      |                                     | $          325,691  
|    |                                                                                                                                  | Amortization of property, plant and equipment                       |                                      |                                      |                                     |                     
|    |                                                                                                                                  |                                                                     |                                      | Canada                               |                                     | $              4,015
|    |                                                                                                                                  |                                                                     |                                      | Poland                               |                                     | 715,156             
|    |                                                                                                                                  |                                                                     |                                      |                                      |                                     | $          719,171  
|    |                                                                                                                                  | Amortization of intangibles                                         |                                      |                                      |                                     |                     
|    |                                                                                                                                  |                                                                     |                                      | Canada                               |                                     | $                  -
|    |                                                                                                                                  |                                                                     |                                      | Poland                               |                                     | 678,933             
|    |                                                                                                                                  |                                                                     |                                      |                                      |                                     | $          678,933  
|    |                                                                                                                                  | Total expenditures for property, plant and equipment                |                                      |                                      |                                     |                     
|    |                                                                                                                                  |                                                                     |                                      | Canada                               |                                     | $              2,295
|    |                                                                                                                                  |                                                                     |                                      | Poland                               |                                     | 2,576,228           
|    |                                                                                                                                  |                                                                     |                                      |                                      |                                     | $       2,578,523   
|    |                                                                                                                                  | Total expenditures for intangibles                                  |                                      |                                      |                                     |                     
|    |                                                                                                                                  |                                                                     |                                      | Canada                               |                                     | $                  -
|    |                                                                                                                                  |                                                                     |                                      | Poland                               |                                     | 1,028,928           
|    |                                                                                                                                  |                                                                     |                                      |                                      |                                     | $       1,028,928   
|    |                                                                                                                                  |                                                                     |                                      |                                      |                                     |                     
|    |                                                                                                                                  | Property, plant, equipment and intangibles                          |                                      |                                      | December 31, 2004                   | December 31, 2003   
|    |                                                                                                                                  |                                                                     |                                      | Canada                               |                                     |                     
|    |                                                                                                                                  |                                                                     |                                      | Poland                               |                                     |                     
|    |                                                                                                                                  |                                                                     |                                      |                                      |                                     |                     



---

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)



|14. | INCOME TAXES                                                                                                                                                                                                                                                                                                                                                                                                     |                                                     |        |        |                      |                           
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | ------ | ------ | -------------------- | --------------------------
|    | The Company has tax losses in Canadian dollars available for offset against future taxable income in various jurisdictions for the following approximate amounts:                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                     | Canada |        |                      | $     13,326,000
2,515,000
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                     | Poland |        |                     
|    | The income tax losses in Poland can be carried forward and deducted from taxable income for the next five years, but not exceeding 50% of the loss in any of these years. The non-capital losses in Canada begin to expire from 2006 to 2014.  The potential tax benefits of the losses in Canada and Poland have not been recognized in the financial statements and have been offset by a valuation allowance.
|    | The following is a reconciliation of income taxes:                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                     |        |        |                      |                           
|    | Statutory rates in Canada                                                                                                                                                                                                                                                                                                                                                                                        |                                                     |        |        |                      | 35.62%                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  | Recovery (income taxes) at Canadian statutory rates |        |        | $       2,338,351    | $       1,916,229         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  | Difference in tax rates in other jurisdictions      |        |        | (525,609)            | (155,211)                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  | Difference due to decrease in statutory rates       |        |        | -                    | (139,210)                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  | Non-deductible expenses for tax purposes            |        |        | (753,431)            | 21,495                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                     |        |        |                      |                           
|    | Tax effect of tax losses not recognized                                                                                                                                                                                                                                                                                                                                                                          |                                                     |        |        | (1,059,312)          | (1,643,303)               
|    | Current and future tax expense (recovery)                                                                                                                                                                                                                                                                                                                                                                        |                                                     |        |        | $                  - | $                  -      
|    | Future income taxes                                                                                                                                                                                                                                                                                                                                                                                              |                                                     |        |        |                      |                           
|    | Future income tax assets                                                                                                                                                                                                                                                                                                                                                                                         |                                                     |        |        |                      |                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  | Tax losses                                          |        |        |                      |                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  | Property, plant and equipment                       |        |        |                      | (28,716)                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  | Intangible assets                                   |        |        |                      |                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  | Share issuance costs                                |        |        |                      | 243,940                   
|    | Future income tax assets                                                                                                                                                                                                                                                                                                                                                                                         |                                                     |        |        |                      | $       4,208,965         
|    | Valuation allowance                                                                                                                                                                                                                                                                                                                                                                                              |                                                     |        |        |                      | (4,208,965)               
|    | Net future income tax assets                                                                                                                                                                                                                                                                                                                                                                                     |                                                     |        |        | $                  - | $                 -       
|15. | FINANCIAL INSTRUMENTS                                                                                                                                                                                                                                                                                                                                                                                            |                                                     |        |        |                      |                           
|    | (a) Fair Value                                                                                                                                                                                                                                                                                                                                                                                                   |                                                     |        |        |                      |                           
|    | Financial instruments consist of cash and cash equivalents, accounts receivable, deposits, accounts payable and accrued liabilities, the fair value of which are considered to approximate their carrying value due to their short-term maturities or ability of prompt liquidation.                                                                                                                            
|    | (b) Credit Risk                                                                                                                                                                                                                                                                                                                                                                                                  |                                                     |        |        |                      |                           
|    | The Company is exposed to credit risk only with respect to uncertainties as the timing and amount of collectibility of accounts receivable.  The Company mitigates credit risk through standard credit and reference checks.                                                                                                                                                                                    
|    | (c) Currency Risk                                                                                                                                                                                                                                                                                                                                                                                                |                                                     |        |        |                      |                           
|    | 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.                                                                                                                                                                     
|    | The Company had the following financial assets and liabilities in foreign currencies:                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                     |        |        | December 31, 2004    | December 31, 2003         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                     |        |        | Polish zlotys        | $USD                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  | Exchange rates to the Canadian dollar               |        | 2.4898 | 0.8300               | 2.9029                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  | Cash                                                |        |        | 871,011              | -                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  | Accounts receivable                                 |        |        | 630,975              | -                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  | Accounts payable                                    |        |        | 3,781,290            | 507,313                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  | Due to related parties                              |        | -      | 3,516,187            | -                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                  | Long term debt                                      |        |        | 2,028,457            | -                         



---

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)



|16. | COMMITMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                        |      |  |                    |                     |                  
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | ---- |  | ------------------ | ------------------- | -----------------
|    | As at December 31, 2004, the company is committed under leases for cable networks, office space and automobiles in the following amounts for the next five years:                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                        | 2005 |  | $          208,145
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                        | 2006 |  | $          205,145
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                        | 2007 |  | $          179,410
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                        | 2008 |  | $          173,139
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                        | 2009 |  | $          170,256
|17. | CONTINGENCY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                        |      |  |                    |                     |                  
|    | 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, 2004 (2003 - $NIL). The Company is of the opinion that these amounts are due if the IPO on the Warsaw Exchange is completed.                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|18. | SUPPLEMENTAL CASH FLOW INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                        |      |  |                   
|    | The following non-cash transactions were recorded during the year ended December 31:                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                        |      |  |                    |                     | 2004             
|    | Financing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                        |      |  |                    |                     |                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | TV programming and content development |      |  | $       1,481,904  | $                 -
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Shares for services                    |      |  |                    |                     | 196,696          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Business development                   |      |  |                    | 487,557             |                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Financial expenses                     |      |  |                    |                     | 629,809          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                        |      |  |                    |                     | $       2,795,966
|19. | SUBSEQUENT EVENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                        |      |  |                    |                     |                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                        |      |  |                    |                     |                  
|    | Subsequent to year-end:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                        |      |  |                    |                     |                  
|    | The Company issued 850,000 common shares to settle debts owed to the employees and directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                       
|    | The Company has announced a private placement of up to 1,500,000 units ("Unit") at a price of $0.75 USD per unit. Each Unit will be comprised of one common share and one half non-transferable share purchase warrant, with each two warrants entitling the holder to purchase an additional common share of the Company at a purchase price of $1.00 USD per common share for a period of two years.  The pricing of the private placement was changed to $0.80 USD per unit with the warrants exercisable at a purchase price of $0.80 USD per common share.
|    | The Company has acquired an Internet network in Southern Poland with 2,100 subscribers. The network is located in close proximity to the Company's existing operations.                                                                                                                                                                                                                                                                                                                                                                                        
|    | The Company has announced an intention  to purchase an additional 1,400 cable subscribers in close proximity to the Company's existing network in Southern Poland from the issuance of 260,000 shares from treasury.                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                        |      |  |                    |                     |                  



---

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)



|20. | SUMMARY OF MATERIAL DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES IN CANADA AND THE UNITED STATES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | The consolidated financial statements of the company have been prepared in accordance with accounting principles generally accepted in Canada (Canadian "GAAP") which conform in all material respects with accounting principles generally accepted in the United States ("U.S. GAAP") except as set out below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | Consolidated Balance sheets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Deficit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | Total assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Consolidated statements of operation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Loss under Canadian GAAP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Foreign exchange income (loss) (note 20 (a))                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Comprehensive income under US GAAP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Basic/diluted loss per share, U.S. GAAP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Consolidated statements of cash flow                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Cash flows from                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Increase (decrease) in cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | Foreign exchange effect on cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Cash and cash equivalents - beginning of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Cash and cash equivalents - end of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | (a) Comprehensive income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Under SFAS 130, the Company is required to record certain gains and losses as a component of Stockholders' Equity, with the current changes in the component balances comprising the balance sheet figure disclosed in a separate statement or in a financial statement note.  The only item in the Company's financial statements impacting comprehensive income is the unrealized gains and losses from foreign exchange.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | (b) Stock based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS 123) encourages, but does not require, companies to record compensation cost for stock-based employee compensation plans at fair value.  The company has chosen to account for stock-based compensation using Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25).  Accordingly, compensation cost for stock options is measured as the excess, if any, of the quoted market price of the company's stock at the date of the grant over the amount an employee is required to pay for the stock. There were no stock options granted in 2003 or 2002.                                                                                                                                                                                                                                                   
|    | In December 2002, FASB issued SFAS No. 148, Accounting for StockBased Compensation  Transition and Disclosure.  SFAS 148 amends SFAS No. 123, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation.  In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results.  SFAS 148 is effective for fiscal years beginning after December 15, 2002.  the interim disclosure provisions are effective for financial reports containing financial statements for interim periods beginning after December 15, 2002.  The company adopted SFAS No. 148, as required, on January 1, 2003 with no material impact on its financial statements.



---

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)



|20. | SUMMARY OF MATERIAL DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES IN CANADA AND THE UNITED STATES con't                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | (c) Goodwill and other intangibles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | In July 2001, the Financial Accounting Standards Board Issued SFAS No. 142 "Goodwill and Other Intangible Assets".  Under SFAS No. 142, goodwill and indefinite life intangible assets are no longer amortized.  Separate intangible assets that are not deemed to have an indefinite life  will continue to be amortized over their useful lives.  SFAS No. 142 also establishes a new method of testing goodwill and other intangible assets for impairment on an annual basis or on an interim basis if an event occurs or circumstances change that would reduce the fair value of that goodwill or other intangible asset below its carrying value.  The non-amortization provision of SFAS No. 142 applying to goodwill and other tangible assets acquired has been adopted at January 1, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | (d) New accounting pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | In March 2004, the Emerging Issues Task Force (EITF) reached a consensus on Issue No. 03-01, The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments (EITF 03-1). EITF 03-1 provides guidance on other-than-temporary impairment models for marketable debt and equity securities accounted for under SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities (SFAS 115), and non-marketable equity securities accounted for under the cost method. The EITF developed a basic three-step model to evaluate whether an investment is other-than-temporarily impaired. On September 30, 2004, the FASB issued FSP 03-1-1, Effective Date of Paragraphs 10-20 of EITF Issue 03-1, The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments, delaying the effective date for the recognition and measurement guidance of EITF 03-1, as contained in paragraphs 10-20, until certain implementation issues are addressed and a final FSP providing implementation guidance is issued. The disclosure requirements of the consensus remain in effect. The Company does not expect the adoption of this consensus or FSP to have a material impact on its consolidated financial statements.
|    | In September 2004, the EITF reached a consensus on EITF Issue 04-1 (EITF 04-1), Accounting for Pre-existing Relationships between the Parties to a Business Combination. EITF 04-1 requires that termination settlements of pre-existing contractual relationships between two parties to a business combination be individually evaluated and accounted for separately from the business combination. The provisions of EITF 04-1 apply to business combinations consummated and goodwill impairment tests performed after December 31, 2004. The Company does not expect the adoption of EITF No. 04-1 to have a material impact on its financial position or results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | In 2003, the Financial Accounting Standards Board (FASB) issued Interpretation No. 46, Consolidation of Variable Interest Entities (FIN 46). FIN 46 provides guidance on the identification of entities for which control is achieved through means other than through voting rights (variable interest entities) and how to determine when and which business enterprise (the primary beneficiary) should consolidate the variable interest entity. This new model for consolidation applies to an entity in which either (i) the equity investors (if any) do not have a controlling financial interest; or (ii) the equity investment at risk is insufficient to finance the entitys activities without receiving additional subordinated financial support from other parties. In addition, FIN 46 requires that the primary beneficiary, as well as all other enterprises with a significant variable interest in a variable interest entity, makes additional disclosures. FIN 46 and its revision FIN 46-R are effective for the year ended December 31, 2004. As of December 31, 2004, these interpretations did not have an impact on the Companys financial statements.                                                                                                     
|    | In December 2004, the FASB issued SFAS No. 123R, Share-Based Payment which sets accounting requirements for share-based compensation to employees, including employee-stock-purchase-plans (ESPPs) and provides guidance on accounting for awards to non-employees. This Statement will require companies to recognize in the income statement the grant-date fair value of stock options and other equity-based compensation issued to employees, but expresses no preference for a type of valuation model. For public entities, this Statement is effective for the first interim period beginning after June 15, 2005. The Company does not expect FASB No. 123R to have a significant impact on its financial position, results of operations or cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | In March 2004, the Emerging Issues Task Force (EITF) reached a consensus on Issue 03-6 (EITF 03-6), Participating Securities and the Two-Class Method under FASB Statement No. 128, Earnings per Share. The consensus addresses how to determine whether a security should be considered a participating security for purposes of computing earnings per share and how earnings should be allocated to a participating security when using the two-class method for computing basic earnings per share. The provisions of EITF 03-6 are effective for reporting periods beginning after March 31, 2004. The adoption of this consensus is not expected to have a material impact on the Companys results of operations, financial position and cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | The Emerging Issues Task Force issued EITF Abstract 03-13 (EITF 03-13) to provide guidance on applying SFAS 144, "Determining Whether to Report Discontinued Operations." SFAS 144 discusses when an entity should disclose a 'component' as discontinued operations. Under SFAS 144, a component should be disclosed as discontinued operations when continuing cash flows are eliminated and when there is no significant continuing involvement with the component. EITF 03-13 provides additional guidance on factors to consider in evaluating what constitutes continuing cash flows and continuing significant influence. This Statement is effective for fiscal periods beginning after December 15, 2004. The Company does not expect there to be any material impact on the consolidated financial statements upon adoption of the guidance.                                                                                                                                                                                                                                                                                                                                                                                                                                        



---

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)



|20. | SUMMARY OF MATERIAL DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES IN CANADA AND THE UNITED STATES con't                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | In November 2004, the FASB issued SFAS No. 151, Inventory Costs, an Amendment of ARB No. 43, Chapter 4. SFAS No. 151 clarifies the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material. The Statement is effective for inventory costs incurred during fiscal year beginning after June 15, 2005. The Company does not expect this statement will have a material impact on the Companys consolidated financial position or results of operations.                                                                                                    
|    | In December 2004, the FASB issued Statement 153, Exchanges of Non-monetary Assets, an Amendment of APB Opinion No. 29, Accounting for Non-monetary Transactions (FAS 153). This Statement eliminates the exception from fair value measurement for non-monetary exchanges of similar productive assets and replaces it with an exception for exchanges that do not have commercial substance. FAS 153 is effective for non-monetary asset exchanges occurring in fiscal periods beginning after June 15, 2005 and is not expected to have a material impact on the Companys results and financial position.