##### Table of Contents



FORM 20-F

[  ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
OF THE SECURITIES EXCHANGE ACT OF 1934

OR

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

For the fiscal year ended
 August 31, 2002

OR

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

For the transition period
from              to

Commission file number 333-13878

CanWest Media Inc.




(Exact name of Registrant as specified in its charter)




---

(Translation of Registrants name into English)


Canada

(Jurisdiction of incorporation or organization)


31st Floor, TD Centre




201 Portage Avenue





Winnipeg, Manitoba, Canada R3B 3L7





(Address of principal executive offices)


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

10 5/8% Series B Senior Subordinated Notes due 2011




(Title of Class)


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

| |  |                     
| |  | --------------------
| |  | 22,785 common shares
| |  |                     

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes      [ X ]       No     [  ]

Indicate by check mark which financial statement item the registrant has
elected to follow.

|                 |  |  |  |  |  |  |  |  |  |                 |  |  |  | 
|---------------- |  |  |  |  |  |  |  |  |  | --------------- |  |  |  | 
|Item 17     [X ] |  |  |  |  |  |  |  |  |  | Item 18    [  ] |  |  |  | 





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TABLE OF CONTENTS



|                                                   |                                                                                       |  |  |  |  |  |  | 
|-------------------------------------------------- | ------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|                                                   | ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                        
|                                                   | ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE                                      
|                                                   | ITEM 3. KEY INFORMATION                                                              
|SELECTED HISTORICAL FINANCIAL DATA                
|                                                   | ITEM 4. INFORMATION ON THE COMPANY                                                   
|                                                   | ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                 
|                                                   | ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                   
|                                                   | ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                            
|                                                   | ITEM 8. FINANCIAL INFORMATION                                                        
|                                                   | ITEM 9. THE OFFER AND LISTING                                                        
|                                                   | ITEM 10. ADDITIONAL INFORMATION                                                      
|                                                   | ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                  
|                                                   | ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                      
|PART II                                           
|                                                   | ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                             
|                                                   | ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|                                                   | ITEM 15. CONTROLS AND PROCEDURES                                                     
|                                                   | ITEM 16. [RESERVED]                                                                  
|                                                   | ITEM 18. FINANCIAL STATEMENTS                                                        
|                                                   | ITEM 19. EXHIBITS                                                                    
|AMALGAMATION AGREEMENT                            
|AMENDING AGREEMENT - SR. SECURED CREDIT FACILITIES
|RETIREMENT COMPENSATION ARRANGEMENT PLAN          
|RETIREMENT COMPENSATION ARRANGEMENT TRUST AGREEMNT
|GENERAL CONVEYANCE                                
|LETTER AGREEMENT                                  
|AMENDING AGREEMENT NO. 2 - SR. SECURED/CREDIT FAC.
|SUPPLEMENTAL INDENTURE                            
|LETTER AGREEMENT                                  
|SHARE PURCHASE AGREEMENT                          
|LETTER AGREEMENT                                  
|SHARE PURCHASE AGREEMENT                          
|LETTER AGREEMENT                                  
|NON-COMPETITION/SOLICITATION & CONFIDENTIALITY AGR
|FORM OF AMENDED & RESTATED ADV. REP. AGREEMENT    
|FORM OF AMENDED & RESTATED SERVICES AGREEMENT     
|PENSION & EMPLOYEE BENEFIT PLANS AGREEMENT        
|TRANSITIONAL SERVICES AGREEMENT                   
|FORM OF AMENDED & RESTATED EDITORIAL SERVICES AGR.
|FORM OF AMENDED & RESTATED ELEC. DISTRIBUTION AGR.
|STATEMENT REGARDING COMPUTATION OF RATIOS         
|LIST OF ENTITIES PARTY TO THE FORM OF AGREEMENT   
|LIST OF ENTITIES PARTY TO THE FORM OF AGREEMENT   
|LIST OF ENTITIES PARTY TO THE FORM OF AGREEMENT   
|LIST OF ENTITIES PARTY TO THE FORM OF AGREEMENT   



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##### Table of Contents



INTRODUCTION

This Annual Report on Form 20-F relates to CanWest Media Inc. and its
subsidiaries (referred to herein as the Company or CanWest). On September
24, 2001, CanWest Media Inc. and certain of its subsidiaries filed a
Registration Statement on Form F-4 with the Securities and Exchange Commission
to register exchange notes for the initial notes that it issued on May 17, 2001
(the notes) became effective. As a result, CanWest Media Inc. became a
reporting company under the Exchange Act.

As used in this annual report CanWest Publications refers to the newspapers
and Internet assets acquired by us from Hollinger International Inc., Southam
Inc., Hollinger Canadian Newspapers, Limited Partnership and HCN Publications
Company on November 16, 2000, including a 100% interest in the National Post
and excluding those publications that have since been sold by the Company (see
Recent Events).

The information required for some items in this annual report is not
applicable to the Company. Not applicable means that the response to the
referenced item is omitted either in reliance on the instructions to this form
or because the information sought by the referenced item does not apply to the
Company or the Company has no relevant information to disclose.

FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements. Whenever a statement
is not simply a statement of historical fact (such as a statement that includes

the words believe, expect, anticipate, estimate, project, and other
similar expressions), the Companys expectations may not be correct, even
though it believes on the date of this annual report that they are reasonable.
The Company does not guarantee that the transactions and events described in
this annual report will happen as described (or that they will happen at all).
Read this annual report completely and with the understanding that actual
future results may be materially different from what the Company expects. The
Company will not update these forward- looking statements, even though the
Companys situation may change in the future, except as required by law.

Whether actual results will conform with the Companys present expectations and
predictions is subject to a number of risks and uncertainties including:



| |  |  | the significant considerations, including the risk factors,
discussed in this annual report (See Item 3.D. Risk Factors);
| | - |  | -------------------------------------------------------------------------------------------------------------------------
|
| |  |  | the Companys outstanding indebtedness and its leverage;                                                                 
|
| |  |  | risks related to the Companys ability to successfully
implement its business and operating strategies;                  
|
| |  |  | risks related to the Companys ability to effectively manage its growth; and                                             
|
| |  |  | the highly competitive nature of the industry in which the Company operates.                                             




ITEM 1.     IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.




ITEM 2.     OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

2



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##### Table of Contents






ITEM 3. KEY INFORMATION

A.        Selected Financial Data

The following tables set forth selected historical financial data for the
Company. The Companys selected historical financial data presented for, and
as of the year end of, each of the years ended August 31, 1998 through 2002,
are derived from the Companys audited financial statements, which were audited
by PricewaterhouseCoopers LLP, independent accountants.

The selected historical financial data are not necessarily indicative of the
Companys future results of operation. The financial statements of the Company
have been prepared in Canadian dollars and in accordance with Canadian GAAP.
The selected historical financial data in the following tables should be read
in conjunction with the Companys audited financial statements and the notes
thereto and Managements Discussion and Analysis of Financial Condition and
Results of Operations included elsewhere in this annual report. (See Item 5
Operating and Financial Review and Prospects and Item 8 Financial Information)

3



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##### Table of Contents






SELECTED HISTORICAL FINANCIAL DATA
(dollars in thousands)

CanWest Media Inc.

|                                                                 |  |      |           |      |  |                                      |           |      |  |      |           |   |  |   |            |   |  |   |           |  
|---------------------------------------------------------------- |  | ---- | --------- | ---- |  | ------------------------------------ | --------- | ---- |  | ---- | --------- | - |  | - | ---------- | - |  | - | --------- | -
|                                                                 |  |      |           |      |  | For the fiscal year ended August 31, |           |      |  |     
|                                                                 |  |     
|                                                                 |  | 1998 |           | 1999 |  | 2000                                 |           | 2001 |  | 2002
|                                                                 |  |      |           |      |  |                                      |           |      |  |     
|Operating Data:(1)                                               |  |      |           |      |  |                                      |           |      |  |      |           |   |  |   |            |   |  |   |           |  
|Revenue                                                          |  | $    | 537,538   |      |  | $                                    | 555,005   |      |  | $    | 620,269   |   |  | $ | 1,767,306  |   |  | $ | 2,120,344 |  
|Operating expenses                                               |  |      | 356,176   |      |  |                                      | 406,978   |      |  |      | 478,953   |   |  |   | 1,333,236  |   |  |   | 1,649,294 |  
|                                                                 |  |      |           |      |  |                                      |           |      |  |      |           |   |  |   |            |   |  |   |           |  
|Operating profit before amortization                             |  |      | 181,362   |      |  |                                      | 148,027   |      |  |      | 141,316   |   |  |   | 434,070    |   |  |   | 471,050   |  
|Amortization of intangibles and
goodwill                         |  |      | 14,380    |      |  |                                      | 14,465    |      |  |      | 20,077    |   |  |   | 89,319     |   |  |   | 17,500    |  
|Other amortization                                               |  |      | 13,180    |      |  |                                      | 19,491    |      |  |      | 22,551    |   |  |   | 64,768     |   |  |   | 80,100    |  
|                                                                 |  |      |           |      |  |                                      |           |      |  |      |           |   |  |   |            |   |  |   |           |  
|                                                                 |  |      | 153,802   |      |  |                                      | 114,071   |      |  |      | 98,688    |   |  |   | 279,983    |   |  |   | 373,450   |  
|Financing expenses                                               |  |      | 37,955    |      |  |                                      | 42,580    |      |  |      | 59,813    |   |  |   | 268,843    |   |  |   | 255,006   |  
|Investment and other income                                      |  |      | (5,321    | )    |  |                                      | (22,473   | )    |  |      | (103,901  | ) |  |   | (31,582    | ) |  |   | (37,084   | )
|                                                                 |  |      |           |      |  |                                      |           |      |  |      |           |   |  |   |            |   |  |   |           |  
|                                                                 |  |      | 121,168   |      |  |                                      | 93,964    |      |  |      | 142,776   |   |  |   | 42,722     |   |  |   | 155,528   |  
|Provision for (recovery of)
income taxes                         |  |      | 49,741    |      |  |                                      | 40,679    |      |  |      | 41,757    |   |  |   | (27,280    | ) |  |   | 47,610    |  
|                                                                 |  |      |           |      |  |                                      |           |      |  |      |           |   |  |   |            |   |  |   |           |  
|Earnings before the following                                    |  |      | 71,427    |      |  |                                      | 53,285    |      |  |      | 101,019   |   |  |   | 70,002     |   |  |   | 107,918   |  
|Minority interests                                               |  |      | (4,346    | )    |  |                                      | 9,791     |      |  |      | 2,174     |   |  |   | (3,196     | ) |  |   | 4,330     |  
|Interest in earnings (loss) of
Network TEN                       |  |      | 74,060    |      |  |                                      | 68,749    |      |  |      | 72,194    |   |  |   | 52,567     |   |  |   | (11,815   | )
|Interest in earnings (loss) of
other equity accounted affiliates |  |      |          |      |  |                                      |          |      |  |      | 2,286     |   |  |   | (14,491    | ) |  |   | (1,523    | )
|Gain on sale of an 18.5% economic
interest in Network TEN        |  |      | 60,757    |      |  |                                      |          |      |  |      |          |   |  |   |           |   |  |   |          |  
|Realized translation adjustments                                 |  |      | (6,000    | )    |  |                                      | (1,500    | )    |  |      | (1,300    | ) |  |   | (7,200     | ) |  |   | (1,000    | )
|                                                                 |  |      |           |      |  |                                      |           |      |  |      |           |   |  |   |            |   |  |   |           |  
|Net earnings for the year                                        |  | $    | 195,898   |      |  | $                                    | 130,325   |      |  | $    | 176,373   |   |  | $ | 97,682     |   |  | $ | 97,910    |  
|                                                                 |  |      |           |      |  |                                      |           |      |  |      |           |   |  |   |            |   |  |   |           |  
|Cash flows from:                                                 |  |      |           |      |  |                                      |           |      |  |      |           |   |  |   |            |   |  |   |           |  
|Operating activities                                             |  | $    | 144,289   |      |  | $                                    | 118,037   |      |  | $    | 128,267   |   |  | $ | 190,743    |   |  | $ | 186,723   |  
|Investing activities                                             |  |      | (155,432  | )    |  |                                      | (234,242  | )    |  |      | (681,191  | ) |  |   | (2,104,325 | ) |  |   | 374,325   |  
|Financing activities                                             |  |      | (54,251   | )    |  |                                      | 110,127   |      |  |      | 589,841   |   |  |   | 1,855,351  |   |  |   | (522,702  | )
|Balance Sheet Data (at period end):                              |  |      |           |      |  |                                      |           |      |  |      |           |   |  |   |            |   |  |   |           |  
|Intangibles and goodwill                                         |  | $    | 437,747   |      |  | $                                    | 428,900   |      |  | $    | 1,453,143 |   |  | $ | 3,877,579  |   |  | $ | 3,696,702 |  
|Total assets                                                     |  |      | 1,409,797 |      |  |                                      | 1,616,911 |      |  |      | 2,79,111  |   |  |   | 6,152,212  |   |  |   | 5,739,661 |  
|Long- term debt                                                  |  |      | 451,387   |      |  |                                      | 544,675   |      |  |      | 1,168,282 |   |  |   | 2,907,527  |   |  |   | 2,379,459 |  
|Equity instruments                                               |  |      | 11,591    |      |  |                                      | 11,591    |      |  |      | 11,591    |   |  |   | 1,280,094  |   |  |   | 1,386,178 |  
|Shareholders equity                                             |  |      | 555,695   |      |  |                                      | 686,596   |      |  |      | 812,211   |   |  |   | 2,145,327  |   |  |   | 2,264,977 |  
|U.S. GAAP Data:                                                  |  |      |           |      |  |                                      |           |      |  |      |           |   |  |   |            |   |  |   |           |  
|Operating income                                                 |  | $    | 134,066   |      |  | $                                    | 115,139   |      |  | $    | 102,020   |   |  | $ | 283,633    |   |  | $ | 364,052   |  
|Net earnings (loss) for the year                                 |  |      | 173,252   |      |  |                                      | 137,508   |      |  |      | 212,674   |   |  |   | 71,684     |   |  |   | (12,497   | )
|Total assets                                                     |  |      | 1,370,491 |      |  |                                      | 1,600,204 |      |  |      | 2,825,592 |   |  |   | 6,116,394  |   |  |   | 5,798,123 |  
|Long term debt                                                   |  |      | 451,387   |      |  |                                      | 535,423   |      |  |      | 1,123,903 |   |  |   | 3,687,962  |   |  |   | 3,335,517 |  
|Shareholders equity                                             |  |      | 517,970   |      |  |                                      | 673,558   |      |  |      | 858,038   |   |  |   | 1,236,987  |   |  |   | 1,357,402 |  
|Other Financial Data:                                            |  |      |           |      |  |                                      |           |      |  |      |           |   |  |   |            |   |  |   |           |  
|EBITDA (2)                                                       |  | $    | 181,362   |      |  | $                                    | 148,027   |      |  | $    | 141,316   |   |  | $ | 434,070    |   |  | $ | 471,050   |  
|Distributions from Network TEN                                   |  |      | 76,166    |      |  |                                      | 60,001    |      |  |      | 75,259    |   |  |   | 71,096     |   |  |   | 60,984    |  
|Capital expenditures and other
investments                       |  |      | 17,667    |      |  |                                      | 17,658    |      |  |      | 14,617    |   |  |   | 43,469     |   |  |   | 57,459    |  
|Fixed charge coverage                                            |  |      | 7.5       |      |  |                                      | 4.7       |      |  |      | 4.6       |   |  |   | 1.1        |   |  |   | 1.3       |  



---

|(1) |  | Operating data and results in the periods presented were impacted by the
following business acquisitions:
|--- |  | ---------------------------------------------------------------------------------------------------------



| |  |  | In fiscal year ended August 31, 1998, the Company acquired
CKMI, an English- speaking television broadcaster in Quebec, and
More FM, a radio operation in New Zealand;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

4



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##### Table of Contents





| |  |  | In fiscal year ended August 31, 2000, the Company acquired WIC;                                                              
| | - |  | -----------------------------------------------------------------------------------------------------------------------------
|
| |  |  | In fiscal year ended August 31, 2001, the Company acquired CanWest Publications; and                                         
|
| |  |  | In fiscal year ended August 31, 2002, the Company acquired
the remaining 50% interest in the National Post not already owned.



|    |  | Operating data and results under Canadian GAAP for the fiscal year ended
August 31, 2001 were impacted by the adoption of new standards in respect
of accounting for income taxes.
Operating data and results under Canadian and U.S. GAAP for the fiscal
year ended August 31, 2002 were impacted by the adoption of new standards
in respect of accounting for goodwill and other intangibles.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | EBITDA represents earnings from continuing operations before realized
translation adjustments, gain on sale of economic interests in Network
TEN, interest in earnings of Network TEN and other equity accounted
affiliates, minority interests, provision for income taxes, investment and
other income, financing expenses, amortization and loss from discontinued
operations. EBITDA is not intended to represent cash flow from operations
as defined by Canadian GAAP and should not be used as an alternative to
operating income or income from continuing operations as an indicator of
operating performance or cash flow as a measure of liquidity. EBITDA as
presented herein may not be comparable to similarly titled measures
reported by other companies. EBITDA is however an indicator of the
Companys ability to fulfill its obligations under its senior
indebtedness.

EXCHANGE RATE DATA

The Company prepares its financial statements in Canadian dollars. In this
annual report, unless otherwise specified, all dollar amounts are expressed in
Canadian dollars. The following tables set forth, for the periods and dates
indicated, information concerning the exchange rates between U.S. dollars and
Canadian dollars based on the noon ratesof exchange as reported by the Bank of
Canada, expressed in U.S. dollars per Cdn$1.00. No representation is made that
the Canadian dollar amounts, on the one hand, or the U.S. dollar amounts, on
the other hand, referred to in this annual report could be or could have been
converted into U.S. dollars or Canadian dollars, as the case may be, at any
particular rate or at all.

|                       |  |      |        |      |  |                        |        |      |  |      |        |  |  |   |        |  |  |   |        | 
|---------------------- |  | ---- | ------ | ---- |  | ---------------------- | ------ | ---- |  | ---- | ------ |  |  | - | ------ |  |  | - | ------ | 
|                       |  |      |        |      |  | Years ended August 31, |        |      |  |      |        |  |  |  
|                       | 
|                       |  | 1998 |        | 1999 |  | 2000                   |        | 2001 |  | 2002
|                       |  |      |        |      |  |                        |        |      |  |     
|High for period        |  | $    | 0.7292 |      |  | $                      | 0.6891 |      |  | $    | 0.6969 |  |  | $ | 0.6695 |  |  | $ | 0.6618 | 
|Low for period         |  |      | 0.6341 |      |  |                        | 0.6423 |      |  |      | 0.6629 |  |  |   | 0.6242 |  |  | $ | 0.6199 | 
|End of period          |  |      | 0.6351 |      |  |                        | 0.6682 |      |  |      | 0.6793 |  |  |   | 0.6300 |  |  | $ | 0.6331 | 
|Average for period (1) |  |      | 0.6901 |      |  |                        | 0.6643 |      |  |      | 0.6805 |  |  |   | 0.6448 |  |  | $ | 0.6372 | 



---

|(1) |  | The average of the noon buying rates on the last business day of each
month during the period.
|--- |  | ----------------------------------------------------------------------------------------------

|                |  |            |        |           |  |           |        |          |  |             |        |          |  |   |        |  |  |   |        |  |  |   |        | 
|--------------- |  | ---------- | ------ | --------- |  | --------- | ------ | -------- |  | ----------- | ------ | -------- |  | - | ------ |  |  | - | ------ |  |  | - | ------ | 
|                |  |            |        |           |  |           |        |          |  | Month ended |        |          |  |   |        |  |  |   |        |  |  |  
|                |  |           
|                |  | August 31, |        | Sept. 30, |  | Oct . 31, |        | Nov. 30, |  | Dec. 31,    |        | Jan. 31,
|                |  | 2002       |        | 2002      |  | 2002      |        | 2002     |  | 2002        |        | 2003    
|                |  |            |        |           |  |           |        |          |  |             |        |         
|High for period |  | $          | 0.6443 |           |  | $         | 0.6434 |          |  | $           | 0.6409 |          |  | $ | 0.6439 |  |  | $ | 0.6462 |  |  | $ | 0.6570 | 
|Low for period  |  |            | 0.6276 |           |  |           | 0.6306 |          |  |             | 0.6273 |          |  |   | 0.6289 |  |  |   | 0.6331 |  |  |   | 0.6350 | 

In this annual report, A$ means Australian dollars, Cdn$ or $ means
Canadian dollars,  means Euros, Ire£ means Irish punts, NZ$ means New Zealand dollars and
US$ means U.S. dollars.

On
February 26, 2003, the Bank of Canada noon rate for Canadian dollars was:



| |  |  | A$1.1023
per Cdn$1.00;   
| | - |  | -------------------------
| |  |  | Euro 0.6202 per Cdn$1.00;

5



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| |  |  | NZ$1.1854 per Cdn$1.00; and
| | - |  | ---------------------------
|
| |  |  | US$0.6696 per Cdn$1.00.    

INDUSTRY DATA

Unless otherwise indicated in this annual report:



| |  |  | Individual newspaper circulation figures are from the Audit Bureau of
Circulations, an independent research organization that audits the
circulation of print media vehicles, including newspapers; industry-
wide newspaper industry advertising revenue, circulation revenue,
circulation and median newspaper price data are from the Canadian
Newspaper Association, a not- for- profit industry association
representing Canadian newspaper publishers.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Broadcasting viewership data for Canada is from Nielsen Media Research
Limited, a company that provides television audience measurement and
related services, and BBM Bureau of Measurement, a not- for- profit
broadcast research company that provides ratings information for the
television, radio and interactive media industries.                                                                                                                    
|
| |  |  | Broadcasting viewership data for Australia, New Zealand and the
Republic of Ireland is from AC Nielsen Corporation, a company that
provides market research, information and analysis to the consumer
products and services industries.                                                                                                                                                                                                                     
|
| |  |  | Broadcasting viewership data for Northern Ireland is from the
Broadcasters Audience Research Board Ltd., a company that provides
television audience data for the United Kingdom.                                                                                                                                                                                                                                                                          
|
| |  |  | Radio listenership data for New Zealand is from the New Zealand Radio
Broadcasters Association, an industry association.                                                                                                                                                                                                                                                                                                                                    

Although the Company believes these independent sources are generally
reliable, the accuracy and completeness of this information is not guaranteed
and has not been independently verified.



|B. |  | Capitalization and Indebtedness
|-- |  | -------------------------------

Not applicable.



|C. |  | Reasons for the Offer and Use of Proceeds
|-- |  | -----------------------------------------

Not applicable.



|D. |  | Risk Factors
|-- |  | ------------

The Companys substantial debt could adversely affect its financial condition.

The Company now has a substantial amount of debt. As of August 31, 2002, it
had $2,530 million in long term debt (including the current portion) and
shareholders equity of $2,265 million, resulting in a total debt to
capitalization ratio of 53%.

The Companys substantial indebtedness could have important consequences. For
example, it could:



| |  |  | make it more difficult for the Company to satisfy its
obligations with respect to the US$425.0 million 10 5/8% senior
subordinated notes due 2011, referred to herein as the notes, and
its obligations under the senior credit facility;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

6



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##### Table of Contents





| |              |  | require the Company to dedicate a substantial portion of its
cash flow from operations to payments on debt, which will reduce
amounts available for working capital, capital expenditures,
marketing, product and program development and other general
corporate purposes. The Company estimates cash flow requirements to
service existing debt over the twelve months ending August 31, 2003
to be $368 million, including scheduled repayments under the senior
credit facility of $127 million. Scheduled annual repayments beyond
August 2002 under the senior credit facility are as follows:
| | ------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | Years ending:

|            |  |              | 
|----------- |  | ------------ | 
|August 2004 |  | $127 million
|August 2005 |  | $166 million
|August 2006 |  | $205 million
|August 2007 |  | $192 million
|August 2008 |  | $627 million
|August 2009 |  | $352 million



| |  |  | limit the Companys flexibility in planning for, or reacting
to, changes in its business and the industry in which it operates;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | increase the Companys vulnerability to general adverse
economic and industry conditions;                                      
|
| |  |  | place the Company at a competitive disadvantage compared to
its competitors with less debt; and                                
|
| |  |  | limit the Companys ability to borrow additional funds.                                                                        

In addition, a portion of the Companys debt, including debt under the senior
credit facility, bears interest at variable rates. An increase in the interest
rates on the debt will reduce the funds available to repay the notes and other
debt and for operations and future business opportunities and will intensify
the consequences of the Companys leveraged capital structure.

The Company may not successfully implement the strategies relating to its
acquisitions or achieve the anticipated benefits from these acquisitions.

The acquisitions of WIC, CanWest Publications and the remaining 50% interest in
The National Post Company form part of a set of business strategies which are
based on developing a comprehensive platform of media assets. The Company is in
the process of refining its strategies, which include the offering of multi-
platform advertising solutions, the pursuit of cross- promotional opportunities
and enhanced content development. The Company believes that its convergence and
synergy strategies will enable it to achieve efficiencies. However, these
strategies are still under development. There can be no assurances that the
Company will be able to fully develop or implement these strategies or that the
Company will realize the anticipated benefits of these strategies.
Implementation of these strategies could also be affected by a number of
factors beyond the Companys control, including operating difficulties,
increased operating costs, regulatory developments, general or local economic
conditions or increased competition. In addition, the Companys ability to
achieve other anticipated benefits from its recent acquisitions, including cost
savings and operating efficiencies, will depend, in large part, on its ability
to successfully integrate certain of the operations of the acquired assets with
its existing operations. The success of the integration of the newly acquired
assets will also require the dedication of management and other personnel
resources, which may temporarily distract their attention from day- to- day
business. There can be no assurances that the Company will accomplish the
integration of any newly acquired assets successfully.

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The Company may not be able to effectively manage growth.

The Company has recently experienced substantial growth in its business and has
significantly expanded its operations both domestically and internationally.
The Company has made a number of other acquisitions in the past and it plans to
continue to make acquisitions in the future. Certain of these acquisitions have
involved expansion into businesses in which the Company has historically had
limited or no involvement. The Company intends to continue to increase business
in Canada and in foreign markets, further expand the types of businesses in
which it engages and make selective acquisitions. This growth and expansion has
placed, and will continue to place, a significant demand on management
resources. To manage growth effectively, the Company must maintain a high level
of content quality, efficiency and performance and must continue to enhance its
operational, financial and management systems, and attract, train, motivate and
manage its employees. The Company may not be able to effectively manage this
expansion and any failure to do so could have a material adverse effect on its
business, financial condition or results of operation.

The Company operates in highly competitive industries.

Participants in the broadcasting and publishing industries depend primarily
upon the sale of advertising and paid subscriptions to generate revenue.
Competition for advertising, subscribers, viewers, listeners, readers and
distribution is intense and comes from broadcast television stations and
networks and specialty cable channels; radio; local, regional and national
newspapers; direct mail; and other communications and advertising media that
operate in these markets. The Companys competitors include both privately-
owned companies and government- owned market participants. In addition, there
is increasing consolidation in the Canadian broadcasting, publishing and other
media industries and competitors increasingly include market participants with
interests in multiple industries and media. There can be no assurances that
existing and future competitors will not pursue or be capable of achieving
similar or competitive business strategies. Some competitors have greater
financial and other resources than the Company. Competing successfully depends
on a number of factors, including the Companys ability to secure popular
television programs and high quality editorial content, the Companys ability
to achieve high distribution levels and subscriptions and the Companys ability
to generate advertising revenue. There can be no assurances that the Company
will be able to compete successfully in the future against existing or
potential competitors, or that increased competition will not have a material
adverse effect on its business, financial condition or results of operation.

The Company competes and will continue to compete with alternative technologies
and it may be required to invest a significant amount of capital to address
continued technological development.

The media industry is experiencing rapid and significant technological changes,
which may result in alternative means of program and content transmission and
which could have a material adverse effect on the Companys business, financial
condition or results of operation. The continued growth of the Internet has
presented alternative content distribution options that compete with
traditional media. Further, in each of the Companys broadcasting markets,
industry regulators have authorized direct- to- home satellite, microwave and
cable services, and may authorize other alternative methods of transmitting
television, radio and other content with improved speed and quality. The
Company may not be able to successfully compete with existing or newly
developed alternative technologies or may be required to acquire, develop or
integrate new technologies. The cost of the acquisition, development or
implementation of new technologies could be significant and the Companys
ability to fund such implementation may be limited and could have a material
adverse effect on its ability to successfully compete in the future.

Revenue is subject to cyclical and seasonal variations and is generated
primarily from advertisers.

The Companys business is cyclical in nature. Because it depends upon the sale
of advertising for a substantial portion of revenue, the Companys operating
results are sensitive to prevailing economic conditions, including changes in
local, regional and national economic conditions, particularly as they may
affect advertising expenditures. In addition, newspaper publishing is both
capital and labor intensive and, as a result, newspapers have relatively high
fixed cost structures. During periods of economic contraction,

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revenue may decrease while some costs remain fixed, resulting in decreased
earnings. Similarly, because a substantial portion of revenue is derived from
retail advertisers, which have historically been sensitive to general economic
cycles, the Companys business, financial condition or results of operation
could be materially adversely affected by a downturn in the retail sector.

The Companys business has experienced and is expected to continue to
experience significant seasonality due to, among other things, seasonal
advertising patterns and seasonal influences on peoples viewing, reading and
listening habits. Typically, revenue is lowest during the fourth quarter of the
fiscal year, which ends in August, and highest during the first quarter of the
fiscal year.

The Company may be adversely affected by variations in television programming
acquisition costs.

The most significant cost in the broadcasting businesses is television
programming. There can be no assurances that the Companys broadcasting
operations will not be exposed in the future to volatile or increased
television programming costs which may adversely affect its operating results.
Developments in cable, satellite or other forms of distribution could also
affect both the availability and the cost of programming and increase
competition for advertising expenditures. In addition, the production and
distribution costs of television and other forms of entertainment, as well as
television programming costs, may increase. Moreover, programs may be purchased
for broadcasting two to three years in advance, making it difficult to predict
how such programs will perform. In some instances, programs must be replaced
before their costs have been fully amortized, resulting in revised amortization
periods or impairments that would increase operating costs.

The Company may be adversely affected by strikes and other labor protests.

The Company estimates approximately half of its employees are represented by
collective bargaining agreements. Any strikes or other forms of labor protest
could disrupt operations and could have a material adverse effect on the
Companys business, financial condition or results of operation. The CHAN
television station in Vancouver, as well as the newspapers in Vancouver, The
Vancouver Sunand The Province; the Victoria Times Columnist, the Calgary
Herald; and the Ottawa Citizenhave each been subject to a strike over the past
five years. These strikes have ranged in duration with the longest continuing
for approximately six months (at the Calgary Herald).

The Company may be adversely affected by variations in the cost of newsprint.

Newsprint expense represents one of the Companys largest raw material expenses
and, after wages and employee benefits expense and programming acquisition
costs, is the Companys most significant operating cost. Newsprint costs vary
widely from time to time and price changes in newsprint can significantly
affect the overall earnings of the publishing operations. There can be no
assurances that the publishing operations will not be exposed in the future to
volatile or increased newsprint costs which could have a material adverse
effect on the Companys business, financial condition or results of operation.

A significant portion of the Companys adjusted pro forma EBITDA is
attributable to distributions from Australias Network TEN; there can be no
assurances that they will continue at the same level or at all.

Distributions from The Ten Group Pty. Limited, referred to herein as Network
TEN, in the form of dividends and interest payments have historically
represented a significant portion of the Companys adjusted pro forma EBITDA,
and the Company expects they will continue to be a significant portion of its
EBITDA in the future. The Company does not own a majority or controlling
voting interest in Network TEN, nor does it exercise control over its
management, strategic direction or daily operations.

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The Company may be adversely affected by foreign exchange fluctuations.

Virtually all of the Companys revenue is generated in the local currencies of
countries in which the Company operates, while certain programming and other
expenses are incurred by the Company in U.S. dollars. Transaction losses have
been nominal. However, declines in the values of the currencies of Australia,
New Zealand, Ireland and the United Kingdom relative to the Canadian dollar
have affected the comparison of Canadian dollar translated amounts over periods
of time. The most significant impact results from the Companys economic
interest in Network TEN. For example, the average rate of exchange used to
translate results from Network TEN increased 4% in fiscal 2002, compared to
fiscal 2001. Had the average exchange rate remained constant over the two
years, the Companys equity in the loss of Network TEN in fiscal 2002 would
have been $3.0 million higher. Additionally, since the Companys initial
acquisition of Network TEN in 1992, it had realized a total of $10.1 million in
currency translation losses arising from distributions made by Network TEN in
respect of the Companys 57.5% interest to August 31, 2002.

In addition a significant portion of the Companys borrowing is denominated in
U.S. dollars, and interest, principal and premium, if any, on such borrowing
must be paid in U.S. dollars. As a result, the Company is exposed to foreign
currency exchange risk. The Company has entered into a cross currency interest
rate swap, which converts the U.S. dollar principal and interest payable under
the notes into a Canadian dollar obligation, to hedge the foreign exchange rate
risk with respect to the notes. However, there can be no assurances that
exchange rate fluctuations will not have a material adverse effect on the
Companys ability to make payments in respect of the notes, as the Company may
be required to provide cash or other collateral to secure its obligations in
respect of its hedging transactions.

Changes in government regulation could adversely affect the Companys business,
financial condition or results of operation.

Changes to the regulations and policies governing broadcast television,
specialty cable channels and program distribution through cable and direct- to-
home satellite services, the introduction of new regulations or policies or
terms of licenses or treatment of the tax deductibility of advertising
expenditures could have a material adverse effect on the Companys business,
financial condition or results of operation.

Broadcasting operations are generally subject to extensive government
regulation. Regulations govern the issuance, amendment, renewal, transfer and
ownership of broadcast licenses in virtually all jurisdictions and, in some
jurisdictions, govern the timing and content of programming; the timing,
content and amount of commercial advertising; and the amount of foreign versus
domestically produced programming. In many jurisdictions, including Australia,
Canada and Northern Ireland, there are significant restrictions on the ability
of foreign entities to own or control broadcasting businesses.

The Companys Canadian television operations are regulated pursuant to the
Broadcasting Act(Canada). Television broadcasting operations in Canada are
also subject to simultaneous program substitution regulatory requirements,
cable priority carriage rules, specialty service access rules, content rules
and foreign ownership restrictions, all of which the Company must comply with
and changes to which could have an adverse affect on the Company.

A House of Commons committee announced on May 10, 2001 that it is undertaking
an 18- month study of the current state and future direction of Canadas
broadcasting system and the efficacy of the Broadcasting Act in meeting policy
objectives. Hearings were held across the country with participation from
various interests, including the Company. Among the issues being considered by
the Committee include patterns of media ownership, cross- media ownership and
vertical integration and Canadian content and cultural diversity. The
Committee is expected to issue its report in the next few months. The
introduction of new laws, regulations or policies with respect to these matters
could have a material adverse effect on the Companys business, financial
condition or results of operation.

The Companys operations outside of Canada are also subject to government
regulation. In Australia, the Companys investments are subject to statutes and
regulation regarding licensing, programming standards, ownership and control of
commercial broadcasting services and administering the allocation of

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broadcasting frequency spectrum. Although the New Zealand radio and television
broadcasting industry was deregulated in 1989, the Companys New Zealand
operations remain subject to broadcasting standards and to general legislation
concerning foreign investment in New Zealand. Television broadcasting in the
Republic of Ireland is regulated with respect to, among other things,
licensing, ownership and control, advertising and programming. The Companys
Northern Ireland operations are subject to rules regarding licensing, foreign
and other ownership restrictions and content quotas. The government of the
United Kingdom has proposed a major revision to its Broadcasting Act that may
see the loosening of certain broadcast license foreign ownership restrictions
that have limited the ability of CanWest in the region. It is expected that
the bill encompassing these changes will make its way through the U.K.
parliamentary process during 2003. There can be no assurances that any changes
to the rules and regulations affecting the Companys operations outside of
Canada will not have a material adverse effect on the business, financial
condition or results of operation of the Companys non- Canadian subsidiaries
and investments or the Companys ability to maintain its ownership interests in
its non- Canadian subsidiaries and investments.

The Canadian Radio-television and Telecommunications Commission or CRTC and
other applicable broadcasting regulatory authorities may not renew the
Companys existing broadcasting licenses or grant it new licenses on acceptable
terms, or at all.

The Companys CRTC broadcasting licenses must be renewed from time to time,
typically every seven years, and cannot be transferred without regulatory
approval. The CRTC considered the Companys applications for the renewal of the
licenses for all of its Canadian television stations, except CJNT (Montreal)
(the license for which expires in 2007) in 2001. New licenses have been granted
with effect from September 1, 2001 for the maximum seven year term. The
Companys license for Global Prime expires in 2004.

While CRTC regulations and policies do not require CRTC approval before a
broadcaster purchases an unregulated media entity, such as a newspaper, the
CRTC considered the issue of the Companys cross- media ownership at license
renewal proceedings. The CRTC has expressed its support for the promotion of
diversity in broadcasting expression at a local and national level, primarily
with respect to news voices, and has the power to preserve diversity of voices
and prevent or address the emergence of undue competitive advantage on behalf
of one licensee where it is found to exist. As a condition of the most recent
license renewals, the CRTC directed the Company to abide by its proposed code
of conduct respecting the maintenance of separate management over the
television and print news operations. There can be no assurances that, in
future license renewal proceedings, the CRTC will not require the Company to
take measures which could have a material adverse effect on the integration of
CanWest Publications with the Companys broadcasting assets and the Companys
ability to continue to realize certain of the anticipated benefits of acquiring
CanWest Publications.

The licenses held by Network TENs stations in Sydney, Melbourne, Brisbane and
Perth were renewed in 2002 and will be subject to renewal by the Australian
Broadcasting Authority in 2007. The license for Network TENs Adelaide station
is subject to renewal in 2004. Licenses in other jurisdictions are also subject
to renewal from time to time.

The Companys inability to renew any of its licenses or acquire new interests
or licenses on acceptable terms, or at all, could have a material adverse
effect on its business, financial condition or results of operation.

The Commissioner under the Competition Act (Canada) retains the right to
challenge a transaction such as the acquisition of CanWest Publications at any
time up to three years after the closing of the transaction.

Under the Competition Act, a transaction satisfying prescribed thresholds is
subject to mandatory pre- merger notification to the Commissioner of
Competition and observance of a prescribed short- form or long- form waiting
period during which the parties are prohibited from closing the transaction.
Where the Commissioner determines the proposed transaction is likely to prevent
or lessen competition substantially, the Commissioner may apply to the
Competition Tribunal for an order prohibiting it or an order permitting

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it provided certain assets are divested and other conditions are satisfied.
Where the Commissioner has not made such a determination, the Commissioner
typically advises the parties in writing that, at that time, the Commissioner
will not apply to the Competition Tribunal for an order in respect of the
transaction. This no- action letter remains subject to the Commissioners
statutory right to challenge a transaction at any time up to three years after
a transaction has been completed. If the Commissioner successfully challenges a
completed transaction, the Competition Tribunal may issue an order ordering
divestiture of assets or shares or dissolution of the merger. Also, with the
consent of the parties, the Competition Tribunal may issue an order to take
such other action as is deemed necessary to remedy any substantial lessening or
prevention of competition the Competition Tribunal determines would result from
or would be likely to result from the completion of the transaction.

The acquisition of CanWest Publications, and the remaining 50% interest in the
National Postwere subject to pre- merger notifications under the Competition
Act. The Commissioner issued no- action letters prior to the closing of the
acquisitions of CanWest Publications and the remaining 50% interest in the
National Post. However, the Commissioner still retains the statutory right to
challenge the acquisitions at any time up to three years after it has been
completed, a right the Commissioner retains in every transaction.

CanWest Global Communications Corp. may not be successful in defending a
lawsuit which has been commenced against CanWest Global Communications Corp.
and certain of its subsidiaries.

On March 5, 2001, certain plaintiffs who owned a 29.3% interest in CanWest
Broadcasting Ltd. or CBL filed a statement of claim with the Ontario Superior
Court of Justice against CanWest Global Communications Corp., certain of its
subsidiaries and Israel Asper. The plaintiffs claim, among other things, that
the defendants:



| |  |  | have acted in a manner that is oppressive and unfairly prejudicial to
the plaintiffs;                                                                     
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | have improperly favored the interests of the defendants over
the interests of CBL and the plaintiffs (including the diversion of
corporate opportunities);
|
| |  |  | owe fiduciary duties to the plaintiffs; and                                                                                                               
|
| |  |  | have wrongly terminated certain contracts with the plaintiffs
and replaced them with non- arms length contracts.                                         

The plaintiffs are seeking, among other things, damages of $345.0 million
(including aggravated and punitive damages).

At the time of the commencement of the action, the Company owned 70.67% of CBL
and the plaintiffs owned the minority interest. CBL owned the Global Television
Network stations in British Columbia (CKVU), Manitoba (CKND) and Saskatchewan
(CFRE and CFSK). On May 1, 2001, CBL amalgamated with one of the Companys
indirect wholly- owned subsidiaries to continue as CBL Amalco. Under the terms
of the amalgamation agreement, the Company received all of the shares of CBL
Amalco and the minority shareholders of CBL received special preference shares
of CanWest Global Communications Corp. CanWest Global Communications Corp.
redeemed the special preference shares for $57.7 million on December 18, 2002.
There can be no assurances as to the outcome of the lawsuit, the timing or
amounts of any payments the Company may make in connection with the lawsuit
(including litigation expenses), whether any additional allegations or claims
will be made, how long the suit will last or as to any of the other risks
inherent in any litigation. There can be no assurances that CanWest Global
Communications Corp. and the other defendants will be successful in defending
this lawsuit. While the Company believes these claims to be substantially
without merit and the suit will not have a material adverse effect on the
Company, a significant adverse result could have a material adverse effect on
the Companys business, financial condition or results of operation.
Specifically, the lawsuit could adversely affect the value of the Companys
equity interests in its subsidiaries named as defendants.

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The Company does not control and is not permitted to control some of its
broadcasting assets.

The Company does not own a majority voting interest in Australias Network TEN,
nor does it control its management or strategic direction, and the Company is
not permitted under Australian law to own more than 15% of the equity of
Network TEN. The Company does not own a majority interest in Northern Irelands
UTV, nor does it have any representation on its board of directors and under a
combination of British broadcasting and securities laws the Company is not
permitted to own more than 29.9% of UTV. The Company does not own a majority
interest in TV3 and the Company believes it is unlikely regulatory authorities
in the Republic of Ireland would permit it to own more than 45% of TV3. There
can be no assurances that any or all of Network TEN, UTV and TV3 will not take
any actions that could have a material adverse effect on the Companys economic
or ownership interest in such entities.

The Company may be adversely affected by changes in government incentive
programs for Canadian program production.

The CRTC requires Canadian broadcasters to broadcast certain amounts of content
of Canadian origin. Often, a portion of the production budgets of Canadian
programs is financed by Canadian government agencies and incentive programs,
such as the Canadian Television Fund, Telefilm Canada and federal and
provincial tax credits.

There can be no assurances that such financing will continue to be available at
current levels, or at all. Any change in the policies of Canada or its
provinces in connection with their incentive programs could have an adverse
effect on the Companys business, financial condition or results of operation.

The Company is subject to extensive environmental and other regulations.

The Company is subject to a variety of Canadian and foreign environmental laws
and regulations concerning emissions to the air, water and sewer discharges,
handling, storage and disposal of wastes, recycling, remediation of
contaminated sites, or otherwise relating to protection of the environment.
Environmental laws and regulations and their interpretation have changed
rapidly in recent years and may continue to do so in the future. Failure to
comply with present or future laws or regulations could result in substantial
liability. The Companys properties, as well as areas surrounding those
properties, particularly those in areas of long- term industrial use, may have
had historic uses (or may have current uses, in the case of surrounding
properties) which may affect its properties and require further study or
remedial measures. There can be no assurances that all environmental
liabilities have been determined, that any prior owner of the properties did
not create a material environmental condition not known to the Company, or that
a material environmental condition does not otherwise exist at any of its
properties.




ITEM 4. INFORMATION ON THE COMPANY



|A. |  | History and Development of the Company
|-- |  | --------------------------------------

The Company is an international media company with interests in broadcast
television, newspapers, radio, specialty cable channels and Internet websites
in Canada, Australia, New Zealand, the Republic of Ireland and Northern
Ireland. Since its incorporation in 2000, the majority of the Companys
revenue has been derived from its Canadian television operations and its
Canadian publishing operations, the latter of which were acquired at the end of
2000 for approximately $3.1 billion. Prior to such acquisition, the Company
did not have any significant publishing operations.

On September 28, 2000, the Company was incorporated under the Canada Business
Corporations Act(Canada) as an indirect wholly- owned subsidiary of CanWest
Global Communications Corp., to acquire 100% of the common shares of Global
Television Network Inc., a wholly- owned subsidiary of CanWest Global
Communications Corp. and to consummate the acquisition of CanWest Publications
described below. The Companys corporate and principal office is located on
the 31st Floor TD Centre, 201 Portage Avenue, Winnipeg, Manitoba, R3B 3L7. The
Companys telephone number is (204) 956-2025. The

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Company appointed CanWest International Corp., a Delaware corporation, as its
authorized agent. CanWest International Corp.s address is c/o Corporation
Service Company, 2711 Centerville Road, Wilmington, Delaware 19808.

In Canada, through its 100% ownership of Global Television Network Inc.
(GTNI), the Company owns 100% of Global Communications Limited (GCL). GCL
owns and operates 16 Canadian television stations, eleven of which comprise the
Global Television Network (Global Television). Of the remaining stations,
three comprise the Companys CH network and two are affiliated with another
network. In addition to the conventional free-to-air television stations, GCL
owns Global Prime, a specialty television channel, and GTNI has varying
interests in six partnerships which own and operate digital specialty
television channels as follows: Lonestar (100%); DejaView (100%); Fox Sports
World Canada (100%); Xtreme Sports (100%); mentv (49%); and Mystery TV
(45.05%). GCL owns and operates, through wholly-owned subsidiaries, 12 daily
metropolitan Canadian newspapers, several non-daily newspaper and other
publications businesses, and The National Post Company which produces the
National Post, a Canadian daily national newspaper. GCL also owns 100% of
canada.com New Media Inc., which owns and operates canada.com, a full-service
Internet portal and a number of websites affiliated with the Companys media
properties. Additionally, the Companys electronic publishing arm consists of
FP Data and Infomart.

Internationally, the Company owns CanWest Television NZ Limited which owns and
operates New Zealands TV3 and TV4 Television Networks (TV3 New Zealand and
TV4 New Zealand respectively); CanWest Radio NZ Limited (CanWest Radio NZ)
which owns and operates the More FM and RadioWorks networks throughout New
Zealand. The Company also has significant investments in Australia, in The TEN
Group Pty. Limited (Network TEN), in the Republic of Ireland, in TV3
Television Network Limited (TV3 Ireland) and in Northern Ireland, in Ulster
Television plc. (UTV). The Companys Interactive division holds interests in
Internet Broadcasting Systems Inc., LifeServ Corporation, Medbroadcast
Corporation and All Sport Ventures Inc.

Recent Developments

Sale of Certain Community Newspapers

On February 14, 2003, the Company sold community newspapers and related assets
in Ontario to Osprey Media Inc. for cash proceeds of approximately $193.5
million. The sale included daily newspapers such as the St. Catharines
Standard, the Brantford Expositor,the Niagara Falls Review, and the Welland
Tribune. The transaction included a number of other periodicals as well as
commercial printing operations in Hamilton. Revenue and EBITDA generated from
these properties in fiscal 2002 were approximately $87 million and $22 million
respectively.

On August 8, 2002 the Company sold all of its community newspapers and related
assets in Atlantic Canada and Saskatchewan to GTC Transcontinental Group Ltd.
for cash proceeds of approximately $257 million. The sale included daily
newspapers such as the Halifax Daily News, Charlottetown Guardian, St. Johns
Telegram, New Glasgow Evening News, Cape Breton Post, Truro Daily News, Prince
Albert Daily Herald, and the Moose Jaw Times. The transaction also included
other weeklies, monthlies, shoppers and insert publications, as well as
commercial printing operations in Prince Edward Island and Saskatchewan.
Revenue and EBITDA generated from these properties in fiscal 2002 were
approximately $94 million and $30 million, respectively.

The proceeds from these sales were used to reduce senior bank debt.

Settlement of Tax Dispute by Network TEN

On August 30, 2002 Network TEN settled a long-standing dispute with the
Australian Tax Office (ATO) over the deductibility of debenture interest
payments. The settlement resulted in a non-recurring tax expense to Network
TEN of A$36 million, including costs incurred in respect of the dispute. Due
to a change in legislation, debenture interest payments made by TEN will not be
deductible after June 30, 2004.

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Acquisition of Eye Corp. by Network TEN

In August 2002 Network TEN bought the remaining 40% interest in Eye Corp,
Australias second largest outdoor advertising company. Network TEN had
acquired its original 60% interest in December 2000.The total purchase price
of A$199.9 million for the 100% interest was paid in cash with available
funds, including draws under Network TENs credit facility. Eye Corp.s outdoor
signage and airport, point of purchase and shopping center advertising
complement Network TENs broadcasting operations and provide Network TEN with
enhanced multi-media advertising opportunities. Eye Corp. operates an
extensive out-of-home advertising network across Australia, and to a lesser
extent, in several South East Asian countries including Indonesia and Malaysia.
During 2002, Network TEN wrote down its investment in Eye Corp. by A$178
million.

Radio Application Approved

In August 2002 the Company received its first broadcast licence for radio in
Canada, 99.1 COOL FM, a jazz station, in its home city of Winnipeg. The
station will launch in 2003 and will be an important first step for the
Companys expansion into Canadian radio.

Acquisition of the remaining 50% interest in theNational Post

In August 2001 the Company entered into a letter agreement with Hollinger to
acquire the remaining 50% interest in the National Post, which transaction
closed in April 2002. The purchase price consisted of nominal cash
consideration and other consideration in the form of agreements and
undertakings exchanged by the parties. In addition, Hollinger was required to
make a payment to The National Post Company in respect of cash requirements of
The National Post Company from August 31, 2001 to March 31, 2002 and the
Company did not have any corresponding or other requirement to advance or
contribute monies to The National Post Company prior to March 31, 2002. In
September 2001, CanWest assumed the day-to-day management of the National Post.

Acquisition of the Minority Interest in CanWest Broadcasting Ltd. (CBL)

In May 2001, through an amalgamation of subsidiaries, one of which was not
wholly owned, the Company acquired the 29.3% minority interest in its Global
Television Network stations in British Columbia (CKVU), Manitoba (CKND) and
Saskatchewan (CFRE and CFSK). Under the terms of the amalgamation agreement, a
wholly-owned subsidiary received all of the shares of the amalgamated company
and the minority shareholders of CBL received Series 2 Preference shares of
CanWest Global Communications Corp. The Series 2 Preference shares were
redeemed for cash of $57.7 million on December 18, 2002. The former minority
shareholders of CBL have commenced a lawsuit against CanWest and certain of its
subsidiaries. See Legal Proceedings.

Sale of Certain Assets Acquired From WIC International Communications Ltd.
(WIC)

As a condition of regulatory approval of the acquisition of WICs television
stations, which was obtained in July 2000, the Company was required to divest
its 70% interest in the former WIC station in Montreal and one of three
stations serving the Vancouver/Victoria market. The Company placed its
interests in CFCF (Montreal) and CKVU (Vancouver) in voting trust arrangements
pending their sale. The sale of CFCF to CTV Inc. was completed on September
12, 2001 for approximately $87 million. The sale of CKVU to CHUM Limited was
completed on October 31, 2001 for approximately $133 million.

In response to the Canadian Competition Bureaus concerns regarding the joint
ownership of ROBTv by the Company and another Canadian multi-media company, the
Companys 50% interest in ROBTv was placed in a voting trust arrangement. The
trustee sold the Companys interest to Thomson Canada Limited on August 31,
2001 for approximately $30.0 million.

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Investment by Granada Media plc in the Republic of Irelands TV3

In March 2001, Granada Media, Britains leading television content producer and
broadcaster, acquired a 45% interest in the Republic of Irelands TV3. Through
a series of transactions, the Company retained its 45% interest in TV3 and
received approximately $32.5 million, which the Company used to repay senior
debt. In conjunction with its investment in TV3, Granada Media entered into a
long-term program supply agreement with TV3 under which several top-rated
programs moved to TV3 from a competing network.

Acquisition of the Minority Interest in RadioWorks New Zealand Limited

In January, 2001, the Company acquired the shares of RadioWorks not already
owned by it for approximately $21.8 million. The Company had previously
acquired 72% of the shares of RadioWorks in May 2000 through a series of
purchases on the New Zealand Stock Exchange for approximately $52.1 million.

Acquisition of CanWest Publications

On November 16, 2000 the Company acquired substantially all of Hollingers
Canadian newspapers and Internet assets and a 50% interest in the National
Post.The purchase price was approximately $3.1 billion, and is subject to
adjustment for working capital.

The consideration for the acquisition consisted of:



| |  |  | $1,985.5 million in cash;                                                                                                                                       
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |  |                                                                                                                                                                 
| |  |  | approximately $766.8 million of subordinated notes issued to Hollinger; and                                                                                     
| |   |  |                                                                                                                                                                 
| |  |  | 24.3 million non-voting shares and 2.7 million Series 1 Preference shares issued by CanWest Global Communications Corp. to
Hollinger aggregating $375.5 million.

This acquisition has had a significant impact on the financial condition, and
results of operations of the Company, accounting for 56% of revenue and 62% of
EBITDA in fiscal 2002.

To finance the cash portion of the consideration for the acquisition the
Company entered into a $2.8 billion senior secured credit facility and issued
US$425.0 million and $60.7 million of ten year senior subordinated notes.

Integration of CanWest Publications

Immediately following the acquisition of CanWest Publications, the Company
assembled twelve transition teams to integrate various areas of operations. The
transition teams were charged with, among other things, revenue enhancement,
cost reduction and quality improvement initiatives in areas including
information technology, real estate utilization, working capital management,
telemarketing, sales force automation, procurement and back office functions.
Additionally, the transition teams were charged with developing new revenue and
maximizing the value of the properties through cross-promotion, re-purposing of
content, product packaging and product development and through the
identification and implementation of best practices across all of the
operations. In addition, the Company established an employee feedback website
and telephone hotline to solicit contributions from all employees regarding
integration efforts.

The Company has created a fully integrated regional contact center, Reach
Canada, located in Winnipeg to serve the circulation and telemarketing
requirements of its newspaper operations. The contact centre will provide more
efficient and lower cost customer service.

The Company has also established a Business Services Centre in Winnipeg. This
new centralized administrative operation is consolidating most of the major
information technology systems as well as the processing of payrolls and
accounts payable for the Companys broadcasting, print and Internet operations.
These tasks will be accomplished more efficiently and at lower cost in a
centralized office.

16



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|B. |  | Business Overview
|-- |  | -----------------

The Companys Markets

General

The Company operates in the commercial television markets in Canada, Australia,
New Zealand and Ireland, the commercial radio market in New Zealand and the
newspaper publishing industry in Canada. Currently, these countries have
well-developed economies and advertising markets. Commercial television
stations (stations which derive most of their revenue from the sale of
advertising time) began broadcasting on a regular basis in the United States in
the 1940s, Canada and Australia in the 1950s, and in New Zealand and Ireland
in the 1960s.

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The following table sets forth demographic and market information for 2001 for
the countries in which CanWest currently operates:

Selected Market Information

|            |  |            |      |              |  |                   |          |              |  |             |         |              |     |              |         |             |     |  |       |  |     |  |       |        |  |  |         | 
|----------- |  | ---------- | ---- | ------------ |  | ----------------- | -------- | ------------ |  | ----------- | ------- | ------------ | --- | ------------ | ------- | ----------- | --- |  | ----- |  | --- |  | ----- | ------ |  |  | ------- | 
|            |  |            |      |              |  |                   |          |              |  |             |         |              |     | Daily        |         | Daily       |     |  |       |  |     |  |       |       
|            |  |            |      |              |  | Total Major Media |          | Television   |  | Newspaper   |         | Newspaper    |     | Out-of-Home  |         | Radio      
|            |  |            |      |              |  | Advertising       |          | Advertising  |  | Advertising |         | Circulation  |     | Advertising  |         | Advertising
|            |  | Population |      | Expenditures |  | Expenditures      |          | Expenditures |  | Revenue     |         | Expenditures |     | Expenditures
|            |  | (millions) |      | (millions)   |  | (millions)        |          | (millions)   |  | (millions)  |         | (millions)   |     | (millions)  
|            |  |            |      |              |  |                   |          |              |  |             |         |              |     |              |         |             |     |  |       |  |     |  |       |        |  |  |         | 
|Canada      |  |            | 31.1 |              |  |                   | C$8,151  |              |  |             | C$2,560 |              |     |              | C$2,501 |             |     |  | C$682 |  |     |  | C$310 |        |  |  | C$1,062 | 
|Australia   |  |            | 19.6 |              |  |                   | A$7,359  |              |  |             | A$2,490 |              |     |              | n/a     |             |     |  | n/a   |  |     |  | A$271 |        |  |  | n/a     | 
|New Zealand |  |            | 4.0  |              |  |                   | NZ$1,500 |              |  | NZ$481      |         |              | n/a |              |         |             | n/a |  |       |  | n/a |  |       | NZ$196
|Ireland     |  |            | 3.9  |              |  |                   | 686     |              |  |             | 155    |              |     |              | n/a     |             |     |  | n/a   |  |     |  | n/a   |        |  |  | n/a     | 

Television Ratings and Transmission

Revenue in the broadcasting industry is derived primarily from the sale of
broadcast air time. The advertising rates that a television station can command
are based, to a large extent, on the stations share of the total potential
audience in the market (the stations ratings), the demographic and
socio-economic composition of its audience and the price and availability of
advertising time on competing networks or in suitable alternative media.
Advertising agencies and media buyers use ratings to direct their clients
advertising expenditures to the appropriate audience. The size and
demographics of the audience that a network can offer to potential advertisers
in turn depends upon the attractiveness to potential viewers of the television
networks programming.

For potential advertisers, the two most important measurement statistics for
television audiences are rating points and share. One rating point equals
one per cent of a defined population within a defined geographic area viewing a
particular program for a specified time period. Rating points in the aggregate
measure the size of the actual viewing audience as a percentage of the total
potential viewing audience. Share indicates the percentage of people within
a defined population who are viewing television and who are tuned to a
particular program for a specific time period in a specific area, and thus
measures the market share held by a particular program relative to the actual
viewing audience.

The two basic methods of television transmission in use in CanWests existing
markets are: (i) over-the-air television broadcasting, which can be either
local or national in scope (these operations are often referred to as
terrestrial broadcast operations), and (ii) satellite-to-cable and direct
satellite (direct-to-home) broadcasting. In over-the-air broadcasting, the
station operator broadcasts its signal at an established frequency and power
via one or more land-based transmitters, each with a limited geographic range.
In satellite-to-cable broadcasting, the station operator transmits its signal
to a satellite which redirects the signal to either a ground based antenna
which is connected to a cable system or directly to a home television via a
satellite receiver. In satellite-to-cable and direct-to-home broadcasting, the
signal can originate from the territory where the viewer is situated or can be
broadcast from abroad. While over-the-air broadcasters can typically be
received by virtually all of the television households in the geographic area
covered by their broadcast signal, satellite broadcasters can be received only
by television households connected to a cable system or households that have
satellite receivers and, if the signals are encrypted, signal decoders.

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Newspaper Advertising, Circulation and Distribution

Revenue in the newspaper industry is derived primarily from advertising and
circulation. Advertising and circulation comprised 78% and 17% respectively of
the Companys newspaper revenues for the year ended August 31, 2002.

Advertising revenues are generated through the sale of retail, classified and
national advertising. Retail advertising is display advertising, typically
placed by local merchants such as department and grocery stores. Classified
advertising includes advertisements listed together in sequence by category,
such as automobile sales, real estate sales or help wanted. National advertising is
advertising principally from advertisers promoting a product on a national
basis.

Newspaper distribution is carried out primarily by a system of independent
carriers, wholesalers and dealers, through which newspapers are delivered to
individual subscribers. Single copies are also sold through vending boxes and
retail outlets in the relevant circulation area.

Revenue

Until November 2000 CanWest operated primarily within the television
broadcasting industry in Canada, Australia, New Zealand and the Republic of
Ireland and Northern Ireland. The consolidated financial statements include
the accounts of the Company and its subsidiaries. The consolidated financial
statements for August 31, 2001 include the accounts of CanWest Publications
from November 16, 2000, the date of acquisition. The Company accounts for its
share and debt interests in Network TEN using the equity basis of accounting.
The Company accounted for its interest in the National Post using the equity
basis of accounting until September 1, 2001, and subsequently consolidated its
interest. The Companys investment in UTV is accounted using the cost basis of
accounting.

Geographic and industry segment revenues for the last three fiscal years is presented below.

|                    |                       |  |                               |           |      |  |           |         |  |  |         |   | 
|------------------- | --------------------- |  | ----------------------------- | --------- | ---- |  | --------- | ------- |  |  | ------- | - | 
|                    |                       |  | For the years ended August 31
|                    |                       |  | (in thousands of dollars)    
|                    |                       |  | 2002                          |           | 2001 |  | 2000     
|                    |                       |  |                               |           |      |  |          
|Canada  Television |                       |  | 691,888                       |           |      |  | 701,027   |         |  |  | 489,896 |  
|                    |  Publishing & Online |  |                               | 1,270,336 |      |  |           | 919,923 |  |  |         |  | 
|                    |                       |  |                               |           |      |  |           |         |  |  |         |  
|                    |                       |  | 1,962,224                     |           |      |  | 1,620,950 |         |  |  | 489,896 |  
|New Zealand         |                       |  |                               |           |      |  |           |         |  |  |         |  
|-Television         |                       |  | 69,079                        |           |      |  | 58,436    |         |  |  | 72,983  |  
|-Radio              |                       |  | 60,724                        |           |      |  | 56,864    |         |  |  | 29,981  |  
|Ireland             |                       |  | 28,317                        |           |      |  | 31,056    |         |  |  | 27,409  |  
|                    |                       |  |                               |           |      |  |           |         |  |  |         |  
|                    |                       |  | 2,120,344                     |           |      |  | 1,767,306 |         |  |  | 620,269 |  
|                    |                       |  |                               |           |      |  |           |         |  |  |         |  

For the years ended August 31, 2002, 2001, and 2000 the Companys equity
interest in the earnings of Australias Network TEN was a loss of $11,815,000
and earnings of $52,567,000, and $72,194,000, respectively.

Canadian Operations

Canadian Television Industry

General

The Canadian television broadcasting industry is currently comprised of:
(i) three English-language national networks, including Global Television, and
one French-language national network; (ii) two French-language networks based
in Quebec; and (iii) a number of local stations, including those of the
Company.

Two of the four national networks are government-owned and operated by the
Canadian Broadcasting Corporation (the CBC). The CBC operates one network in
English and one in French and both are financed by a combination of
parliamentary grants and commercial revenues. CTV Television Network Inc.
(CTV) is Canadas third national network.

In addition to receiving signals from Canadian broadcasters, virtually all
populated areas of Canada have access either directly by over-the-air
broadcasts or through cable television to the signals of U.S. border stations.
These stations are usually affiliated with one of four national U.S. commercial
networks (ABC, CBS, Fox and NBC) or with the Public Broadcasting System.
Numerous Canadian and American English-

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language and French-language specialty programming services are also available
via cable service in most areas on either basic or optional cable service
basis. The extensive penetration of cable television in most Canadian cities
has resulted in most television viewers in those areas having a wide range of
viewing options. In the fall of 2000 the CRTC awarded a total of 283 new
digital specialty cable channels, which will increase the viewing options
available to Canadians over time. Of the new licences granted, approximately
50 new digital specialty channels have been launched to date.

The following table reflects the respective share of the English-language
audience held by the major Canadian networks and station groups in Spring 2002
as a percentage of both Canadian television and total television viewership:

|                                    |  |                              |     |                           |  |  |    |  
|----------------------------------- |  | ---------------------------- | --- | ------------------------- |  |  | -- | -
|Network or Station Group            |  | Share of Canadian Television |     | Share of Total Television
|                                    |  |                              |     |                          
|Global Television Network           |  |                              | 22  | %                         |  |  | 16 | %
|CTV                                 |  |                              | 22  | %                         |  |  | 15 | %
|CBC                                 |  |                              | 9   | %                         |  |  | 6  | %
|CHUM                                |  |                              | 10  | %                         |  |  | 7  | %
|Other broadcast stations            |  |                              | 5   | %                         |  |  | 4  | %
|Specialty cable channels            |  |                              | 32  | %                         |  |  | 23 | %
|                                    |  |                              |     |                           |  |  |    |  
|Total English-language broadcasting |  |                              | 100 | %                         |  |  | 71 | %
|                                    |  |                              |     |                           |  |  |    |  

Source: Bureau of Broadcast Measurement (BBM) sweeps, Monday to Sunday, 6:00
a.m. to 2:00 a.m. adults ages 18 to 49.

Simultaneous Program Substitution

An integral aspect of over-the-air broadcasting operations in Canada is the
concept of simultaneous program substitution or simulcasting. Due to
Canadas geographic proximity to the United States, the Cable Television
Regulations in Canada require that cable television systems with over 2000
subscribers must substitute the Canadian over-the-air broadcast of a U.S.
program, including the Canadian commercials, for the broadcast of an identical
program by a U.S. station when the two programs are broadcast at the same time.
This effectively means that the Canadian stations signal and advertisements
appear on two or more channels simultaneously, including the originating
Canadian channel and the channel of the U.S. station for whose signal it is
being substituted. In so doing, Canadian over-the-air broadcasters, which have
purchased exclusive Canadian broadcast rights from U.S. programming
distributors or producers, are compensated to some degree for the encroachment
on cable television by U.S. broadcasters who have not acquired the Canadian
rights to broadcast those programs.

In markets with significant cable television penetration, broadcasting a
Canadian signal simultaneously on two or more cable channels can substantially
increase the potential size of a Canadian broadcasters audience, and thus
rating points and share. As a result, advertisers are prepared to pay more for
broadcast airtime in simulcast programs. Canadian broadcasters generally
attempt to maximize the number of simulcast programs in their schedules.

Canadian Television Operations

General

The Company, through its principal broadcasting subsidiaries in Canada, is
currently licensed to provide over-the-air English-language television
broadcasting services through 16 television stations located in eight of
Canadas ten provinces. The Companys broadcast interests have developed
through the acquisition and turnaround of financially distressed stations, the
start-up of new stations, and more recently, the acquisition of stations
previously owned by WIC.

CanWests national network of stations, Global Television, includes eleven
stations and broadcasts to all major metropolitan markets in Canada, including
Toronto, Montreal, Vancouver, Ottawa, Calgary, Edmonton, Quebec and Winnipeg.
Global Television Network stations reach an estimated 22.7 million

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persons, or approximately 94% of Canadas English-language market, and is
targeted to appeal to adults ages 18 to 49.

Two independent stations, CHCH in Hamilton and CHEK in Victoria, are regional
stations offering a broad range of entertainment, news and information
programming. CHCH reaches 90% of viewers in the province of Ontario, or
approximately 10.4 million people, and CHEK reaches 81% of viewers in British
Columbia, or approximately 3.1 million people. The acquisition of these
stations from WIC provides second stations in Canadas three largest
English-language markets: Toronto/Hamilton, Vancouver/Victoria and
Ottawa/Hull. The Companys CH brand stations, including CHCH and CHEK are
targeted at the adult audience ages 25 to 54, a more mature demographic group
than the 18 to 49 year old audience targeted by the Global Television Network.
A third independent station, CH-Horizon in Montreal, Quebec, broadcasts a
schedule consisting primarily of multi-cultural programming.

CanWest also owns two stations affiliated with the CBC, which were acquired as
part of the WIC transaction.

CanWest also owns Global Prime, a Canadian cable specialty channel providing
entertainment and information programming to the baby boomer generation.

In November 2000, the CRTC awarded licences to operate three new digital
Category 1 specialty channels and 27 new digital Category 2 specialty channels
to the Company and various third parties who will hold interests in the
entities holding the licences. Cable and Satellite service operators are
legally required to carry Category 1 channels, and can carry Category 2
channels at their option. The Company launched two Category 1 services, mentv
and Mystery TV and four Category 2 channels, Lonestar, DejaView, Fox Sports
World Canada and Xtreme Sports in September 2001.

Operating Strategy

The key elements of the Companys operating strategy are to: (i) broadcast
top-rated series programming targeting the adult 18 to 49 year old or 25 to 54
year old demographic; (ii) purchase national rights to such programming; and
(iii) maximize simulcasting programming opportunities. The Company emphasizes
the broadcasting and aggressive promotion of top-rated series programming and
seeks to develop viewer loyalty by offering a regular, consistent programming
format, which the Company calls appointment television. By purchasing
national broadcasting rights to such programming, the Company is able to
control its distribution throughout Canada, including its syndication to
affiliated or non-competing stations, which in turn, decreases programming
costs for the Companys owned stations. In addition, the Company controls
programming costs by producing only its news and sports programming in-house
and by entering into partnership agreements with production companies to
acquire or produce programming. The Company further offsets programming costs
through the sale of syndication rights and the sublicensing to non-competing
broadcasters of regional broadcasting rights for programming for which it has
national rights. The Company also seeks to produce high quality Canadian news
and series programming of relevance to local and national audiences and
believes that success in this area represents a growth opportunity.

CanWest attempts to simulcast its US-originated programming whenever possible
in order to maximize ratings and share through the inclusion of the additional
audience available from the duplication of its signal on cable television.
CanWest believes that it has greater flexibility than its competitors in
coordinating its program schedules to match those of U.S. broadcasters.

Advertising Market

In 2001, English-language and French-language television advertising
expenditures in Canada were approximately $2.6 billion, representing
approximately 31% of major media advertising expenditures of $8.2 billion.
Television advertising expenditures in 2001 included approximately $438 million
related to specialty channels.

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CanWest derives its revenue in Canada primarily from the sale of broadcast
airtime to national, regional and local advertisers. CanWest Media Sales
Limited (CanWest Media), a wholly owned subsidiary of the Company, is the
principal national advertising sales representative for each of the Companys
stations and also represents other, non-competing television broadcasters.
CanWest Media is the largest television advertising sales representation
company in Canada in terms of sales revenues. CanWest Media, through its
offices in Toronto and Montreal, is responsible for the Companys sales to
national advertisers while sales to regional and local advertisers are made by
each stations local staff. In fiscal 2002, approximately 91% of the revenue
delivered from the sale of broadcast airtime related to sales to national
advertisers and 9% related to sales to regional and local advertisers. By
condition of its broadcasting licences in Ontario and Quebec, Global Television
can sell broadcast airtime only to national advertisers. Based on information
provided by the CRTC, the Company estimates its share of the Canadian
English-language television advertising market (conventional and specialty) was
28% in 2001.

CanWest believes that its significant presence in the three largest
English-speaking markets in Canada position it to benefit from the continuing
shift in advertising expenditures towards major markets at the expense of
secondary markets. In addition, management believes that CanWest offers an
advantage to national advertisers over its competitors in that such advertisers
need only to deal with one agent, CanWest Media, when purchasing broadcast
airtime. In contrast, a purchaser of national advertising from one of its
competitors may be required to purchase broadcast airtime at both the network
level and from selected local affiliates.

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Ratings

According to independent surveys, Global Television enjoyed high ratings and
strong audience shares during fiscal 2002.

The following table sets forth the relative ranking and audience share of the
Companys originating broadcast television stations in each of their respective
Demographic Market Areas or Extended Market Areas for Fall 2001/Spring 2002:

|                              |  |           |  |         |    |             |  |          |   |          |  |  |      |   |  | 
|----------------------------- |  | --------- |  | ------- | -- | ----------- |  | -------- | - | -------- |  |  | ---- | - |  | 
|                              |  |           |  |         |    | Stations in |  | Rank in  |   | Audience
|                              |  | Call Sign |  | DMA/EMA |    | DMA/EMA(1)  |  | Share(1)
|                              |  |           |  |         |    |             |  |         
|Global Television Network:    |  |           |  |         |    |             |  |          |   |          |  |  |      |   |  | 
|Global Ontario                |  | CIII      |  |         | 14 |             |  |          | 1 |          |  |  | 12.4 | %
|Global Quebec                 |  | CKMI      |  |         | 8  |             |  |          | 2 |          |  |  | 12.5 | %
|Global Vancouver              |  | CHAN      |  |         | 13 |             |  |          | 1 |          |  |  | 13.4 | %
|Global Calgary                |  | CICT      |  |         | 8  |             |  |          | 1 |          |  |  | 15.5 | %
|Global Edmonton               |  | CITV      |  |         | 8  |             |  |          | 1 |          |  |  | 15.3 | %
|Global Winnipeg               |  | CKND      |  |         | 8  |             |  |          | 2 |          |  |  | 14.0 | %
|Global Halifax                |  | CIHFNS    |  |         | 8  |             |  |          | 2 |          |  |  | 12.2 | %
|Global Saskatoon              |  | CFSK      |  |         | 7  |             |  |          | 2 |          |  |  | 11.9 | %
|Global Regina                 |  | CFRE      |  |         | 7  |             |  |          | 2 |          |  |  | 11.6 | %
|Global Saint John             |  | CIHF-NB   |  |         | 8  |             |  |          | 2 |          |  |  | 9.3  | %
|Global Lethbridge (2)(3)      |  | CISA      |  |         | 9  |             |  |          | 1 |          |  |  | 18.1 | %
|                              |  |           |  |         |    |             |  |          |   |          |  |  |      |   |  | 
|CH Television System:         |  |           |  |         |    |             |  |          |   |          |  |  |      |   |  | 
|Montreal, Quebec              |  | CJNT      |  |         | 8  |             |  |          | 8 |          |  |  | 2.6  | %
|Hamilton, Ontario (4)         |  | CHCH      |  |         | 14 |             |  |          | 5 |          |  |  | 4.8  | %
|Victoria, British Columbia    |  | CHEK      |  |         | 13 |             |  |          | 5 |          |  |  | 5.3  | %
|                              |  |           |  |         |    |             |  |          |   |          |  |  |      |   |  | 
|CBC Affiliates:               |  |           |  |         |    |             |  |          |   |          |  |  |      |   |  | 
|Kelowna, British Columbia (5) |  | CHBC      |  |         | 8  |             |  |          | 3 |          |  |  | 9.1  | %
|Red Deer, Alberta             |  | CKRD      |  |         | 8  |             |  |          | 4 |          |  |  | 4.1  | %



---

|(1) |  | Monday to Sunday, Central Prime Time (8:00 p.m. to 11:00 p.m. in all
markets except Saskatchewan and Manitoba where, due to time zone
differences with U.S. border stations, Central Prime Time is 7:00 p.m. to
10:00 p.m.)
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | For Toronto/Hamilton and Vancouver/Victoria Sept 17, 2001 to May 26, 2002
BBM Meter Research adults ages 18 to 49                                                                                                          
|   
|    |  | All other markets: Fall 2001 and Spring 2002 average BBM Sweeps, adults ages
18 to 49                                                                                                                                      
|   
|(2) |  | BBM Central Area                                                                                                                                                                                                           
|   
|(3) |  | CISA is a repeater of CICT Calgary                                                                                                                                                                                         
|   
|(4) |  | Rank and Share in the Toronto/Hamilton DMA                                                                                                                                                                                 
|   
|(5) |  | North Okanagan County                                                                                                                                                                                                      

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The following table sets forth Global Televisions audience shares and that of
its competitors in each of the Toronto/Hamilton and Vancouver/Victoria markets
for the 2001 and 2002 broadcast years:

Audience Share in Selected Major Markets

|                          |  |                   |      |           |  |                 |      |           |  |           |   |           |  |  |      |  |  |  |      |  |  |  |   | 
|------------------------- |  | ----------------- | ---- | --------- |  | --------------- | ---- | --------- |  | --------- | - | --------- |  |  | ---- |  |  |  | ---- |  |  |  | - | 
|                          |  | Audience
Share(1)
|                          |  |                  
|                          |  | Prime-time:       |      |           |  |                 |      |           |  |           |   |           |  |  |      |  |  | 
|                          |  | 7PM-11PM(2)       |      | Rank(3)   |  | 6AM-MIDNIGHT(2) |      | Rank(3)  
|                          |  |                   |      |           |  |                 |      |          
|                          |  | 2001/2002         |      | 2000/2001 |  | 2001/2002       |      | 2001/2002 |  | 2000/2001 |   | 2001/2002
|                          |  |                   |      |           |  |                 |      |           |  |           |   |          
|                          |  | %                 |      | %         |  |                 |      |           |  | %         |   | %         |  |  |      | 
|Toronto/Hamilton(4):      |  |                   |      |           |  |                 |      |           |  |           |   |           |  |  |      |  |  |  |      |  |  |  |   | 
|Global Ontario  CIII     |  |                   | 11.7 |           |  |                 | 13.9 |           |  |           | 1 |           |  |  | 9.2  |  |  |  | 10.9 |  |  |  | 1 | 
|CTV-CFTO                  |  |                   | 10.0 |           |  |                 | 10.6 |           |  |           | 2 |           |  |  | 9.0  |  |  |  | 9.9  |  |  |  | 2 | 
|CBC  CBLT                |  |                   | 9.4  |           |  |                 | 8.5  |           |  |           | 3 |           |  |  | 7.0  |  |  |  | 6.0  |  |  |  | 3 | 
|Independent  CITY        |  |                   | 7.5  |           |  |                 | 7.7  |           |  |           | 4 |           |  |  | 6.7  |  |  |  | 7.1  |  |  |  | 4 | 
|Independent
 CHCH(5)     |  |                   | 4.9  |           |  |                 | 4.9  |           |  |           | 5 |           |  |  | 3.5  |  |  |  | 3.6  |  |  |  | 5 | 
|Independent  CKVR        |  |                   | 3.2  |           |  |                 | 3.2  |           |  |           | 6 |           |  |  | 3.0  |  |  |  | 2.7  |  |  |  | 6 | 
|Fox  WUTV                |  |                   | 3.1  |           |  |                 | 4.0  |           |  |           | 7 |           |  |  | 3.5  |  |  |  | 4.2  |  |  |  | 5 | 
|Rogers  CFMT             |  |                   | 2.2  |           |  |                 | 2.1  |           |  |           | 8 |           |  |  | 3.0  |  |  |  | 3.0  |  |  |  | 6 | 
|                          |  |                   |      |           |  |                 |      |           |  |           |   |           |  |  |      |  |  |  |      |  |  |  |   | 
|Vancouver/Victoria(6):    |  |                   |      |           |  |                 |      |           |  |           |   |           |  |  |      |  |  |  |      |  |  |  |   | 
|Global
Vancouver- CHAN(5) |  |                   | 13.0 |           |  |                 | 10.2 |           |  |           | 1 |           |  |  | 12.4 |  |  |  | 10.9 |  |  |  | 1 | 
|CTV  CIVT                |  |                   | 8.3  |           |  |                 | 7.3  |           |  |           | 2 |           |  |  | 6.1  |  |  |  | 5.7  |  |  |  | 3 | 
|CBC  CBUT                |  |                   | 7.6  |           |  |                 | 6.4  |           |  |           | 3 |           |  |  | 8.0  |  |  |  | 6.1  |  |  |  | 2 | 
|CHUM-CKVU(7)              |  |                   | 5.6  |           |  |                 | 12.5 |           |  |           | 4 |           |  |  | 4.2  |  |  |  | 9.0  |  |  |  | 4 | 
|Independent
 CHEK(5)     |  |                   | 5.1  |           |  |                 | 5.0  |           |  |           | 5 |           |  |  | 4.0  |  |  |  | 4.1  |  |  |  | 5 | 
|Independent  KVOS        |  |                   | 1.9  |           |  |                 | 4.0  |           |  |           | 7 |           |  |  | 2.2  |  |  |  | 4.7  |  |  |  | 7 | 
|CHUM  CIVI               |  |                   | 3.1  |           |  |                 | 0.0  |           |  |           | 6 |           |  |  | 2.4  |  |  |  | 0.0  |  |  |  | 6 | 



| | (1) |  | Audience share among adults 18 to 49                                                                                                   
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------
| | (2) |  | 17/09/01 to 26/05/02 for 2002 and 11/09/00 to 27/05/01 for 2001                                                                        
| | (3) |  | Based upon figures reported in this table                                                                                              
| | (4) |  | Nielsen Ratings                                                                                                                        
| | (5) |  | Acquired on March 31, 2000 and re-branded September 1, 2001                                                                            
| | (6) |  | BBM Survey                                                                                                                             
| | (7) |  | Divested in accordance with CRTC decision effective October 31, 2001, although CKVU commenced CHUM programming as of
September 1, 2001.

Programming

Substantially all of the Companys acquired programming is purchased for
national exposure in Canada and the majority of the programming is produced
within Canada and the United States. In order to gain economies of scale, the
programming is often purchased for multiple levels, including telecast rights
for our specialty and digital television channels as well as conventional
television outlets. Many of the Companys programming agreements are for
multi-year program supply. Such agreements are currently held with several
major non-Canadian studios, including Sony Pictures Television (Columbia), Fox,
Vivendi Universal, Paramount, CBS and NBC. These agreements require suppliers
to provide, and the Company to buy, pre-agreed amounts of programming over one
or more years. These agreements have provided price stability for the
Companys program acquisitions and have enhanced our ability to retain
highly-rated US network series programming and to acquire desirable new
programming while, at the same time, helping to soften the effect of the very
cyclical nature of most television programs.

Both Global Television and the independent stations broadcast many of the most
popular programs in Canada. Among the many hit shows in our current program
schedules are a combination of recent entrants and established programs,
including Survivor, Frasier, Friends, Will and Grace, Everybody Loves Raymond,
60 Minutes, Ed, Fear Factor, The Simpsons, NYPD Blue, Dawsons Creek, Gilmore
Girls, The Practice, Boston Public, That 70s Show, Malcolm in the Middle, Fear
Factorand 24.Global Television is also Canadas television source for world
class sporting events such as NFL football (including the Super Bowl), Molson
Indy, the Masters Golf Tournamentand the Wimbledon Tennis Finals. In 2002,
Global Television introduced Global Showcase, a series of Canadian
documentaries from independent producers across all the regions of Canada.
Several of the programs have aired to strong national acclaim, including

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On Wings and Dreams,which was nominated for a Gemini Award in 2002. Global
Televisions Popstarscontinues to be one of the highest-rated
Canadian-produced series and recently added Canadian hour-long action series,
Mutant Xand Andromedaare also generating very positive audience reaction.

Since launching the Global Nationalnews in September 2001, during what must
rank as one of the most intense news gathering periods in the history of
television, (Global Nationalanchor Kevin Newman was the first Canadian
national newscaster on the air with the devastating news from New York on
September 11, 2001), it has gained stature among its peers and with its
audience. The BBM has placed Global Nationalas the number two national
newscast in Canada  and the audience growth continues. Global National,
Canadas only national dinner-hour newscast, has already been recognized with
two Gemini nominations and two major Radio Television News Director Association
awards. Strategically, Global Nationalhas enhanced the news brand and
credibility of many of Global Televisions local television news and public
affairs programs. Each of the local stations maintains local news teams which
coordinate with national news bureaus in Ottawa and Calgary and international
news bureaus in Washington, D.C., and London, England. Local news is in
increasingly high demand in virtually all of the Companys television markets.

Canadian Publishing Industry

General

The Canadian newspaper industry is comprised of over 100 daily paid circulation
newspapers and numerous non-daily paid and free-distribution publications. The
industry is mature and is dominated by a small number of major publishers.
CanWest is the largest newspaper publisher in Canada, with 31% of daily
newspaper circulation (including the National Post), ahead of Quebecor Inc.
(20%), Torstar Corporation (13%), Power Corporation (9%), Bell Globemedia (7%),
Osprey Media (5%), and others (15%).

Total Canadian daily newspaper industry revenue was $3.2 billion in 2001, with
79% derived from advertising and the balance of 21% coming from circulation.
Advertising revenue and, to a lesser extent, circulation revenue are cyclical
and dependent upon general economic conditions. Historically, increases in
advertising revenue have corresponded with periods of economic growth, while
decreases have corresponded with general economic downturns and regional and
local recessions. Daily newspaper advertising revenue decreased by 3%, or $80
million in 2001, following six successive years of growth from the $1.8 billion
posted in 1994. Most of the losses in 2001 were attributable to declines in
national and classified linage.

Daily newspaper circulation revenue decreased slightly from $692.7 million in
1995 to $681.6 million in 2001 as price increases offset receding demand. The
median single copy price for a weekday edition of a Canadian daily newspaper
increased from $0.65 in 1995 to $0.75 in 2001, partly in an attempt by
newspaper publishers to offset the impact of significant increases in newsprint
prices during earlier periods. Average daily newspaper circulation declined
marginally from 5.3 million copies in 1995 to 5.2 million copies in 2001.

CanWests Publishing Operations

General

CanWest is the largest publisher of daily newspapers in Canada, as measured by
circulation, revenue and EBITDA. The Companys publications include 10 daily
newspapers, all of which serve markets also reached by the Companys broadcast
television signals. In addition, the Company owns and operates several
non-daily newspapers, shopping guides and other newspaper-related publications.
The Company also owns the National Post, one of Canadas two national daily
newspapers.

The Companys newspapers (including the National Post)have an average daily
paid circulation of 1.4 million copies, representing 35% of Canadas daily
average English-language newspaper circulation, and

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an estimated average daily readership of 3.1 million people. Most of the
Companys newspapers have the highest circulation among publications in their
markets and many of its publications serving smaller cities and towns are the
only general circulation newspapers published in their markets. The high cost
associated with starting a major daily newspaper operation constitutes a
barrier to entry by potential new competitors to larger daily newspapers.
While Internet advertising may become more competitive in the future, it has
not yet had a significant impact on revenue or EBITDA of CanWest Publications.

The following table provides circulation statistics for the six months ended
September 30, 2002 for the major newspapers (excluding the National Post):

|                     |  |                             |  |                   |         |          |  |        |   |     |  | 
|-------------------- |  | --------------------------- |  | ----------------- | ------- | -------- |  | ------ | - | --- |  | 
|                     |  |                             |  |                   |         | Average  |  | Market
|Newspaper            |  | CMA                         |  | Daily Circulation |         | Position
|                     |  |                             |  |                   |         |         
|The Vancouver Sun    |  | Vancouver, British Columbia |  |                   | 203,216 |          |  |        | 1 |    
|The Province         |  | Vancouver, British Columbia |  |                   | 166,790 |          |  |        | 2 |    
|The Gazette          |  | Montreal, Quebec            |  |                   | 142,347 |          |  |        | 1 | (1)
|Ottawa Citizen       |  | Ottawa, Ontario             |  |                   | 143,111 |          |  |        | 1 |    
|The Edmonton Journal |  | Edmonton, Alberta           |  |                   | 137,697 |          |  |        | 1 |    
|Calgary Herald       |  | Calgary, Alberta            |  |                   | 119,721 |          |  |        | 1 |    
|The Windsor Star     |  | Windsor, Ontario            |  |                   | 76,661  |          |  |        | 1 |    
|The Times Colonist   |  | Victoria, British Columbia  |  |                   | 76,012  | (2)      |  |        | 1 |    
|The Star Phoenix     |  | Saskatoon, Saskatchewan     |  |                   | 58,308  |          |  |        | 1 |    
|The Leader Post      |  | Regina, Saskatchewan        |  |                   | 55,479  |          |  |        | 1 |    





|(1) |  | Number one English-language newspaper; number three overall.                                                                       
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------
|(2) |  | Circulation is for the six months ended March 31, 2002, September data
was not comparable due to a work stoppage  see Employees.

The National Postis a leading Canadian national newspaper with an average
daily circulation of 254,909 for the six months ended September 30, 2002. The
National Postwas developed from The Financial Post, a daily business newspaper
based in Toronto. Since its launch on October 27, 1998, the National Posthas
established a large national readership with attractive demographics.

The National Postssole competitor as a national newspaper is The Globe and
Mail. In Toronto, the National Postcompetes with the Toronto Star, The Sun
and The Globe and Mail.

The National Postis printed at CanWests facilities in Calgary, Regina,
Montreal and Ottawa, and by third-party printing contractors in Vancouver,
Toronto, Halifax, and St. Johns.

Raw Material

Newsprint comprised approximately $157 million, or 16% of the total costs of
CanWest Publications for the year ending August 31, 2002. Newsprint is a
commodity subject to considerable price volatility. For example, the average
price of newsprint decreased by 16% in the twelve months ending August 31, 2002
compared to the prior year. Subsequent to August 31, 2002 prices have
increased by about 5%. CanWest Publications papers use approximately 180,000
tonnes of newsprint per year.

Australian Operations

Australian Television Industry

Australia has five national broadcast networks and several unaffiliated local
commercial stations. Two of the national broadcast networks, the Australian
Broadcasting Corporation and the Special Broadcasting System, are
government-owned and largely commercial-free.

Three national networks, Seven, Nine and Network TEN, are privately-owned and
broadcast commercial television to substantially all of the Australian
population, including the major metropolitan areas of Sydney, Melbourne,
Brisbane, Adelaide and Perth. Unaffiliated broadcasters serve rural areas and
broadcast programs purchased from some or all of these three networks.

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Australia also has two major metropolitan pay television operators and one
regional pay television operator, who broadcast primarily via cable and direct
to home satellite delivery technologies. Pay television competes with the
existing commercial FTA broadcasters for available viewing audience, but with
an average household income in 2001 of A$37,000, the reach of pay television is
always likely to be limited. The introduction of pay television into Australia
is mirroring the experience of international markets, particularly in North
America, where the impact of the FTA broadcast industry has been minimal.
After 7 years, only 21% of the population, or about 1.5 million households in
Australia, have pay television. While pay television operators have been
permitted to broadcast paid advertising since July 1997, federal legislation
requires that subscription fees remain the predominant source of revenue for
pay television operators.

Network TEN - Acquisition

In 1992, the Company organized a consortium, which acquired Network TEN for
total consideration of $208 million (A$236 million), including the provision of
acquisition financing by Westpac Banking Corporation of $128 million (A$145
million). Since the acquisition, which was effective October 1992, management
of Network TEN has sought earnings growth through the implementation of a
strategy which focuses upon controlling operating costs targeting selected
demographic groups and expanding signal coverage through the acquisition of its
affiliated stations in Perth and Adelaide, and strategic alliances with
affiliates in regional markets. Over the period since acquisition, Network
TENs cash flows have improved dramatically and distributions to date to
securities holders far exceed the original investments.

In addition, Network TEN holds a 9.8% share interest in Television and Media
Services Limited (TMS). TMS provides the television and video industry with
facilities, studio and field production and post-production of television
programming and advertising.

Network TEN, through its wholly owned and affiliated stations, now has signal
coverage reaching approximately 65% of the Australian population of 19.6
million. Through program supply contracts with its affiliates, Network TEN
augments its audience coverage, with signal coverage reaching approximately 90%
of the Australian population.

Operating Strategy

The operating strategy of Network TEN is to (i) purchase programming targeted
to a particular demographic niche, (ii) effectively market the network and its
programming to its advertisers and (iii) control all operating and
administrative expenses. Network TENs programming strategy focuses upon
attracting viewers between the ages of 16 to 39, a key demographic segment for
Australian advertisers. Network TEN reaches its chosen niche audience through
a combination of Australian-produced programming, U.S. network series and other
non-Australian programming. Network TEN also uses a counter-programming
strategy to attract viewers in demographic groups not served by programming on
other networks at particular times. Network TEN seeks sponsorship of its
programming by advertisers and employs on-air promotion as well as radio and
print advertising to market both the network and its programming.

Australian programming is generally more expensive to produce than foreign
programs are to acquire, but domestically produced programming is generally
more highly rated than foreign programming. As a result, Network TEN has
sought to implement a mix of domestic and foreign programming to achieve higher
ratings at the lowest possible cost.

Network TEN seeks to control programming costs by producing only its news and
some sports programming in-house and by purchasing independently sourced and
produced programming, including Australian and non-Australian programs. As
part of this strategy, in fiscal 1995 Network TEN sold its production studio
business to TMS in exchange for a shareholding interest in TMS. Network TEN
commissions independent production companies to produce Australian programming
and purchases national rights to programming. For commissioned programs,
Network TEN typically acquires direct interests in the revenue streams
generated by these programs in markets outside Australia, and maintains an

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active role in certain of the creative aspects of the programs. In addition,
Network TEN enters into multi-year supply agreements with several major U.S.
programming suppliers as well as other non-Australian production companies in
order to acquire desirable programming at fixed prices.

Television Advertising Market

In 2001, television advertising expenditures in Australia generated
approximately A$2.5 billion, representing approximately 33% of total major
media advertising expenditures of approximately A$7.4 billion. The cities of
Adelaide, Brisbane, Melbourne, Perth and Sydney, which are all reached by
Network TENs signal, account for approximately 78% of all television
advertising expenditures in Australia.

The Australian television industry generates more than 90% of its total revenue
from the sale of advertising time. The table below sets forth advertising
market shares of Australias three commercial networks based upon industry
information available to the Company:

Television Advertising Market Shares

|            |  |      |    |         |  |                              |    |      |  |      |    |  |  |  |    |  |  |  |    | 
|----------- |  | ---- | -- | ------- |  | ---------------------------- | -- | ---- |  | ---- | -- |  |  |  | -- |  |  |  | -- | 
|            |  |      |    |         |  | Twelve months ended June 30, |    |      |  |      |    |  |  | 
|            |  |      |    |         |  |                              |    |      |  |      |    |  |  | 
|            |  | 2002 |    | 2001(1) |  | 2000                         |    | 1999 |  | 1998
|            |  | %    |    | %       |  | %                            |    | %    |  | %   
|            |  |      |    |         |  |                              |    |      |  |     
|Network     |  |      |    |         |  |                              |    |      |  |      |    |  |  |  |    |  |  | 
|            |  |      |    |         |  |                              |    |      |  |      |    |  |  |  |    |  |  |  |    | 
|Network TEN |  |      | 27 |         |  |                              | 23 |      |  |      | 24 |  |  |  | 26 |  |  |  | 25 | 
|Nine        |  |      | 39 |         |  |                              | 38 |      |  |      | 41 |  |  |  | 41 |  |  |  | 40 | 
|Seven       |  |      | 34 |         |  |                              | 39 |      |  |      | 35 |  |  |  | 33 |  |  |  | 35 | 

Source: Federation of Australian Commercial Television Stations

(1)  Includes the Sydney 2000 Olympics, aired by Seven.

Ratings

The table below sets forth commercial network audience shares for calendar
years: 16-39 year olds (Sunday-Saturday 6:00 pm  10:30 pm) for each of the
three national commercial networks:

Audience Share

|            |  |      |    |      |  |         |    |      |  |      |    |  |  |  |    |  |  |  |    | 
|----------- |  | ---- | -- | ---- |  | ------- | -- | ---- |  | ---- | -- |  |  |  | -- |  |  |  | -- | 
|            |  | 2002 |    | 2001 |  | 2000(1) |    | 1999 |  | 1998
|            |  | %    |    | %    |  | %       |    | %    |  | %   
|            |  |      |    |      |  |         |    |      |  |     
|Network     |  |      |    |      |  |         |    |      |  |      |    |  |  |  |    |  |  |  |    | 
|            |  |      |    |      |  |         |    |      |  |      |    |  |  |  |    |  |  |  |    | 
|Network TEN |  |      | 37 |      |  |         | 34 |      |  |      | 31 |  |  |  | 30 |  |  |  | 32 | 
|Nine        |  |      | 34 |      |  |         | 33 |      |  |      | 36 |  |  |  | 37 |  |  |  | 38 | 
|Seven       |  |      | 29 |      |  |         | 33 |      |  |      | 33 |  |  |  | 33 |  |  |  | 30 | 



---

|Source: 2001-2002 OxTam television ratings; 1998-2000 AC Nielsen television ratings data
|----------------------------------------------------------------------------------------
|                                                                                        
|(1)                                                                                     

Since audience share is the principal factor by which television advertising is
bought in Australia, there is a strong correlation between audience and revenue
shares. While overall audience share is the most frequently published
statistic, advertisers are increasingly looking to the demographic and
socio-economic sub-groups that make up the overall audience share. Network TEN
has attempted to differentiate itself from other broadcasters by focusing
primarily on demographics and only secondarily on overall audience share.

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Programming

Network TEN sources programming material from international and Australian
sources. Both prime-time and off peak schedules include a mix of local and
international content, appealing predominantly to the under 40s audience.
Local content regulations also place certain minimum requirements on drama,
documentary and childrens programming as well as an overall domestic quota.
Although Australian programming is generally more expensive to acquire than
foreign programming, it generally attracts more viewers. As a result, Network
TEN schedules a mix of Australian and foreign shows to maximize ratings while
controlling costs.

Network TEN purchases most of its non-Australian programming from major U.S.
studios. It has acquired Australian rights to shows that are popular with its
target audience, such as Charmed, Everybody Loves Raymond, Becker, Just Shoot
Me, The Guardian, The Simpsons,and the Law & Orderfranchise. By obtaining
run of series commitments, Network TEN ensures these series remain with the
network for as long as they are produced. In addition, Network TEN enters into
multi-year supply agreements with U.S. and other non-Australian production
companies in order to acquire Australian rights to desirable programming at
fixed prices.

Network TEN produces news, local sports and a limited number of other programs
in-house, while entertainment programs are acquired from independent Australian
producers. In-house productions include the sports programs Sports Tonightand
RPM, the news program Meet the Press,the afternoon childrens programs Totally
Wildand Cheez TVand the breakfast program Good Morning Australia.
Entertainment programs commissioned from Australian production companies
include The Secret Life of Us, Big Brother, Search For A Supermodel,
Neighbours, The Paneland Rove Live.For commissioned programs, Network TEN
typically maintains an active role in the creative process and acquires direct
interests in the residual revenue generated by these programs in markets
outside Australia. Network TEN seeks sponsorship of certain of its programs by
advertisers and employs on-air promotion as well as radio and print advertising
to market both the network and its programming.

Domestic production is a combination of news, sport, drama, light entertainment
and childrens programming. News and some sport is produced internally, but
most entertainment programming is acquired from independent producers.
Australia has a large and efficient independent production sector that supplies
programming to all commercial and government broadcasters.

Network TEN is a key partner in the media consortium that won the rights to
Australias top football code, the AFL, which began this year. Network TEN is
the major broadcaster, hosting exclusive free-to-air coverage of the finals
series, including the Grand Final. Motorsport has surged in popularity through
Network TENs coverage of the World Motorcycle Championships, the Indy Cars,
the World and Australian Rally Championships and the V8s.

Australian Out-of-Home and Eye Corp.

Eye Corp. is one of Australias premier out-of-home advertising companies. In
December 2000, Network Ten acquired a 60% interest in Eye Corp. and then in
August 2002 acquired the remaining 40% interest. The out-of home advertising
industry in Australia has achieved significant growth in recent years.

Eye Corp., which was created from the consolidation of several smaller players
has become the second largest entity in the marketplace, following APN News and
Media Limited, which management estimates controls 40% of the domestic market.

Eye Corp.s operations is comprised of four divisions: (i) Eye Drive,has
Australias second largest stable of large format outdoor signage, and includes
inventory of nearly 400 sites; (ii) Eye Fly, has more than 800 strategically
located signs within all of Australias domestic and international air
terminals, with the exception of Perth international, giving Eye Fly 98% of the
Australian airport market; (iii) Eye Shop controls two and half thousand
eyelites through more than 50 leading shopping centres across Australia and
New Zealand; and (iv) Adval is a visual merchandising and point-of-sale
supplier to leading retailers.

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Overseas, Eye Corp. has made substantial inroads into southeast Asian markets,
including Indonesia, Malaysia, Vietnam and Myanmar, and encompasses large
format outdoor advertising and internal airport signage.

New Zealand Operations

New Zealand Television Industry

The New Zealand television industry currently consists of five national
free-to-air networks, TV1, TV2, TV3, TV4 and Prime TV and several smaller
regional broadcasters. TVNZ (which consists of TV1 and TV2) is
government-owned, although it operates as a commercial enterprise. TV3 and
TV4, both of which are owned and operated by the Company, are the only
privately owned, VHF national commercial broadcast television networks in New
Zealand. Prime TV, a company affiliated with Australias Nine Network, is a
free-to-air service provided on UHF frequencies.

SKY Network, the leading pay service operating in New Zealand, operates dual
playout signals on both UHF terrestrial frequency and digital satellite DTH.
The terrestrial service transmits seven SKY channels while the digital DTH
service offers 43 channels. In total, the SKY service has approximately 36%
penetration or 503,000 subscribers. Relatively few New Zealand homes have
access to cable television. TV3 and TV4 have been carried on SKY Satellite
since January 2000.

Operating Strategy

TV3 and TV4s operating strategies are to: (i) focus on mainstream
demographics, (ii) improve air time inventory management, (iii) increase
broadcasts of certain sports and special events programming and (iv) attract
advertiser sponsorship on certain programs. TV3 has also acquired and aired
sports and special event programming. With the introduction of TV4, television
advertisers have targeted access to the important 15-39 age demographic in
urban markets. TV3 and TV4 use programming approaches similar to CanWests
other operations around the world and target younger viewers. TV3 targets the
18 to 49 year old core demographic group and TV4 aims for an even younger,
upbeat audience with programming focusing on comedy, lifestyle and
entertainment.

In 1993, TV3 embarked upon a campaign to extend its signal coverage and
presently reaches approximately 98% of the New Zealand population. This
increase in coverage was funded in part by New Zealand On-Air, a government
body established to promote the expansion of broadcasting throughout the
country. TV4 reaches approximately 75% of the New Zealand population.

Television Advertising Market

For the twelve months to March 31, 2002, gross television advertising
expenditures generated approximately NZ$481 million, representing approximately
32% of total expected advertising expenditures of NZ$1.5 billion.

Television advertising in New Zealand experienced strong growth during the
1991-1997 period, which management attributes primarily to (i) deregulation of
the New Zealand economy, which has led to significant increases in advertising
expenditures to challenge and protect many long-held New Zealand brand
monopolies, (ii) the launch of TV3 in late 1989, which broke a 24-year
government-owned television monopoly, and (iii) general improvement in the New
Zealand economy. Since 1998 the television advertising market has been
relatively constant ranging between NZ$475 million and NZ$501 million.

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The New Zealand television industry generates its revenue from the sale of
advertising time. The distribution between TVNZ and TV3 and TV4 of their
combined television market share (based on revenue) as estimated by management
is set out below:

|        |  |                                              |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|------- |  | -------------------------------------------- | ---- | ---- |  | ---- | ---- | ---- |  | ---- | ---- |  |  |  | ---- |  |  |  | ---- | 
|        |  | Advertising Market Share
Year ended March 31
|        |  |                                             
|        |  | 2002                                         |      | 2001 |  | 2000 |      | 1999 |  | 1998
|        |  | %                                            |      | %    |  | %    |      | %    |  | %   
|        |  |                                              |      |      |  |      |      |      |  |     
|TV3/TV4 |  |                                              | 25.1 |      |  |      | 24.8 |      |  |      | 24.7 |  |  |  | 25.9 |  |  |  | 29.7 | 
|TVNZ    |  |                                              | 74.9 |      |  |      | 75.2 |      |  |      | 75.3 |  |  |  | 74.1 |  |  |  | 70.3 | 

Ratings

The table below sets forth audience shares of New Zealands commercial
television networks during prime-time viewing hours:

|          |  |      |    |      |  |                     |    |      |  |      |    |  |  |  |    |  |  |  |    | 
|--------- |  | ---- | -- | ---- |  | ------------------- | -- | ---- |  | ---- | -- |  |  |  | -- |  |  |  | -- | 
|          |  |      |    |      |  | Audience
Share(1)   |    |      |  |     
|          |  |      |    |      |  | Year ended March 31 |    |      |  |     
|          | 
|          |  | 2002 |    | 2001 |  | 2000                |    | 1999 |  | 1998
|          |  | %    |    | %    |  | %                   |    | %    |  | %   
|          |  |      |    |      |  |                     |    |      |  |     
|TV3       |  |      | 23 |      |  |                     | 22 |      |  |      | 23 |  |  |  | 23 |  |  |  | 26 | 
|TV4       |  |      | 4  |      |  |                     | 3  |      |  |      | 3  |  |  |  | 4  |  |  |  | 4  | 
|TV1       |  |      | 30 |      |  |                     | 33 |      |  |      | 31 |  |  |  | 31 |  |  |  | 30 | 
|TV2       |  |      | 31 |      |  |                     | 33 |      |  |      | 33 |  |  |  | 32 |  |  |  | 32 | 
|SKY/Other |  |      | 12 |      |  |                     | 9  |      |  |      | 10 |  |  |  | 10 |  |  |  | 8  | 

Source: AC Nielsen

(1)  Among adults 18 to 49
(Sunday  Saturday 6:00 p.m. to 10:30 p.m.)

Similar to Network TENs strategy in Australia, TV3 and TV4 have differentiated
themselves from other broadcasters by focusing primarily on demographics and
secondarily on audience share.

Programming

TV3s long-term programming strategy is designed to improve the ratings
performance of both domestic productions and foreign series among its targeted
demographic audience. This strategy has focused upon increasing the amount of
local production, adding sports programming, building evenings with time blocks
of compatible programming and encouraging audience loyalty by offering a
regular consistent programming format. An important factor in TV3s audience
share growth has been its increased development of domestically produced
programs. TV3 has developed and promoted a nightly news hour and the current
affairs program 20/20and 60 Minutesattracted funding from the government
production agency, New Zealand On-Air, for developing new domestic programming.
Local productions include the popular documentary series Inside New Zealand,
Ground Force, Hot Propertyand Target.

In September 1999, TV3 announced a major sporting rights deal which
substantially increased viewership and sales and promotional opportunities.
TV3 New Zealand completed a deal with pay TV operator, SKY Television that made
the network New Zealands leading free-to-air sports broadcaster. Since
December 1, 1999, TV3 has carried a comprehensive and exclusive free-to-air
schedule of domestic Cricket and Rugby games. The deal with SKY has seen TV3
add extensive coverage of cricket test matches, one-day international cricket,
Super 12 rugby matches, and the prestigious international rugby matches
featuring the world famous New Zealand All-Blacks. The agreement to broadcast
the cricket and rugby matches is part of a larger commercial arrangement
between TV3 and SKY offering long-term benefits for both, including carriage of
TV3 on SKYs digital platform.

The deal significantly enhances revenues and is a major draw for audiences
throughout the year. It also provides all of CanWests media operations in New
Zealand with new and beneficial promotional opportunities. TV3 believes that
the sports broadcasts help create a solid foundation for future growth.

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TV3 and TV4 continue to offer viewers a combination of popular U.S. and foreign
programming with excellent domestic productions. Among the shows on the
schedule for TV3 this season are: Third Rock from the Sun, CSI, That 70s Show,
Alias, Boston Public, Charmedand Sex and The City. TV4 offers a diverse mix
of programs such as Buffy the Vampire Slayer, Angel, and 18 Wheels of Justice.

TV3 has developed strong relationships to secure ongoing supply of foreign
programming and features with distributors and major studios including Disney,
Universal and Carsey-Werner. In addition, TV3 has entered into a multi-year
supply agreement with FOX Studios, which provides strong movie titles and
series programming.

New Zealand Radio Industry

The New Zealand radio broadcasting industry has been through significant
changes commencing with the passing of the Broadcasting Act 1989 (the 1989
Act) which came into force on July 1, 1989. The 1989 Act repealed the
Broadcast Act 1976 which placed restrictions on entry to broadcasting markets.

Among other things, the 1989 Act made it easier for new broadcasters to enter
the industry; reduced or removed ownership restrictions; made it is easier for
new technologies to be used and new services provided; and in the interests of
increasing efficiency, separated the Governments commercial and non-commercial
radio interests. Since deregulation in 1989, there has been a rapid and
significant increase in the number of commercial radio stations operating in
New Zealand. The total number of commercial radio stations has increased from
56 in 1989, to over 200 today.

The 1989 Act established the Broadcasting Commission and the Broadcasting
Standards Authority, provided for election broadcasting and restricted the
scope for political intervention in the management or programming of TVNZ and
state-owned radio.

The Act and the Broadcasting Standards Authority require radio broadcasters to
adhere to industry codes, but these are not unduly restrictive. Licences are
issued and technical parameters are controlled by the Ministry of Commerce, but
there are no restrictions as to format, style, or content of a radio broadcast,
provided it meets the Broadcast Standards for good taste and decency and
respects the privacy of the individual.

There are effectively two major groupings of stations, which account for 91% of
radio revenues, as follows:

|                        |  |                           |     |  
|----------------------- |  | ------------------------- | --- | -
|                        |  | Approximate
revenue share
|The Radio Network (TRN) |  |                           | 45  | %
|CanWest NZ Radio        |  |                           | 46  | %
|Others                  |  |                           | 9   | %
|                        |  |                           |     |  
|                        |  |                           | 100 | %
|                        |  |                           |     |  

Radio Advertising Market

Over the past three years to December 31, 2001, the total radio advertising
market grew at an average of 5.1% per annum. For the twelve months ending March
31, 2002, radio advertising generated approximately NZ$196 million,
representing approximately 13% of total advertising expenditures.

CanWest NZ Radio

CanWest entered the radio business in 1997 when it acquired nine radio stations
in the metropolitan markets of Auckland, Wellington, Christchurch, Dunedin and
Hamilton reaching approximately 65% of New Zealands population. The success
of these stations resulted from developing top talent in all areas of the
operation backed by extensive audience and radio media research, which
experienced radio executives use to develop strong brand identities.

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During May 2000, the Company acquired a 72% share of RadioWorks New Zealand
Limited, a New Zealand stock exchange listed national radio operator. The
remaining 28% was purchased in January 2001. CanWest NZ Radio now operates
four national network stations and 22 local or regional stations under the
RadioWorks brand. The four national networks are Radio Pacific, (AM) (a
talkback format) targeted at the older demographic; Solid Gold (FM) (a classic
hits format also targeted at the older demographic); The Rock (FM) (targeted to
mainly males in the 18-34 age group; and The Edge (FM) (a contemporary station
targeting a young audience with current hits). The 22 local stations cover
various cities and towns across the country. They operate under specific
location brand names and are mainly adult contemporary in format, targeting a
middle market position. Management estimates RadioWorks signal reaches 99%
of the New Zealand population.

With the purchase of RadioWorks, CanWests NZ Radio now covers both urban and
rural markets and virtually the full range of formats.

The group has made good progress with the full integration of all radio
properties. This integration process has achieved synergy benefits, including
both revenue gains and cost savings. Operationally, CanWest NZ Radio has the
best operating and profit margins in the industry in New Zealand.

Ratings

In the recent September 2002 surveys of New Zealands largest markets, CanWest
had the number one music stations in Christchurch, Dunedin and Hamilton, and
the number two music station in Wellington and the number three music station
in Auckland.

Irish Operations

Irish Television Industry

Prior to the launch of TV3 Ireland in September 1998, the Irish television
industry consisted of three national networks, RTE1, Net 2 and TG4 , which are
all available off-air and through cable, satellite and MMDS. In addition to
commercial advertising revenue, these three networks are publicly funded and
operate under the auspices of RTE, the state-owned broadcast organization. TV3
Ireland is the first and only privately owned independent commercial television
channel in the Republic of Ireland. TV3 targets the 15-44 age groups and is a
full service free-to-air television network offering a mix of domestic and
foreign general entertainment programming.

In addition to the four Irish channels, the major UK terrestrial channels, each
of which serves Northern Ireland, including BBCI, BBC2, ITV (Channel 3),
Channel 4 and Channel 5 are available to some or all Republic of Ireland
viewers off-air, satellite to cable or MMDS. In addition, Sky One and other
pay services are available on cable, MMDS or satellite. In April 2002 the four
Irish terrestrial channels, including TV3, were made available on the family
package offered by Sky Digital Satellite in the Republic of Ireland. The
addition of Sky satellite distribution added to the 92% terrestrial coverage of
TV3, making it technically available to essentially every Republic of Ireland
home.

TV3 is available to approximately 65% of Northern Irish homes off air and
enjoys target audience shares equal to the other Republic of Ireland channels
RTE1 and Net 2.

Overall, approximately 58% of the Irish television households are served by
cable, MMDS or satellite services, reaching up to 76% in the major urban
markets, including Dublin.

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Advertising Market

In 2001, television advertising expenditures in the Republic of Ireland were
expected to have generated approximately 155 million, representing
approximately 23% of total advertising expenditures of 686 million. In
addition, there are additional expenditures on advertising in Northern Ireland
on services, which reach into the Republic of Ireland, which expenditures are
targeted at consumers in the Republic of Ireland. This expenditure is
estimated at approximately 35 million annually.

The Irish advertising market has grown substantially over the last five years.
TV3, in its fourth year, experienced revenue growth of 28% in fiscal 2002
compared to fiscal 2001.

Ratings

TV3 Ireland has quickly demonstrated the need for a third mainstream station.
It has filled the gap between RTE1s older audience and Net 2s youthful
franchise. With the addition of TV3 Ireland, there has been repatriation of
Irish audiences and growth in the number of people viewing Irish channels each
month.

After four years on-air, TV3 Ireland has achieved a significant share of the
market, exceeding that of the established and successful British channels. In
the year just completed, TV3 continued as Irelands second most viewed channel
for its target demographic.

|        |  |                     |    |  
|------- |  | ------------------- | -- | -
|        |  | Peak Audience Share
|        |  | Summer 2002        
|Network |  |                    
|TV3     |  |                     | 15 | %
|RTE1    |  |                     | 23 | %
|Net 2   |  |                     | 14 | %
|UTV     |  |                     | 9  | %

Source: AC Nielsen audience share: 15  44 (Monday to Sunday 6:00 pm  11:30
pm) June/July 2002

Programming

TV3 Ireland offers a wide variety of programming, including news, factual,
comedy, drama, sports and local interest programming. The schedule is a mix of
domestic programming and foreign programming.

TV3 Irelands programming is targeted to the 15  44 age group, audiences which
are in high demand by Irish advertisers and which TV3 Ireland has proved to
have been previously neglected in the Irish market. TV3 Ireland has quickly
established itself with the viewing audience through the introduction of
programs to the Irish market like Sex and the City, South Park, Malcolm in the
Middle,and currently the most popular non U.K. acquired series Law and Order:
Special Victims Unit. The tradition of U.S. movie premieres on a Sunday
evening has continued with such titles as Men in Black, Face Off, and Jackie
Brown.

In 2001, as part of the agreement by which Granada acquired an interest in TV3,
two new titles to TV3, Coronation Streetand particularly Emmerdale,which was
new to Irish broadcasting at 7:00 p.m., have improved the audience share for
the 7.00 to 8.00 p.m. time-band and have greatly enhanced viewing of later
programs. Other Granada products, like Heartbeatand Cold Feet,have further
improved the channel. Support for TV3 Irelands coverage of Europes prime
club soccer tournament, the UEFA Champions Leaguehas increased, with
particularly good audiences for the season that began in September 2001.
During 2002, TV3 also completed at four-year agreement to broadcast Ireland
home international soccer matches on a taped live basis. The agreement also
provides TV3 access to broadcast a minimum of five important senior domestic
soccer matches each year. Coupled with the recent renewal of Champions

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Leagues telecasts from 2003 to 2006, TV3 has a comprehensive line-up of Irish
and European professional soccer to offer viewers and advertisers.

TV3 Ireland recognizes the importance of relevant domestic programming and in
2002 invested almost twice as much in homegrown production than it did in
programming acquired from outside the country. In addition to three daily news
bulletins, TV3 Ireland produces Sports Tonight, Week in Review, periodic News
Specials, and Ireland AM, Irelands first morning breakfast television service,
which quickly established itself as the number one breakfast choice in Ireland.
Ireland AMis a weekday live, magazine and lifestyle program. Building on its
success, the program was expanded to three hours daily, now 7:00 a.m. to 10:00
a.m. Agenda, a weekly one-hour live program focusing on politics and money was
again recently critiqued as Irelands best current affairs program. The
network has broadcast a number of Irish award ceremonies recognizing the
talents of Irish actors and musicians, including The Irish Theatre Awards, and
the Buzzmusic awards, broadcast from Belfast. As part of the strategy to
build a strong inventory of Irish dramatic programs, TV3 continues to actively
invest in Irish theatrical productions. TV3 invested in a re-creation of the
events of Bloody Sunday, a pivotal event in modern Irish history, Map Maker,
a modern day Irish love story, and the Irish film Watermelon,bringing total
independent Irish film investment budgets to over 7 million. These movies will
be broadcast on TV3 in the next few years. Other drama co-production
initiatives continue to be explored.

Northern Ireland - UTV

Headquartered in Belfast, UTV is the ITV television service provider in
Northern Ireland. It first went on the air in 1958, and over the past 44
years, has firmly positioned itself as the number one regional television
network in Northern Ireland. With a strong focus on meeting the distinctive
viewing needs and preferences of its audience, UTV enjoys a viewing share in
excess of 40% (all times) and approximately 45% in the 6 p.m. to 11 p.m. time
period.

Its strong regional identity is reflected not only in the programs being shown,
but also in the tone, style and nature of the presentation of the service,
which is targeted primarily at a younger demographic audience. Regional
programming is the mainstay of UTVs service and over the years has been the
driver of the networks solid ratings figures.

UTV is also an internet service provider under the brand UTV Internet and
recently entered the telephone service reselling business. In the past few
years, UTV has also invested in radio stations in both Limerick and Cork, in
the Republic of Ireland.

The Company has a 29.9% equity interest in UTV, and does not currently have
representation on the UTV board.

Seasonality

The Companys business has experienced and is expected to continue to
experience significant seasonality due to, among other things, seasonal
advertising patterns and seasonal influences on peoples viewing, reading and
listening habits. Typically, the Companys revenue is lowest during the fourth
quarter of the fiscal year, which ends in August, and highest during the first
quarter of the fiscal year.

Regulation

Canadian Television

Canadian television broadcasting, including specialty cable television
broadcasting, is regulated principally by the Broadcasting Act(Canada). The
Canadian Radio-television and Telecommunications Commission, or CRTC, which,
among other things, administers the Broadcasting Act, grants and reviews
broadcasting licences, approves certain changes in corporate ownership and
control, and establishes and oversees compliance with regulations and policies
concerning broadcasting, including various programming requirements, subject to
certain directions from the federal cabinet.

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A House of Commons committee is undertaking an 18-month study of the current
state and future direction of Canadas broadcasting system and the efficacy of
the Broadcasting Act in meeting policy objectives. The committee is studying
issues including media ownership, Canadian content and the administration of
broadcasting policy. The Committee is expected to issue its report in the next
few months.

Ownership and Control

The Canadian government, through an Order-in-Council referred to as the
Direction to the CRTC (Ineligibility of Non-Canadians), has directed the CRTC
not to issue, amend or renew a broadcasting licence to an applicant that is a
non-Canadian. Canadian, a defined term within the CRTC Direction, means, among
other things, a citizen or a permanent resident of Canada, a qualified
corporation, a Canadian government, a non-share capital corporation the
directors of which are appointed or designated by statute or governmental
authorities, or a mutual insurance company, pension fund society or cooperative
of which 80% of the directors or members are Canadian. A qualified corporation
is one incorporated or continued in Canada, of which the chief executive
officer or other presiding officer and 80% of the directors are Canadian, and
not less than 80% of the issued and outstanding voting shares and not less than
80% of the votes are beneficially owned and controlled, directly or indirectly,
by Canadians. In addition, in order for a subsidiary to be a qualified
corporation, Canadians must beneficially own and control, directly or
indirectly, not less than 66 2/3% of the issued and outstanding voting shares
and not less than 66 2/3% of the votes of the parent company that controls the
subsidiary and neither the parent company nor its directors or similar officers
may exercise control or influence over any programming decisions of the
subsidiary. There are no specific restrictions on the number of non-voting
shares that may be owned by non-Canadians. Finally, an applicant seeking to
acquire, amend or renew a broadcasting licence must not otherwise be controlled
in fact by non-Canadians, a question of fact, which may be determined by the
CRTC in its discretion.

The CRTCs Television Broadcasting Regulations, 1987, and the Specialty
Services Regulations, 1990, require the prior approval of the CRTC of any
transaction that directly or indirectly results in (i) a change in effective
control of the broadcasting undertaking of a licensee, (ii) a person or a
person and its associates acquiring control of 30% or more of the voting
interests of a licensee or of a person that has, directly or indirectly,
effective control of a licensee, or (iii) a person or a person and its
associates acquiring 50% of more of the issued common shares of the licensee or
of a person who has direct or indirect effective control of a licensee. In
addition, if a transaction results in a person or a person and its associates
acquiring control of at least 20% but less than 30% of the voting interests of
a licensee, or of a person that has, directly or indirectly, effective control
of the licensee, the CRTC must be given notice of the transaction. If a
transaction increases control to over 40%, the CRTC must be notified.

To enable CanWest to ensure continuing compliance with the CRTC Direction, the
CRTC regulations and the conditions of its Canadian broadcasting licences, the
issue and transfer of CanWest Global Communications Corp.s preference shares,
subordinate voting shares and multiple voting shares and the conversion of
CanWest Global Communications Corp.s non-voting shares, multiple voting shares
or preference shares into subordinate voting shares are constrained by CanWest
Global Communications Corp.s articles.

Canadian Programming Content

CRTC regulations require licensees of television stations to maintain a
specified percentage of Canadian content in their programming. Television
broadcasters are subject to the requirement that, over the broadcast year and
over any six month period specified in the licence, a minimum of 60% of the
aggregate programming shown during the broadcast day (a continuous 18 hour
period between 6:00 a.m. and 1:00 a.m.) must be of Canadian origin. Canadian
origin is most commonly achieved on the basis of a points system requiring that
a number of creative and production staff be Canadian and that specified
Canadian production expenditure levels be met. In addition, at least 50% of
the aggregate programming between the hours of 6:00 p.m. and 12:00 midnight
over the broadcast year must be of Canadian origin. Specialty cable television
channels also have to maintain a specified percentage of Canadian content in
their programming,

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generally set forth in their conditions of licence.
Broadcasters are required to broadcast a minimum of
eight hours per week of priority programming during prime time (7:00 p.m. to
11:00 p.m.). Priority programming includes Canadian-produced drama, music and
dance, and variety and long-form documentaries, but does not include news and
information or sports programming.

Advertising

The CRTC also regulates the quantity and content of television advertising. A
television licensee may not, during any clock hour, broadcast more than twelve
minutes of advertising, subject to certain exceptions for unpaid public service
announcements and promotions for upcoming Canadian programs. Advertising
content is regulated by various federal and provincial statutes and
regulations, as well as by standards in the Canadian television broadcasting
industry.

Licensing

The CRTC has responsibility for the issuance, amendment and renewal of Canadian
broadcasting licences. A television broadcasting licence grants the right to a
broadcaster to transmit a television signal on a defined frequency within a
defined geographic area and at a defined power level. Subject to being
distributed as a distant signal by a distribution service such as cable or
direct-to-home satellite service, it defines the geographic area capable of
being reached by the broadcaster. The CRTC may also grant licences for
rebroadcast transmitters to relay a particular signal to other areas. A
specialty cable television licence grants the right to a broadcaster to
transmit programming to the public through a distribution service such as cable
or direct-to-home satellite service. Broadcasting licences may be issued for
periods not exceeding seven years and are usually renewed, except in cases of a
serious breach of the conditions attached to the licence or the regulations of
the CRTC. The CRTC is required to hold a public hearing in connection with the
issuance, suspension or revocation of a licence and may hold public hearings in
other circumstances.

In order to conduct business, CanWest must maintain its licences in good
standing. Failure to meet the terms of such licences may result in their
short-term renewal, suspension, revocation or non-renewal. Conditions may be
imposed by the CRTC on broadcasting licences that may affect the licensees
profitability. Licensees of distribution services must also meet technical
certification requirements under the Radiocommunication Act(Canada).

All of the Companys licences are in good standing and the Company is confident
of its ability to continue to satisfy the terms of all related undertakings.
Licences and their respective dates of renewal are as follows:

| |                            |                                  |  |        |  |                 |  |  |  | 
| | -------------------------- | -------------------------------- |  | ------ |  | --------------- |  |  |  | 
| | Station                    |                                  |  |        |  |                 |  |  | 
| | Global Television Network: |                                  |  |        |  |                 |  |  | 
| |                            | Global Vancouver                 |  | CHAN   |  | August 31, 2008
| |                            | Global Halifax                   |  | CIHF   |  | August 31, 2008
| |                            | Global Saint John                |  | CIHF-2 |  | August 31, 2008
| |                            | Global Quebec                    |  | CKMI   |  | August 31, 2008
| |                            | Global Calgary                   |  | CICT   |  | August 31, 2008
| |                            | Global Edmonton                  |  | CITV   |  | August 31, 2008
| |                            | Global Winnipeg                  |  | CKND   |  | August 31, 2008
| |                            | Global Saskatoon                 |  | CFSK   |  | August 31, 2008
| |                            | Global Regina                    |  | CFRE   |  | August 31, 2008
| |                            | Global Lethbridge                |  | CISA   |  | August 31, 2008
| |                            | Global Ontario                   |  | CIII   |  | August 31, 2008
| |                            |                                  |  |        |  |                 |  | 
| | Independent Stations:      |                                  |  |        |  |                 |  |  | 
| |                            | CJNT Montreal, Quebec            |  | CJNT   |  | August 31, 2007
| |                            | CHCH Hamilton, Ontario           |  | CHCH   |  | August 31, 2008
| |                            | CHEK, Victoria, British Columbia |  | CHEK   |  | August 31, 2008

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| |                 |                                |  |      |  |  |                 |  |  | 
| | --------------- | ------------------------------ |  | ---- |  |  | --------------- |  |  | 
| | CBC Affiliates: |                                |  |      |  |  |                 |  | 
| |                 | CHBC Kelowna, British Columbia |  | CHBC |  |  | August 31, 2008
| |                 | CKRD Red Deer, Alberta         |  | CKRD |  |  | August 31, 2008

| |                           |                           |  |              |  |                 |  |  |  | 
| | ------------------------- | ------------------------- |  | ------------ |  | --------------- |  |  |  | 
| | Specialty Cable Channels: |                           |  |              |  |                 |  |  | 
| | Analog:                   |                           |  |              |  |                 |  |  | 
| |                           | Global Prime              |  | Global Prime |  | August 31, 2003
| |                           |                           |  |              |  |                 |  | 
| | Digital:                  |                           |  |              |  |                 |  |  | 
| |                           | mentv (49% interest)      |  | Category 1   |  | August 31, 2007
| |                           | Mystery (45.05% interest) |  | Category 1   |  | August 31, 2007
| |                           | Lonestar                  |  | Category 2   |  | August 31, 2007
| |                           | DejaView                  |  | Category 2   |  | August 31, 2007
| |                           | Fox Sports World Canada   |  | Category 2   |  | August 31, 2007
| |                           | Xtreme Sports             |  | Category 2   |  | August 31, 2007

All licences and related CRTC decisions are available for public review.

The Company believes it enjoys good relations with the CRTC and all other
regulatory bodies that govern its operations. All of its licences have been
renewed since the granting of its first licence in 1974. The CRTC considered
the licence renewals of all of the Global Television stations in spring 2001
under new group licensing procedures. These licences were renewed effective
September 2001 for the maximum term, which is seven years.

Cross-Ownership Issues

Although the Broadcasting Act and its regulations and policies do not require
the CRTCs approval of a broadcasters purchase of an unregulated media entity
such as a newspaper, the CRTC may consider the issue of a cross-media ownership
when granting or renewing broadcasting licences. The CRTC has a broad mandate
to regulate and supervise all aspects of the Canadian broadcasting system, to
provide for and encourage the expression of a diversity of voices within the
broadcasting system and to prevent or address the emergence of any undue
competitive advantage on behalf of one licensee. As such, the CRTC may be
concerned about the level of diversity among the media voices available in the
geographic markets where cross-ownership occurs and may choose to accept
safeguards or implement conditions in the Companys licences to ensure a level
of diversity and prevent any undue competitive advantage. Whether the CRTC will
be concerned about the level of diversity will depend upon a number of factors,
including the definition of the relevant geographic market in which diversity
is measured and the number of participants in the market. The CRTC has wide
discretion in determining what constitutes the relevant market. The CRTC
examined cross-ownership issues at the recently completed group licence renewal
hearings.

At the renewal of the Companys broadcasting licences and in response to
potential concerns about diversity or undue competitive advantage, the CRTC
attached a condition to the Companys group licence which requires a code of
conduct be followed respecting the maintenance of separate management over the
television and print news operations. The CRTC could refuse to renew a licence
or to grant new licences based on the concerns about diversity or undue
competitive advantage.

While there are currently no specific prohibitions on the cross-ownership of
television stations and other media properties in Canada, the House of Commons
committee reviewing Canadas broadcasting system and the Broadcasting Act has
announced that it will study patterns of media ownership, cross-media ownership
and vertical integration as part of its review.

Canadian Publishing

The publication of newspapers in Canada is not directly regulated by federal or
provincial laws. There are, however, indirect restrictions on the foreign
ownership of Canadian newspapers by virtue of certain

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provisions of the Income Tax Act(Canada). The Income Tax Act limits the deductibility by Canadian
taxpayers of advertising expenditures that are made in newspapers other than
Canadian issues of Canadian newspapers. For any given publication to qualify
as a Canadian issue of a Canadian newspaper, the entity that publishes it, if
publicly traded, must ultimately be controlled by Canadian citizens and, if a
private company, must be at least 75% owned by Canadians. In addition, the
publication must, with limited exceptions, be printed and published in Canada.
All the Companys newspapers qualify as Canadian issues of Canadian
newspapers and, as a result, the Companys advertisers generally have the
right to deduct their advertising expenditures with us for Canadian tax
purposes.

Australian Television

The Broadcasting Services Act (Australia), (BSA) regulates the commercial
television industry in Australia. Under the provisions of the BSA, the
Australian Broadcasting Authority, (ABA) has responsibility for planning and
licensing, programming and content standards, ownership and control of
commercial broadcasting services, complaints handling and administering the
allocation of broadcasting frequency spectrum.

Ownership and Control

The BSA prohibits non-Australian persons from being in a position to exercise
control, either alone or together with associates, over commercial television
broadcasting licences. Control is very widely defined and includes the
capacity to veto or exercise restraint over a substantial issue affecting the
management of affairs of a corporation holding a licence.

The BSA limits foreign ownership of commercial television licences by any one
person and its associates to 15% of the shares of any television licensee or
of the voting rights or rights to distributions by way of dividend or a winding
up of the licensee, because the BSA deems any person who has more than 15%
interest of this type to control the television licensee. This limit
increases to 20% for a combined interest holding for two or more persons. An
interest in shares, voting or distribution rights of this nature is referred to
as a company interest. Interests of this kind are also traced on a
proportionate basis through a chain of companies or other entities, so that a
person with a company interest in CanWest would also be considered to have a
company interest in Network TEN. In addition, if foreign persons acquired
company interests directly or indirectly in other shareholders of Network TEN
(including through interests in other companies such as TEN Network Holdings
Limited, a company listed on the Australian Stock Exchange, those interests
would be traced on a proportionate basis through those corporate chains and
aggregated with those persons existing interests for the purposes of
determining compliance with the 15% and 20% thresholds.

The BSA also includes provisions that limit cross-ownership between commercial
television licences, radio licences and newspapers within the same licence
area.

The audience reach limitations of the BSA prevent a person from being in a
position to exercise control of television licences with a combined audience
reach of more than 75% of the Australian population, although it is possible
for a person to supply programming (through affiliates or otherwise) to achieve
greater audience reach. Furthermore, a person must not be in a position to
control more than one licence in the same licence area.

In April 2000, the Australian Productivity Commission released a report
recommending changes to Australian broadcast regulations. The report
recommended the repeal of all restrictions on foreign investment, ownership and
control in the BSA and a relaxation of cross-media ownership rules, subject to
the insertion of a media-specific public interest test in the Trade Practices
Act(Australia). The Commission stated that the easing of foreign ownership
restrictions and the entry of competitive international capital were essential
before cross-ownership restrictions were removed. The Commission also noted
that the convergence of various media was making the present restrictions
outmoded. The Broadcasting Services Amendment (Media Ownership) Bill, which
encapsulates the recommendation made in this report, is

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presently before Parliament for debate. There is, however, no guarantee that it will be passed
due to wavering support by the independent candidates who hold the balance of
power in the Senate.

Content and Advertising

The ABA imposes mandatory transmission quotas for Australian content and other
more specific quotas for Australian drama, childrens programming and
documentaries. A minimum of 55% of programming broadcast between 6:00 a.m. and
12:00 midnight must be produced under Australian creative control.

The Australian commercial television industry is also subject to the Commercial
Television Industry Code of Practice, which has been developed by the
Federation of Australian Commercial Television Stations in conjunction with the
ABA. The industrys code pertains to matters such as the classification of
programs and program promotions, the content of news and current affairs
programs and the content, placement and amount of advertisements, as well as
handling of complaints on code matters.

The broadcasting of commercials and program promotions is limited under the
Code of Practice to an average of 13 minutes per hour from 6:00 p.m. to 12:00
midnight and an average of 15 minutes per hour at other times. The exception to
this is certain childrens programming which is regulated by the ABAs
Childrens Television Standards.

Digital Television

The Australian government passed legislation that requires national television
networks to commence broadcasting on new digital channels beginning on January
1, 2001. Commencing no later than 2005, over-the-air broadcasters will be
required to simulcast both digital and analog services until 2008, or such time
as determined by further review. Over-the-air broadcasters are not permitted
to provide multiple channels or over-the-air subscription broadcasting services
until the end of 2005. In view of this legislation and the investment and
expense involved for existing broadcasters, the government has determined that
no new commercial television licences will be issued before December 31, 2006.

Network TEN has undertaken a major implementation plan to establish the
infrastructure and operations necessary for digital terrestrial broadcasting
and commenced digital broadcasting on January 1, 2001.

General Regulatory Obligations

In addition to the regulatory framework specific to broadcasting, the
television industry is also governed by general legislation that applies to all
industries. This includes the Trade Practices Act, which primarily deals with
anti-competitive conduct and consumer protection, and the Foreign Acquisitions
and Takeovers Act(Australia), which provides the Federal Treasurer with the
power to prohibit acquisitions by foreign persons of Australian companies and
assets where the acquisition is considered to be contrary to the national
interest.

Licensing

The ABA grants commercial television licences only to companies incorporated in
Australia. Commercial television licences granted by the ABA remain in force
for five years, subject to compliance with the BSA, and are renewed at the
request of the licence holder if the licensee is considered suitable by the ABA
to continue to hold a licence.

The following table sets forth the licences held by Network TEN and their
respective dates of renewal:

|          |  |           |  |                 |      |  |  | 
|--------- |  | --------- |  | --------------- | ---- |  |  | 
|          |  | Call Sign |  | Due for Renewal
|          |  |           |  |                
|Sydney    |  | TEN       |  |                 | 2007 | 
|Melbourne |  | ATV       |  |                 | 2007 | 
|Brisbane  |  | TVO       |  |                 | 2007 | 
|Perth     |  | NEW       |  |                 | 2007 | 
|Adelaide  |  | ADS       |  |                 | 2004 | 

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New Zealand Broadcasting

The New Zealand broadcasting industry was deregulated in 1989. Current
broadcasting laws are primarily concerned with the maintenance of broadcasting
standards in New Zealand and do not contain restrictions on foreign ownership,
cross media ownership or domestic content quotas. Other general legislation
concerning foreign investment in New Zealand may, however, have some effect on
proposals by non-New Zealand persons to acquire companies in New Zealand.

TV3 operates under a broadcast licence issued in 1995 and TV4 operates under a
broadcast licence issued in 1994. Both licences were granted for a 20-year
period and have similar terms and conditions. CanWest Radio NZ and RadioWorks
each hold broadcasting licences that will expire in 2011.

Under New Zealand law, television and radio broadcasters are required to
report their annual operating revenue to the New Zealand Broadcasting
Standards Authority and, if that operating revenue exceeds NZ$500,000 in any
year, they are required to pay a levy of 0.00051% of that revenue, plus
applicable taxes.

Republic of Ireland Television

Television broadcasting in the Republic of Ireland is regulated by the Office
of the Director for Telecommunications Regulations and the Broadcast
Commission of Ireland, or the BCI, pursuant to the Broadcast Act, 2001and the
Broadcasting Authority Acts, 1960 to 1990.The broadcasting industry is also
overseen by the Minister for Public Enterprise; the Minister for Communication
and the Environment; the Broadcasting Complaints Commission; the Irish
Competition Authority; and is guided by European Union Directives.

Licensing

The Office of the Director for Telecommunications Regulation issues television
broadcasting licences to the BCI, which then contracts with television program
service providers. Under the Broadcast Act, 2001, TV3 has been awarded
broadcast spectrum in the event a national Digital Terrestrial Television
platform is built, which would enable TV3 to supply digital and other
services.

TV3 has entered an agreement with the BCI providing TV3 with the right to
operate its television service and setting forth certain restrictions on the
manner in which TV3 will conduct business. The contract expires in September
2008 and provides for automatic renewal of the contract for an additional ten
years unless TV3 is in breach of the contract or suffers some form of
insolvency event.

Ownership and Control

The BCI has the right to approve any changes to TV3s articles of association,
directors and senior management. The BCI also has the right to approve
material changes in the ownership of TV3 and any related shareholders
agreement. The BCI must approve any transfer of TV3 shares to a person deemed
to be a media operator, non-European Union persons and certain others. A
media operator includes any person who is a television or radio broadcaster,
a cable operator, a program production company, a newspaper, a news magazine,
an advertising agency and certain other persons. There is no express
regulatory prohibition on a non-European Union person controlling TV3.
However, the Company believes it is unlikely the BCI would approve the Company
or any other non-European Union person acquiring more than a 45% interest in
TV3.

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Advertising

The BCI and other regulators regulate the quantity and content of television
advertising. Under the terms of TV3s agreement with the BCI, TV3 may
broadcast commercials for an average of 15% of its broadcast day (or an
average of nine minutes per hour), with a maximum of ten minutes in any single
hour.

Programming

In accordance with European Union Directives, a minimum of 50% of TV3s
programming must be of European Union origin. In addition, TV3s agreement with
the BCI requires that in 2002-2003 a minimum of 25% of its content must be of
Irish origin. TV3 has consistently exceeded on its Irish origin programming
commitment.

Northern Ireland Television

Commercial television broadcasting in the United Kingdom (including Northern
Ireland) is regulated by the Independent Television Commission, or the ITC,
under the Broadcasting Act 1990,as amended.

Licensing

The ITC issues broadcasting licences under the Broadcasting Act 1990.UTV holds
a regional licence for Northern Ireland that expires on December 31, 2009.

Foreign Ownership Restrictions

Under the Broadcasting Act 1990,no licence of the type held by UTV may be held
or controlled by an individual who is not either (i) a national of a European
Union member state and ordinarily resident within the European Community, or
(ii) a national of the United Kingdom, the Isle of Man and the Channel Islands.
In addition, no such licences may be held by a body corporate which is not
either (i) formed under the laws of a European Union member state and has its
registered or head office or principal place of business within the European
Community, or (ii) is formed under the law of the Isle of Man or the Channel
Islands.

The government of the United Kingdom has proposed a major revision to its
Broadcasting Act that may see the loosening of certain broadcast license
foreign ownership restrictions that have limited the ability of CanWest in the
region. It is expected that the bill encompassing these changes will make its
way though the U.K. parliamentary process during 2003.

Other Ownership Restrictions

The Broadcasting Act 1990imposes several additional restrictions on holding or
controlling broadcast licences. These restrictions include prohibitions against
(i) the ownership of multiple television stations, (ii) the cross-ownership of
television stations and radio stations serving a particular market, and (iii)
the cross-ownership of television stations and newspapers.

Content Quotas

In accordance with the terms of its licence, in each calendar year, a majority
of UTVs programming must be of European Union origin, a minimum of 25% of
UTVs programming must be independent productions, and a minimum of 65% of
UTVs programming must be originally commissioned or produced for UTV or
another ITV affiliate.

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C.     Organizational Structure

The following chart illustrates the relationship of the Company to its parent
and principal subsidiaries and indicates each companys respective jurisdiction
of incorporation and the percentage of voting securities held by each companys
parent company; entities are 100% owned unless otherwise indicated:

Organizational Structure



|(1) |  | Owned indirectly through CanWest Irish Holdings (Barbados) Inc.                                                               
|--- |  | ------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | 50% owned indirectly through CanWest International Investments
(Luxembourg) S.A. (International Investments).               
|   
|(3) |  | The Company owns 15% of the voting stock and 100% of the subordinated
debentures indirectly through International Investments.
|   
|(4) |  | Owned indirectly through International Investments.                                                                           

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Property, Plant and Equipment

Facilities

The corporate head office is located in leased space located at the TD Centre,
31st Floor, 201 Portage Avenue, Winnipeg, Manitoba, Canada R3B 3L7.

The Company owns the administrative and studio buildings associated with
television broadcasting operations in Vancouver, Victoria, Kelowna, Edmonton,
Calgary, Lethbridge, Red Deer, Regina, Saskatoon, Winnipeg, Toronto and
Hamilton. The Company also leases office and studio premises in Toronto,
Ottawa, Montreal, Quebec City, Dartmouth and Saint John. The Company leases
certain tower and transmitter facilities and a channel on the Anik- E2
satellite which is used to deliver the Companys signal to its transmitters.

All of the newspapers and the National Postare published from premises owned
by the Company, except The Edmonton Journal, which is published from premises
occupied under a long- term sale and lease- back agreement. In addition, the
Company prints all of its publications using its own presses and related
equipment, except for the National Post, which is printed in part by third
parties at locations throughout Canada. The Company leases additional office
space and warehouse space from time to time as required. The Company owns an
office facility in Toronto which serves as the headquarters for the Canadian
Media Operations. The New Zealand television operations are headquartered in
Auckland, where the Company owns a broadcast and production facility. The
Company also leases premises for its news bureaus in Wellington and
Christchurch. The majority of the transmission facilities are leased under
long- term agreements. CanWest Radio NZ operates its radio stations from leased
premises located in Auckland, Wellington, Christchurch, Dunedin and Hamilton.
RadioWorks leases a corporate office in Auckland and studios throughout the
country.

TV3 is headquartered in Dublin, where it leases office and studio premises.

All of the Companys owned property has been pledged as security under senior
bank debt.

Environmental Protection

Substantially all of the Companys operations are subject to laws and
regulations concerning, among other things, emissions to the air, water and
sewer discharges, handling, storage and disposal of wastes, recycling,
remediation of contaminated sites or otherwise relating to protection of the
environment. The Company believes all of its operations, including its
publishing operations, are in compliance with applicable environmental
protection laws and its own internal environmental compliance standards.
Ensuring environmental compliance has not given and is not expected to give
rise, in the aggregate, to any material adverse financial or operational
effects upon the Companys business.

Nevertheless, more stringent environmental laws as well as more vigorous
enforcement policies or discovery of previously unknown conditions requiring
remediation could result in additional costs that may have such effects.

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ITEM 5.   OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Certain statements in this annual report may constitute forward-looking
statements. Such forward-looking statements involve risks, uncertainties and
other factors which may cause actual results, performance or achievements of
the Company to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements.

OVERVIEW

The Company is an international media company formed under the laws of Canada.
In Canada, the Company owns and operates 16 broadcast television stations and
several specialty cable channels  including Prime TV and 6 digital specialty
channels, 16 metropolitan newspapers (6 of which were sold effective February
14, 2003), the National Post   a daily Canadian national newspaper, and more
than 50 non-daily publications. The Company also owns and operates New
Zealands TV3, TV4 and CanWest Radio NZ and has a 57.5% economic interest in
Australias Network TEN, which includes a wholly owned out-of-home advertising
company, Eye Corp. The Company also has a 45% interest in the Republic of
Irelands TV3, and a 29.9% equity interest in Northern Irelands UTV.

In August 2002, the Companys Australian operating unit, Network TEN, purchased
the remaining 40% of Eye Corp, Australias leading out-of-home advertising
company, for aggregate cash consideration of approximately A$10 million.

In August 2002, CanWest sold 10 small-to-medium market daily newspapers  as
well as certain community papers in Atlantic Canada and Saskatchewan  to
G.T.C. Transcontinental Group Ltd. for aggregate cash consideration of
approximately $257 million.

In March 2002, the Company completed the purchase of the 50% of the National
Post it did not already own for nominal consideration in the form of cash and
agreements and undertakings. In October 2001, the Company sold its interest in
CKVU (Vancouver) and received cash proceeds of approximately $133 million. In
September 2001, the Company sold its 70% interest in CFCF (Montreal) for cash
proceeds of $87 million. In August 2001, the Company sold its 50% interest in
ROBTv for cash proceeds of $30 million.

In May 2001, the Company concluded the private placement of approximately $720
million in 10-year senior subordinated notes bearing a coupon of 10 5/8%,
replacing interim financing arrangements.

In May 2001, through an amalgamation of subsidiaries, the Company acquired the
29.3% minority interest in CanWest Broadcasting Ltd. (CBL) which owned Global
Television Network stations in British Columbia (CKVU), Manitoba (CKND) and
Saskatchewan (CFRE and CFSK) in exchange for Series 2 preference shares of
CanWest Global Communications Corp. In December 2002, CanWest Global
Communications Corp. redeemed the Series 2 preference shares for cash of $57.7
million. The redemption was financed through the companys senior credit
facility. The former minority shareholders of CBL have commenced a lawsuit
against CanWest Global Communications Corp., the Company and certain of its
subsidiaries. See Notes 17 and 18 to the consolidated financial statements.

In March 2001, the Company completed a series of transactions through which
Granada Media acquired a 45% interest in TV3 (Ireland). While the Company
retains a 45% interest in TV3, control of its board of directors is shared with
Granada Media.

In November 2000, the Company acquired CanWest Publications for an aggregate
purchase price of approximately $3.1 billion, including certain costs
associated with the transaction, and subject to adjustment for working capital.

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In May 2000, the Company acquired a 72% equity interest in New Zealands
RadioWorks through a series of purchases on the New Zealand Stock Exchange and,
in January 2001, acquired its remaining shares. The aggregate acquisition cost
of RadioWorks was $74 million.

In 1997 and 1998, the Company acquired approximately 44% of WIC Western
International Communications Inc. (WIC). On March 31, 2000, the Company
completed a series of transactions with the other shareholders of WIC, which
resulted in the division of WICs broadcasting, distribution and other
businesses among certain of that companys shareholders. Through these
transactions, the Company acquired all of WICs shares and retained all of
WICs broadcast television stations, as well as a 50% interest in ROBTv and
certain other assets. The aggregate acquisition cost for the WIC assets
acquired was approximately $861 million.

TRENDS

The Company historically derives more than 80% of its revenues from advertising
in Canada. For that reason, the Companys results typically reflect overall
activity in the economy. Although advertising markets in North America and
throughout the world were affected by the slowing economy, results for the
fourth quarter confirm that the Canadian economy continues to improve with a
more rapid resumption of economic growth than in other major economies. The
rebound in advertising revenues in Canada has been stronger than in the United
States or Europe, where spending on advertising continues to grow more slowly.

Feedback from both television and newspaper advertising markets suggest that
the improvement in operating results evident in the latter half of fiscal 2002
should continue through the next fiscal year. Bookings for the first quarter of
2003 and into the rest of the fiscal year indicate a sustained strengthening of
television and print advertising.

CanWests Canadian television stations and metropolitan newspapers are
generally the highest rated in prime time and most read papers in their
respective markets. In managements opinion, these attributes enable the
Company to sustain its levels of revenue more successfully than its
competitors.

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APPLICATION OF ACCOUNTING PRINCIPLES

The Company prepares its consolidated financial statements in Canadian dollars
and in accordance with Canadian GAAP. The consolidated financial statements
include the Companys accounts and the accounts of its subsidiary companies.

The preparation of financial statements in accordance with Canadian GAAP
requires the use of estimates and assumptions that affect reported amounts of
assets, liabilities, revenue and expenses, and disclosure of contingencies.
Future events could alter such estimates.

The Company operates in highly competitive markets. The Company has estimated
the useful lives of intangible assets and the value of goodwill, based on
historical customer patterns, industry trends and existing competitive factors.
Significant long-term changes in these factors could result in a material
impairment of the value and life of intangible assets and goodwill.

In September 2001, the Company adopted the recommendations of the Canadian
Institute of Chartered Accountants, CICA, Handbook Section 3062, Goodwill and
Other Intangiblesand Handbook Section 1581, Business Combinations. Goodwill
and indefinite life intangibles are no longer amortized and are subject to an
annual value impairment test. As a result, the Company recorded a write down of
$76 million related to Network TENs investment in Eye Corp., $45 million of
which was charged to retained earnings at September 1, 2001.

During 2001, the Company adopted new recommendations of CICA Handbook Section
3465, Income Taxes. A description of the impact of these changes in accounting
policies, and a discussion of new accounting standards of the CICA which impact
the Company, is provided in Note 1 to the Consolidated Financial Statements for
the years ended August 31, 2002 and 2001.

The Company accounts for its economic interest in Network TEN using the equity
method of accounting. Under this method, the Companys interest in the net
earnings (before interest on subordinated debentures) of Network TEN is
included in the Companys consolidated earnings, and an adjustment is made to
the carrying value at which the investment is recorded on the consolidated
balance sheet. The carrying value of this investment is reduced by any interest
on subordinated debentures and dividends received by the Company.

In fiscal 2001, the Company accounted for its 50% interest in the National Post
using the equity method. In September 2001, the Company assumed control of the
National Post and, thereafter, the Company has consolidated its interest in the
National Post.

As a result of the restructuring effective March 31, 2001, the Company changed
the accounting for its 45% interest in TV3 Ireland to proportionate
consolidation.

THE COMPANY

A.      Operating Results

Fiscal 2002 Compared to Fiscal 2001

The Companys results were significantly impacted by acquisitions and
divestitures in 2002 and 2001. Accordingly, the following discussion includes
references to pro forma results. Pro forma results reflect the following
transactions as if they had occurred at the beginning of 2001:



| |  | the acquisition of CanWest
Publications including online operations in November 2000;   
|- |  | ----------------------------------------------------------------------------------------
| 
| |  | the acquisition of the remaining 50% interest in the National Post effective March 2002;

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| |  | the reorganization of the
Companys interest in TV3 Ireland in March 2001; and,
|- |  | -------------------------------------------------------------------------------
| 
| |  | the sale of CKVU effective August 2001.                                        

The following is a reconciliation of actual revenue and EBITDA to pro forma
revenue and EBITDA for the year ended August 31, 2001:

|                     |  |         |           |           |  |  |         |  
|-------------------- |  | ------- | --------- | --------- |  |  | ------- | -
|                     |  | Revenue |           | EBITDA(1)
|                     |  | $000    |           | $000     
|As reported          |  |         | 1,767,306 |           |  |  | 434,070 |  
|CanWest Publications |  |         | 269,717   |           |  |  | 87,256  |  
|Online operations    |  |         | 1,804     |           |  |  | (3,214  | )
|National Post        |  |         | 152,350   |           |  |  | (64,869 | )
|TV3 Ireland          |  |         | (10,735   | )         |  |  | (1,014  | )
|CKVU                 |  |         | (68,170   | )         |  |  | (21,245 | )
|                     |  |         |           |           |  |  |         |  
|Pro forma            |  |         | 2,112,272 |           |  |  | 430,984 |  
|                     |  |         |           |           |  |  |         |  

(1)  EBITDA represents earnings from continuing operations before realized
translation adjustments, interest in earnings from Network TEN and other equity
accounted affiliates, minority interests, provision for income taxes,
investment and other income, financing expenses and amortization. EBITDA is not
a recognized measure under Canadian GAAP. Management believes that in addition
to net income (loss), EBITDA is a useful supple-mental measure as it provides
investors with an indication of cash available for distribution prior to debt
service, capital expenditures and income taxes. Investors should be cautioned,
however, that EBITDA should not be construed as an alternative to net income
(loss) determined in accordance with GAAP as an indicator of the Companys
performance. The Companys method of calculating EBITDA may differ from other
companies and, accordingly, EBITDA may not be comparable to measures used by
other companies.

The Company reported consolidated revenues of $2,120 million for the year ended
August 31, 2002, an increase of $353 million from the actual revenues reported
for the previous year, and an increase of $8 million from pro forma revenues of
$2,112 million. The increase in actual revenue was primarily attributable to
the inclusion of twelve months of Publications results in 2002 compared to
inclusion of only nine and a half months in 2001. Pro forma revenues reflect
solid increases in Canadian television revenues offset by decreased revenues in
Publications.

Consolidated operating expenses (including selling, general, and administrative
expenses) before amortization increased $316 million to $1,649 million as a
result of the inclusion of a full year of the Publications results. On a pro
forma basis, operating expenses (including selling, general, and administrative
expenses) decreased $32 million, 2% from $1,681 million in the previous year,
reflecting expense reductions in Publications offset by increased expenses in
Canadian television operations.

EBITDA increased by 9% to $471 million, from $434 million last year. The
increase in actual operating profit is the result of the inclusion of twelve
months of Publications results partially offset by a reduction due to the sale
of CKVU. On a pro forma basis, EBITDA increased by 9% over $431 million last
year, primarily due to reductions in losses of the National Post.

Actual revenues from Canadian television (excluding the 6 specialty digital
channels launched in September 2001) were down slightly to $688 million from
$701 million recorded in the previous year. This was due entirely to the sale
of CKVU (Vancouver) effective August 31, 2001. On a pro forma (same station)
basis, Canadian television revenues increased by 9% compared to $633 million in
fiscal 2001. BCTV was a substantial contributor to the growth in revenue in
fiscal 2002, as a result of an additional 40 hours per week of airtime
inventory being available for sale following its disaffiliation with the CTV
network. Operating expenses at Canadian television increased by 5% to $493
million dollars, compared to $472 million in fiscal 2001. On a pro forma basis,
which excluded operating expenses associated with CKVU in the previous year,
the increase in operating expenses was 16% compared to fiscal 2001. The

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year-over-year increase reflected higher programming costs arising from the
affiliation of BCTV in Vancouver with the Global Television Network, as well as
substantial additional investment in programs designed to enhance future
ratings performance. Examples include securing a new season of the top-ranked
Survivor series, PGA golf and big event programming for the Companys CH
stations.

In addition, as part of the CRTC approval, CanWest made substantial investments
in local programming at the CH stations in Victoria and Hamilton, which
included enhanced news programming and daytime programming. The additional
investments resulted in a 6% decline in EBITDA for Canadian television
operations to $195 million, from $208 million on a pro forma basis the year
before.

The Companys conventional television operations in Canada continued to be the
market leaders in prime time ratings. Outside of high profile sports events,
Global Television ranked number one in the countrys largest English speaking
markets, with 8 of the top 10 shows in Toronto and 17 of the top 20 shows in
Vancouver.

Revenues increased by 27% at Prime, the Companys top-rated specialty cable
channel, to $25 million from $19 million in fiscal 2001. The increase was
attributable to a 44.9% increase in advertising sales revenue over the previous
year, and an increase in the subscriber base of 6.6% over the previous year.

The Company launched six specialty digital channels in September 2001. Five of
the new channels ranked in the top ten of the 47 new digital channels that went
on air at that time. At the close of the fiscal year, the Companys portfolio
of Canadian digital channels had approximately 2,000,000 subscribers. Revenue
from the specialty digital channels for the eight months following the end of
the free preview period was $4 million, with expenses of $8 million, resulting
in an operating loss of $4 million.

Global Television launched a new national news service during fiscal 2001 and
attracts a substantial number of Canadian television viewers. According to the
Broadcast Bureau of Measurement, an average of 773,000 adult Canadians, 18
years or older, tuned into Global National with Kevin Newman in the fall of
2001. By the spring of 2002, Global National with Kevin Newman had increased
its adult audience to 802,000, overtaking the late evening CBC National
newscast with Peter Mansbridge in numbers of viewers.

Publications group revenues for fiscal 2002, including the National Post, were
$1,264 million, a decline of 6% from the pro forma revenues of $1,340 million
for the previous year. Newspaper revenues were negatively affected by the
impact of the September 11th tragedy on advertising expenditures and the
lingering effects of a slowdown in overall advertising markets that began in
April 2001. However, the decrease in advertising linage slowed and reversed
through fiscal 2002. During the last four months of fiscal 2002, revenues were
ahead of the corresponding months of the previous year. Consistent with the
prior year, approximately 78% of newspaper revenues are derived from
advertising, while circulation represents about 17% of the total.

Compared to last year, on a pro forma basis, operating expenses (including
selling, general and administrative expenses) of the Companys newspaper
operations declined by 11% to $972 million as a result of restructuring at the
National Post and reduced manning at other newspapers, and an overall drop of
14% in average newsprint costs during the year. Operating costs include the
start-up costs associated with the launch of the Reach Canada customer contact
centre in Winnipeg which deals with customer service calls for all major
newspapers in the group. EBITDA for the newspaper group increased by 18% to
$292 million, from the $246 million recorded the previous year on a pro forma
basis.

In August 2002, the Company sold a number of newspapers and related assets to
G.T.C. Transcontinental Group Ltd. for aggregate cash proceeds of $257 million.
The Company determined that these newspapers, which included eleven smaller
market daily papers and certain community papers in Atlantic Canada and
Saskatchewan, were not central to its multi-platform sales, content and
promotion strategy. The newspapers and related assets included in the
transaction generated approximately $95 million in revenue and $30 million in
EBITDA in fiscal 2002.

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The Companys online operations achieved a significant improvement in EBITDA,
cutting losses from $19 million in the previous fiscal year to $7 million in
the current year on a pro forma basis. These operations include the web portal,
canada.com, and other web based operations. Online revenues for the fiscal year
decreased by $1 million to $7.4 million compared to the previous fiscal year on
a pro forma basis. The Company achieved substantial efficiency gains, cutting
operating expenses to $14 million from $28 million in the previous year on a
pro forma basis as a result of technical and physical integration of its online
properties.

CanWests 45% share of revenues at TV3 in the Republic of Ireland increased 39%
to $28 million from $20 million the previous year. CanWests share of TV3s
EBITDA was $8 million, more than three times the level of the previous year.
Ratings were up 13% in prime time viewing hours, with an 18% growth in all-day
ratings at TV3. Improved ratings for locally produced programming, as well as
the inclusion of top-rated entertainment programming from Granada Media,
contributed substantially to the continued growth at TV3.

Revenues from TV3/4 New Zealand in fiscal 2002 increased by 18% to $69 million
from $58 million the previous year. In local currency revenues increased by 9%
to NZ$100 million from NZ$92 million in 2001. EBITDA also improved, from an
EBITDA loss of $9 million in fiscal 2001 to an EBITDA loss of less than $2
million for the year ended August 31, 2002. Results from New Zealand have been
translated at an average exchange rate of $0.6910, an increase of 8% over the
prior years rate of exchange. A combination of factors contributed to the
improved results, including higher ratings, improved advertising market
conditions, and higher prices for advertising. A stronger New Zealand dollar
also helped to reduce the cost of imported programming.

TV3 gained two points in ad market share to 25% compared to a 23% ad market
share in the previous fiscal year. In the last quarter of the year, TV3
achieved the highest share in Auckland, New Zealands largest city, with an
audience market share of 32.

CanWest Radio in New Zealand continued to make steady progress, increasing both
its revenues and EBITDA. EBITDA grew by 14% to $16 million from $14 million in
the previous year on revenues of $61 million. It recorded operating expenses of
$44 million, a 4% reduction in costs from the previous year.

Financing costs were $255 million for the year ended August 2002, compared to
$269 million in the previous year. The decrease reflects reduced interest rates
and debt repayments in 2002 offset by a full twelve months of financing costs
related to the acquisition of CanWest Publications properties which occurred
late in the first quarter of last year, resulting in only nine and one-half
months of the carrying cost associated with the acquisition in 2001.

Amortization of intangibles and goodwill was reduced to $18 million in 2002,
compared to $89 million in the previous year as a result of the adoption of the
new accounting policy under which goodwill and indefinite life intangibles are
no longer amortized. Amortization of property and equipment increased to $73
million from $60 million as a result of the acquisition of the publishing
properties.

In 2002, the Company had investment gains, net of losses on write down of
investments, of $34 million. This is comprised of a gain on the sale of CKVU of
$68 million, a gain on the sale of Atlantic Canada and Saskatchewan community
newspapers of $49 million offset by write downs of $86 million as a result of
non temporary declines in fair value of other investments. In the previous
year, the net investment gain was $29 million.

The provision for income taxes was $48 million in 2002, compared to a tax
recovery of $27 million in 2001. The effective tax rate of 31% is significantly
lower than the Companys statutory rate of 39%, primarily as a result of the
non-taxable portion of gains. The previous years recovery included a future
income tax recovery of $71 million due to reductions in federal and provincial
income tax rates enacted during 2001.

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In 2002, the Company recorded a recovery from minority interest of $4 million,
compared to a charge of $3 million in the prior year. In 2002, the credit is
related to the minority interest in the National Post from September 1, 2001 to
March 2002. In the prior year the charge related to the minority interest in
Radio Works to January 2001.

The Companys interest in the loss of Network TEN for the year was $12 million,
compared to income of $53 million the previous year. The Companys share of
earnings before TENs investment losses and write downs was $44 million in
2002, compared to $37 million in 2001, a $7 million, 19% increase. In 2002, our
share of TENs non-recurring charges included a one-time income tax settlement
of $17 million, a goodwill impairment loss related to Eye Corp. of $30 million,
and a $9 million write down of investments to fair value. In the prior year,
the Companys share of non-recurring charges included gains on sale of
investments of $29 million offset by a loss on the write down of the SCAPE
investment of $13 million. Results from TEN have been translated at an average
rate of $0.8311, up 4% from the average rate of exchange in 2001. See detailed
discussion of Network TEN below.

The Companys interest in losses of equity accounted affiliates was $2 million
for 2002, compared to $14 million in 2001. The 2001 loss is primarily comprised
of the Companys share of the National Post losses. In 2002, the National Post
was consolidated.

The Company incurred a $1 million loss from currency translation, realized on
distributions declared by Network TEN in 2002, compared to a $7 million loss in
2001.

Net earnings for the year were $98 million, compared to $98 million in 2001.
Adjusted earnings for 2001, excluding the amortization of goodwill and
indefinite life intangibles, were $167 million.

Fiscal 2001 Compared to Fiscal 2000

Consolidated revenue increased by $1,147 million, or 185%, to $1,767 million
for the year ended August 31, 2001, from $620 million in the previous year.
This increase was primarily due to the acquisitions of WIC in March 2000,
RadioWorks in May 2000 and CanWest Publications in November 2000.

Total operating expenses (including selling, general and administrative
expenses) before amortization, increased by $854 million, or 178%, to $1,333
million for the year ended August 31, 2001, from $479 million for the same
period in 2000. This increase was primarily related to the acquisitions of WIC,
RadioWorks and CanWest Publications.

EBITDA increased by $293 million, or 207%, to $434 million for the year ended
August 31, 2001, from $141 million in the previous year. The increase was
primarily attributable to the acquisitions of WIC, RadioWorks and CanWest
Publications (excluding the National Post). EBITDA of RadioWorks and CanWest
Publications (excluding the National Post) for the period were $10 million and
$224 million respectively. Offsetting the effect of these acquisitions were
declines in EBITDA from Global Television Network on a same station basis and
declines in EBITDA from TV3 and TV4 in New Zealand.

In Canada, revenue from television operations increased $211 million, or 43%
for the year, to $701 million from $490 million in fiscal 2000. This increase
was due to higher airtime revenue of $236 million as a result of the
contributions from the former WIC stations. Revenue from Global Prime increased
$5 million, or 37%, from the same period in 2000. On a pro-forma, same station
basis, revenue from conventional television decreased $19 million, or 27%. This
decline was primarily the result of the 2000 Olympics, which were broadcast on
a competing network and delayed the commencement of the fall programming
schedule.

For Canadian broadcast operations, total operating expenses before amortization
increased by $149 million, or 46%, to $472 million, from $323 million in the
prior year as a result of the acquisition of the WIC television stations.

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In New Zealand, revenue from television operations decreased $15 million, or
20%, to $58 million for the year from $73 million in fiscal 2000. Results from
New Zealand have been translated at an average rate of $0.638 compared to
$0.713 last year, a decline of 11% in the exchange value of the New Zealand
currency. Revenue in local currency decreased to NZ$92 million, or 10%, from
NZ$102 million in the prior year. The decline was primarily a result of a
generally soft market environment and the impact of the Olympics in September
2000.

In New Zealand, total operating expenses before amortization for television
operations decreased $5 million, or 7%, to $67 million, from $72 million in the
same period the prior year. The decline was mainly attributable to the
depreciating value of the New Zealand dollar against the Canadian dollar. In
local currency terms, total operating expenses before amortization increased to
NZ$106 million, or 5%, from NZ$101 million in fiscal 2000.

Revenue from radio operations in New Zealand increased $27 million, or 90%, to
$57 million for the year, up from $30 million in fiscal 2000. The Company
acquired 72% of RadioWorks shares in May 2000 and the remaining 28% in January
2001. RadioWorks contributed $39 million to consolidated revenue in the year
ended August 31, 2001. CanWest Radio NZs revenue in local currency was
unchanged from the prior year.

Total operating expenses before amortization for radio operations in New
Zealand increased to $43 million, or 85%, from $23 million in fiscal 2000. In
local currency, the increase was NZ$34 million to NZ$67 million from NZ$33
million in the same period in the prior year. The increase was primarily the
result of the RadioWorks acquisition. Total operating expenses before
amortization for RadioWorks were NZ$45 million for the year ended August 31,
2001.

Revenue from TV3 Ireland increased $4 million, or 13%, to $31 million for the
year ended August 31, 2001, from $27 million in the same period in fiscal 2000.
In March 2001, the Company restructured its interest in TV3 Ireland. As a
result, the accounting treatment was changed to a 45% proportionate
consolidation from 100% consolidation in previous periods. Results from TV3
Ireland were converted to Canadian dollars at an average rate of $1.7167 for
the 12 months, compared to $1.8243 for fiscal 2000, a 6% decline. On a local
currency basis, TV3 Irelands total revenue grew 62% to Ire£24 million for the
12 months, from Ire£15 million for the same period in the prior year, as TV3
continued to build advertiser support.

TV3 Irelands total operating expenses before amortization decreased to $28
million, from $36 million for the same period last year, reflecting the change
in accounting treatment from 100% consolidated to 45% on a proportionately
consolidated basis. In local currency, TV3 Irelands operating expenses
increased by Ire£3 million or 14% to Ire£23 million, from Ire£20 million in
fiscal 2000.

Revenue of $918 million from the Companys newspaper group (excluding the
National Post) was included in operations for the period from November 16, 2000
to August 31, 2001. On a pro forma basis for the twelve months ended August 31,
2001, the newspaper group generated revenues of $1,188 million, compared to
$1,192 million in the previous period. The decline reflected a weakening in the
advertising market, which commenced in April 2001, following comparatively
strong first and second quarters. Approximately 78% of Publications revenues
were derived from advertising, while circulation revenues represented 17% of
total revenue.

Total operating expenses before amortization of $694 million for the Companys
newspaper group were included in operations for the year ended August 31, 2001,
representing the period following the November 16, 2000 acquisition.

On a pro forma basis for the twelve months ended August 31, 2001, total
operating expenses for the newspaper group were $876 million, which represented
no material change compared to the same twelve months in 2000.

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A 13% year-over-year increase in newsprint prices was offset by the
consolidation of regional printing operations and other cost efficiency gains.

EBITDA losses from CanWest Interactive were $16 million for the fiscal year
2001 on revenues of $7 million. In the fourth quarter, EBITDA losses were
reduced to $3 million, reflecting the significant progress achieved in reducing
costs through the consolidation and integration of technical platforms under
the canada.com brand.

Amortization, including amortization of broadcast licences, circulation,
goodwill and capital assets, increased by $112 million to $154 million for the
year ended August 31, 2001, from $43 million in the previous year. The increase
is a result of the WIC, RadioWorks and CanWest Publications acquisitions.

Financing expenses increased $209 million to $269 million for the year ended
August 31, 2001, from $60 million in fiscal 2000. The increase reflected a
higher level of debt outstanding as a result of the acquisitions of WIC in
March 2000, Radio Works in May 2000, and CanWest Publications in November 2000.

Investment gains decreased $73 million to $29 million for the year ended August
31, 2001, from $101 million for the same period the previous year. For the year
ended August 31, 2001, the Company recorded gains on the sale of investments of
$8 million from the sale of publicly traded common shares of Alliance Atlantis
Communications Inc., previously acquired for investment purposes, and of $21
million from the reorganization of the Companys interest in TV3 Ireland. In
fiscal 2000, the Company recorded a gain on the sale of its investment in
publicly traded shares of CTV Inc. of $99 million. Dividend income included
dividends from Ulster TV of $3 million for the year ended August 31, 2001,
substantially unchanged compared to the previous year.

Recovery of income taxes increased $69 million to $27 million for the year
ended August 31, 2001, from a charge of $42 million in the previous year. The
provision for income taxes reflects a future income tax recovery of $71 million
related to reductions in federal and provincial income tax rates enacted during
2001.

The net charge for minority interests increased by $5 million to $3 million,
from a credit of $2 million in the same period last year. This increase was
primarily the result of the depletion of the minority interest credit related
to TV3 Ireland and the inclusion of a charge related to the 28% minority
interest in RadioWorks until January 2001.

Interest in earnings from Network TEN declined $20 million, or 27%, to $53
million for the year ended August 31, 2001, from $72 million in the prior year.
The decline was attributable to a reduction in revenue resulting from the
impact of the 2000 Olympics, broadcast on a competing network, and a generally
soft advertising market following the 2000 Olympics. Network TEN and Village
Roadshow discontinued SCAPE, their online partnership, in March 2001. As a
result, Network TEN wrote off its investment in SCAPE in February 2001. The
Companys share of the loss amounted to $13 million. Partially offsetting these
decreases were investment gains related to the sale of certain investments and
other assets by Network TEN. The Companys share of these gains was $29
million. Also affecting the result was a decline of 11% in the average rate of
exchange of the Australian dollar.

The Company incurred a $7 million loss from currency translation realized on
distributions declared by Network TEN in the year ended August 31, 2001,
compared to a loss of $1 million in the previous year.

The Company incurred losses from equity accounted affiliates of $15 million for
the year ended August 31, 2001, representing the Companys share of net
earnings from CFCF and ROBTv of $2 million offset by its 50% share of losses
for the National Post.

Net earnings decreased $79 million, or 45%, to $98 million for the year ended
August 31, 2001, compared to $177 million in the same period last year.

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B.      Liquidity and Capital Resources

Cash flow from operations before changes in non-cash working capital was $254
million for the year ended August 31, 2002, compared to $198 million for the
previous year.

Distributions of $61 million from Network TEN were included in cash flow from
operations in 2002. As a result of losses incurred in 2002, Network TEN will
not make a distribution of 2002 earnings. TEN has adopted a policy of interim
and final dividends for 2003 which will allow for a distribution to be paid
early in the 2003 calendar year.

Cash was $50 million at August 31, 2002, compared to $11 million as of August
31, 2001.

Capital expenditures were $52 million for the year ended August 31, 2002,
compared to $42 million for the previous fiscal year. Capital spending in 2002
included investment spending related to the Companys new printing plant in
Montreal, and fit-out of the digital specialty operations, Reach Canada, the
Companys contact centre and the Companys centralized business services and
information technology units. Planned capital expenditures for fiscal 2003
amount to approximately $50 million, including $7 million related to the
fit-out of the Companys central services.

Proceeds from divestitures and the sale of investments, including CFCF, CKVU
and community newspapers, amounted to $477 million during 2002. In September
2001, the Company suspended the payment of dividends in favor of debt
reduction.

Long-term debt, including the current portion, decreased $494 million during
the year ended August 31, 2002 to $2,530 million as a result of repayment of
principal.

The total credit available under the Companys senior credit facility is $2,397
million, of which the Company had drawn approximately $1,797 million as of
August 31, 2002. The facility includes revolving and non-revolving tranches
with terms ranging from 6 to 8.5 years. The senior credit facility is
collateralized by certain assets of the Company. Scheduled repayments of the
Companys senior credit facility amount to $127 million in fiscal 2003. In
addition, the Company has outstanding $720 million in senior subordinated notes
maturing in 2011. The senior subordinated notes are guaranteed by certain
subsidiaries.

Total leverage under the Companys senior credit facility was 5.25 times EBITDA
for the year ended August 31, 2002, compared to a covenant of 5.75 times.

On May 2002, the Company secured certain amendments to its senior secured
credit facility which, under certain conditions, (1) allow greater flexibility
to repay the junior subordinated notes, and (2) defer the scheduled step-down
of the total leverage ratio from 5.75 times to 5.50 times until February 2004.

The Company has entered into currency and interest rate swaps with certain
lenders under its senior indebtedness. The average cost of debt, including
junior subordinated notes, after taking into account other financial
instruments in place, was 10%.

At August 31, 2002 the junior subordinated notes payable to the Companys
parent were $949 million. These notes bear interest at 12.155% and mature in
2020.

The Companys primary market risk exposures are interest rate and currency
exchange rate risk. The Company is exposed to interest rate risk and currency
exchange rate fluctuations resulting from the issuance of floating rate debt
and debt denominated in U.S. dollars. In addition to monitoring the ratio of
fixed-rate debt to long-term debt, the Company uses interest rate swaps to
manage the proportion of total debt that is subject to variable rates.
Cross-currency swaps are used to hedge both the interest rate and the currency
exposure on debt originally issued in U.S. dollars. The Company does not enter
into any derivatives for trading purposes.

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The Company has fully hedged the currency exposure on all of its U.S. dollar
denominated debt, and has fixed the interest rate for the majority of its
floating rate debt by entering into a combination of cross-currency swaps and
interest rate swaps.

In addition to foreign exchange rate risk on foreign currency denominated debt,
the Company is also exposed to some currency risk as a result of having
investments and carrying on business in currencies other than the Canadian
dollar. All of the Companys foreign operations are self sustaining, and
therefore foreign exchange gains and losses are deferred as a separate
component of shareholders equity. The Company translates the earnings of
equity accounted subsidiaries and affiliates at the average rate of translation
of the relevant period. The Company recognizes deferred translation gains and
losses as appropriate upon dispositions and/or distributions from such
operations. The Companys primary currency exposure is to variations in the
Australian dollar relative to the Canadian dollar as a result of its investment
in Network TEN. Currently, the Company does not use derivative financial
instruments to manage its exposure to fluctuations in foreign currency exchange
rates.

Based on current operations, the Company believes that cash flow from
operations, together with available borrowing capacity under the senior credit
facility, will be adequate to meet its anticipated requirements for working
capital, capital expenditures, interest payments and its potential obligation
to redeem CanWest Series 2 preference shares.

Although the Company has no current undertakings or agreements with respect to
material acquisitions or investments, from time to time potential acquisitions
and investments are evaluated and, to the extent permitted by the terms of
senior debt instruments, the Company may make such acquisitions or investments
should attractive opportunities arise. The Company expects that the funding for
any such acquisitions or investments would come from working capital, borrowing
under the senior credit facility or future credit facilities, additional equity
and debt financing, entering into joint ventures or a combination of these
options.

Network Ten

The Company has a 57.5% economic interest in Network TEN, one of Australias
three non-government owned national television broadcast networks. While
Network TENs results are not consolidated into the Companys financial
statements, the Company receives interest payments under Network TENs
outstanding subordinated debentures, all of which are owned by the Company and
dividend payments in respect of the Network TEN shares owned by the Company.

Set forth below is a discussion of Network TENs results of operations without
giving effect to the Companys proportionate interest in Network TEN.

Fiscal 2002 Compared to Fiscal 2001

Network TEN television operations in Australia reported a record year in terms
of revenues after significant ratings gains for its prime time schedule in both
its target demographic of 16-39 year olds and other audience categories. Total
revenues increased by 16% to A$587 million, from A$506 million the previous
year. This included a record fourth quarter for the television operations of
the company.

Operating expenses of the Australian television operation increased by A$60
million, or 17%, to A$416 million for the year ended August 31, 2002, from
A$356 million in the same period in the previous year. The increase reflected
the investment in a winning program strategy that included the most watched
Australian program, Big Brother, and sports programming with wide audience
appeal, such as the AFL games.

EBITDA increased by A$22 million, or 15%, to A$172 million for the year ended
August 31, 2002, from A$150 million for the same period in the previous year.
Revenues from Eye Corp., TENs out-of-home operation, increased by A$30
million, or 59%, to A$80 million for the year ended August 31, 2002, from A$50
million the previous year, which included only eight months of Eye Corp.
results.

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Operating expenses at Eye Corp. increased by 67% to A$78 million, from A$47
million the previous year due to the inclusion of a full year of Eye Corp.
results in 2002 compared to eight months in 2001.

EBITDA of Eye Corp. decreased to A$2 million from A$4 million the previous
year.

Shortly before the end of the fiscal year, Network TEN acquired the remaining
40% of Eye Corp. for A$10 million. The potential for growth and profits in the
out-of-home market remains substantial, but the difficult advertising
environment at this time has affected the out-of-home industry more than other
media. Acquisition of full ownership and control of the company will enable TEN
to make the necessary realignments of management and strategy to realize
further efficiencies.

In 2002, Network TEN recorded an investment loss of A$20 million related to the
write down of other investments to fair value. In 2001, Network TEN had a net
investment income of A$35 million.

As a result of the adoption of new accounting policies under Canadian GAAP no
amortization of goodwill and indefinite life intangibles was recorded. In the
previous year, amortization of A$14 million was recorded. In 2002, Network TEN
recognized a goodwill impairment loss of A$168 million related to its
investment in Eye Corp. In accordance with the new accounting policy, A$102
million was recorded as a charge against opening retained earnings, and A$66
million charged against 2002 earnings. The decline in fair value is
attributable to weaknesses in the out-of-home advertising market and to certain
operational issues. Financing expenses, excluding interest in respect of
subordinated debentures, increased to A$27 million from A$18 million in the
previous year, reflecting higher debt levels.

Income tax expense increased to A$71 million in 2002, compared to A$24 million
in 2001 as a result of increased taxable income, as well as the A$36 million
settlement with the Australian Tax Office, as described in the following
section.

Network TENs earnings, excluding interest in respect of subordinated
debentures, decreased to a loss of A$23 million for the year ended August 31,
2002, from earnings of A$123 million in the previous year.

Fiscal 2001 Compared to Fiscal 2000

Total revenues increased A$7 million, or 1%, to A$556 million for the year
ended August 31, 2001, from A$548 million. Revenues of A$50 million from Eye
Corp., in which Network TEN acquired a 60% controlling interest in December
2000, offset declines in television revenues.

Operating expenses before depreciation and amortization increased A$54 million,
or 15%, to A$406 million for the year ended August 31, 2001, from A$353 million
for the previous year. The increase is primarily attributable to the inclusion
of A$47 million in Eye Corp. operating expenses, as well as increased operating
costs associated with transmission of digital broadcast signals.

EBITDA decreased A$46 million, or 24%, to A$149 million for the year ended
August 31, 2001, from A$195 million for the previous year.

Network TENs investment income totaled A$35 million for the year ended August
31, 2001. This included gains on sale of certain listed investments of A$57
million and sale of excess real property of A$7 million. These gains were
partially offset by a loss of A$29 million resulting from the write-off of
certain of Network TENs online investments, primarily the result of the
discontinuance of its SCAPE joint ventures.

Amortization expenses increased by A$12 million, to A$25 million for the year
ended August 31, 2001, from A$14 million in the previous year. This increase
was primarily attributable to the additional amortization resulting from the
acquisition of 60% of Eye Corp.

Financing expenses, excluding interest in respect of subordinated debentures,
increased to A$18 million for the year ended August 31, 2001, from A$2 million
in the previous year, reflecting higher debt levels.

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Income tax expense decreased by A$10 million, to A$24 million for the year
ended August 31, 2001, from A$34 million in the previous year, as a result of
the reduction in earnings.

Network TENs earnings, excluding interest in respect of subordinated
debentures, decreased by A$25 million, or 17%, to A$123 million for the year
ended August 31, 2001, from A$148 million in the previous year.

Liquidity and Capital Resources

Cash flow from operations before changes in non-cash working capital decreased
by A$37 million in the 12 months ended August 31, 2002 to A$94 million,
compared to the previous year.

Capital expenditures for replacement of capital assets were A$32 million for
the year ended August 31, 2002, compared to A$23 million in the same period
last year. As required by its existing broadcast licence, Network TEN converted
to digital signal transmission in January 2001. The total capital cost of the
conversion is estimated at A$80 million, which will be expended over a five
year period. In August 2002, Network TEN acquired the remaining interest in
Eye Corp. that it did not already own for A$10 million.

In January 2002, Network TEN paid distributions aggregating A$139 million.

As a result of losses incurred in 2002, Network TEN will not make a
distribution of 2002 earnings. TEN has adopted a policy of interim and final
dividends for the 2003 fiscal year. This will allow a cash distribution to be
paid early in the 2003 calendar year from earnings generated in the first half
of fiscal 2003.

As of August 31, 2002, Network TEN had cash on hand of A$12 million, compared
to A$22 million as of August 31, 2001.

Network TEN has a credit facility with a syndicate of banks providing for
operating and term credit facilities in the aggregate amount of A$700 million.
The credit facility is secured by a lien on substantially all of the assets of
Network TEN and its subsidiaries. Outstanding loans under Network TENs credit
facility totaled A$460 million on August 31, 2002.

A longstanding dispute between TEN and the Australian Tax Office (ATO)
regarding the deductibility of debenture interest paid to CanWest was resolved
in August 2002. As a result, the ATO will allow TEN to continue to deduct
interest on its subordinated debentures until June 30, 2004. After that date,
in accordance with new tax legislation in Australia that will come into effect
on July 1, 2004, TEN will no longer be entitled to tax deductions for interest
in respect of the subordinated debentures. The settlement resulted in a
non-recurring income tax expense of A$36 million in 2002.

C.      Research and Development, Patents and Licenses

Not applicable.

D.      Trend Information

The recession, which remained entrenched through the first half of 2002, seems
to have abated in most markets, with Australia and Canada recovering first,
both registering robust economic growth, particularly in comparison to the
United States. Results to date in fiscal 2003 and forward sales bookings in our
Canadian and Australian television operations support managements expectation
that the positive trends in demand for advertising will continue in all markets
in the coming year, and that it would be reasonable to anticipate a
continuation of the improvement in operating results evident in recent months
in Canada and at all of the Companys international operations.

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Integration of the newly acquired newspaper and interactive assets in Canada
with the Companys existing Canadian media assets is already well underway.
Nevertheless, considerable additional ground remains to extract full value from
the cost reduction and revenue enhancement opportunities available from
combining television, newspaper and interactive assets on a national scale in
Canada.

Over the past year, the Company has revamped its national and local sales
organizations to take advantage of multi-platform sales opportunities. The
Company has created a national promotions team to extract value from the
cross-promotion of its various media. The Company also has strengthened its
executive capacity to drive the integration of news and information content in
order to enhance both the quantity and quality available for all our media
outlets. Building on these initiatives will be top operating priorities in
2003.

Initiatives currently underway will provide the Companys newspaper publishers
with the means to improve overall information content with enhanced local
reporting and access to more and better quality national and international
reporting and quality features through the facilities of an expanded CanWest
news service and national news network. The tremendous success of Global
National with Kevin Newman, and the Global Sunday current affairs program also
provide valuable platforms on which to build a more competitive television news
and public affairs franchise. All of these initiatives will improve the
competitive position of CanWest Canadian media operations and should contribute
to improved earnings in future years.

Debt reduction remains the Companys senior corporate priority. With a
reduction of over $500 million in senior debt achieved over the past year, and
with the expectation of improved operating results and significant additional
potential to generate cash from the sale of other non-core assets, the Company
anticipates a significant opportunity to reduce debt further in fiscal 2003.

Higher ratings and market shares of Canadian television operations at Global
Television, as well as at the Companys international operations, should
contribute to continued increased revenues and EBITDA profits as advertising
markets recover. In Canada investments in new programming such as PGA Golf,
acclaimed mini-series such as Band of Brothers and continued strong performance
from the prime time schedules should help Global and CH to remain the first
choice among conventional television alternative for Canadian advertisers. The
success of the Companys new digital specialty channels, in particular Fox
SportsWorld and LoneStar, have diversified the Companys offering to Canadian
advertisers and will become increasingly important as the number of subscribers
to digital television services continues to grow.

In March 2003, the Company will add to that diversified offering with the
inclusion of a jazz themed digital channel, COOL TV and the launch of CanWests
first Canadian radio station COOL 99.1 FM in the Companys home city of
Winnipeg. The inclusion of radio and music-themed television programming will
add to the range of multi-platform offerings to Canadian advertisers.

In sum, the combination of reduced unit costs, solid ratings performance in
television, improving advertising markets for both television and newspapers,
the immediate prospects are for sustained positive momentum in revenues and
EBITDA. Further progress in the reduction of corporate debt should reduce
interest costs, improve the Companys balance sheet and contribute to higher
profits going forward.

Differences Between Canadian GAAP and U.S. GAAP

The preceding discussion and analysis has been based upon financial statements
prepared in accordance with Canadian GAAP, which differs in certain respects
from United States GAAP. The significant differences relevant to the Company
are discussed in detail in Note 20 of Notes to the Consolidated Financial
Statements for the years ended August 31, 2002 and August 31, 2001.

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ITEM 6.   DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.      Directors and Senior Management

The following table sets forth certain information regarding the Companys
directors and senior management:

|                                                     |  |                                                
|---------------------------------------------------- |  | -----------------------------------------------
|Name                                                 |  | Position with the Company                      
|                                                     |  |                                                
|Israel Asper, O.C., O.M., Q.C., LL.D.(1)(2)          |  | Chairman of the Board of Directors             
|                                                     |  |                                                
|Leonard J. Asper (1)                                 |  | President, Chief Executive Officer and Director
|                                                     |  |                                                
|Richard C. Camilleri                                 |  | Chief Operating Officer (Operations)           
|                                                     |  |                                                
|Thomas C. Strike                                     |  | Chief Operating Officer (Corporate)            
|                                                     |  |                                                
|John E. Maguire                                      |  | Chief Financial Officer                        
|                                                     |  |                                                
|Richard M. Leipsic                                   |  | Vice-President and General Counsel             
|                                                     |  |                                                
|Gail S. Asper                                        |  | Secretary and Director                         
|                                                     |  |                                                
|David A. Asper (1)(4)                                |  | Executive Vice President and Director          
|                                                     |  |                                                
|Dr. Lloyd I. Barber, C.C., LL.D. (1)(2)(3)(4)        |  | Director                                       
|                                                     |  |                                                
|Jalynn H. Bennett, C.M. (2)(3)                       |  | Director                                       
|                                                     |  |                                                
|The Hon. Frank J. McKenna, P.C.(2)(3)                |  | Director                                       
|                                                     |  |                                                
|Lord Black of Cross Harbour, P.C. (Can) O.C.,K.C.S.G |  | Director                                       
|                                                     |  |                                                
|F. David Radler (1)                                  |  | Director                                       



---

|(1) |  | Member of the Executive Committee of the Companys Board of Directors.             
|--- |  | -----------------------------------------------------------------------------------
|    |  |                                                                                    
|(2) |  | Member of the Executive Compensation Committee of the Companys Board of
Directors.
|    |  |                                                                                    
|(3) |  | Member of the Audit Committee of the Companys Board of Directors.                 
|    |  |                                                                                    
|(4) |  | Member of the Pensions Committee of the Companys Board of Directors.              

Israel Asperis the founder of CanWest Global Communications Corp. and has
been its Chairman since 1997 and the Companys Chairman since 2000. Mr. Asper
was CanWest Global Communications Corp.s President and Chief Executive Officer
until 1997 and has been a director of CanWest Global Communications Corp. since
1984. Mr. Asper is the father of Leonard Asper, the Companys President and
Chief Executive Officer and one of the Companys Directors; Gail Asper, the
Companys Secretary and another of the Companys Directors; and David Asper,
another of the Companys Directors.

Leonard J. Asperhas been CanWest Global Communications Corp.s President
and Chief Executive Officer since September 1999 and the Companys President
and Chief Executive Officer since 2000. Mr. Asper has also been a member of
CanWest Global Communications Corp.s Board of Directors

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since 1997 and the Companys Board of Directors since 2000. He joined
CanWest Global Communications Corp. in 1991 as Associate Counsel for the Global
Television Network. He served as CanWest Global Communications Corp.s
Executive Vice- President and Chief Operating Officer from October 1998 to
August 1999. Prior to this, he was Director, Corporate Development.

Richard C. Camilleriwas appointed Chief Operating Officer (Operations) of
CanWest Global Communications Corp. and the Company in July 2002. Prior to his
appointment to the Company, Mr. Camilleri was Chairman, President and CEO of
Arius3D Inc, and prior to 2001, was President, Sony Music Entertainment.

Thomas C. Strikewas appointed Chief Operating Officer (Corporate) of
CanWest Global Communications Corp. and the Company in July 2002. Prior to his
latest appointment, Mr. Strike was CanWest Global Communications Corp.s Chief
Operating Officer since September 1999 and the Companys Chief Operating
Officer since 2000. Prior to that, Mr. Strike was Executive Vice President, and
prior to January 1996, he was Executive Vice President and Chief Financial
Officer. He is a Chartered Accountant. Prior to joining CanWest Global
Communications Corp.s, Mr. Strike worked with Coopers and Lybrand from 1978 to
1986.

John E. Maguirehas been CanWest Global Communications Corp.s Chief
Financial Officer since January 1996 and prior to that was Vice President,
Finance since September 1994. Mr. Maguire has been the Companys Chief
Financial Officer since 2000. Mr. Maguire is a Chartered Accountant. Prior to
joining CanWest Global Communications Corp., Mr. Maguire worked with Coopers
and Lybrand from 1980 to 1987.

Richard M. Leipsichas been CanWest Global Communications Corp.s Vice
President and General Counsel since he joined CanWest Global Communications
Corp. in 1999. Mr. Leipsic has been the Companys Vice President and General
Counsel since 2000. From 1975 until he joined CanWest Global Communications
Corp., Mr. Leipsic practiced commercial law at Pitblado Buchwald Asper, a
Winnipeg- based law firm, where he was a senior partner. During his time at
Pitblado Buchwald Asper, Mr. Leipsic acted as CanWest Global Communications
Corp.s outside legal counsel.

Gail S. Asperhas been CanWest Global Communications Corp.s Secretary and
one of its Directors since 1990, and the Companys Secretary and one of the
Companys Directors since 2000. From 1991 to 1998, she served as CanWest Global
Communications Corp.s General Counsel. Ms. Asper also acts as President of the
CanWest Global Foundation, which leads CanWest Global Communications Corp.s
numerous charitable activities. Ms. Asper is currently a director of the Great-
West Life Assurance Co., London Life Insurance Group and London Life Insurance
Co.

David A. Asperhas been one of CanWest Global Communications Corp.s
Directors since 1997 and one of the Companys Directors since 2000. Since 1998,
he has been President of Daremax Enterprises, a Winnipeg- based private
investment company. He is also Managing Director of Creswin Properties Ltd., a
private property management and development company; Chairman of Centre Venture
Development Corp., Winnipegs downtown development authority; and Chairman of
the Winnipeg Blue Bombers Football Club. From 1997 to 1999, Mr. Asper was one
of CanWest Global Communications Corp.s Executive Vice Presidents. Prior to
1997, he was Vice President, Programming of CanWest Global Communications Corp.

Dr. Lloyd I. Barberhas been one of CanWest Global Communications Corp.s
Directors since 1992 and one of the Companys Directors since 2000. He was
President Emeritus of the University of Regina from 1976 to 1990. Dr. Barber
also serves as a director of The Bank of Nova Scotia, Cominco Ltd, Greystone
Capital Management, Northwest Company, Consolidated Properties, Working
Ventures Canada, and Molson Inc.

Jalynn H. Bennetthas been one of CanWest Global Communications Corp.s
Directors since 1998 and one of the Companys Directors since 2000. She has
been President of Jalynn H. Bennett & Associates Ltd., a Toronto- based
consulting firm since 1989. Ms. Bennett also serves as a director of several
Canadian

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companies, including Canadian Imperial Bank of Commerce, Sears Canada Inc.
and Ontario Power Generation Inc.

The Hon. Frank J. McKennahas been one of CanWest Global Communications
Corp.s Directors since 1999 and one of the Companys Directors since 2000. Mr.
McKenna has been a member of the law firm of McInnes Cooper as Counsel since
1998. From 1987 to 1997, he was the Premier of the Province of New Brunswick.
Mr. McKenna also serves as a director of several public companies, including
Bank of Montreal, Noranda Inc. and Major Drilling Group International Inc.

Lord
Black of Cross Harbourhas been one of CanWest Global Communications
Corp.s Directors since November 2000 and one of the Companys Directors since
2000. Since 1985, he has been Chairman of the Board and Chief Executive Officer
of Hollinger Inc. Mr. Black also serves as a director of Brascan Corporation,
the Canadian Imperial Bank of Commerce and Sothebys Holdings, Inc.

F. David Radlerhas been one of CanWest Global Communications Corp.s
Directors since November 2000 and one of the Companys Directors since 2000.
Since 1995, he has been President and Chief Operating Officer of Hollinger Inc.
and, since 1998, he has also served as Deputy Chairman of Hollinger Inc. Mr.
Radler also serves as a director of West Fraser Timber Co. Ltd.

All of the Companys directors and senior management, other than Mr.
Black, Mr. Radler and Mr. Camilleri have served in their respective positions
since the Companys incorporation on September 28, 2000. Mr. Black and Mr.
Radler joined the Companys Board of Directors on November 28, 2000, and Mr.
Camilleri was appointed to his executive role in July, 2002.

B.      Compensation

Compensation of Directors

The Companys directors who are employees or who are otherwise retained by the
Company or CanWest Global Communications Corp. are not entitled to receive any
additional compensation for serving as directors. All other directors are
entitled to receive an annual directors fee of $25,000 for serving as
directors and a maximum of $1,500 for each meeting attended. The chairman of
each committee of Board of Directors is entitled to an additional $5,000 per
year for acting in such capacity and directors are entitled to $1,000 per year
for each committee on which they serve. All of the Companys directors are
reimbursed for travel and other reasonable expenses incurred in attending board
meetings. Fees to which directors are entitled, if any, for serving as the
Companys directors are paid by CanWest Global Communications Corp.

Directors are also entitled to participate in CanWest Global Communications
Corp.s Executive Stock Option Plan. In January 2002, each non- executive
director received a grant of options to purchase 7,500 subordinate voting
shares of CanWest Global Communications Corp. These options, which vested
immediately on grant, have a ten year term and may be exercised at a price of
$11.99 per share.

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Executive Compensation

The following table details the annual and long term compensation of
individuals who were, on August 31, 2002 the Companys Chief Executive Officer
and certain other executive officers, which are referred to as named executive
officers, for the 2002 fiscal year:

|                                                                        |  |                        |         |       |  |                 |         |         |  |              |        |         |  |            |   |  |  |  |   | 
|----------------------------------------------------------------------- |  | ---------------------- | ------- | ----- |  | --------------- | ------- | ------- |  | ------------ | ------ | ------- |  | ---------- | - |  |  |  | - | 
|Annual Compensation                                                     |  | Long Term Compensation
|                                                                        |  |                       
|                                                                        |  |                        |         |       |  |                 |         |         |  |              |        |         |  | Securities |   |  |  | 
|                                                                        |  |                        |         |       |  |                 |         |         |  |              |        |         |  | Underlying |   |  |  | 
|Name and Principal                                                      |  |                        |         |       |  |                 |         |         |  | Other Annual |        | Options |  | All Other 
|Position with the Company                                               |  | Salary                 |         | Bonus |  | Compensation(1) |         | Granted |  | Compensation
|                                                                        |  |                        |         |       |  |                 |         |         |  |             
|Israel Asper                                                            |  | $                      | 575,000 |       |  | $               | 305,180 |         |  | $            |       |         |  |            |  |  |  |  |  | 
|Executive Chairman                                                      |  |                        |         |       |  |                 |         |         |  |              |        |         |  |            |   |  |  |  |   | 
|Leonard J. Asper                                                        |  | $                      | 540,800 |       |  | $               |        |         |  | $            |       |         |  |            |  |  |  |  |  | 
|President and Chief
Executive Officer                                   |  |                        |         |       |  |                 |         |         |  |              |        |         |  |            |   |  |  |  |   | 
|D. Babick (2)                                                           |  | $                      | 600,000 |       |  | $               | 142,500 |         |  | $            | 17,766 |         |  |            |  |  |  |  |  | 
|President and Chief
Executive Officer
of Southam
Publications Inc.      |  |                        |         |       |  |                 |         |         |  |              |        |         |  |            |   |  |  |  |   | 
|Gerald R. Noble (3)                                                     |  | $                      | 602,993 |       |  | $               |        |         |  | $            |       |         |  |            |  |  |  |  |  | 
|President and Chief
Executive Officer
of Global
Television Network
Inc. |  |                        |         |       |  |                 |         |         |  |              |        |         |  |            |   |  |  |  |   | 
|Thomas C. Strike                                                        |  | $                      | 500,000 |       |  | $               | 60,000  |         |  | $            | 13,278 |         |  |            |  |  |  |  |  | 
|Chief Operating
Officer (Corporate)                                     |  |                        |         |       |  |                 |         |         |  |              |        |         |  |            |   |  |  |  |   | 



---

|(1) |  | The value of rights and benefits for each named executive officer is less
than the lesser of $50,000 and 10% of the total annual base compensation
and bonuses. Amounts shown reflect imputed interest benefit on loans
pursuant to CanWest Global Communications Corp.s Management Share
Purchase Plan and other indebtedness.                                          
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Mr. Babick was appointed to his present position on November 16, 2000.
Prior to this date, Mr. Babick was not employed by the Company or a
subsidiary of the Company. Effective January 27, 2003,
Mr. Babick relinquished his position as President and Chief Executive
Officer of Southam Publishing and was appointed
as Special Advisor to the Chief Operating Officer.
|   
|(3) |  | Mr. Noble was appointed to
his present position May 1, 2000. Effective January 27,
2003, Mr. Noble relinquished his position as President and Chief
Executive Officer of Global Television Network Inc. and was appointed
as Special Advisor to the Chief Operating Officer.                                                                                              

Option Grants During the Most Recently Completed Financial Year

Although the Company has not issued any stock options, its parent CanWest
Global Communications Corp. has adopted an Executive Stock Option Plan as part
of its Amended and Restated Share Compensation Plan under which directors and
eligible executives of the Company are entitled to receive options to acquire
subordinate voting shares or non-voting shares of CanWest Global
Communications Corp., depending upon the citizenship of the optionee. The
Executive Stock Option Plan is administered by the Board of Directors of
CanWest Global Communications Corp., which establishes the option price per
share on the date on which options are granted. In all cases, the option price
per share has been the market value of the subordinate voting shares or non-
voting shares, as applicable, on the date the option was granted and in no case
has the option term exceeded ten years. Options granted up to December 31, 1995
are exercisable in

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equal annual installments over a five year period at any time in each year
unless CanWest Global Communications Corp.s Board of Directors determines
otherwise. Options granted from January 1, 1996 to January 1, 2000 vest in
equal annual installments over five years in the twelfth month of each year of
the option with the exception of options granted to CanWest Global
Communications Corp.s directors which vest immediately, and options granted to
Mr. Viner which vest in equal annual amounts over the period to July 2002.
Options granted after January 1, 2000 are exercisable over a six year period
with one third of the options vesting every two years. The aggregate number of
subordinate voting shares and non-voting shares which have been reserved for
issue under this plan, together with any subordinate voting shares and non-voting shares reserved for issue under any options for service or other
employee stock purchase or option plans established from time to time, may not
exceed an aggregate of approximately 13.8 million shares and no individual may
hold options to purchase an aggregate number of subordinate voting shares and
non-voting shares in excess of 5% of the issued and outstanding subordinate
voting shares and non-voting shares at the date of the grant of the option.

No options were granted during fiscal 2002 to the named executive officers of
the Company under the Executive Stock Option Plan.

Executive Pension Benefits

Retirement Compensation Arrangement

Certain senior executives of the Company are covered under a Retirement
Compensation Arrangement (RCA). Under the RCA, the benefit accrual is equal to
2.25% of the executives Final Average Earnings multiplied by the number of
years the executive has been continuously employed by the Company. Final
Average Earnings are defined as the average of the executives salary plus
incentive bonus in each of the best 3 consecutive years out of the last 10
years of the executives employment with the Company. Normal retirement is at
age 62 and the pension is payable for only the lifetime of the executive.
Participants can retire as early as age 50 with 5 years service. Pensions
payable on early retirement will be reduced by 0.5% for each month that
retirement occurs prior to age 62. For purposes of the RCA benefits, the Final
Average Earnings are capped at $500,000. Benefits accrued under the RCA are
not reduced by any social security or Canada Pension Plan benefits. The table
below shows the pension amounts which would be payable at normal retirement
based on various levels of compensation and service.

|              |         |    |                           |            |  |    |  |            |  |    |  |            |  |  |  |            |  |  |  |            | 
|------------- | ------- | -- | ------------------------- | ---------- |  | -- |  | ---------- |  | -- |  | ---------- |  |  |  | ---------- |  |  |  | ---------- | 
|              |         |    | Years of Credited Service
|Final Average |         |   
|Earnings      |         | 15 |                           | 20         |  | 25 |  | 30         |  | 35
|              |         |    |                           |            |  |    |  |            |  |   
|$             | 125,000 |    |                           | 42,187.50  |  |    |  | 56,250.00  |  |    |  | 70,312.50  |  |  |  | 84,375.00  |  |  |  | 98,437.50  | 
|              | 150,000 |    |                           | 50,625.00  |  |    |  | 67,500.00  |  |    |  | 84,375.00  |  |  |  | 101,250.00 |  |  |  | 118,125.00 | 
|              | 175,000 |    |                           | 59,062.50  |  |    |  | 78,750.00  |  |    |  | 98,437.50  |  |  |  | 118,125.00 |  |  |  | 137,812.50 | 
|              | 200,000 |    |                           | 67,500.00  |  |    |  | 90,000.00  |  |    |  | 112,500.00 |  |  |  | 135,000.00 |  |  |  | 157,500.00 | 
|              | 225,000 |    |                           | 75,937.50  |  |    |  | 101,250.00 |  |    |  | 126,562.50 |  |  |  | 151,875.00 |  |  |  | 177,187.50 | 
|              | 250,000 |    |                           | 84,375.00  |  |    |  | 112,500.00 |  |    |  | 140,625.00 |  |  |  | 168,750.00 |  |  |  | 196,875.00 | 
|              | 300,000 |    |                           | 101,250.00 |  |    |  | 135,000.00 |  |    |  | 168,750.00 |  |  |  | 202,500.00 |  |  |  | 236,250.00 | 
|              | 400,000 |    |                           | 135,000.00 |  |    |  | 180,000.00 |  |    |  | 225,000.00 |  |  |  | 270,000.00 |  |  |  | 315,000.00 | 
|              | 500,000 |    |                           | 168,750.00 |  |    |  | 225,000.00 |  |    |  | 281,250.00 |  |  |  | 337,500.00 |  |  |  | 393,750.00 | 

The above table is applicable to L.J. Asper, I.H. Asper, G.R. Noble and T.C.
Strike. Credited service at January 1, 2003 will be as follows:



| |  | Mr. L.J. Asper, 8.9 years;     
| |  | -------------------------------
| |  | Mr. I.H. Asper, 30 years;      
| |  | Mr. G.R. Noble, 17.7 years; and
| |  | Mr. T.C. Strike, 16.4 years    

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Supplemental Executive Retirement Arrangement

Certain executives of the Company are covered under a Supplemental Executive
Retirement Arrangement (SERA). Under this arrangement the pension accrual is
equal to 2% of the Executives Final Average Earnings multiplied by the
executives years of credited service. Final Average Earnings are defined as
the last 60 consecutive months earnings including salary, incentive bonuses
and any other compensation received by the executive from the Company. Normal
retirement is at age 65 and the pension is payable for only the lifetime of the
executive except that five years payments are guaranteed. Participants can
retire as early as age 55 with 5 years service or, its equivalent in combined
age and service. Pensions payable on early retirement will be reduced by 0.33%
for each month that retirement occurs prior to age 65 or, in certain cases, age
62 with 10 years service. For purposes of the SERA, credited service is capped
at 30 or 35 years, depending on the circumstances. Benefits accrued under the
SERA are reduced by the pension payable under the Canada Pension Plan.

| |               |  |                           |         |    |  |    |         |    |  |    |         |  |  |  |         |  |  |   |         | 
| | ------------- |  | ------------------------- | ------- | -- |  | -- | ------- | -- |  | -- | ------- |  |  |  | ------- |  |  | - | ------- | 
| |               |  | Years of Credited Service
| | Final Average |  |                          
| | Earnings      |  | 15                        |         | 20 |  | 25 |         | 30 |  | 35
| |               |  |                           |         |    |  |    |         |    |  |   
| | $200,000      |  |                           | 60,000  |    |  |    | 80,000  |    |  |    | 100,000 |  |  |  | 120,000 |  |  | $ | 140,000 | 
| | 250,000       |  |                           | 75,000  |    |  |    | 100,000 |    |  |    | 125,000 |  |  |  | 150,000 |  |  |   | 175,000 | 
| | 300,000       |  |                           | 90,000  |    |  |    | 120,000 |    |  |    | 150,000 |  |  |  | 180,000 |  |  |   | 210,000 | 
| | 350,000       |  |                           | 105,000 |    |  |    | 140,000 |    |  |    | 175,000 |  |  |  | 210,000 |  |  |   | 245,000 | 
| | 400,000       |  |                           | 120,000 |    |  |    | 160,000 |    |  |    | 200,000 |  |  |  | 240,000 |  |  |   | 280,000 | 
| | 500,000       |  |                           | 150,000 |    |  |    | 200,000 |    |  |    | 250,000 |  |  |  | 300,000 |  |  |   | 350,000 | 
| | 600,000       |  |                           | 180,000 |    |  |    | 240,000 |    |  |    | 300,000 |  |  |  | 360,000 |  |  |   | 420,000 | 
| | 700,000       |  |                           | 210,000 |    |  |    | 280,000 |    |  |    | 350,000 |  |  |  | 420,000 |  |  |   | 490,000 | 
| | 800,000       |  |                           | 240,000 |    |  |    | 320,000 |    |  |    | 400,000 |  |  |  | 480,000 |  |  |   | 560,000 | 

The above table is applicable to Mr. D. Babick. Mr. Babicks retirement
benefit will be based on 60% of final average remuneration after age 60 (or 50%
at age 55). Mr. Babicks credited service at January 1, 2003 will be 25.9
years.

C.     Board Practices

In accordance with the Companys charter and by-laws, the Board of Directors
may consist of up to 10 directors. The Companys Board of Directors presently
consists of nine directors. Each director serves a one year term and holds
office until the next annual general shareholders meeting or until the
election of his or her successor, unless he or she resigns or his or her office
becomes vacant by reason of his or her death, removal or other cause. The
Company has no arrangements with any of its directors providing for the payment
of benefits upon termination of service as director.

Board Committees

The Company has four committees of its Board of Directors: the Audit Committee,
the Executive Compensation Committee, the Executive Committee, and the Pensions
Committee.



| |  |  | The Companys Audit Committee is composed entirely of
independent directors. The committee is responsible for, among
other things, reviewing the Companys financial reporting
procedures, internal controls and the performance of the Companys
external auditors. The committee is also responsible for reviewing
quarterly financial statements and the annual financial statements
prior to their approval by the Board of Directors. The
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| |   |  | members of the committee are Dr. Barber, Ms. Bennett (Chair) and
The Hon Frank McKenna.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | The Companys Executive Compensation Committee is composed of
four directors. The committee makes recommendations to the Board of
Directors on executive compensation, including the compensation of
the Companys President and Chief Executive Officer, and reviews
other aspects of executive compensation. The members of the
committee are Israel Asper (Chair), Dr. Barber, The Hon. Frank
McKenna and Ms. Bennett.                                                                                                                                                                                                                                                  
|
| |  |  | The Companys Executive Committee is composed of the
Companys Executive Chairman, the Companys President and Chief
Executive Officer and three other directors. The committee meets
between meetings of the Board of Directors to review the Companys
performance and business development opportunities and make
recommendations to the Board of Directors. The committee also deals
with less significant matters and corporate matters of a routine
nature. Matters of a significant nature must be addressed by the
Board of Directors. The members of the committee are Israel Asper
(Chair), David A. Asper, Leonard J. Asper, Dr. Barber and Mr. F.
David Radler.
|
| |  |  | The Companys Pensions Committee is composed of three
directors. The committee is responsible for overseeing matters
relating to the investment policies and performance of the Companys
pension funds. The members of the committee are Dr. Barber (Chair)
and David Asper.                                                                                                                                                                                                                                                                                                                                                                                              

D.    Employees

The Companys Canadian television operations employ approximately 1,934 people
on a full-time and full-time equivalent basis. Approximately 57% of the
Companys Canadian broadcasting employees are employed under a total of 15
collective agreements, 12 of which are with the Communications, Energy and
Paperworkers Union of Canada. Four of these agreements were renegotiated in
2002, and four are in negotiation or conciliation. In 2003, three agreements
will expire.

CanWest Publications has approximately 6,006 full-time and full-time equivalent
employees. Approximately 50% of these employees are employed under a total of
49 collective agreements. Seven of these collective agreements expire in 2003
and are in negotiation, and 19 expire in 2004. In general, the Companys
collective agreements cover operations at particular publications or business
locations, rather than multiple locations.

Canadian newspaper operations experienced two work stoppages in 2002.
Collective bargaining in Vancouver between the Pacific Newspaper Group and the
CEP, Local 2000, representing 1050 employees commenced during the month of
October 2001 for the renewal of the 1998  2001 collective agreement. After
continuous bargaining, the CEP, Local 2000 engaged in strike activity on July
1, 2002 affecting the publication of The Vancouver Sun and the Province
newspapers. The parties reached a settlement on July 18, 2002 and both
newspapers resuming publication for the July 22, 2002 editions. The term of the
new collective agreement runs to November 30, 2004. Operations at the Pacific
Newspaper Group have since been without disruption and no significant labour
issues have developed as a result of the dispute.

The second work stoppage occurred in Victoria at the Times-Colonist.
Collective bargaining commenced in April 2002 to renew agreements expiring
December 31, 2001. Four unions representing 300 employees went on strike from
September 2, 2002 to November 4, 2002. The term of the new collective
agreement runs to December 31, 2004. Operations have returned to normal with
no further disruption expected.

In Australia, Network TEN and Eye Corp. employ a total of approximately 1,021
full-time employees and management estimates 30% are represented by labor
unions.

65



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In New Zealand, TV3 and TV4 have 309 employees, and CanWest NZ Radio has 560
employees. In the Republic of Ireland, TV3 has 155 employees. None of the
Companys employees in New Zealand or the Republic of Ireland are represented
by trade unions.

CanWest employs approximately 49 people at its corporate and international
offices. The Companys Business Services Centre, including finance and
information technology services, employs 122 people, and Reach Canada employs
23 people and subcontracts the balance of its human resource requirements.

Collective bargaining agreements to which the Company is subject vary as to the
number of employees covered and content. The Company believes it has
satisfactory relationships with unionized and non-unionized employees.

E.     Share Ownership

The Company is an indirect wholly- owned subsidiary of CanWest Global
Communications Corp, the voting power of which is controlled by its founder and
Executive Chairman, Israel Asper.




ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.     Major Shareholders

Not applicable.

B.    
 Related Party Transactions

The Company has entered into various transactions with management and other
related parties including the following, which it believes are on substantially
comparable terms as those which it could have obtained with unrelated parties
on an arms length basis:



| |  |  | For the year ended August 31,
2002, the Company paid $1.6 million in
aircraft lease payments to CanWest Global Communications Corp. and
expects to make similar payments in the future.                                                                                                                                                                                        
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | As of August 31, 2002, the Company has outstanding advances
due from CanWest Global Communications Corp. of $25.7 million. In
the future, similar advances must be made in accordance with the
terms of the indenture governing the notes.                                                                                                                                     
|
| |  |  | The Company has had a non-interest bearing loan outstanding
during the previous year in the principal amount of $59.5 million
to CanWest Entertainment Inc., the proceeds of which were used to
acquire Fireworks Entertainment Inc.                                                                                                                                           
|
| |  |  | As of August 31, 2002, the Company had loans outstanding to
Fireworks Entertainment Inc. in the principal amount of $381.3
million. The proceeds of such loan were used for production of
content and related operating expenses, as well as a $110.0 million
loan used to acquire a film and program library. The loan to
Fireworks bears interest at the Canadian prime rate.
|
| |  |  | For the year ended August 31, 2002 the Company acquired
broadcast rights for various television programs from Fireworks in
the amount of $4.5 million.                                                                                                                                                                                                                         

In addition, CanWest Global Communications Corp. has approved stock based
compensation programs, the purpose of which are to provide the Companys
employees and certain of the Companys directors and the directors of the
Companys subsidiaries with the opportunity to participate in the growth and
development

66



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of CanWest Global Communications Corp. through the granting of options on
CanWest Global Communications Corp. shares and share purchase loans.

On November 16, 2000, CanWest Global Communications Corp. acquired
substantially all of Hollingers Canadian newspapers and Internet assets,
including a 50% interest in the National Postthrough its wholly-owned
subsidiary, 3815668 Canada Inc., the Companys immediate parent, which then
transferred those assets to the Company. The purchase price for CanWest
Publications was approximately $3.1 billion, based upon an agreed value for
CanWest Global Communications Corp.s equity, subject to adjustment for future
operating results and working capital.

The consideration for the acquisition of CanWest Publications consisted of:



| |  |  | $1,985.5 million in cash;                                                                                                                                                                                    
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | approximately $766.8 million of holding company notes issued
by the Companys immediate parent to Hollinger; and                                                                                             
|
| |  |  | 24.3 million non-voting shares and 2.7 million series 1
preference shares issued by CanWest Global Communications Corp. to
Hollinger, which were accepted in payment of $617.6 million of the
purchase price.

The value ascribed to the non-voting shares and series 1 preference shares was
approximately $375.5 million under Canadian GAAP. The Companys immediate
parent issued shares to CanWest Global Communications Corp. for the
consideration paid in shares by CanWest Global Communications Corp. The
Company acquired CanWest Publications from its immediate parent in return for
cash, share consideration and notes payable to its immediate parent. The notes
payable to the Companys immediate parent and their related service costs are
payable, at the Companys option, in cash or shares. In connection with the
acquisition of CanWest Publications, CanWest Global Communications Corp.
entered into a management services agreement with Ravelston and The National
Post Company. Ravelston provides advisory, consultative, procurement and
administrative services to the Companys Canadian publishing operations and to
The National Post Company for an annual fee of $6.0 million.

Subsequently, the Company acquired the 50% of the National Postit did not
already own.The purchase price for such acquisition consisted of nominal cash
consideration and other consideration in the form of agreements and
undertakings exchanged by the parties, including the elimination of certain of
the purchase price adjustments. In addition, on September 30, 2001, Hollinger
was required to make payment to The National Post Company in respect of a pre-
payment of future losses or cash requirements of The National Post Company.

In September 2001, the Company assumed the day-to-day management of the
National Post. In addition, in September 2001, the executives holding the
positions of chairman, chief executive officer, publisher and assistant
publisher of the National Postresigned and the Company filled the resulting
vacancies.

Indebtedness of Directors and Senior Officers Under Securities Purchase
Programs

All of the Companys employees and non-executive directors are eligible to
participate in the CanWest Global Communications Corp. Employee Share Purchase
Plan and certain of the Companys management employees are eligible to
participate in the CanWest Global Communications Corp. Management Share
Purchase Plan, each of which are part of CanWest Global Communication Corp.s
Amended and Restated Combined Share Compensation Plan. Participants may
acquire, annually, subordinate voting shares or non-voting shares of CanWest
Global Communications Corp., depending upon the participants citizenship, with
a purchase price equal to the market price per share of the relevant shares up
to a maximum of the

67



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amount of their annual directors fees in the case of directors; 5% of their
annual base compensation in the case of other participants in the CanWest
Employee Share Purchase Plan; and 10% of their annual base compensation in the
case of participants in the CanWest Management Share Purchase Plan. All
participants are eligible to receive interest- free share purchase loans from
CanWest Global Communications Corp. Such loans are repayable in full by
December 31 of the year in which the loans were made.

The aggregate amount outstanding to CanWest Global Communications Corp. and its
subsidiaries for indebtedness of present and former directors, officers and
employees, in connection with the purchase of CanWest Global Communication
Corp.s securities, excluding routine indebtedness, as of February 14, 2003 was
approximately $400,628.

Effective July 30, 2002, Section 402 of the Sarbanes-Oxley Act of 2002
precludes executive officers and directors of companies which are registered
for trading in the United States from receiving share purchase loans from the
Company.

Other Indebtedness to CanWest Global Communications Corp.

The aggregate amount outstanding to CanWest Global Communications Corp. and its
subsidiaries for indebtedness of present and former directors, officers and
employees, borrowed not in connection with the purchase of securities of the
Company as of February 14, 2003, was approximately $1,257,265. This amount
includes loans to Mr. Strike, Mr. Leipsic and Mr. Babick in connection with the
purchase of their residences with principal amounts outstanding of $403,514,
$111,893, and $550,000, respectively. The highest principal amount outstanding
under these loans since September 1, 2001 was $418,514, $118,750, and $550,000,
respectively. These loans are interest- free and secured by mortgages on the
respective residences of the individuals concerned. Repayments of amounts
outstanding under each of these loans are required in annual amounts equal to
50% of the individuals net bonus after taxes in the case of Mr. Strike and Mr.
Leipsic.

C.     Interests of Experts and Counsel

Not applicable.




ITEM 8.  FINANCIAL INFORMATION

A.     Consolidated Statements and Other Financial Information

See the Consolidated Financial Statements for CanWest Media Inc. and The Ten
Group Pty. Limited set forth in Part III, Item 17 hereof and filed as part of
this annual report.

Legal Proceedings

On March 5, 2001, certain plaintiffs who owned a 29.3% interest in CBL filed a
statement of claim against CanWest Global Communications Corp., the Company,
certain subsidiaries, and Israel Asper. The plaintiffs claim, among other
things, that the defendants have acted in a manner that is oppressive and
unfairly prejudicial to the plaintiffs; have improperly favored the interests
of the defendants over the interests of CBL and the plaintiffs (including the
diversion of corporate opportunities); owe fiduciary duties to the plaintiffs;
and have wrongly terminated certain contracts with the plaintiffs and replaced
them with non- arms length contracts. They are seeking, among other things,
damages of $345.0 million (including aggravated and punitive damages).

While the results of litigation are inherently uncertain, the Company believes
the allegations are substantially without merit and intends to vigorously
defend it.

68



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At the time of the commencement of the action, the Company owned 70.67% of CBL
and the plaintiffs owned the minority interest. CBL owned Global Television
Network stations in British Columbia (CKVU), Manitoba (CKND) and Saskatchewan
(CFRE and CFSK). On May 1, 2001, CBL amalgamated with one of the Companys
indirect wholly- owned subsidiaries. Under the terms of the amalgamation
agreement, the Company received all of the shares of the amalgamated
corporation and the minority shareholders of CBL received series 2 preference
shares of CanWest Global Communications Corp. CanWest Global Communications
Corp. redeemed the series 2 preference shares for cash of $57.7 million on
December 18, 2002.

B.     Significant Changes

Except as otherwise disclosed in this annual report, no significant changes
have occurred since the date of the Companys Financial Statements.




ITEM 9.  THE OFFER AND LISTING

A.     Offer and Listing Details

Not applicable.

B.     Plan of Distribution

Not applicable.

C.     Markets

The Company is an indirect, wholly- owned subsidiary of CanWest Global
Communications Corp. CanWest Global Communications Corp. is a public company
whose shares are listed on The Toronto Stock Exchange and The New York Stock
Exchange.

D.     Selling Shareholders

Not applicable.

E.     Dilution

Not applicable.

F.     Expenses of the Issue

Not applicable.




ITEM 10.  ADDITIONAL INFORMATION

A.     Share Capital

Not Applicable.

B.     Memorandum and Articles of Association

Set forth below is a summary of certain provisions of the Companys Articles of
Incorporation and By-Laws. This summary does not purport to be complete and is
qualified in its entirety by reference to the Articles of Incorporation and
By-Laws.

69



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The Companys board of directors shall consist of a majority of resident
Canadians. (Section 4.2 of the By-laws) If a director is materially
interested in a contract or proposed contract with the Company, or is a
director or officer of or has a material interest in any person who is a party
to a contract or proposed contract with the Company, such director must
disclose in writing to the Company the nature and extent of such directors
interest and refrain from voting with respect thereto. (Section 4.19 of the
By-laws) Directors need not hold shares of the Company in order to qualify as
directors on the Board of Directors. (Section 4.2 of the By-laws)

Holders of the Companys common shares are entitled to receive notice of and
attend all meetings of the shareholders of the Company and to vote thereat,
except meetings at which only holders of a specified class or series of shares
are entitled to vote. Each holder of common shares is entitled to one vote for
each share held. (Common Shares  Section 1 of Schedule I to the Articles of
Incorporation). Holders of common shares are entitled to receive any dividend
declared by the Company, subject to the rights, privileges, restrictions and
conditions attaching to any other class of shares of the Company. (Common
Shares  Section 2 of Schedule I to the Articles of Incorporation).

Holders of the Companys Preference shares shall, with respect to the payment
of dividends and any distribution or assets or return of capital, rank on a
parity with the preference shares of every other series and be entitled to
preference over the common shares and any other shares ranking junior to the
preference shares. (Preference Shares  Section 3 of Schedule I to the
Articles of Incorporation).

Annual meetings of shareholders are to be held on such day as determined by the
board, or the chairman of the board or president and approved by the board.
(Section 8.1 of the By-laws.) The Board may call a special meeting at any
time. (Section 8.2 of the By-laws.) Shareholders shall receive notice of any
meeting not less than 21 days nor more than 50 days before the meeting.
(Section 8.5 of the By-laws.) Shareholders of record as of the record date, if
set, or as of one day prior to the day notice of the meeting is given, shall be
entitled to attend and vote at a shareholders meeting. (Section 8.9 of the
By-laws.)

The Articles of Incorporation prohibit any offering of the Companys shares to
the public. (Schedule II to the Articles of Incorporation). The shares of the
Company may not be transferred without the approval of the board of directors.
(Section 5 of the Articles of Incorporation).

C.     Material Contracts

Except as otherwise disclosed in this annual report and the Companys financial
statements and notes included elsewhere in this annual report, the Company has
no other material contracts.

D.     Exchange Controls

Canada has no system of exchange controls. There are no Canadian restrictions
on the repatriation of capital or earnings of a Canadian company to non-resident investors.

E.     Taxation

Not applicable.

F.     Dividends and Paying Agents

Not applicable.

G.     Statement by Experts

Not applicable.

70



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H.     Documents on Display

The Company has filed a registration statement on Form F-4 with the SEC with
respect to the exchange of all of its US$425.0 million in outstanding 10 5/8%
series A senior subordinated notes due 2011 on September 4, 2001. The Company
has also filed an annual report on Form 20-F for the year ended August 31,
2001. Filed as exhibits to the registration statement, as exhibits to the 2001
annual report and as exhibits to this annual report, are complete copies of the
material contracts described herein. The registration statement and exhibits
thereto, 2001 annual report and exhibits thereto, and this annual report and
exhibits thereto may be inspected without charge at the public reference
facilities maintained by the SEC in Room 1024, 450 Fifth Street, N.W.
Washington, D.C. 20549, and the SECs regional offices located in New York, New
York and Chicago, Illinois. Copies of all or any part of the registration
statement may also be obtained from the Companys offices after payment of fees
prescribed by the SEC. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms.

I.     Subsidiary Information

Not applicable.




ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Companys primary market risk exposures are interest rate and currency
exchange rate risk. The Company is exposed to interest rate risk and currency
exchange rate fluctuations resulting from the issuance of floating rate debt
and debt denominated in U.S. dollars. In addition to monitoring the ratio of
fixed rate debt to long term debt, the Company uses interest rate swaps to
manage the proportion of total debt that is subject to variable rates. Cross
currency swaps are used to hedge both the interest rate and the variable rates.
Cross currency swaps are used to hedge both the interest rate and the currency
exposure on debt originally issued in U.S. dollars. The Company does not enter
into any derivatives for trading purposes.

The Company has fully hedged the currency exposure on all of its U.S. dollar
denominated debt, and has fixed the interest rate of 97% of its floating rate
debt by entering into a combination of cross currency swaps and interest rate
swaps.

As of August 31, 2002, the Company has entered into interest rate swap
contracts to pay fixed rates of interest (at an average rate of 8.91%) and
receive floating rates of interest (at an average rate of 5.56%) on a notional
amount of $720.1 million. The Company has entered into cross currency swap
contracts to pay a fixed rate of interest (at an average rate of 10.27%) on a
notional amount of $1,076.4 million and receive floating rates of interest (at
an average rate of 7.77%) on a notional amount of US$425.0 million.

Based on the current swap contracts outstanding and the current level of
variable rate debt, the Company estimates that a 1% increase in floating
interest rates will increase annual interest expense by $7.0 million. This
estimate is based on the assumption of a constant variable rate debt and swap
level and an immediate rate increase with no subsequent rate changes in the
remaining term to maturity.

The fair value of the swap contracts represents an estimate of the amount that
the Company would receive or pay if the contracts were closed out at a market
price on the balance sheet date. As of August 31, 2002, the fair value of the
outstanding swap contracts was $56.0 million.

As of August 31, 2002, assuming all other variables are held constant, a 10
basis point shift in the Canadian fixed yield would result in a $2.9 million
change in the mark to market value of all swaps. A 10 basis point change in the
value of the Canadian dollar against the U.S. dollar, assuming all other
variables are held constant, would result in a $1.5 million change in the mark
to market value of the cross currency swaps.

71



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In addition to foreign exchange rate risk on foreign currency denominated debt,
the Company is also exposed to some currency risk as a result of having
investments and carrying on business in currencies other than the Canadian
dollar. All of the Companys foreign operations are self sustaining, and
therefore foreign exchange gains and losses are deferred as a separate
component of shareholders equity. The Company translates the earnings of
equity accounted subsidiaries and affiliates at the average rate of translation
of the relevant period. The Company recognizes deferred translation gains and
losses as appropriate upon dispositions and/or distributions from such
operations. The Companys primary currency exposure is to variations in the
Australian dollar relative to the Canadian dollar as a result of its investment
in Network TEN. Currently, the Company does not use derivative financial
instruments to manage its exposure to fluctuations in foreign currency exchange
rates.




ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not Applicable.

72



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PART II




ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not applicable.




ITEM 14.  MATERIAL MODIFICATIONS
TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not applicable.




ITEM 15.  CONTROLS AND PROCEDURES

Within 90 days prior to the filing date of this Annual Report on Form 20-F, the
Company carried out an evaluation, under the supervision and with the
participation of the Companys management, including the Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the Companys
disclosure controls and procedures as defined in Exchange Act Rule 13a-14.
Based upon that evaluation, the Chief Executive Officer and Chief Financial
Officer have concluded that the Companys current disclosure controls and
procedures are effective. There have been no significant changes in the
Companys internal controls or in other factors that could significantly affect
internal controls subsequent to the date of the evaluation by the Chief
Executive Officer and Chief Financial Officer. The design of any system of
controls and procedures is based in part upon certain assumptions about the
likelihood of future events. There can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions,
regardless of how remote.




ITEM 16.  [RESERVED]

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CANWEST MEDIA INC.

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED AUGUST 31, 2002, 2001 and 2000

(expressed in Canadian dollars)



---



##### Table of Contents



[PRICEWATERHOUSECOOPERS LOGO]

|                                                                         |  |                                                                                                               
|------------------------------------------------------------------------ |  | --------------------------------------------------------------------------------------------------------------
|November 1, 2002,
except as to note 18,
which is as of December 18, 2002 |  | PricewaterhouseCoopers LLP
Chartered Accountants
One Lombard Place
Suite 2300
Winnipeg Manitoba
Canada R3B 0X6
|Auditors
ReportTo the Directors of Can West Media Inc.                  |  | Telephone +1 (204) 926 2400
Facsimile +1 (204) 944 1020                                                       

We have audited the  consolidated
balance sheets of Can West Media Inc. as at August 31, 2002
and August 31,2001 and the consolidated  statements of earnings,
retained earnings and cash flows for each of the years in the three year period
ended August 31, 2002. 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 audit in accordance with Canadian and United States generally
accepted auditing standards. 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 August 31, 2002
and August 31, 2001  and the results of its
operations and its cash flows for each of the years in the three year period
ended August 31, 2002 in accordance with Canadian generally accepted accounting
principles.

SignatureChartered Accountants

November 1, 2002, except as to
note 18,
which is as of December 18, 2002

Comments by Auditors on Canada-U.S. Reporting Difference

In the United States, reporting standards for auditors require the addition of
an explanatory paragraph when there are changes in accounting principles that
have a material effect on the comparability of the Companys financial
statements, such as the changes described in note 1 to the consolidated
financial statements. Our report to the directors dated November 1, 2002,
except as to note 18, which is as of December 18, 2002, is expressed in
accordance with Canadian reporting standards which do not require a reference
to such changes in accounting principles in the auditors report when the
changes are properly accounted for and adequately disclosed in the financial
statements.

Signature

Chartered Accountants

PricewaterhouseCoopers refers to the Canadian firm of PricewaterhouseCoopers
LLP and other members of the worldwide
PricewaterhouseCoopers organization.

2



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##### Table of Contents



CANWEST MEDIA INC.

CONSOLIDATED BALANCE SHEETS

AS AT AUGUST 31

|                                                    |  |      |           |      |  |  |           |  
|--------------------------------------------------- |  | ---- | --------- | ---- |  |  | --------- | -
|                                                    |  | 2002 |           | 2001
|                                                    |  | $000 |           | $000
|ASSETS                                              |  |      |           |      |  |  |           |  
|Current assets                                      |  |      |           |      |  |  |           |  
|Cash                                                |  |      | 49,778    |      |  |  | 11,432    |  
|Accounts receivable                                 |  |      | 382,337   |      |  |  | 344,865   |  
|Income taxes recoverable                            |  |      | 40,370    |      |  |  | 5,116     |  
|Inventory                                           |  |      | 19,836    |      |  |  | 30,817    |  
|Broadcast rights                                    |  |      | 98,096    |      |  |  | 96,385    |  
|Future income taxes                                 |  |      | 30,013    |      |  |  | 33,243    |  
|Other                                               |  |      | 13,231    |      |  |  | 16,922    |  
|                                                    |  |      |           |      |  |  |           |  
|                                                    |  |      | 633,661   |      |  |  | 538,780   |  
|Investment in Network TEN                           |  |      | 4,494     |      |  |  | 107,210   |  
|Other investments                                   |  |      | 159,181   |      |  |  | 412,112   |  
|Broadcast rights                                    |  |      | 23,172    |      |  |  | 8,335     |  
|Due from parent and affiliated companies            |  |      | 466,457   |      |  |  | 408,310   |  
|Property, plant and equipment                       |  |      | 660,700   |      |  |  | 689,175   |  
|Other assets                                        |  |      | 95,294    |      |  |  | 110,711   |  
|Intangibles                                         |  |      | 1,096,458 |      |  |  | 1,080,412 |  
|Goodwill                                            |  |      | 2,600,244 |      |  |  | 2,797,167 |  
|                                                    |  |      |           |      |  |  |           |  
|                                                    |  |      | 5,739,661 |      |  |  | 6,152,212 |  
|                                                    |  |      |           |      |  |  |           |  
|LIABILITIES                                         |  |      |           |      |  |  |           |  
|Current liabilities                                 |  |      |           |      |  |  |           |  
|Bank loans and advances                             |  |      |          |      |  |  | 28,999    |  
|Accounts payable                                    |  |      | 158,252   |      |  |  | 124,395   |  
|Accrued liabilities                                 |  |      | 213,070   |      |  |  | 258,990   |  
|Broadcast rights accounts payable                   |  |      | 35,294    |      |  |  | 22,953    |  
|Deferred revenue                                    |  |      | 30,522    |      |  |  | 31,396    |  
|Current portion of long term debt                   |  |      | 150,865   |      |  |  | 116,500   |  
|                                                    |  |      |           |      |  |  |           |  
|                                                    |  |      | 588,003   |      |  |  | 583,233   |  
|Long term debt                                      |  |      | 2,379,459 |      |  |  | 2,907,527 |  
|Other accrued liabilities                           |  |      | 86,217    |      |  |  | 88,809    |  
|Future income taxes                                 |  |      | 421,005   |      |  |  | 427,316   |  
|                                                    |  |      |           |      |  |  |           |  
|                                                    |  |      | 3,474,684 |      |  |  | 4,006,885 |  
|                                                    |  |      |           |      |  |  |           |  
|SHAREHOLDERS
EQUITY                                |  |      |           |      |  |  |           |  
|Equity instruments                                  |  |      | 1,386,178 |      |  |  | 1,280,094 |  
|Contributed surplus                                 |  |      | 132,953   |      |  |  | 132,953   |  
|Retained earnings                                   |  |      | 794,504   |      |  |  | 806,574   |  
|Cumulative foreign currency translation
adjustments |  |      | (48,658   | )    |  |  | (74,294   | )
|                                                    |  |      |           |      |  |  |           |  
|                                                    |  |      | 2,264,977 |      |  |  | 2,145,327 |  
|                                                    |  |      |           |      |  |  |           |  
|                                                    |  |      | 5,739,661 |      |  |  | 6,152,212 |  
|                                                    |  |      |           |      |  |  |           |  

The notes constitute an integral part of the consolidated financial statements.

Signed on behalf of the Board

|                   |  |                   
|------------------ |  | ------------------
|Signature
Director |  | Signature
Director

3



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##### Table of Contents



CANWEST MEDIA INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE YEARS ENDED AUGUST 31

|                                                                 |  |      |           |      |  |      |           |   |  |  |         |  
|---------------------------------------------------------------- |  | ---- | --------- | ---- |  | ---- | --------- | - |  |  | ------- | -
|                                                                 |  | 2002 |           | 2001 |  | 2000
|                                                                 |  | $000 |           | $000 |  | $000
|Revenue                                                          |  |      | 2,120,344 |      |  |      | 1,767,306 |   |  |  | 620,269 |  
|Operating expenses                                               |  |      | 1,108,942 |      |  |      | 965,515   |   |  |  | 391,967 |  
|Selling, general and administrative expenses                     |  |      | 540,352   |      |  |      | 367,721   |   |  |  | 86,986  |  
|                                                                 |  |      |           |      |  |      |           |   |  |  |         |  
|                                                                 |  |      | 471,050   |      |  |      | 434,070   |   |  |  | 141,316 |  
|Amortization of intangibles and goodwill                         |  |      | 17,500    |      |  |      | 89,319    |   |  |  | 20,077  |  
|Amortization of property, plant and
equipment                    |  |      | 73,430    |      |  |      | 59,528    |   |  |  | 18,276  |  
|Other amortization                                               |  |      | 6,670     |      |  |      | 5,240     |   |  |  | 4,275   |  
|                                                                 |  |      |           |      |  |      |           |   |  |  |         |  
|                                                                 |  |      | 373,450   |      |  |      | 279,983   |   |  |  | 98,688  |  
|Financing expenses                                               |  |      | (255,006  | )    |  |      | (268,843  | ) |  |  | (59,813 | )
|Investment gains net of write-down of
investments                |  |      | 33,843    |      |  |      | 28,630    |   |  |  | 101,213 |  
|Dividend income                                                  |  |      | 3,241     |      |  |      | 2,952     |   |  |  | 2,688   |  
|                                                                 |  |      |           |      |  |      |           |   |  |  |         |  
|                                                                 |  |      | 155,528   |      |  |      | 42,722    |   |  |  | 142,776 |  
|Provision for (recovery of) income taxes                         |  |      | 47,610    |      |  |      | (27,280   | ) |  |  | 41,757  |  
|                                                                 |  |      |           |      |  |      |           |   |  |  |         |  
|Earnings before the following                                    |  |      | 107,918   |      |  |      | 70,002    |   |  |  | 101,019 |  
|Minority interests                                               |  |      | 4,330     |      |  |      | (3,196    | ) |  |  | 2,174   |  
|Interest in earnings (loss) of Network TEN                       |  |      | (11,815   | )    |  |      | 52,567    |   |  |  | 72,194  |  
|Interest
in earnings (loss) of other equity accounted
affiliates |  |      | (1,523    | )    |  |      | (14,491   | ) |  |  | 2,286   |  
|Realized currency translation adjustments                        |  |      | (1,000    | )    |  |      | (7,200    | ) |  |  | (1,300  | )
|                                                                 |  |      |           |      |  |      |           |   |  |  |         |  
|Net earnings for the year                                        |  |      | 97,910    |      |  |      | 97,682    |   |  |  | 176,373 |  
|                                                                 |  |      |           |      |  |      |           |   |  |  |         |  

The notes constitute an integral part of the consolidated financial statements.

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##### Table of Contents



CANWEST MEDIA INC.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
FOR THE YEARS ENDED AUGUST 31

|                                                                                  |  |      |         |      |  |      |         |   |  |  |         |  
|--------------------------------------------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- | - |  |  | ------- | -
|                                                                                  |  | 2002 |         | 2001 |  | 2000
|                                                                                  |  | $000 |         | $000 |  | $000
|Retained earnings  beginning of year,
as previously reported                     |  |      | 806,574 |      |  |      | 755,549 |   |  |  | 594,008 |  
|Adjustment for adoption of new
accounting pronouncements                          |  |      | (45,269 | )    |  |      | (329    | ) |  |  | (15,161 | )
|                                                                                  |  |      |         |      |  |      |         |   |  |  |         |  
|Retained earnings, beginning of year,
as adjusted                                 |  |      | 761,305 |      |  |      | 755,220 |   |  |  | 578,847 |  
|Net earnings for the year                                                         |  |      | 97,910  |      |  |      | 97,682  |   |  |  | 176,373 |  
|Interest on junior subordinated
debentures net of tax of $41,373
(2001 - $29,812) |  |      | (64,711 | )    |  |      | (46,328 | ) |  |  |        |  
|                                                                                  |  |      |         |      |  |      |         |   |  |  |         |  
|Retained earnings  end of year                                                   |  |      | 794,504 |      |  |      | 806,574 |   |  |  | 755,220 |  
|                                                                                  |  |      |         |      |  |      |         |   |  |  |         |  

The notes constitute an integral part of the consolidated financial statements.

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CANWEST MEDIA INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED AUGUST 31

|                                            |                                                            |  |          |         |      |  |            |         |   |  |          |          |  
|------------------------------------------- | ---------------------------------------------------------- |  | -------- | ------- | ---- |  | ---------- | ------- | - |  | -------- | -------- | -
|                                            |                                                            |  | 2002     |         | 2001 |  | 2000      
|                                            |                                                            |  | $000     |         | $000 |  | $000      
|CASH GENERATED (UTILIZED) BY:               |                                                            |  |          |         |      |  |            |         |   |  |          |         
|Operating activities                        |                                                            |  |          |         |      |  |            |         |   |  |          |         
|Net earnings for the year                   |                                                            |  | 97,910   |         |      |  | 97,682     |         |   |  | 176,373  |         
|Items not affecting cash                    |                                                            |  |          |         |      |  |            |         |   |  |          |         
|                                            | Amortization                                               |  | 107,542  |         |      |  | 165,128    |         |   |  | 45,908   |         
|                                            | Future income taxes                                        |  |          | 11,210  |      |  |            | (97,006 | ) |  |          | (25,080  | )
|                                            | Interest in loss (earnings) of Network TEN                 |  |          | 11,815  |      |  |            | (52,567 | ) |  |          | (72,194  | )
|                                            | Interest
in loss (earnings) of equity accounted affiliates |  |          | 1,523   |      |  |            | 14,491  |   |  |          | (2,286   | )
|                                            | Minority interests                                         |  |          | (4,330  | )    |  |            | 3,196   |   |  |          | (2,174   | )
|                                            | Realized currency translation adjustments                  |  |          | 1,000   |      |  |            | 7,200   |   |  |          | 1,300    |  
|                                            | Write-off of deferred financing fees                       |  |          |        |      |  |            | 17,900  |   |  |          |         |  
|                                            | Write-down of program inventory                            |  |          |        |      |  |            |        |   |  |          | 12,566   |  
|                                            | Investment gains net of write-down of
investments          |  |          | (33,843 | )    |  |            | (28,630 | ) |  |          | (101,787 | )
|Distributions from Network TEN              |                                                            |  | 60,984   |         |      |  | 71,096     |         |   |  | 75,259   |         
|                                            |                                                            |  |          |         |      |  |            |         |   |  |          |         
|                                            |                                                            |  | 253,811  |         |      |  | 198,490    |         |   |  | 107,885  |         
|Changes in non-cash operating accounts      |                                                            |  | (67,088  | )       |      |  | (7,747     | )       |   |  | 20,382   |         
|                                            |                                                            |  |          |         |      |  |            |         |   |  |          |         
|                                            |                                                            |  | 186,723  |         |      |  | 190,743    |         |   |  | 128,267  |         
|                                            |                                                            |  |          |         |      |  |            |         |   |  |          |         
|Investing activities                        |                                                            |  |          |         |      |  |            |         |   |  |          |         
|Acquisitions                                |                                                            |  |         |         |      |  | (2,007,291 | )       |   |  | (517,819 | )       
|Other investments                           |                                                            |  | (5,187   | )       |      |  | (1,733     | )       |   |  | (119,454 | )       
|Proceeds from sale of investments           |                                                            |  | 87,000   |         |      |  | 64,045     |         |   |  | 224,782  |         
|Proceeds from divestitures                  |                                                            |  | 390,059  |         |      |  | 32,454     |         |   |  |         |         
|Purchase of property, plant and equipment   |                                                            |  | (52,272  | )       |      |  | (41,736    | )       |   |  | (8,228   | )       
|Advances to parent and affiliated companies |                                                            |  | (45,275  | )       |      |  | (150,064   | )       |   |  | (260,472 | )       
|                                            |                                                            |  |          |         |      |  |            |         |   |  |          |         
|                                            |                                                            |  | 374,325  |         |      |  | (2,104,325 | )       |   |  | (681,191 | )       
|                                            |                                                            |  |          |         |      |  |            |         |   |  |          |         
|Financing activities                        |                                                            |  |          |         |      |  |            |         |   |  |          |         
|Issuance of long term debt                  |                                                            |  |         |         |      |  | 3,862,600  |         |   |  | 618,329  |         
|Repayment of long term debt                 |                                                            |  | (493,703 | )       |      |  | (2,030,988 | )       |   |  |         |         
|Net change in bank loans and advances       |                                                            |  | (28,999  | )       |      |  | 23,739     |         |   |  | (28,488  | )       
|                                            |                                                            |  |          |         |      |  |            |         |   |  |          |         
|                                            |                                                            |  | (522,702 | )       |      |  | 1,855,351  |         |   |  | 589,841  |         
|                                            |                                                            |  |          |         |      |  |            |         |   |  |          |         
|Net change in cash                          |                                                            |  | 38,346   |         |      |  | (58,231    | )       |   |  | 36,917   |         
|Cash  beginning of year                    |                                                            |  | 11,432   |         |      |  | 69,663     |         |   |  | 32,746   |         
|                                            |                                                            |  |          |         |      |  |            |         |   |  |          |         
|Cash  end of year                          |                                                            |  | 49,778   |         |      |  | 11,432     |         |   |  | 69,663   |         
|                                            |                                                            |  |          |         |      |  |            |         |   |  |          |         

The notes constitute an integral part of the consolidated financial statements.

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CANWEST MEDIA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED AUGUST 31, 2002 AND 2001

(expressed in Canadian dollars)

1. SIGNIFICANT ACCOUNTING POLICIES

On September 28, 2000, CanWest Media Inc. (the Company) was created as a
wholly-owned subsidiary of CanWest Global Communications Corp. (CanWest)
solely to acquire 100% of the common shares of Global Television Network Inc.
(GTNI), a wholly-owned subsidiary of CanWest. This transaction has been
accounted for on a continuity of interests basis. The results of operations
for periods prior to creation of the Company are presented as those of the
Company in a manner similar to a pooling of interests. Accordingly, these
consolidated financial statements present the operations of the Company on a
continuity of interests basis which is identical to the financial position and
results of operations of GTNI for those periods presented.

The Company is an international media company with interests in broadcast
television, publishing, radio, specialty cable channels and internet websites
in Canada, Australia, New Zealand, Ireland and Northern Ireland. The Companys
operating segments include television and radio broadcasting, out of home
advertising and publishing and online operations. In Canada, the Television
Broadcasting segment includes the operation of the Global Television Network,
Global Prime and various other conventional and specialty channels. The
Canadian Publishing and Online segment includes the publication of a number of
newspapers, including metropolitan daily newspapers, community newspapers and
the National Post, as well as operation of the canada.com web portal, and other
web based operations. The New Zealand Television Broadcasting segment includes
the operations of the TV3 and TV4 Television Networks. The New Zealand Radio
Broadcasting segment includes the More FM Radio and RadioWorks Networks. The
Irish Television Broadcasting segment includes the Companys 45% interest in
the Republic of Irelands TV3 Television Network. The Corporate and Other
segment includes the Companys 57.5% economic interest in the TEN Group Pty
Limited, which owns and operates Australias TEN Television Network (Network
TEN) and various portfolio investments in media operations, including a 29.9%
equity interest in Northern Irelands Ulster Television plc (UTV).

The Companys broadcast customer base is comprised primarily of large
advertising companies who place advertisements with the Company on behalf of
their customers. Publishing revenues include advertising, circulation and
subscriptions which are derived from a variety of sources. The Companys
advertising revenues are seasonal. Revenues are highest in the first and third
quarters while expenses are relatively constant throughout the year.

A summary of significant accounting policies followed in the preparation of
these consolidated financial statements is as follows:

Basis of presentation

The consolidated financial statements are prepared in accordance with generally
accepted accounting principles in Canada. All amounts are expressed in Canadian
dollars unless otherwise noted. A reconciliation to accounting principles
generally accepted in the United States is provided in note 20.

Principles of consolidation

The consolidated financial statements include the accounts of the Company and
its subsidiaries, and the Companys pro rata 45% share of the assets,
liabilities, and results of operations of TV3 Ireland from March 28, 2001, the
date when it ceased to be a subsidiary and became a jointly controlled
enterprise.

Investments

The Company accounts for its investment in Network TEN, mentv, Mystery, ROBTv
(to the date of its sale on August 31, 2001) and CF Television Inc. (to the
date of its sale on September 12, 2001) using the equity method. The Companys
accounting for its investment in The National Post Company is described in note
2.

Other investments are recorded at the lower of cost and net realizable value.
A provision for loss in value of other investments is made when a decline in
current market values is considered other than temporary.

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Broadcast rights

The Company has entered into various agreements for the rights to broadcast
certain television programs. The Company records a liability for broadcast
rights and the corresponding asset when films and programs are available for
telecast. Broadcast rights are charged to operations as programs are telecast
over the anticipated period of use. Broadcast rights are carried at the lower
of unamortized cost and net recoverable value based on discounted future cash
flows.

Foreign currency translation

The Companys operations in Australia, New Zealand and Ireland represent
self-sustaining foreign operations, and the respective accounts have been
translated into Canadian dollars in accordance with the current rate method.
Assets and liabilities are translated at the exchange rates prevailing at the
balance sheet dates, and revenue and expenses are translated on the basis of
average exchange rates during the periods. Any gains or losses arising from the
translation of these accounts are deferred and included as a component of
shareholders equity as cumulative foreign currency translation adjustments. An
applicable portion of these deferred gains and losses is included in the
determination of net earnings when there is a reduction of the net investment.

Property, plant and equipment

Property, plant and equipment are recorded at cost. Amortization is provided
over the assets estimated useful lives on a straight line basis at the
following annual rates:

|                                |  |             
|------------------------------- |  | ------------
|Buildings                       |  | 2 1/2% - 5% 
|Machinery and equipment         |  | 4% - 33 1/3%
|Leasehold and land improvements |  | 2 1/2% - 20%

Intangible assets

Broadcast licences, newspaper mastheads, circulation and other intangible
assets are recorded at their cost which represents fair market value at the
date of acquisition.

Circulation and other finite life intangibles are amortized over periods from 5
to 40 years. Intangibles with indefinite lives are not subject to amortization
and are tested for impairment annually. Impairment of indefinite life
intangibles is tested by comparing the fair value of the intangible assets to
its carrying value.

Goodwill

Goodwill represents the cost of acquired businesses in excess of the fair value
of net identifiable assets acquired. Effective September 1, 2001, goodwill is
not subject to amortization, whereas previously goodwill was amortized over a
40 year period. Goodwill is tested for impairment annually by comparing the
fair value of goodwill assigned to a particular reporting unit to its carrying
value.

Pre-operating costs

Pre-operating costs incurred in new business undertakings are deferred prior to
the commencement of commercial operations, which is generally the time at which
subscriber revenues commence. Pre-operating costs are amortized over a period
of five years.

Revenue recognition

Revenue derived from broadcasting activities consists primarily of the sale of
airtime which is recognized at the time commercials are broadcast. Circulation
and advertising revenue from publishing activities is recognized in income when
the newspaper is delivered. Subscription revenue is recognized on a
straight-line basis over the term of the subscription.

Amounts received or receivable and not yet recognized as revenue are included
in deferred revenue.

Income taxes

The asset and liability method is used to account for income taxes. Under this
method, future income tax assets and liabilities are recognized for the
estimated future tax consequences attributable to differences between the
financial statement carrying amount and

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the tax bases of assets and liabilities. Future income tax assets and
liabilities are measured using substantively enacted tax rates in effect for
the year in which those 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 recognized in income in the period that includes the enactment
date. Future income tax assets are recognized to the extent that realization is
considered more likely than not.

Income taxes on unremitted earnings of Network TEN are provided at rates
applicable to distributions. Income taxes on unremitted earnings of foreign
operations other than Network TEN are not provided as such earnings are
expected to be indefinitely reinvested.

Inventory

Inventory, consisting primarily of printing material, is valued at the lower of
cost and net realizable values.

Pension plans and post retirement benefits

The Company maintains a number of defined benefit and defined contribution
pension plans. For the defined benefit plans, the pension expense is
determined using the projected benefit method pro rated based on service. For
the defined contribution plans, the pension expense is the Companys
contribution to the plan. The Company also maintains post retirement benefit
plans, for certain of its employees, the cost of which is expensed as benefits
are earned by the employees.

Cash and cash equivalents

For the purpose of the statements of cash flows, cash includes cash and short
term investments with maturities at the date of purchase of up to three months.

Financial instruments

The Company uses various financial instruments to reduce its exposure to
fluctuations in interest rates and U.S. currency exchange rates. The Company
does not hold or issue any derivative financial instruments for speculative
trading purposes. The interest differential to be paid or received under
interest rate swap agreements is recognized as an adjustment to interest
expense. The Company translates its U.S. denominated debt that is hedged by
cross currency swaps at the rate implicit in the swap agreement.

Stock based compensation

The Company has share based compensation plans under which options of its
parent company, CanWest, are issued to certain employees. These options are
granted by CanWest with exercise prices equal to the market value of the
underlying stock on the date of grant. No compensation expense is recognized
from stock options granted by CanWest to the employees of the Company.

Use of estimates

The preparation of financial statements in accordance with generally accepted
accounting principles requires the Company to make estimates and assumptions
that affect reported amounts of assets, liabilities, revenue and expenses, and
disclosure of contingencies. Future events could alter such estimates in the
near term.

The Company operates in highly competitive markets. The Company has estimated
the useful lives of intangible assets and the value of goodwill based on
historical customer patterns, industry trends and existing competitive factors.
Significant long term changes in these factors could result in a material
impairment of the value and life of intangible assets and goodwill.

Changes in accounting policies

a) Income taxes

On September 1, 2000 the Company adopted the recommendations of the Canadian
Institute of Chartered Accountants (CICA) Handbook Section 3465, Income Taxes,
which replaced the deferral method with the asset and liability method of tax
allocation. The Company has applied the change retroactively, restating prior
years. The cumulative effect of the change was to reduce opening retained earnings at
September 1, 2000 by $0.3 million, decrease the Investment in Network TEN by
$7.9 million, increase goodwill by $417.5 million, decrease other assets by
$1.7 million, and increase future income tax liabilities by $408.2 million. Net
earnings for the year ended August 31, 2000 were increased by $14.9 million.

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(b)  Business combinations, intangibles and goodwill

In July 2001, the Accounting Standards Board of the CICA issued Handbook
Section 1581, Business Combinations, and Handbook Section 3062, Goodwill and
Other Intangibles.

Under the new Section 1581, all business combinations initiated after June 30,
2001, must be accounted for as a purchase. In addition, the standards require
classification of carrying amounts of goodwill and other intangibles related to
purchase business combinations in accordance with the new definitions of
intangibles. The standard requires intangibles assets to be recognized
separately from goodwill if an asset arises from contractual or other legal
rights, or is separable. These provisions are applicable to business
combinations consummated after June 30, 2001 and for any recognized intangibles
acquired in a business combination prior to July 1, 2001 when Section 3062 is
first applied. This section was adopted by the Company on September 1, 2001 and
applied prospectively.

On September 1, 2001, the Company adopted the new Handbook Section 3062,
Goodwill and Other Intangibles. As a result of adopting the new standard,
goodwill and certain intangibles with indefinite lives, including newspaper
mastheads and broadcast licences are no longer amortized. Circulation and
other intangibles are amortized for periods from 5 to 40 years. As a result of
applying the new standards, no impairments in intangibles with indefinite lives
or goodwill have been identified at the Company or any of its subsidiaries.
However, an initial goodwill impairment was identified by Network TEN in its
reporting unit, Eye Corp, resulting in a charge to the Companys retained
earnings of $45.3 million (net of income tax recoveries of $2.5 million). In
addition, as a result of events occurring after the beginning of 2001, a
goodwill impairment of $30.2 million (net of income taxes recoveries of $2.0
million) has been reflected in the Companys interest in loss of Network TEN in
the Companys statement of earnings for the period ended August 31, 2002 (see
note 3).

This change in accounting policy has been applied prospectively commencing
September 1, 2001. The table below provides a reconciliation of previously
reported 2001 and 2000 earnings to net earnings adjusted to exclude
amortization of goodwill and intangible assets with indefinite lives.

|                                                                                                                                |  |      |        |      |  |      |         |  |  |  |         | 
|------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------- |  |  |  | ------- | 
|                                                                                                                                |  | 2002 |        | 2001 |  | 2000
|                                                                                                                                |  | $000 |        | $000 |  | $000
|Reported net earnings                                                                                                           |  |      | 97,910 |      |  |      | 97,682  |  |  |  | 176,373 | 
|Amortization of goodwill and indefinite life
intangibles, net of tax $11,975
for the year ended August 31, 2001
(2000 - $9,106) |  |      |       |      |  |      | 62,868  |  |  |  | 11,810  | 
|Amortization of goodwill and indefinite
life intangibles in equity accounted
affiliates, net of tax of nil                      |  |      |       |      |  |      | 6,211   |  |  |  | 4,225   | 
|                                                                                                                                |  |      |        |      |  |      |         |  |  |  |         | 
|Net earnings adjusted to
exclude amortization expense
recognized in 2001 and 2000                                               |  |      | 97,910 |      |  |      | 166,761 |  |  |  | 192,408 | 
|                                                                                                                                |  |      |        |      |  |      |         |  |  |  |         | 

Proposed Accounting Policies

Foreign currency translation and hedging relationships

In November 2001, the Accounting Standards Board of the CICA approved
amendments to CICA Handbook Section 1650, Foreign Currency Translationand a
new accounting Guideline, Hedging Relationships. The amendments to Section
1650, applicable for the Company in fiscal 2003 with retroactive application,
eliminate the deferral and amortization method for unrealized translation gains
and losses on non current monetary assets and liabilities and require the
disclosure of exchange gains and losses included in net income. The Guideline,
applicable for the Company in fiscal 2004, deals with the identification,
documentation and designation and effectiveness of hedges. The impact of
implementing these changes is not expected to be significant.

2.     ACQUISITIONS AND DIVESTITURES

Acquisitions



|(a) |  | Effective March 31, 2002, the Company acquired the remaining 50% interest
in The National Post Company not already owned. The purchase price
consisted of cash and other consideration in the form of agreements and
undertakings, exchanged by the parties, which had a nominal value. In
addition, the vendor agreed to provide $22.5 million to fund losses and
cash requirements
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|    |  | of The National Post Company to March 31, 2002. In September 2001, the
Company assumed control of the National Post, therefore, the Company changed
its method of accounting for the National Post to a consolidation basis from
an equity basis.                                                                                                                                                                                                                                                                                                                                                                        
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | In May 2001, through an amalgamation of CanWest Broadcasting Ltd.
(CBL), the 29.34% minority interest in CBL was exchanged for 21,783
series 2 preference shares of CanWest, rendering CBL a wholly owned
subsidiary of CanWest and the Company. The redemption and conversion
value of the shares is based on valuations which have not been finally
determined and was estimated at $50.0 million. At August 31, 2002, the
estimated redemption and conversion value is $54.7 million.The Company
issued 21,783 common shares to CanWest in consideration for CanWest
issuing shares to the minority interest in CBL.
|   
|(c) |  | In January 2001, the Company acquired the shares of RadioWorks that it
did not already own. The cost to acquire this 28% interest was $21.8
million. In May 2000, the company acquired a 72% interest in RadioWorks
for cash of $52 million.                                                                                                                                                                                                                                                                                                                                                                             
|   
|(d) |  | On November 16, 2000, the Company acquired substantially all of the
Canadian newspaper and other Canadian media assets, including a 50%
interest in the National Post (CanWest Publications), of Hollinger
International Inc. and certain of its affiliates (Hollinger) for
consideration of approximately $3.1 billion, including certain costs
related to the acquisition.                                                                                                                                                                                                                                         
|   
|    |  | The purchase price is subject to adjustment based on the working capital of
CanWest Publications at August 31, 2000 and the results of its operations
from September 1, 2000 to November 16, 2000. The amount of such adjustment
is subject to negotiation between the parties and has not been finally
determined. When finalized, the working capital adjustment payable or
refundable will increase or decrease the amount of goodwill recorded on
acquisition.                                                                                                                                                       
|   
|    |  | The Company partially financed the acquisition and refinanced certain
existing credit facilities by entering into a new senior secured credit
facility, of which the Company had drawn approximately $2.5 billion at
closing. In addition, the Company issued US$425.0 million and $60.7 million
in senior subordinated notes, and approximately $767.0 million in
subordinated notes payable to Hollinger. The Company also issued 2.7 million
Series 1 preferred shares and 24.3 million non-voting shares to Hollinger.                                                                                               
|   
|    |  | During the year ended August 31, 2002, the Company adjusted the allocation of
the purchase price based on valuations of intangibles which were completed in
the year. This resulted in an increase in newspaper mastheads, circulation
and other intangibles, reduction in goodwill and an increase in the future
tax liability. The prior period was restated to reflect this reallocation.                                                                                                                                                                                                                             
|   
|    |  | The Company accounted for these acquisitions using the purchase method. As
such, the results of operations reflect the revenues and expenses of the
acquired operations since the dates of acquisition.                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(e) |  | Effective March 31, 2000 the Company acquired all of the shares in WIC
Western International Communications Inc. that it did not hold. The net
cash consideration paid and debt assumed amounted to $465.7 million.                                                                                                                                                                                                                                                                                                                                                                                                      

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##### Table of Contents



A summary of the fair value of the assets acquired is as follows:

|                                                                              |  |                   |         |                  |  |            |           |      |  |       |        |     |  |  |        |     |  |  |           |  
|----------------------------------------------------------------------------- |  | ----------------- | ------- | ---------------- |  | ---------- | --------- | ---- |  | ----- | ------ | --- |  |  | ------ | --- |  |  | --------- | -
|                                                                              |  | 2002              |         | 2001            
|                                                                              |  |                   |         |                 
|                                                                              |  |                   |         |                  |  | CanWest    |           |      |  |       |        |     |  |  |        |     |  | 
|                                                                              |  | National
Post (1) |         | Publications (2) |  | RadioWorks |           | CBL  |  | Total
|                                                                              |  | $000              |         | $000             |  | $000       |           | $000 |  | $000 
|Current assets                                                                |  |                   | 50,257  |                  |  |            | 324,382   |      |  |       |       |     |  |  |       |     |  |  | 324,382   |  
|Property, plant and equipment                                                 |  |                   | 12,436  |                  |  |            | 537,053   |      |  |       |       |     |  |  |       |     |  |  | 537,053   |  
|Other investments                                                             |  |                   |        |                  |  |            | 101,561   |      |  |       |       |     |  |  |       |     |  |  | 101,561   |  
|Other assets                                                                  |  |                   |        |                  |  |            | 67,412    |      |  |       |       |     |  |  |       |     |  |  | 67,412    |  
|Circulation and other intangibles                                             |  |                   | 10,700  |                  |  |            | 129,300   |      |  |       |       |     |  |  |       |     |  |  | 129,300   |  
|Newspaper mastheads and
broadcast licences                                    |  |                   | 35,000  |                  |  |            | 330,000   |      |  |       |       |     |  |  | 25,466 |     |  |  | 355,466   |  
|Goodwill                                                                      |  |                   | 62,987  |                  |  |            | 2,101,619 |      |  |       | 16,928 |     |  |  |       |     |  |  | 2,118,547 |  
|                                                                              |  |                   |         |                  |  |            |           |      |  |       |        |     |  |  |        |     |  |  |           |  
|Total assets                                                                  |  |                   | 171,380 |                  |  |            | 3,591,327 |      |  |       | 16,928 |     |  |  | 25,466 |     |  |  | 3,633,721 |  
|                                                                              |  |                   |         |                  |  |            |           |      |  |       |        |     |  |  |        |     |  |  |           |  
|Current liabilities                                                           |  |                   | (50,665 | )                |  |            | (294,856  | )    |  |       |       |     |  |  |       |     |  |  | (294,856  | )
|Other accrued liabilities                                                     |  |                   |        |                  |  |            | (10,000   | )    |  |       |       |     |  |  |       |     |  |  | (10,000   | )
|Future income taxes                                                           |  |                   | (14,600 | )                |  |            | (158,587  | )    |  |       |       |     |  |  |       |     |  |  | (158,587  | )
|Minority interests                                                            |  |                   | (22,500 | )                |  |            |          |      |  |       | 4,842  | (3) |  |  | 24,534 | (3) |  |  | 29,376    |  
|                                                                              |  |                   |         |                  |  |            |           |      |  |       |        |     |  |  |        |     |  |  |           |  
|Total liabilities                                                             |  |                   | (87,765 | )                |  |            | (463,443  | )    |  |       | 4,842  |     |  |  | 24,534 |     |  |  | (434,067  | )
|                                                                              |  |                   |         |                  |  |            |           |      |  |       |        |     |  |  |        |     |  |  |           |  
|                                                                              |  |                   | 83,615  |                  |  |            | 3,127,884 |      |  |       | 21,770 |     |  |  | 50,000 |     |  |  | 3,199,654 |  
|                                                                              |  |                   |         |                  |  |            |           |      |  |       |        |     |  |  |        |     |  |  |           |  
|Consideration:                                                                |  |                   |         |                  |  |            |           |      |  |       |        |     |  |  |        |     |  |  |           |  
|Cash                                                                          |  |                   |        |                  |  |            | 1,985,521 |      |  |       | 21,770 |     |  |  |       |     |  |  | 2,007,291 |  
|Shares                                                                        |  |                   |        |                  |  |            | 375,516   |      |  |       |       |     |  |  | 50,000 |     |  |  | 425,516   |  
|Note payable                                                                  |  |                   |        |                  |  |            | 766,847   |      |  |       |       |     |  |  |       |     |  |  | 766,847   |  
|Carrying value of The National
Post Company investment at date
of acquisition |  |                   | 83,615  |                  |  |            |          |      |  |       |       |     |  |  |       |     |  |  |          |  
|                                                                              |  |                   |         |                  |  |            |           |      |  |       |        |     |  |  |        |     |  |  |           |  
|                                                                              |  |                   | 83,615  |                  |  |            | 3,127,884 |      |  |       | 21,770 |     |  |  | 50,000 |     |  |  | 3,199,654 |  
|                                                                              |  |                   |         |                  |  |            |           |      |  |       |        |     |  |  |        |     |  |  |           |  



---

|(1) |  | The remaining 50% interest at acquisition of control, September 1, 2001.                               
|--- |  | -------------------------------------------------------------------------------------------------------
|   
|(2) |  | Including a 50% interest in the National Post.                                                         
|   
|(3) |  | The allocation of consideration to minority interests represents the
extinguishment of those interests.

Divestitures



|(a) |  | On August 8, 2002, the Company sold its interest in community newspapers
and related assets in Atlantic Canada and Saskatchewan for cash proceeds
of $257.0 million. The accounting gain on this sale was $48.9 million;
assets and liabilities disposed amounted to $227.3 million and $19.2
million, respectively.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | On October 31, 2001, the Company completed the sale of CKVU Sub Inc., and
received proceeds of $133.0 million. The accounting gain on the sale was
$67.7 million; assets and liabilities disposed amounted to $84.1 million
and $18.8 million, respectively.                                                        
|   
|(c) |  | On September 12, 2001, the Company completed the sale of CF Television
Inc., and received proceeds of $87.0 million. No gain or loss arose from
this transaction; assets and liabilities disposed amount to $87.0 million
and nil, respectively.                                                                    
|   
|(d) |  | On August 31, 2001 the Company sold its 50% interest in ROBTv for $30.0
million. No gain or loss arose from this sale; assets and liabilities
disposed amount to $30.0 million and nil, respectively.                                                                                                               

12



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##### Table of Contents





|(e) |  | On March 28, 2001, the Company restructured its controlling interest in
TV3 Ireland through a series of transactions, which included: (i) the
repayment by TV3 Ireland of loans made by the Company and another minority
investor, (ii) the exercise of certain call options by the Company and
(iii) the acquisition by Granada Media plc of a 45% interest in TV3
Ireland from the Company and another minority investor. The Company
received cash, net of the call price and including repayment of loans made
to TV3 Ireland of $32.5 million and recorded a gain on disposition of
$30.7 million. The Company and Granada Media plc also entered into a
joint venture agreement to jointly control TV3 Ireland. As a result,
effective March 28, 2001, the Company began to proportionately consolidate
its 45% interest in TV3 Ireland.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3.     INVESTMENT IN NETWORK TEN

The Company owns approximately 15% of the issued ordinary shares and all of the
convertible debentures and subordinated debentures of Network TEN, an
Australian television broadcast network. The subordinated debentures have an
aggregate principal amount of A$45.5 million and pay interest based on
distributions to holders of Network TENs ordinary shares. The convertible
debentures have an aggregate principal amount of A$45,500 and pay a market
linked rate of interest. The combination of ordinary shares and subordinated
debentures yield distributions equivalent to approximately 57.5% of all
distributions paid by Network TEN. The convertible debentures are convertible,
upon payment of an aggregate of A$45.5 million, into a number of ordinary
shares which would represent 50% of the issued and outstanding shares of
Network TEN at the time of conversion.

As a result of its contractual right to representation on Network TENs board
of directors and other factors, the Company accounts for its interest in
Network TEN on the equity basis. The Company has appointed three of the
thirteen members of the board of directors of Network TEN.

The following selected consolidated financial information of Network TEN has
been prepared in accordance with accounting principles generally accepted in
Canada. The accounts have been translated to Canadian dollars using the current
rate method.

Summary Consolidated Balance Sheets

|                                     |                                                    |  |         |         |      |  |         |         |  
|------------------------------------ | -------------------------------------------------- |  | ------- | ------- | ---- |  | ------- | ------- | -
|                                     |                                                    |  | 2002    |         | 2001
|                                     |                                                    |  | $000    |         | $000
|Assets                               |                                                    |  |         |         |      |  |         |        
|                                     | Current assets                                     |  | 285,303 |         |      |  | 192,460 |        
|                                     | Other assets                                       |  |         | 4,825   |      |  |         | 7,893   |  
|                                     | Property, plant and equipment                      |  |         | 71,875  |      |  |         | 61,967  |  
|                                     | Long term investments                              |  |         | 2,188   |      |  |         | 17,516  |  
|                                     | Intangibles                                        |  |         | 246,305 |      |  |         | 245,721 |  
|                                     | Goodwill                                           |  |         | 49,304  |      |  |         | 215,615 |  
|                                     |                                                    |  |         |         |      |  |         |        
|                                     |                                                    |  | 659,800 |         |      |  | 741,172 |        
|                                     |                                                    |  |         |         |      |  |         |        
|Liabilities and Shareholders Equity |                                                    |  |         |         |      |  |         |        
|                                     | Current liabilities                                |  | 191,736 |         |      |  | 194,813 |        
|                                     | Other long term liabilities                        |  |         | 442,975 |      |  |         | 251,390 |  
|                                     | Minority interest                                  |  |         |        |      |  |         | 54,433  |  
|                                     | Subordinated debentures issued to the Company      |  |         | 40,154  |      |  |         | 40,154  |  
|                                     | Share capital                                      |  |         | 40,146  |      |  |         | 40,146  |  
|                                     | Retained earnings (deficit)                        |  |         | (52,232 | )    |  |         | 177,251 |  
|                                     | Cumulative foreign currency translation adjustment |  |         | (2,979  | )    |  |         | (17,015 | )
|                                     |                                                    |  |         |         |      |  |         |        
|                                     |                                                    |  | 659,800 |         |      |  | 741,172 |        
|                                     |                                                    |  |         |         |      |  |         |        

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Other Consolidated Financial Data

|                             |  |      |         |      |  |      |         |  |  |  |         | 
|---------------------------- |  | ---- | ------- | ---- |  | ---- | ------- |  |  |  | ------- | 
|                             |  | 2002 |         | 2001 |  | 2000
|                             |  | $000 |         | $000 |  | $000
|Cash
flow from operations(1) |  |      | 75,000  |      |  |      | 105,000 |  |  |  | 139,000 | 
|                             |  |      |         |      |  |      |         |  |  |  |         | 
|Distributions paid           |  |      | 111,900 |      |  |      | 130,000 |  |  |  | 138,000 | 
|                             |  |      |         |      |  |      |         |  |  |  |         | 
|Capital expenditures         |  |      | 25,700  |      |  |      | 18,600  |  |  |  | 14,300  | 
|                             |  |      |         |      |  |      |         |  |  |  |         | 

Summary Consolidated Statements of Earnings

|                                                                                        |  |      |         |      |  |      |         |   |  |  |         |  
|--------------------------------------------------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- | - |  |  | ------- | -
|                                                                                        |  | 2002 |         | 2001 |  | 2000
|                                                                                        |  | $000 |         | $000 |  | $000
|Revenue                                                                                 |  |      | 555,653 |      |  |      | 445,179 |   |  |  | 495,479 |  
|Operating expenses                                                                      |  |      | 411,904 |      |  |      | 324,999 |   |  |  | 318,223 |  
|                                                                                        |  |      |         |      |  |      |         |   |  |  |         |  
|                                                                                        |  |      | 143,749 |      |  |      | 120,180 |   |  |  | 177,256 |  
|Amortization of intangibles and goodwill                                                |  |      |        |      |  |      | 10,802  |   |  |  | 7,348   |  
|Amortization of property, plant and equipment and other                                 |  |      | 15,130  |      |  |      | 9,329   |   |  |  | 4,832   |  
|                                                                                        |  |      |         |      |  |      |         |   |  |  |         |  
|                                                                                        |  |      | 128,619 |      |  |      | 100,049 |   |  |  | 165,076 |  
|Investment income and gains net of write-down of investments                            |  |      | (17,221 | )    |  |      | 26,427  |   |  |  |        |  
|Financing expenses                                                                      |  |      | (28,270 | )    |  |      | (71,343 | ) |  |  | (76,391 | )
|Goodwill impairment loss(2)                                                             |  |      | (56,114 | )    |  |      |        |   |  |  |        |  
|                                                                                        |  |      |         |      |  |      |         |   |  |  |         |  
|                                                                                        |  |      | 27,014  |      |  |      | 55,133  |   |  |  | 88,685  |  
|Provision for income taxes(3)                                                           |  |      | 59,511  |      |  |      | 19,328  |   |  |  | 30,521  |  
|                                                                                        |  |      |         |      |  |      |         |   |  |  |         |  
|Earnings (loss) before the following                                                    |  |      | (32,497 | )    |  |      | 35,805  |   |  |  | 58,164  |  
|Minority interests                                                                      |  |      | 4,737   |      |  |      | 4,354   |   |  |  |        |  
|Interest in earnings of equity accounted affiliates                                     |  |      |        |      |  |      | 940     |   |  |  | 1,284   |  
|                                                                                        |  |      |         |      |  |      |         |   |  |  |         |  
|Net earnings (loss) for the year                                                        |  |      | (27,760 | )    |  |      | 41,099  |   |  |  | 59,448  |  
|Interest in respect of subordinated debentures
held by the Company                      |  |      | 5,370   |      |  |      | 56,697  |   |  |  | 74,519  |  
|                                                                                        |  |      |         |      |  |      |         |   |  |  |         |  
|Earnings (loss) for the period before interest in
respect of subordinated debentures(4) |  |      | (22,390 | )    |  |      | 97,796  |   |  |  | 133,967 |  
|                                                                                        |  |      |         |      |  |      |         |   |  |  |         |  

Summary Statement
of Retained Earnings

|                                                                                   |  |      |          |      |  |      |          |   |  |  |          |  
|---------------------------------------------------------------------------------- |  | ---- | -------- | ---- |  | ---- | -------- | - |  |  | -------- | -
|                                                                                   |  | 2002 |          | 2001 |  | 2000
|                                                                                   |  | $000 |          | $000 |  | $000
|Retained earnings  beginning of year as previously reported                       |  |      | 177,251  |      |  |      | 220,853  |   |  |  | 220,724  |  
|Adjustment for adoption of new accounting pronouncements(2)                        |  |      | (83,109  | )    |  |      |         |   |  |  |         |  
|                                                                                   |  |      |          |      |  |      |          |   |  |  |          |  
|Retained earnings  beginning of year as adjusted                                  |  |      | 94,142   |      |  |      | 220,853  |   |  |  | 220,724  |  
|Earnings (loss) for the year before interest in respect of
subordinated debentures |  |      | (22,390  | )    |  |      | 97,796   |   |  |  | 133,967  |  
|Distributions paid                                                                 |  |      | (123,984 | )    |  |      | (141,398 | ) |  |  | (133,838 | )
|                                                                                   |  |      |          |      |  |      |          |   |  |  |          |  
|Retained earnings (deficit)  end of period                                        |  |      | (52,232  | )    |  |      | 177,251  |   |  |  | 220,853  |  
|                                                                                   |  |      |          |      |  |      |          |   |  |  |          |  

14



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---

|(1) |  | Cash flow from operations before changes in non-cash operating accounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | On December 18, 2000 Network TEN acquired 60% of Eye Corp. for A$189.9
million. Under Australian generally accepted accounting principles (GAAP),
on February 28, 2002 the Eye Corp. goodwill has been written down by A$137.5
million to A$113.8 million. In August 2002, Network TEN determined that
there was a further impairment of Eye Corp. goodwill which resulted in an
additional write down of A$40.9 million. Under Canadian GAAP in accordance
with the adoption of CICA Handbook Section 3062, the Eye Corp. goodwill
impairment has been recorded as a charge of $83.1 million to retained
earnings as of September 1, 2001 with a further goodwill impairment loss of
$56.1 million recorded as a charge to net earnings for the year ended August
31, 2002. Under Canadian GAAP, the fair value of Eye Corp. has been
determined on a discounted cash flow basis. The decline in fair value is
attributable to weaknesses in the out of home advertising market and to
certain operational issues.
|   
|(3) |  | Network TEN has been in dispute with the Australian Tax Office (ATO)
regarding the deductibility of debenture interest paid to the Company
since 1997. Network TEN reached an agreement with the ATO during 2002.
Under the agreement Network TEN will be entitled to deduct debenture
interest until June 30, 2004. The settlement resulted in a non recurring
income tax expense charge of A$36.2 million to Network TEN in the year
ended August 31, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(4) |  | The Companys economic interest in Network TENs earnings (loss) for the
year ended August 31, 2002 is $(11.8) million (2001- $52.6 million, 2000 -
$72.2 million).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  



| |                                                                                                                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | At August 31, 2002, the Companys share of undistributed earnings of Network
TEN was nil, (August 31, 2001 - $101.9 million). The Company estimates that
the market value of the Companys investment in Network TEN, based on quoted
market rates for Ten Network Holdings Limited at August 31, 2002, was
approximately $842 million (August 31, 2001 - $810 million).

4.     OTHER INVESTMENTS

|                                                   |  |      |         |           |  |        |         |          |  |  |         |        |  |  |         | 
|-------------------------------------------------- |  | ---- | ------- | --------- |  | ------ | ------- | -------- |  |  | ------- | ------ |  |  | ------- | 
|                                                   |  | 2002 |         | 2001     
|                                                   |  |      |         |          
|                                                   |  |      |         |           |  | Market |         |          |  |  |         | Market
|                                                   |  | Cost |         | value (1) |  | Cost   |         | value(1)
|                                                   |  |      |         |           |  |        |         |         
|                                                   |  | $000 |         | $000      |  | $000   |         | $000    
|Investments in publicly traded companies  at cost |  |      |         |           |  |        |         |          |  |  |         |        |  |  |         | 
|Ulster Television plc(2)                           |  |      | 92,006  |           |  |        | 148,340 |          |  |  | 92,006  |        |  |  | 95,109  | 
|Other                                              |  |      | 55,980  |           |  |        | 49,175  |          |  |  | 115,440 |        |  |  | 70,483  | 
|                                                   |  |      |         |           |  |        |         |          |  |  |         |        |  |  |         | 
|                                                   |  |      | 147,986 |           |  |        | 197,515 |          |  |  | 207,446 |        |  |  | 165,592 | 
|                                                   |  |      |         |           |  |        |         |          |  |  |         |        |  |  |         | 
|Investments in private companies  at cost         |  |      | 8,602   |           |  |        |         |          |  |  | 34,052  |        |  |  |         | 
|Investments  on an equity basis                   |  |      | 2,593   |           |  |        |         |          |  |  | 170,614 |        |  |  |         | 
|                                                   |  |      |         |           |  |        |         |          |  |  |         |        |  |  |         | 
|                                                   |  |      | 159,181 |           |  |        |         |          |  |  | 412,112 |        |  |  |         | 
|                                                   |  |      |         |           |  |        |         |          |  |  |         |        |  |  |         | 

During 2002, the Company wrote down the value of various other investments by
$85.5 million to reflect the non temporary decline in market value.



---

|(1) |  | Market values are based on quoted closing prices at August 31. The
Company considers the excess of cost over market value to be a temporary
decline in value, the result of short term market volatility.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | The Companys 29.9% equity interest is accounted for at cost, as the
Company has not been successful in its attempts to gain board representation or
to influence UTVs management.                      

15



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5.     PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are classified as follows:

|                                |  |      |         |              |  |             |         |  |  |  |         | 
|------------------------------- |  | ---- | ------- | ------------ |  | ----------- | ------- |  |  |  | ------- | 
|                                |  | 2002
|                                |  |     
|                                |  |      |         |              |  | Accumulated |         |  |  | 
|                                |  | Cost |         | Amortization |  | Net        
|                                |  | $000 |         | $000         |  | $000       
|Land                            |  |      | 60,002  |              |  |             |        |  |  |  | 60,002  | 
|Buildings                       |  |      | 170,302 |              |  |             | 36,630  |  |  |  | 133,672 | 
|Machinery and equipment         |  |      | 648,706 |              |  |             | 197,498 |  |  |  | 451,208 | 
|Leasehold and land improvements |  |      | 26,785  |              |  |             | 10,967  |  |  |  | 15,818  | 
|                                |  |      |         |              |  |             |         |  |  |  |         | 
|                                |  |      | 905,795 |              |  |             | 245,095 |  |  |  | 660,700 | 
|                                |  |      |         |              |  |             |         |  |  |  |         | 

|                                |  |      |         |              |  |             |         |  |  |  |         | 
|------------------------------- |  | ---- | ------- | ------------ |  | ----------- | ------- |  |  |  | ------- | 
|                                |  | 2001
|                                |  |     
|                                |  |      |         |              |  | Accumulated |         |  |  | 
|                                |  | Cost |         | Amortization |  | Net        
|                                |  | $000 |         | $000         |  | $000       
|Land                            |  |      | 61,409  |              |  |             |        |  |  |  | 61,409  | 
|Buildings                       |  |      | 212,497 |              |  |             | 35,426  |  |  |  | 177,071 | 
|Machinery and equipment         |  |      | 584,552 |              |  |             | 143,083 |  |  |  | 441,469 | 
|Leasehold and land improvements |  |      | 16,418  |              |  |             | 7,192   |  |  |  | 9,226   | 
|                                |  |      |         |              |  |             |         |  |  |  |         | 
|                                |  |      | 874,876 |              |  |             | 185,701 |  |  |  | 689,175 | 
|                                |  |      |         |              |  |             |         |  |  |  |         | 

6.     INTANGIBLES AND GOODWILL

|                      |  |      |           |              |  |             |         |  |  |  |           | 
|--------------------- |  | ---- | --------- | ------------ |  | ----------- | ------- |  |  |  | --------- | 
|                      |  | 2002
|                      |  |     
|                      |  |      |           |              |  | Accumulated |         |  |  | 
|                      |  | Cost |           | Amortization |  | Net        
|                      |  | $000 |           | $000         |  | $000       
|Intangibles           |  |      |           |              |  |             |         |  |  |  |           | 
|Finite life:          |  |      |           |              |  |             |         |  |  |  |           | 
|Circulation and other |  |      | 140,000   |              |  |             | 26,972  |  |  |  | 113,028   | 
|                      |  |      |           |              |  |             |         |  |  |  |           | 
|Indefinite life:      |  |      |           |              |  |             |         |  |  |  |           | 
|Broadcast licences    |  |      | 706,031   |              |  |             | 81,091  |  |  |  | 624,940   | 
|Newspaper mastheads   |  |      | 365,000   |              |  |             | 6,510   |  |  |  | 358,490   | 
|                      |  |      |           |              |  |             |         |  |  |  |           | 
|                      |  |      | 1,071,031 |              |  |             | 87,601  |  |  |  | 983,430   | 
|                      |  |      |           |              |  |             |         |  |  |  |           | 
|Total intangibles     |  |      | 1,211,031 |              |  |             | 114,573 |  |  |  | 1,096,458 | 
|                      |  |      |           |              |  |             |         |  |  |  |           | 
|Goodwill              |  |      | 2,720,382 |              |  |             | 120,138 |  |  |  | 2,600,244 | 
|                      |  |      |           |              |  |             |         |  |  |  |           | 

16



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|                      |  |      |           |              |  |             |         |  |  |  |           | 
|--------------------- |  | ---- | --------- | ------------ |  | ----------- | ------- |  |  |  | --------- | 
|                      |  | 2001
|                      |  |     
|                      |  |      |           |              |  | Accumulated |         |  |  | 
|                      |  | Cost |           | Amortization |  | Net        
|                      |  | $000 |           | $000         |  | $000       
|Intangibles           |  |      |           |              |  |             |         |  |  |  |           | 
|Finite life:          |  |      |           |              |  |             |         |  |  |  |           | 
|Circulation and other |  |      | 129,300   |              |  |             | 9,471   |  |  |  | 119,829   | 
|                      |  |      |           |              |  |             |         |  |  |  |           | 
|Indefinite life:      |  |      |           |              |  |             |         |  |  |  |           | 
|Broadcast licences    |  |      | 726,574   |              |  |             | 89,481  |  |  |  | 637,093   | 
|Newspaper mastheads   |  |      | 330,000   |              |  |             | 6,510   |  |  |  | 323,490   | 
|                      |  |      |           |              |  |             |         |  |  |  |           | 
|                      |  |      | 1,056,574 |              |  |             | 95,991  |  |  |  | 960,583   | 
|                      |  |      |           |              |  |             |         |  |  |  |           | 
|Total intangibles     |  |      | 1,185,874 |              |  |             | 105,462 |  |  |  | 1,080,412 | 
|                      |  |      |           |              |  |             |         |  |  |  |           | 
|Goodwill              |  |      | 2,925,131 |              |  |             | 127,964 |  |  |  | 2,797,167 | 
|                      |  |      |           |              |  |             |         |  |  |  |           | 



|(a) |  | The divestiture of CKVU resulted in decreases in broadcast licences and
goodwill of $22.4 million and $44.8 million respectively.                                                                    
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Sale of community newspapers and related assets in Atlantic Canada and
Saskatchewan resulted in a decrease of goodwill of $187.9 million.                                                            
|   
|(c) |  | Acquisition of the remaining 50% interest in the National Post resulted in
a net increase of goodwill of $32.4 million.                                                                              
|   
|(d) |  | Changes in the currency translation rates used to translate the balances of
goodwill and broadcast licences resulted in net increases in the balances of
$2.2 million and $10.3 million respectively.
|   
|(e) |  | The resolution of an income tax issue related to a period prior to an
acquisition resulted in a $13.4 million reduction in goodwill.                                                                 
|   
|(f) |  | Amortization of circulation and other intangibles was $17.5 million for the
year ended August 31, 2002.                                                                                              

7.     LONG TERM DEBT

|                                                    |  |          |      |      |  |          |           |      |  |  |      |   |  |  |           |  
|--------------------------------------------------- |  | -------- | ---- | ---- |  | -------- | --------- | ---- |  |  | ---- | - |  |  | --------- | -
|                                                    |  | Interest |      | 2002 |  | Interest |           | 2001
|                                                    |  | Rate(1)  |      | $000 |  | Rate(1)  |           | $000
|Term
bank loans(2)                                  |  |          | 9.73 | %    |  |          | 1,791,938 |      |  |  | 9.14 | % |  |  | 2,286,018 |  
|Senior
subordinated notes(3)                        |  |          | 7.8  | %    |  |          | 705,700   |      |  |  | 9.08 | % |  |  | 703,585   |  
|Term
and demand loan 21,375
(2001  IRE£16,505)(4) |  |          | 5.8  | %    |  |          | 32,686    |      |  |  | 5.32 | % |  |  | 29,486    |  
|Term and demand loan (2001 - NZ$7,275)              |  |          |     |      |  |          |          |      |  |  | 6.50 | % |  |  | 4,938     |  
|                                                    |  |          |      |      |  |          |           |      |  |  |      |   |  |  |           |  
|Long term debt                                      |  |          |      |      |  |          | 2,530,324 |      |  |  |      |   |  |  | 3,024,027 |  
|Less portion due within one year                    |  |          |      |      |  |          | (150,865  | )    |  |  |      |   |  |  | (116,500  | )
|                                                    |  |          |      |      |  |          |           |      |  |  |      |   |  |  |           |  
|Long term portion                                   |  |          |      |      |  |          | 2,379,459 |      |  |  |      |   |  |  | 2,907,527 |  
|                                                    |  |          |      |      |  |          |           |      |  |  |      |   |  |  |           |  



---

|(1) |  | The weighted average interest rate giving effect to interest rate swaps.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Credit facilities provide for revolving and term loans in the maximum
amounts of $600,000,000 and $1,796,500,000 respectively. At August 31,
2002, the Company had drawn on availabilities under all of its term
facilities, including U.S. dollar loans of US$705,765,000 and had no
amounts drawn under revolving facilities. The revolving credit facility
matures in November 2006. The amount of credit available under
$1,796,500,000 of the term facilities decreases periodically until
maturity between November 2006 and May 2009. Additional term facilities
of $15,000,000, of which no amount was drawn at August 31, 2002, mature in
August 2005. The loans bear interest at floating rates, and are
collateralized by certain assets of the Company.

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|    |  | Up to $30,000,000 of the revolving credit facility is available on an
operating basis, of which no amount was utilized at August 31, 2002.                                                                                                                                                                                                                                 
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(3) |  | The senior subordinated notes mature on May 15, 2011 and bear interest at
10.625% and include loans of US$425,000,000 and Canadian dollar loans of
$60,724,000. Most of the Canadian dollar loans are held by the majority
shareholder of CanWest. The notes rank junior to the Companys senior
credit facility and are guaranteed by certain subsidiaries of the Company.
|   
|(4) |  | These credit facilities provide for demand bank loans at August 31, 2002
in the maximum amount of 47,500,000 (2001  IRE£46,086,000). The debt
bears interest at floating rates and is secured by a letter of credit
provided by the Company.                                                                                                                             

The Company has entered into various cross currency interest rate and interest
rate swaps resulting in fixed interest costs on its senior indebtedness, in the
principal amount of $1,796,500,000 at August 31, 2002 at rates ranging from
5.7% to 6.63%, plus a margin, for terms matching the maturity of the loans. (At
August 31, 2001 the Company had fixed $1,884,000,000 at interest rates ranging
from 5.7% to 6.73% plus a margin). In addition, the Company has entered into
swaps resulting in floating rates on the US$425,000,000 senior subordinated
notes.

The Company is subject to covenants under certain of the credit facilities
referred to above, including thresholds for leverage and interest coverage, and
is also subject to certain restrictions under negative covenants.

Principal payments in respect of long-term debt over the next five years are:

|                      |  |  |      |  |  |       |         | 
|--------------------- |  |  | ---- |  |  | ----- | ------- | 
|                      |  |  |      |  |  | $ 000
|Year ended August 31, |  |  | 2003 |  |  |       | 150,865 | 
|                      |  |  | 2004 |  |  |       | 132,070 | 
|                      |  |  | 2005 |  |  |       | 166,113 | 
|                      |  |  | 2006 |  |  |       | 204,800 | 
|                      |  |  | 2007 |  |  |       | 192,027 | 

In addition to the facilities described above, the Company has additional
operating loan facilities payable on demand of NZ$5,000,000 at floating rates.
As at August 31, 2002, the Companys indebtedness under these facilities was
nil (2001  $728,000).

8.     BUSINESS COMBINATION RESTRUCTURING ACCRUALS

At August 31, 2000, the Company had restructuring accruals of $113.1 million
related to the acquisition and integration of WIC Western International
Communications Ltd. (WIC). This balance was made up of approximately $75
million in required regulatory benefits, payable over a 6-year period, $12.5
million in severance costs, $10.0 million related to integration and rebranding
of WIC and $15.6 million in other restructuring costs.

During 2001, the Company recorded restructuring accruals of $43.0 million
related to the acquisition and restructuring of its publishing operations.
Restructuring activities include the centralization of certain call centers,
integration of the Companys interactive and news and editorial operations, and
centralization of business, finance and information technology functions. This
balance was made up of $23.8 million in involuntary severance costs, and $19.2
million in other restructuring costs.

In the year ended August 31, 2002, the Company established a restructuring
accrual of $7.0 million related to its acquisition and restructuring of the
National Post. This balance is primarily related to involuntary severance
costs and contract cancellation costs.

For the year ended August 31 2002, expenditures charged to the restructuring
accruals were $43.9 million (August 31, 2001- $19.5 million). As at August 31,
2002, an aggregate balance of $99.7 million remains accrued for future
expenditures.

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##### Table of Contents



9.     EQUITY INSTRUMENTS

The authorized and issued capital stock of the Company is as follows:

Authorized

An unlimited number of common shares.

An unlimited number of preference shares.

Issued

|                                                 |  |      |           |      |  |  |           | 
|------------------------------------------------ |  | ---- | --------- | ---- |  |  | --------- | 
|                                                 |  | 2002 |           | 2001
|                                                 |  | $000 |           | $000
|22,785 common shares                             |  |      | 437,107   |      |  |  | 437,107   | 
|Junior subordinated notes, due November 15, 2020 |  |      | 949,071   |      |  |  | 842,987   | 
|                                                 |  |      |           |      |  |  |           | 
|                                                 |  |      | 1,386,178 |      |  |  | 1,280,094 | 
|                                                 |  |      |           |      |  |  |           | 

During the year ended August 31, 2001, the Company issued 22,785 common shares
to its parent, one of which was issued upon incorporation, and 999 in exchange
for all of the outstanding shares of GTNI, which have been recorded at the paid
up value of the GTNI shares of $11,591,000. One common share was issued for
$375,516,000 in November 2000, in connection with the acquisition of CanWest
Publications, one common share was issued in March 2001 in connection with the
restructuring of TV3 Ireland, and in April 2001 the Company issued 21,783
common shares to CanWest as consideration for the series 2 preference shares
issued by CanWest as consideration to the minority interests on the
amalgamation of CBL.

The junior subordinated notes were issued to the Companys parent on November
16, 2000 for $766,846,716 in connection with the financing of the acquisition
of CanWest Publications. These junior subordinated notes bear interest at
12.155%, which under certain conditions could vary subject to a maximum limit
of 13.03%. Additional junior subordinated notes were issued in satisfaction of
interest. The Company has the option of settling all principal and interest
obligations under the junior subordinated notes with shares, and therefore the
debentures and associated interest have been classified as equity instruments.

10.     CUMULATIVE TRANSLATION ADJUSTMENTS

The cumulative foreign currency translation adjustments account reflects the
net changes in the respective book values of the Companys investments in
self-sustaining foreign operations due to exchange rate fluctuations since the
respective dates of their acquisition or start-up.

The changes in this account arise from changes in the Australian, New Zealand,
Irish and Euro currencies relative to the Canadian currency, and changes in the
Companys net investment in the book values of international operations.

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Changes in this account were as follows:

|                                                        |  |      |         |      |  |      |        |   |  |  |        |  
|------------------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------ | - |  |  | ------ | -
|                                                        |  | 2002 |         | 2001 |  | 2000
|                                                        |  | $000 |         | $000 |  | $000
|Deferred loss, beginning of year                        |  |      | 74,294  |      |  |      | 87,553 |   |  |  | 36,795 |  
|Deferred foreign currency exchange gain during the year |  |      | (24,636 | )    |  |      | (6,059 | ) |  |  | 52,058 |  
|Realization of translation loss due to distributions    |  |      | (1,000  | )    |  |      | (7,200 | ) |  |  | (1,300 | )
|                                                        |  |      |         |      |  |      |        |   |  |  |        |  
|Deferred loss, end of year                              |  |      | 48,658  |      |  |      | 74,294 |   |  |  | 87,553 |  
|                                                        |  |      |         |      |  |      |        |   |  |  |        |  

The balance of cumulative translation adjustments at the end of the year
represents net unrealized losses (gains) as follows:

|                   |  |      |        |      |  |      |        |   |  |  |        | 
|------------------ |  | ---- | ------ | ---- |  | ---- | ------ | - |  |  | ------ | 
|                   |  | 2002 |        | 2001 |  | 2000
|                   |  | $000 |        | $000 |  | $000
|Australian dollar  |  |      | 8,120  |      |  |      | 19,759 |   |  |  | 19,688 | 
|New Zealand dollar |  |      | 40,266 |      |  |      | 55,467 |   |  |  | 67,508 | 
|Irish punt         |  |      |       |      |  |      | (932   | ) |  |  | 357    | 
|Euro               |  |      | 272    |      |  |      |       |   |  |  |       | 
|                   |  |      |        |      |  |      |        |   |  |  |        | 
|                   |  |      | 48,658 |      |  |      | 74,294 |   |  |  | 87,553 | 
|                   |  |      |        |      |  |      |        |   |  |  |        | 

11.     INCOME TAXES

The Companys provision for income taxes reflects an effective income tax rate
which differs from the combined Canadian statutory rate as follows:

|                                                                                       |  |      |         |      |  |      |         |   |  |  |         |  
|-------------------------------------------------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- | - |  |  | ------- | -
|                                                                                       |  | 2002 |         | 2001 |  | 2000
|                                                                                       |  | $000 |         | $000 |  | $000
|Income taxes at combined Canadian statutory rate
of 38.7% (2001  41.3%, 2000  43.7%) |  |      | 60,127  |      |  |      | 17,644  |   |  |  | 62,393  |  
|Non-taxable portion of capital gains                                                   |  |      | (17,044 | )    |  |      | (11,716 | ) |  |  | (16,418 | )
|Effect of valuation allowance on future tax assets                                     |  |      | (3,552  | )    |  |      |        |   |  |  |        |  
|Effect of income tax losses not recognized                                             |  |      |        |      |  |      |        |   |  |  | 4,552   |  
|Non-deductible amortization expense                                                    |  |      | 6,766   |      |  |      | 30,980  |   |  |  |        |  
|Effect of foreign income tax rates differing from
Canadian
income tax rates            |  |      | (1,924  | )    |  |      | (995    | ) |  |  | 6,360   |  
|Large corporations tax                                                                 |  |      | 3,250   |      |  |      | 1,788   |   |  |  | 293     |  
|Effect of substantially enacted income tax rate
change on future tax balances          |  |      |        |      |  |      | (70,573 | ) |  |  | (14,832 | )
|Other                                                                                  |  |      | (13     | )    |  |      | 5,592   |   |  |  | (591    | )
|                                                                                       |  |      |         |      |  |      |         |   |  |  |         |  
|Provision for (recovery of) income taxes                                               |  |      | 47,610  |      |  |      | (27,280 | ) |  |  | 41,757  |  
|                                                                                       |  |      |         |      |  |      |         |   |  |  |         |  

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An analysis of earnings before tax by jurisdiction follows:

|                    |  |      |         |      |  |      |        |  |  |  |         |  
|------------------- |  | ---- | ------- | ---- |  | ---- | ------ |  |  |  | ------- | -
|                    |  | 2002 |         | 2001 |  | 2000
|                    |  | $000 |         | $000 |  | $000
|Canada              |  |      | 137,566 |      |  |      | 10,907 |  |  |  | 169,371 |  
|Foreign             |  |      | 17,962  |      |  |      | 31,815 |  |  |  | (26,595 | )
|                    |  |      |         |      |  |      |        |  |  |  |         |  
|Earnings before tax |  |      | 155,528 |      |  |      | 42,722 |  |  |  | 142,776 |  
|                    |  |      |         |      |  |      |        |  |  |  |         |  

An analysis of the provision for (recovery of) current and future income
taxes by jurisdiction follows:

|                              |         |  |        |     |      |  |         |        |   |  |         |      |  
|----------------------------- | ------- |  | ------ | --- | ---- |  | ------- | ------ | - |  | ------- | ---- | -
|                              |         |  | 2002   |     | 2001 |  | 2000   
|                              |         |  | $000   |     | $000 |  | $000   
|Current
income taxes
  Canada |         |  | 38,455 |     |      |  | 69,523  |        |   |  | 65,868  |     
|                              | Foreign |  |        | 302 |      |  |         | 203    |   |  |         | 968  |  
|                              |         |  |        |     |      |  |         |        |   |  |         |     
|                              |         |  | 38,757 |     |      |  | 69,726  |        |   |  | 66,836  |     
|                              |         |  |        |     |      |  |         |        |   |  |         |     
|Future
income taxes
  Canada  |         |  | 8,703  |     |      |  | (94,544 | )      |   |  | (24,926 | )   
|                              | Foreign |  |        | 150 |      |  |         | (2,462 | ) |  |         | (153 | )
|                              |         |  |        |     |      |  |         |        |   |  |         |     
|                              |         |  | 8,853  |     |      |  | (97,006 | )      |   |  | (25,079 | )   
|                              |         |  |        |     |      |  |         |        |   |  |         |     
|Provision for income taxes    |         |  | 47,610 |     |      |  | (27,280 | )      |   |  | 41,757  |     
|                              |         |  |        |     |      |  |         |        |   |  |         |     

Significant components of the Companys future income tax assets and
liabilities are as follows:

|                                   |                                                 |  |         |         |      |  |         |         |  
|---------------------------------- | ----------------------------------------------- |  | ------- | ------- | ---- |  | ------- | ------- | -
|                                   |                                                 |  | 2002    |         | 2001
|                                   |                                                 |  | $000    |         | $000
|Future tax assets                  |                                                 |  |         |         |      |  |         |        
|                                   | Non-capital loss carryforwards                  |  |         | 61,399  |      |  |         | 38,187  |  
|                                   | Accounts payable and other accruals             |  |         | 45,417  |      |  |         | 63,192  |  
|                                   | Pension and post retirement benefits            |  |         |        |      |  |         | 5,660   |  
|                                   | Less: valuation allowance                       |  |         | (20,717 | )    |  |         | (10,840 | )
|                                   |                                                 |  |         |         |      |  |         |        
|                                   | Total future tax assets                         |  |         | 86,099  |      |  |         | 96,199  |  
|                                   |                                                 |  |         |         |      |  |         |        
|Future tax liabilities             |                                                 |  |         |         |      |  |         |        
|                                   | Tax depreciation in excess of book depreciation |  |         | 52,845  |      |  |         | 71,476  |  
|                                   | Pension obligations                             |  |         | 14,823  |      |  |         |        |  
|                                   | Intangible assets                               |  |         | 398,157 |      |  |         | 404,983 |  
|                                   | Other assets                                    |  |         | 11,266  |      |  |         | 13,813  |  
|                                   |                                                 |  |         |         |      |  |         |        
|                                   | Total future tax liabilities                    |  |         | 477,091 |      |  |         | 490,272 |  
|                                   |                                                 |  |         |         |      |  |         |        
|Net future tax liability           |                                                 |  | 390,992 |         |      |  | 394,073 |        
|Current net future tax asset       |                                                 |  | 30,013  |         |      |  | 33,243  |        
|                                   |                                                 |  |         |         |      |  |         |        
|Net long term future tax liability |                                                 |  | 421,005 |         |      |  | 427,316 |        
|                                   |                                                 |  |         |         |      |  |         |        

As at August 31, 2002, the Company had non capital loss carry forwards for
income tax purposes of $197,592,000, that expire as follows: 2006
- $1,769,000,
2007 - $9,397,000, 2008 - $55,245,000, 2009 - $39,396,000, 2010 and thereafter
- $91,785,000.

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12. STATEMENTS OF CASH FLOWS

The following amounts comprise the net change in non-cash operating
accounts included in the statements of cash flows:

|                                         |  |      |         |      |  |      |         |   |  |  |         |  
|---------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- | - |  |  | ------- | -
|                                         |  | 2002 |         | 2001 |  | 2000
|                                         |  | $000 |         | $000 |  | $000
|Cash generated (utilized) by             |  |      |         |      |  |      |         |   |  |  |         |  
|Accounts receivable                      |  |      | (36,426 | )    |  |      | 93,424  |   |  |  | 38,422  |  
|Broadcast rights                         |  |      | (16,548 | )    |  |      | (55,674 | ) |  |  | 31,817  |  
|Inventory                                |  |      | 12,342  |      |  |      | (7,342  | ) |  |  |        |  
|Other current assets                     |  |      | 977     |      |  |      | (8,788  | ) |  |  | 4,747   |  
|Other assets                             |  |      | (1,195  | )    |  |      | 24,878  |   |  |  |        |  
|Accounts payable and accrued liabilities |  |      | (67,947 | )    |  |      | (35,769 | ) |  |  | (44,586 | )
|Deferred revenue                         |  |      | (4,120  | )    |  |      | 1,494   |   |  |  |        |  
|Income taxes payable                     |  |      | 33,904  |      |  |      | (14,154 | ) |  |  | 30,533  |  
|Broadcast rights accounts payable        |  |      | 11,925  |      |  |      | (5,816  | ) |  |  | (40,551 | )
|                                         |  |      |         |      |  |      |         |   |  |  |         |  
|                                         |  |      | (67,088 | )    |  |      | (7,747  | ) |  |  | 20,382  |  
|                                         |  |      |         |      |  |      |         |   |  |  |         |  

The following amounts were paid on account of interest and income taxes:

|             |  |      |         |      |  |      |         |  |  |  |        | 
|------------ |  | ---- | ------- | ---- |  | ---- | ------- |  |  |  | ------ | 
|             |  | 2002 |         | 2001 |  | 2000
|             |  | $000 |         | $000 |  | $000
|Interest     |  |      | 258,719 |      |  |      | 237,264 |  |  |  | 62,152 | 
|Income taxes |  |      | 23,005  |      |  |      | 72,923  |  |  |  | 49,128 | 

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13.     RETIREMENT ASSETS AND OBLIGATIONS

Information on the Companys pension and post retirement benefit plans follows:

|                                                              |  |                  |         |                          |  |      |         |      |  |  |         |   |  |  |         |  
|------------------------------------------------------------- |  | ---------------- | ------- | ------------------------ |  | ---- | ------- | ---- |  |  | ------- | - |  |  | ------- | -
|                                                              |  | Pension benefits |         | Post retirement benefits
|                                                              |  |                  |         |                          | 
|                                                              |  | 2002             |         | 2001                     |  | 2002 |         | 2001
|                                                              |  | $000             |         | $000                     |  | $000 |         | $000
|Plan
Assets                                                   |  |                  |         |                          |  |      |         |      |  |  |         |   |  |  |         |  
|Fair value  beginning of year                                |  |                  | 220,346 |                          |  |      | 96,351  |      |  |  |        |   |  |  |        |  
|Plan assets acquired                                          |  |                  | 8,163   |                          |  |      | 132,425 |      |  |  |        |   |  |  |        |  
|Investment income                                             |  |                  | 3,739   |                          |  |      | (2,444  | )    |  |  |        |   |  |  |        |  
|Employer contributions                                        |  |                  | 3,699   |                          |  |      | 609     |      |  |  | 400     |   |  |  |        |  
|Employee contributions                                        |  |                  | 5,800   |                          |  |      | 4,475   |      |  |  |        |   |  |  |        |  
|Benefits, refund of contributions and administrative expenses |  |                  | (7,027  | )                        |  |      | (11,070 | )    |  |  | (400    | ) |  |  |        |  
|                                                              |  |                  |         |                          |  |      |         |      |  |  |         |   |  |  |         |  
|Fair value  end of year                                      |  |                  | 234,720 |                          |  |      | 220,346 |      |  |  |        |   |  |  |        |  
|                                                              |  |                  |         |                          |  |      |         |      |  |  |         |   |  |  |         |  
|Plan Obligations                                              |  |                  |         |                          |  |      |         |      |  |  |         |   |  |  |         |  
|Accrued benefit obligation  beginning of year                |  |                  | 226,361 |                          |  |      | 77,704  |      |  |  | 35,121  |   |  |  | 5,816   |  
|Obligation acquired                                           |  |                  | 8,084   |                          |  |      | 132,425 |      |  |  |        |   |  |  | 26,927  |  
|Accrued interest on benefits                                  |  |                  | 18,252  |                          |  |      | 13,814  |      |  |  | 2,503   |   |  |  | 1,959   |  
|Current service cost                                          |  |                  | 15,174  |                          |  |      | 10,586  |      |  |  | 1,198   |   |  |  | 419     |  
|Past service costs                                            |  |                  | 11,868  |                          |  |      |        |      |  |  |        |   |  |  |        |  
|Benefits, refund of contributions                             |  |                  | (7,027  | )                        |  |      | (10,499 | )    |  |  | (400    | ) |  |  |        |  
|Experience loss                                               |  |                  | 4,900   |                          |  |      | 2,331   |      |  |  | 2,744   |   |  |  |        |  
|                                                              |  |                  |         |                          |  |      |         |      |  |  |         |   |  |  |         |  
|Accrued benefit obligation  end of year                      |  |                  | 277,612 |                          |  |      | 226,361 |      |  |  | 41,166  |   |  |  | 35,121  |  
|                                                              |  |                  |         |                          |  |      |         |      |  |  |         |   |  |  |         |  
|The Companys accrued benefit asset is determined as follows: |  |                  |         |                          |  |      |         |      |  |  |         |   |  |  |         |  
|Plan deficit                                                  |  |                  | (42,892 | )                        |  |      | (6,015  | )    |  |  | (41,166 | ) |  |  | (35,121 | )
|Unamortized net actuarial loss (gain)                         |  |                  | 41,662  |                          |  |      | 21,069  |      |  |  | 2,752   |   |  |  |        |  
|Unamortized transitional obligation (asset)                   |  |                  | (5,573  | )                        |  |      | (5,029  | )    |  |  | 4,938   |   |  |  | 5,377   |  
|Unamortized past service costs                                |  |                  | 11,542  |                          |  |      |        |      |  |  |        |   |  |  |        |  
|Valuation allowance                                           |  |                  | (916    | )                        |  |      | (1,002  | )    |  |  |        |   |  |  |        |  
|                                                              |  |                  |         |                          |  |      |         |      |  |  |         |   |  |  |         |  
|Accrued plan asset                                            |  |                  | 3,823   |                          |  |      | 9,023   |      |  |  | (33,476 | ) |  |  | (29,744 | )
|                                                              |  |                  |         |                          |  |      |         |      |  |  |         |   |  |  |         |  



| |                                                                                                        
| | -------------------------------------------------------------------------------------------------------
| | The valuation allowance represents the amount of surplus not recognized on the Companys balance sheet.
|
| | The Companys benefit expense is determined as follows:                                                

|                                                       |  |      |         |      |  |                  |         |      |  |      |        |      |  |  |       |                          |  |  |       |  |  |  |   | 
|------------------------------------------------------ |  | ---- | ------- | ---- |  | ---------------- | ------- | ---- |  | ---- | ------ | ---- |  |  | ----- | ------------------------ |  |  | ----- |  |  |  | - | 
|                                                       |  |      |         |      |  | Pension benefits |         |      |  |      |        |      |  |  |       | Post retirement benefits |  |  |       | 
|                                                       |  |      |         |      | 
|                                                       |  | 2002 |         | 2001 |  | 2000             |         | 2002 |  | 2001 |        | 2000
|                                                       |  | $000 |         | $000 |  | $000             |         | $000 |  | $000 |        | $000
|Current service cost                                   |  |      | 15,174  |      |  |                  | 10,586  |      |  |      | 1,806  |      |  |  | 1,198 |                          |  |  | 419   |  |  |  |  | 
|Employee contributions                                 |  |      | (5,800  | )    |  |                  | (4,475  | )    |  |      | (456   | )    |  |  |      |                          |  |  |      |  |  |  |  | 
|Accrued interest on benefits                           |  |      | 18,252  |      |  |                  | 13,814  |      |  |      | 2,790  |      |  |  | 2,503 |                          |  |  | 1,959 |  |  |  |  | 
|Expected return on plan assets                         |  |      | (19,174 | )    |  |                  | (16,451 | )    |  |      | (3,432 | )    |  |  |      |                          |  |  |      |  |  |  |  | 
|Amortization of transitional (asset) obligation        |  |      | (358    | )    |  |                  | (358    | )    |  |      |       |      |  |  | 439   |                          |  |  | 439   |  |  |  |  | 
|Amortization of past service costs                     |  |      | 527     |      |  |                  |        |      |  |      |       |      |  |  |      |                          |  |  |      |  |  |  |  | 
|Amortization of net experience losses                  |  |      | 57      |      |  |                  |        |      |  |      |       |      |  |  |      |                          |  |  |      |  |  |  |  | 
|Changes in valuation allowance                         |  |      | (86     | )    |  |                  | (61     | )    |  |      | (419   | )    |  |  |      |                          |  |  |      |  |  |  |  | 
|                                                       |  |      |         |      |  |                  |         |      |  |      |        |      |  |  |       |                          |  |  |       |  |  | 
|Benefit expense                                        |  |      | 8,592   |      |  |                  | 3,055   |      |  |      | 289    |      |  |  | 4,140 |                          |  |  | 2,817 |  |  |  |  | 
|Employer contribution to the defined
contribution plan |  |      | 1,552   |      |  |                  | 463     |      |  |      | 463    |      |  |  |      |                          |  |  |      |  |  |  |  | 
|                                                       |  |      |         |      |  |                  |         |      |  |      |        |      |  |  |       |                          |  |  |       |  |  | 
|Total pension and post retirement benefit
expense      |  |      | 10,144  |      |  |                  | 3,518   |      |  |      | 752    |      |  |  | 4,140 |                          |  |  | 2,817 |  |  |  |  | 
|                                                       |  |      |         |      |  |                  |         |      |  |      |        |      |  |  |       |                          |  |  |       |  |  | 



| |                                                                                                         
| | --------------------------------------------------------------------------------------------------------
| | Significant actuarial assumptions in measuring the Companys accrued benefit obligations are as follows:

|                                                         |  |  |           |   |  |  |           |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|-------------------------------------------------------- |  |  | --------- | - |  |  | --------- | - |  |  | ---- | - |  |  | ---- | - |  |  | ---- | - |  |  | ---- | -
|Discount rate                                            |  |  | 6.75-7.25 | % |  |  | 7.25      | % |  |  | 7.25 | % |  |  | 7.25 | % |  |  | 7.00 | % |  |  | 7.00 | %
|Expected long-term rate of return on pension
plan assets |  |  | 7.00-7.25 | % |  |  | 7.25-8.00 | % |  |  | 7.25 | % |  |  | 7.00 | % |  |  | 7.00 | % |  |  | 7.00 | %
|Rate of compensation increase                            |  |  | 3.50-4.00 | % |  |  | 4.00      | % |  |  | 4.00 | % |  |  | 4.00 | % |  |  | 4.00 | % |  |  | 4.00 | %

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14.     RELATED PARTY BALANCES AND TRANSACTIONS

Due from parent and affiliated companies consist of the following:

|                                                |                                                          |  |         |         |      |  |         |         | 
|----------------------------------------------- | -------------------------------------------------------- |  | ------- | ------- | ---- |  | ------- | ------- | 
|                                                |                                                          |  | 2002    |         | 2001
|                                                |                                                          |  | $000    |         | $000
|Due from parent, CanWest  non-interest bearing |                                                          |  | 25,651  |         |      |  | 32,289  |        
|Due from various affiliated companies          |                                                          |  |         |         |      |  |         |        
|                                                | CanWest Entertainment Inc.  non-interest bearing        |  |         | 59,516  |      |  |         | 59,516  | 
|                                                | Fireworks Entertainment Inc.  bearing interest at prime |  |         | 381,290 |      |  |         | 316,505 | 
|                                                |                                                          |  |         |         |      |  |         |        
|Due from parent and affiliated companies        |                                                          |  | 466,457 |         |      |  | 408,310 |        
|                                                |                                                          |  |         |         |      |  |         |        

The Company has entered into the following transactions with related parties.
The related parties are the parent of the Company and other affiliates:

|                                                                                    |  |      |        |      |  |      |        |  |  |  |       | 
|----------------------------------------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ----- | 
|                                                                                    |  | 2002 |        | 2001 |  | 2000
|                                                                                    |  | $000 |        | $000 |  | $000
|Operating expenses  acquisition of broadcast
rights  Fireworks Entertainment Inc. |  |      | 4,475  |      |  |      | 4,516  |  |  |  | 356   | 
|Interest income  Fireworks Entertainment Inc.                                      |  |      | 12,872 |      |  |      | 18,534 |  |  |  | 3,298 | 
|Interest expense  CanWest                                                          |  |      |       |      |  |      | 2,613  |  |  |  | 9,298 | 
|Management fee expense  CanWest                                                    |  |      |       |      |  |      | 7,600  |  |  |  | 9,000 | 
|Operating lease expense  CanWest                                                   |  |      | 1,600  |      |  |      |       |  |  |  |      | 

All transactions occur at the exchange amount agreed to by the parties.

15.     FINANCIAL INSTRUMENTS

Financial instruments consist of the following:

|                                           |  |          |           |       |  |          |           |       |  |  |           |  |  |  |           | 
|------------------------------------------ |  | -------- | --------- | ----- |  | -------- | --------- | ----- |  |  | --------- |  |  |  | --------- | 
|                                           |  | 2002     |           | 2001 
|                                           |  |          |           |      
|                                           |  | Carrying |           | Fair  |  | Carrying |           | Fair 
|                                           |  | value    |           | value |  | value    |           | value
|                                           |  | $000     |           | $000  |  | $000     |           | $000 
|Short term assets                          |  |          | 472,485   |       |  |          | 472,485   |       |  |  | 361,413   |  |  |  | 361,413   | 
|Other investments                          |  |          | 159,181   |       |  |          | 208,710   |       |  |  | 412,112   |  |  |  | 407,392   | 
|Short term liabilities                     |  |          | 406,616   |       |  |          | 406,616   |       |  |  | 435,337   |  |  |  | 435,337   | 
|Long term debt                             |  |          | 2,530,324 |       |  |          | 2,474,324 |       |  |  | 3,024,027 |  |  |  | 2,929,963 | 
|Other long term liabilities                |  |          | 86,217    |       |  |          | 86,217    |       |  |  | 88,809    |  |  |  | 88,809    | 
|Unrealized net loss on interest rate swaps |  |          |          |       |  |          | 56,000    |       |  |  |          |  |  |  | 94,064    | 
|Due from parent and affiliated companies   |  |          | 466,457   |       |  |          | 466,457   |       |  |  | 408,310   |  |  |  | 408,310   | 

The fair value of short term assets and liabilities, which include, cash,
accounts receivable, income taxes recoverable, bank loans and advances,
accounts payable and accrued liabilities and broadcast rights accounts payable
approximate their fair value due to the short term nature of these financial
instruments.

The fair value of other investments is primarily based on quoted market prices
for publicly traded securities, and the most recent purchase transactions and
agreements for non-listed securities.

The fair value of long term debt subject to floating interest rates
approximates the carrying value. The fair value of long term debt subject to
fixed interest rates is estimated by discounting future cash flows, including
interest payments, using rates currently available for debt of similar terms
and maturity.

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The fair values of other long term liabilities including business combination
restructuring accruals and broadcast rights accounts payable approximates their
carrying values.

The fair values of unrealized net loss on interest rate and cross currency
interest rate swaps are based on the amounts at which they could be settled
based on estimates of market rates.

Credit risk

The Company is exposed to credit risk, primarily in relation to accounts
receivable. Exposure to credit risk for advertiser accounts receivable is
affected by the concentration of individual balances with large advertising
agencies. The Company performs regular credit assessments of its customers and
provides allowances for potentially uncollectable accounts receivable.

Interest rate risk

The Company manages its exposure to fluctuations in interest rates through the
use of interest rate and cross currency interest rate swap agreements more
fully described in note 7.

16.     JOINTLY CONTROLLED ENTERPRISE

The following amounts included in the consolidated financial statements
represent the companys proportionate interest in TV3 Ireland.

|                              |                       |  |        |        |      |  |        |        |  
|----------------------------- | --------------------- |  | ------ | ------ | ---- |  | ------ | ------ | -
|                              |                       |  | 2002   |        | 2001
|                              |                       |  | $000   |        | $000
|Balance sheets                |                       |  |        |        |      |  |        |       
|Assets                        |                       |  |        |        |      |  |        |       
|                              | Current assets        |  |        | 9,329  |      |  |        | 7,106  |  
|                              | Long term assets      |  |        | 12,732 |      |  |        | 12,801 |  
|                              |                       |  |        |        |      |  |        |       
|                              |                       |  | 22,061 |        |      |  | 19,907 |       
|                              |                       |  |        |        |      |  |        |       
|Liabilities                   |                       |  |        |        |      |  |        |       
|                              | Current liabilities   |  |        | 32,906 |      |  |        | 5,700  |  
|                              | Long term liabilities |  |        | 4,643  |      |  |        | 29,486 |  
|                              |                       |  |        |        |      |  |        |       
|                              |                       |  | 37,549 |        |      |  | 35,186 |       
|                              |                       |  |        |        |      |  |        |       
|Statements of earnings        |                       |  |        |        |      |  |        |       
|Revenue                       |                       |  | 25,643 |        |      |  | 9,542  |       
|Expenses                      |                       |  | 24,630 |        |      |  | 8,051  |       
|                              |                       |  |        |        |      |  |        |       
|Net earnings                  |                       |  | 1,013  |        |      |  | 1,491  |       
|                              |                       |  |        |        |      |  |        |       
|Statements of cash flows      |                       |  |        |        |      |  |        |       
|Cash generated (utilized) by: |                       |  |        |        |      |  |        |       
|                              | Operating activities  |  |        | (1,936 | )    |  |        | 207    |  
|                              | Investing activities  |  |        | (130   | )    |  |        | (227   | )
|                              | Financing activities  |  |        | 2,903  |      |  |        | 334    |  
|                              |                       |  |        |        |      |  |        |       
|                              | Net increase in cash  |  |        | 837    |      |  |        | 314    |  
|                              |                       |  |        |        |      |  |        |       

17.     COMMITMENTS AND CONTINGENCIES

(a)  The Company has entered into various agreements for the right to broadcast
certain feature films and syndicated television programs in the future. These
agreements, which range in term from one to five years, generally commit the
Company to acquire specific programs or films or certain levels of future
productions. The acquisition of these broadcast rights is contingent on the
actual production and/or the airing of the programs or films. Management estimates that at August 31, 2002 these agreements will result
in future annual program and film expenditures of $250 million to $277 million.

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(b)  The Companys future minimum payments under the terms of its operating
lease commitments are as follows:

|     |  |  |            | 
|---- |  |  | ---------- | 
|2003 |  |  | 25,155,937 | 
|2004 |  |  | 22,332,208 | 
|2005 |  |  | 20,070,564 | 
|2006 |  |  | 16,946,527 | 
|2007 |  |  | 14,692,948 | 

(c)  On March 5, 2001, a statement of claim was filed against CanWest, the
Company and certain of the Companys subsidiaries by CBLs former minority
interests requesting, among other things, that their interests in CBL, be
purchased without minority discount. In addition, the claim alleges the
Company wrongfully terminated certain agreements and acted in an oppressive and
prejudicial manner towards the plaintiffs. The lawsuit seeks damages in excess
of $345 million. The Company believes the allegations are substantially
without merit and not likely to have a material adverse effect on its business,
financial condition or results of operation. The Company intends to vigorously
defend this lawsuit.

(d)  The Company is involved in various legal matters arising in the ordinary
course of business. The resolution of these matters is not expected to have a
material adverse effect on the Companys financial position, results of
operations or cash flows.

18.     SUBSEQUENT EVENT

Subsequent to the end of the 2002 fiscal year, the Companys parent, CanWest,
elected to redeem all of its outstanding Series 2 Preference Shares recorded at
$50.0 million for an aggregate redemption price of $57.7 million. The shares
were redeemed on December 18, 2002, and the Company financed the redemption
through its senior credit facility.

19.     SEGMENTED INFORMATION

The Company operates primarily within the publishing and online and
broadcasting industries in Canada, New Zealand, Ireland and Australia.

Each segment reported below operates as a strategic business unit with separate
management. Segment performance is measured primarily on the basis of net
income before tax in each jurisdiction. There are no significant inter-segment
items. Segmented information in Canadian dollars is as follows:

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|                                                        |      |  |            |           |              |  |             |         |         |  |       |         |              |  |      |        |  |  |  |         |   |  |  |          |   |  |  |           | 
|------------------------------------------------------- | ---- |  | ---------- | --------- | ------------ |  | ----------- | ------- | ------- |  | ----- | ------- | ------------ |  | ---- | ------ |  |  |  | ------- | - |  |  | -------- | - |  |  | --------- | 
|                                                        |      |  | Publishing |           |              |  |             |         |         |  |       |         |              |  |      |        |  |  | 
|                                                        |      |  | and Online |           | Broadcasting |  | Corporate   |         |         |  |      
|                                                        |      |  |            |           |              |  | and         |         |         |  |       |        
|                                                        |      |  | Canada     |           | Canada       |  | New Zealand |         | Ireland |  | other |         | Consolidated
|                                                        |      |  |            |           |              |  |             |         |         |  |       |         |             
|                                                        |      |  |            |           |              |  |             |         |         |  | TV    |         | Radio        |  |      |        |  |  |  |         |   |  |  |          |  
|                                                        |      |  |            |           |              |  |             |         |         |  |       |         |              |  |      |        |  |  |  |         |   |  |  |          |  
|                                                        |      |  | $000       |           | $000         |  | $000        |         | $000    |  | $000  |         | $000         |  | $000
|Revenue from external customers                         |      |  |            |           |              |  |             |         |         |  |       |         |              |  |      |        |  |  |  |         |   |  |  |          |   |  |  |          
|                                                        | 2002 |  |            | 1,270,336 |              |  |             | 691,888 |         |  |       | 69,079  |              |  |      | 60,724 |  |  |  | 28,317  |   |  |  |         |   |  |  | 2,120,344 | 
|                                                        | 2001 |  |            | 919,923   |              |  |             | 701,027 |         |  |       | 58,436  |              |  |      | 56,864 |  |  |  | 31,056  |   |  |  |         |   |  |  | 1,767,306 | 
|                                                        | 2000 |  |            |          |              |  |             | 489,896 |         |  |       | 72,983  |              |  |      | 29,981 |  |  |  | 27,409  |   |  |  |         |   |  |  | 620,269   | 
|Operating profit (loss) before
amortization             |      |  |            |           |              |  |             |         |         |  |       |         |              |  |      |        |  |  |  |         |   |  |  |          |   |  |  |          
|                                                        | 2002 |  |            | 288,028   |              |  |             | 191,092 |         |  |       | (1,938  | )            |  |      | 16,361 |  |  |  | 7,654   |   |  |  | (30,147  | ) |  |  | 471,050   | 
|                                                        | 2001 |  |            | 207,804   |              |  |             | 226,458 |         |  |       | (8,939  | )            |  |      | 14,301 |  |  |  | 2,748   |   |  |  | (8,302   | ) |  |  | 434,070   | 
|                                                        | 2000 |  |            |          |              |  |             | 166,418 |         |  |       | (12,036 | )            |  |      | 7,002  |  |  |  | (8,672  | ) |  |  | (11,396  | ) |  |  | 141,316   | 
|Amortization of intangibles and
goodwill                |      |  |            |           |              |  |             |         |         |  |       |         |              |  |      |        |  |  |  |         |   |  |  |          |   |  |  |          
|                                                        | 2002 |  |            | 17,500    |              |  |             |        |         |  |       |        |              |  |      |       |  |  |  |        |   |  |  |         |   |  |  | 17,500    | 
|                                                        | 2001 |  |            | 50,504    |              |  |             | 33,645  |         |  |       | 2,246   |              |  |      | 2,834  |  |  |  | 61      |   |  |  | 29       |   |  |  | 89,319    | 
|                                                        | 2000 |  |            |          |              |  |             | 16,217  |         |  |       | 2,198   |              |  |      | 1,441  |  |  |  | 192     |   |  |  | 29       |   |  |  | 20,077    | 
|Amortization of capital assets and
other                |      |  |            |           |              |  |             |         |         |  |       |         |              |  |      |        |  |  |  |         |   |  |  |          |   |  |  |          
|                                                        | 2002 |  |            | 44,986    |              |  |             | 25,924  |         |  |       | 2,574   |              |  |      | 2,086  |  |  |  | 1,869   |   |  |  | 2,661    |   |  |  | 80,100    | 
|                                                        | 2001 |  |            | 32,649    |              |  |             | 24,195  |         |  |       | 2,731   |              |  |      | 1,919  |  |  |  | 3,046   |   |  |  | 228      |   |  |  | 64,768    | 
|                                                        | 2000 |  |            |          |              |  |             | 14,267  |         |  |       | 3,109   |              |  |      | 889    |  |  |  | 4,271   |   |  |  | 15       |   |  |  | 22,551    | 
|Financing expenses (revenue)                            |      |  |            |           |              |  |             |         |         |  |       |         |              |  |      |        |  |  |  |         |   |  |  |          |   |  |  |          
|                                                        | 2002 |  |            | 238,521   |              |  |             | 125,170 |         |  |       | 261     |              |  |      | 188    |  |  |  | 1,728   |   |  |  | (110,862 | ) |  |  | 255,006   | 
|                                                        | 2001 |  |            | 227,464   |              |  |             | 113,751 |         |  |       | 104     |              |  |      | 234    |  |  |  | 3,374   |   |  |  | (76,084  | ) |  |  | 268,843   | 
|                                                        | 2000 |  |            |          |              |  |             | 59,745  |         |  |       | (213    | )            |  |      | 106    |  |  |  | 2,970   |   |  |  | (2,795   | ) |  |  | 59,813    | 
|Investment gains and dividend income net
of write-downs |      |  |            |           |              |  |             |         |         |  |       |         |              |  |      |        |  |  |  |         |   |  |  |          |   |  |  |          
|                                                        | 2002 |  |            |          |              |  |             |        |         |  |       |        |              |  |      |       |  |  |  |        |   |  |  | 37,084   |   |  |  | 37,084    | 
|                                                        | 2001 |  |            |          |              |  |             |        |         |  |       |        |              |  |      |       |  |  |  |        |   |  |  | 31,582   |   |  |  | 31,582    | 
|                                                        | 2000 |  |            |          |              |  |             |        |         |  |       |        |              |  |      |       |  |  |  |        |   |  |  | 103,901  |   |  |  | 103,901   | 
|Earnings (loss) before taxes                            |      |  |            |           |              |  |             |         |         |  |       |         |              |  |      |        |  |  |  |         |   |  |  |          |   |  |  |          
|                                                        | 2002 |  |            | (12,979   | )            |  |             | 31,898  |         |  |       | (4,898  | )            |  |      | 14,087 |  |  |  | 3,809   |   |  |  | 123,611  |   |  |  | 155,528   | 
|                                                        | 2001 |  |            | (100,046  | )            |  |             | 42,536  |         |  |       | (14,298 | )            |  |      | 9,314  |  |  |  | (3,733  | ) |  |  | 108,949  |   |  |  | 42,722    | 
|                                                        | 2000 |  |            |          |              |  |             | 76,189  |         |  |       | (17,130 | )            |  |      | 4,566  |  |  |  | (16,105 | ) |  |  | 95,256   |   |  |  | 142,776   | 

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|                                                                                         |      |  |            |           |              |  |             |           |         |  |         |         |              |  |        |         |  |  |         |        |  |  |         |         |  |  |           |           | 
|---------------------------------------------------------------------------------------- | ---- |  | ---------- | --------- | ------------ |  | ----------- | --------- | ------- |  | ------- | ------- | ------------ |  | ------ | ------- |  |  | ------- | ------ |  |  | ------- | ------- |  |  | --------- | --------- | 
|                                                                                         |      |  | Publishing |           |              |  |             |           |         |  |         |         |              |  |        |         |  |  |        
|                                                                                         |      |  | and Online |           | Broadcasting |  | Corporate   |           |         |  |        
|                                                                                         |      |  |            |           |              |  | and         |           |         |  |         |        
|                                                                                         |      |  | Canada     |           | Canada       |  | New Zealand |           | Ireland |  | other   |         | Consolidated
|                                                                                         |      |  |            |           |              |  |             |           |         |  |         |         |             
|                                                                                         |      |  |            |           |              |  |             |           |         |  | TV      |         | Radio        |  |        |         |  |  |         |        |  |  |         |         | 
|                                                                                         |      |  |            |           |              |  |             |           |         |  |         |         |              |  |        |         |  |  |         |        |  |  |         |         | 
|                                                                                         |      |  | $000       |           | $000         |  | $000        |           | $000    |  | $000    |         | $000         |  | $000  
|Capital expenditures                                                                     |      |  |            |           |              |  |             |           |         |  |         |         |              |  |        |         |  |  |         |        |  |  |         |         |  |  |           |          
|                                                                                         | 2002 |  |            | 17,063    |              |  |             | 14,392    |         |  |         | 1,518   |              |  |        | 1,207   |  |  |         | 479    |  |  |         | 17,613  |  |  |           | 52,272    | 
|                                                                                         | 2001 |  |            | 21,932    |              |  |             | 16,465    |         |  |         | 2,163   |              |  |        | 1,090   |  |  |         | 86     |  |  |         |        |  |  |           | 41,736    | 
|                                                                                         | 2000 |  |            |          |              |  |             | 11,156    |         |  |         | 189     |              |  |        | 637     |  |  |         | 2,635  |  |  |         |        |  |  |           | 14,617    | 
|Property, plant and equipment                                                            |      |  |            |           |              |  |             |           |         |  |         |         |              |  |        |         |  |  |         |        |  |  |         |         |  |  |           |          
|                                                                                         | 2002 |  |            | 490,932   |              |  |             | 122,956   |         |  |         | 22,635  |              |  |        | 8,481   |  |  |         | 4,183  |  |  |         | 11,513  |  |  |           | 660,700   | 
|                                                                                         | 2001 |  |            | 523,381   |              |  |             | 130,211   |         |  |         | 22,099  |              |  |        | 8,781   |  |  |         | 4,288  |  |  |         | 415     |  |  |           | 689,175   | 
|Intangibles                                                                              |      |  |            |           |              |  |             |           |         |  |         |         |              |  |        |         |  |  |         |        |  |  |         |         |  |  |           |          
|2002                                                                                     |      |  | 478,439    |           |              |  | 491,157     |           |         |  | 47,657  |         |              |  | 75,333 |         |  |  | 2,219   |        |  |  | 1,653   |         |  |  | 1,096,458 |          
|2001                                                                                     |      |  | 450,239    |           |              |  | 513,807     |           |         |  | 43,851  |         |              |  | 70,020 |         |  |  | 1,330   |        |  |  | 1,165   |         |  |  | 1,080,412 |          
|Goodwill                                                                                 |      |  |            |           |              |  |             |           |         |  |         |         |              |  |        |         |  |  |         |        |  |  |         |         |  |  |           |          
|2002                                                                                     |      |  | 1,920,333  |           |              |  | 604,752     |           |         |  | 19,613  |         |              |  | 54,323 |         |  |  | 1,223   |        |  |  |        |         |  |  | 2,600,244 |          
|2001                                                                                     |      |  | 2,060,559  |           |              |  | 662,733     |           |         |  | 19,613  |         |              |  | 53,039 |         |  |  | 1,223   |        |  |  |        |         |  |  | 2,797,167 |          
|Total assets                                                                             |      |  |            |           |              |  |             |           |         |  |         |         |              |  |        |         |  |  |         |        |  |  |         |         |  |  |           |          
|                                                                                         | 2002 |  |            | 3,219,846 |              |  |             | 1,588,000 |         |  |         | 141,677 |              |  |        | 150,176 |  |  |         | 21,530 |  |  |         | 618,432 |  |  |           | 5,739,661 | 
|                                                                                         | 2001 |  |            | 3,360,423 |              |  |             | 1,721,356 |         |  |         | 133,018 |              |  |        | 141,761 |  |  |         | 21,950 |  |  |         | 773,704 |  |  |           | 6,152,212 | 
|Reconciliation of net earnings
before taxes to net earnings 
year ended August 31, 2002 |      |  |            |           |              |  |             |           |         |  |         |         |              |  |        |         |  |  |         |        |  |  |         |         |  |  |           |          
|Earnings (loss) before income tax                                                        |      |  | (12,979    | )         |              |  | 31,898      |           |         |  | (4,898  | )       |              |  | 14,087 |         |  |  | 3,809   |        |  |  | 123,611 |         |  |  | 155,528   |          
|(Provision for) recovery of
income taxes                                                 |      |  | (8,731     | )         |              |  | (6,595      | )         |         |  | 42      |         |              |  | 94     |         |  |  | (612    | )      |  |  | (31,808 | )       |  |  | (47,610   | )        
|Minority interests                                                                       |      |  | 4,330      |           |              |  |            |           |         |  |        |         |              |  |       |         |  |  |        |        |  |  |        |         |  |  | 4,330     |          
|Interest in loss of Network
TEN                                                          |      |  |           |           |              |  |            |           |         |  |        |         |              |  |       |         |  |  |        |        |  |  | (11,815 | )       |  |  | (11,815   | )        
|Interest in loss of other equity
accounted affiliates                                    |      |  |           |           |              |  | (1,523      | )         |         |  |        |         |              |  |       |         |  |  |        |        |  |  |        |         |  |  | (1,523    | )        
|Realized translation
adjustments                                                         |      |  |           |           |              |  |            |           |         |  |        |         |              |  |       |         |  |  |        |        |  |  | (1,000  | )       |  |  | (1,000    | )        
|                                                                                         |      |  |            |           |              |  |             |           |         |  |         |         |              |  |        |         |  |  |         |        |  |  |         |         |  |  |           |          
|Net earnings (loss) for the year                                                         |      |  | (17,380    | )         |              |  | 23,780      |           |         |  | (4,856  | )       |              |  | 14,181 |         |  |  | 3,197   |        |  |  | 78,988  |         |  |  | 97,910    |          
|                                                                                         |      |  |            |           |              |  |             |           |         |  |         |         |              |  |        |         |  |  |         |        |  |  |         |         |  |  |           |          
|Reconciliation of net earnings
before taxes to net earnings 
year ended August 31, 2001 |      |  |            |           |              |  |             |           |         |  |         |         |              |  |        |         |  |  |         |        |  |  |         |         |  |  |           |          
|Earnings (loss) before income tax                                                        |      |  | (100,046   | )         |              |  | 42,536      |           |         |  | (14,298 | )       |              |  | 9,314  |         |  |  | (3,733  | )      |  |  | 108,949 |         |  |  | 42,722    |          
|(Provision for) recovery of
income taxes                                                 |      |  | 18,304     |           |              |  | 35,099      |           |         |  | 2,821   |         |              |  | (614   | )       |  |  | 269     |        |  |  | (28,599 | )       |  |  | 27,280    |          
|Minority interests                                                                       |      |  |           |           |              |  | (2,531      | )         |         |  |        |         |              |  | (665   | )       |  |  |        |        |  |  |        |         |  |  | (3,196    | )        
|Interest in earnings of Network
TEN                                                      |      |  |           |           |              |  |            |           |         |  |        |         |              |  |        |         |  |  |        |        |  |  | 52,567  |         |  |  | 52,567    |          
|Interest in earnings (loss) of
other equity
accounted affiliates                         |      |  | (16,385    | )         |              |  | 1,894       |           |         |  |        |         |              |  |        |         |  |  |        |        |  |  |        |         |  |  | (14,491   | )        
|Realized translation
adjustments                                                         |      |  |           |           |              |  |            |           |         |  |        |         |              |  |        |         |  |  |        |        |  |  | (7,200  | )       |  |  | (7,200    | )        
|                                                                                         |      |  |            |           |              |  |             |           |         |  |         |         |              |  |        |         |  |  |         |        |  |  |         |         |  |  |           |          
|Net earnings (loss) for the year                                                         |      |  | (98,127    | )         |              |  | 76,998      |           |         |  | (11,477 | )       |              |  | 8,035  |         |  |  | (3,464  | )      |  |  | 125,717 |         |  |  | 97,682    |          
|                                                                                         |      |  |            |           |              |  |             |           |         |  |         |         |              |  |        |         |  |  |         |        |  |  |         |         |  |  |           |          
|Reconciliation of net earnings
before taxes to net earnings 
year ended August 31, 2000 |      |  |            |           |              |  |             |           |         |  |         |         |              |  |        |         |  |  |         |        |  |  |         |         |  |  |           |          
|Earnings (loss) before income tax                                                        |      |  |           |           |              |  | 76,189      |           |         |  | (17,130 | )       |              |  | 4,566  |         |  |  | (16,105 | )      |  |  | 95,256  |         |  |  | 142,776   |          
|(Provision for) recovery of
income taxes                                                 |      |  |           |           |              |  | (12,008     | )         |         |  | 988     |         |              |  | (1,285 | )       |  |  | 1,754   |        |  |  | (31,206 | )       |  |  | (41,757   | )        
|Minority interests                                                                       |      |  |           |           |              |  | (2,607      | )         |         |  |        |         |              |  | (268   | )       |  |  | 5,049   |        |  |  |        |         |  |  | 2,174     |          
|Interest in earnings of Network
TEN                                                      |      |  |           |           |              |  |            |           |         |  |        |         |              |  |       |         |  |  |        |        |  |  | 72,194  |         |  |  | 72,194    |          
|Interest in earnings of WIC                                                              |      |  |           |           |              |  | 2,286       |           |         |  |        |         |              |  |       |         |  |  |        |        |  |  |        |         |  |  | 2,286     |          
|Realized translation
adjustments                                                         |      |  |           |           |              |  |            |           |         |  |         |         |              |  |       |         |  |  |        |        |  |  | (1,300  | )       |  |  | (1,300    | )        
|                                                                                         |      |  |            |           |              |  |             |           |         |  |         |         |              |  |        |         |  |  |         |        |  |  |         |         |  |  |           |          
|Net earnings (loss) for the year                                                         |      |  |            |           |              |  | 63,860      |           |         |  | (16,142 | )       |              |  | 3,013  |         |  |  | (9,302  | )      |  |  | 134,944 |         |  |  | 176,373   |          
|                                                                                         |      |  |            |           |              |  |             |           |         |  |         |         |              |  |        |         |  |  |         |        |  |  |         |         |  |  |           |          

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20. UNITED STATES ACCOUNTING PRINCIPLES

These consolidated financial statements have been prepared in accordance with
Canadian generally accepted accounting principles (GAAP). In certain aspects
GAAP as applied in the United States (U.S.) differs from Canadian GAAP.

Principal differences affecting the Company

Comprehensive income

Comprehensive income, defined as all changes in equity other than those
resulting from investments by owners and distributions to owners, must be
reported under U.S. GAAP. There is no similar requirement under Canadian GAAP.

Pre-operating costs

In the U.S., pre-operating costs are expensed in the period incurred. In
accordance with Canadian GAAP, the Company defers pre-operating costs until
commencement of commercial operations and amortizes the deferred costs over a
period of five years.

Foreign currency translation

In the U.S., distributions from self-sustaining foreign operations do not
result in a realization of the cumulative translation adjustments account.
Realization of such foreign currency translation adjustments occurs only upon
the sale of all or a part of the investment giving rise to the translation
adjustments. In accordance with Canadian GAAP, reductions in the net investment
in self-sustaining foreign operations result in a proportionate reduction in
the cumulative foreign currency translation adjustment accounts.

Programming Commitments

Under Canadian GAAP, certain programming commitments related to an acquisition
imposed by regulatory requirements were accrued in the purchase equation.
Under U.S. GAAP, these costs are expensed as incurred.

Equity accounted affiliates

Under U.S. GAAP, investments placed in trust due to regulatory requirements
must be accounted for at cost. Under Canadian GAAP, these investments are
accounted as cost, equity or consolidated investments based on the level of
influence that the investor has over the investment.

Investment in WIC on an equity basis

Under Canadian GAAP, the investment in WIC was accounted for using the equity
method during the period that this investment was held in trust pending
completion of the regulatory approval process. Under US GAAP, the investment
was accounted for on a cost basis then, as a result of receiving approval to
complete the purchase of WIC, the Company changed its method of accounting for
WIC to the equity method. The change in accounting policy was retroactively
applied as required under APB Opinion No. 18, The Equity Method of Accounting
for Investments in Common Stock. Effective July 6, 2000, the Company
consolidated its investment in WIC for both Canadian and US GAAP purposes.

Impairment of long-lived assets

Under U.S. GAAP, the Company recognizes an impairment loss on property,
equipment and broadcast licences and circulation if the undiscounted expected
future cash flows are less than the carrying value. The impairment loss
recognized would be an amount equal to the difference between the carrying
amount and the fair vale of the assets. Under Canadian GAAP, the impairment
loss would be in the amount equal to the difference between the carrying amount
and the undiscounted expected future cash flows.

Under U.S. GAAP, goodwill associated with assets acquired in a purchase
business combination is included in impairment evaluations of other long-lived
assets when event or circumstances exist that indicate the carrying value of
those assets may not be recoverable. In addition, impairments of goodwill
would be recognized when a review indicates that the goodwill will not be
recoverable, as determined based on projected income and cash flows on a
undiscounted basis from the underlying operations. In such circumstances, the
goodwill will be reduced to the estimated recoverable amount. Under Canadian
GAAP, prior to the acquisition of WIC and CanWest Publications, the Company has
not had any significant goodwill arising on its acquisitions.

The Company regularly assesses the carrying value of its assets and has
determined that there is no impairment in long-lived assets at this time.

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Investment in marketable securities

In the U.S., investment assets classified as available for sale are carried
at market, and unrealized temporary gains and losses are included, net of tax,
in accumulated comprehensive income. In accordance with Canadian GAAP, the
Company carries its investment in marketable securities at lower of cost and
net realizable value. A provision for loss in value of marketable securities
is made when a decline in market value is considered other than temporary.

Effect of tax rate changes

Under U.S. GAAP, changes in tax rates are applied to reduce or increase future
income tax assets or liabilities when the proposed tax rate change has received
legislative approval. Under Canadian GAAP, tax rate changes are applied when
the change in tax rate is considered substantively enacted.

Cash flow statement

The Canadian accounting standard for the preparation of cash flow statements is
consistent with the guidance provided under IAS 7, and accordingly, the cash
flow statements presented herein have not been reconciled to U.S. GAAP under
the accommodation provided by the Securities and Exchange Commission of the
United States (SEC).

Proportionate Consolidation

In the U.S., investments in jointly controlled entities are accounted as equity
investments. Canadian GAAP requires the accounts of jointly controlled
enterprises to be proportionately consolidated. This accounting difference
applies to the Companys investment in TV3 Ireland.

Accounting for derivative instruments and hedging activities

Under U.S. GAAP, entities are required to recognize all derivative instruments
as either assets or liabilities in the balance sheet and measure those
instruments at fair value. The changes in fair value of the derivative are
included either in the statement of earnings or other comprehensive income
depending on the nature of the instrument. Under Canadian GAAP, hedging
derivatives are eligible for hedge accounting if certain criteria are met.
Non-hedging derivatives are recognized at their fair value as either assets or
liabilities.

Debt classification

Effective for 2002, in accordance with new requirements under Canadian GAAP
which are consistent with US GAAP, the Company has classified all debt maturing
in the following twelve months as current if refinancing was not in place.
Previously under Canadian GAAP, debt which the Company intended to refinance
was classified as long term. For 2001 under US GAAP this debt was reclassified
as current.

Classification of Equity

Under Canadian GAAP, the Companys junior subordinated notes are classified as
equity instruments because the Company has the option of settling all principal
and interest obligations with shares of the Company. Under U.S. GAAP, these
debentures are classified as debt in accordance with their legal form.

Cumulative effect of the prospective adoption of new accounting pronouncements

Under U.S. GAAP, the transitional impairment of goodwill related to Network TEN
is recorded as a charge to net earnings in accordance with Statement of
Financial Accounting Standard No. 142, Goodwill and Other Intangibles, where as
under Canadian GAAP it is recorded as a charge to opening retained earnings.
The principles and methods for computing impairment in accordance with FAS 142
are similar to those prescribed under Canadian GAAP as described in notes 1 and
3.

Integration costs related to CanWest Publications

Under Canadian GAAP, certain integration costs related to the CanWest
Publications acquisition were accrued in the purchase equation. Under US GAAP,
these costs are expensed as incurred.

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New accounting standards

a) Accounting for Asset Retirement Obligations

In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 143, Accounting for Asset Retirement
Obligations.FAS 143 requires that an asset retirement obligation be
recognized as a liability, measured at fair value, in the period in which the
obligation is incurred if a reasonable estimate of fair value can be made. The
associated asset retirement costs are capitalized as part of the carrying
amount of the long lived assets and amortized to expense over the assets useful
life. FAS 143 is effective for financial statements issued for fiscal years
beginning after June 15, 2002. The Company is currently considering the impact
of FAS 143.

b) Accounting for the Impairment or Disposal of Long-Lived Assets

In fiscal 2003, the Company will adopt new standards approved by the Financial
Accounting Standards Board, Statement of Financial Accounting Standard No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets. The Standard
requires that an impairment loss should be recognized if the carrying amount of
a long-lived asset is not recoverable and exceeds its fair value for assets in
use. For long-lived assets classified as held for sale they should be measured
at the lower of their carrying amount or fair value less cost to sell. The
standard also changes the criteria for classification of operating results as
discontinued operations. FAS 144 is effective for financial statements
prepared beginning on or after December 15, 2001. The Company is currently
considering the impact of FAS 144.

c) Technical corrections

In April 2002, Statement of Financial Accounting Standard No. 145 was issued
rescinding the requirement to include gains and losses on the settlement of
debt as extraordinary items. FAS 145 is applicable for fiscal years beginning
on or after May 15, 2002. The standard has been adopted by the Company with no
impact.

d) Accounting for costs associated with exit or disposal activities

In June, 2002, Statement of Financial Accounting Standard No. 146 was issued.
The standard requires that liabilities for exit or disposal activity costs be
recognized and measured at fair value when the liability is incurred. This
standard is effective for disposal activities initiated after December 31,
2002.

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Reconciliation of financial statements

Consolidated statements of earnings

The following is a reconciliation of net earnings reflecting the differences
between Canadian and U.S. GAAP:

|                                                                                                                                                      |  |      |         |      |  |      |         |   |  |  |         |  
|----------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- | - |  |  | ------- | -
|                                                                                                                                                      |  | 2002 |         | 2001 |  | 2000
|                                                                                                                                                      |  | $000 |         | $000 |  | $000
|Net earnings in accordance with Canadian GAAP                                                                                                         |  |      | 97,910  |      |  |      | 97,682  |   |  |  | 176,373 |  
|Pre-operating costs  net of tax of $1,331 (2001  $1,175, 2000 -
$544)                                                                               |  |      | (100    | )    |  |      | 3,337   |   |  |  | 2,788   |  
|Realization of cumulative translation losses  net of
tax of nil                                                                                      |  |      | 1,000   |      |  |      | 7,200   |   |  |  | 1,300   |  
|Reversal of amortization of goodwill related to future
programming costs imposed by regulatory requirement on business
combination, net of tax of nil |  |      |        |      |  |      | 938     |   |  |  |        |  
|Programming costs imposed by regulatory requirement, net of tax of
$2,438 (2001 - $774)                                                               |  |      | (3,232  | )    |  |      | (1,026  | ) |  |  |        |  
|Integration costs related to CanWest Publications net of tax of $827                                                                                  |  |      | (1,470  | )    |  |      |        |   |  |  |        |  
|Equity accounted affiliates in trust, net of tax of nil                                                                                               |  |      | 3,375   |      |  |      | (3,375  | ) |  |  |        |  
|Reclassification of interest on junior subordinated notes
from equity net of tax of $41,372 (2001 - $29,812)                                          |  |      | (64,711 | )    |  |      | (46,328 | ) |  |  |        |  
|Timing of tax rate enactment                                                                                                                          |  |      |        |      |  |      | 14,832  |   |  |  | (14,832 | )
|Investment in WIC on an equity basis net of tax of nil (2001  nil,
2000 - $22,452)                                                                   |  |      |        |      |  |      |        |   |  |  | 47,045  |  
|Amortization of WIC goodwill adjustment resulting from
retroactive equity accounting of WIC upon regulatory approval
net of tax of nil                |  |      |        |      |  |      | (1,576  | ) |  |  |        |  
|                                                                                                                                                      |  |      |         |      |  |      |         |   |  |  |         |  
|Net earnings in accordance with U.S. GAAP before cumulative effect
of adoption of new accounting policy                                               |  |      | 32,772  |      |  |      | 71,684  |   |  |  | 212,674 |  
|Cumulative effect of adoption of new goodwill and intangibles
accounting policy net of tax of $2,500                                                  |  |      | (45,269 | )    |  |      |        |   |  |  |        |  
|                                                                                                                                                      |  |      |         |      |  |      |         |   |  |  |         |  
|Net earnings (loss) in accordance with U.S. GAAP                                                                                                      |  |      | (12,497 | )    |  |      | 71,684  |   |  |  | 212,674 |  
|Amortization of goodwill and indefinite life intangibles net of tax
of 2001 - $11,975 (2000- $9,106)                                                  |  |      |        |      |  |      | 63,506  |   |  |  | 11,810  |  
|Amortization of goodwill and indefinite life intangibles in equity
accounted affiliates net of tax of nil                                             |  |      |        |      |  |      | 6,211   |   |  |  | 4,225   |  
|                                                                                                                                                      |  |      |         |      |  |      |         |   |  |  |         |  
|Net earnings (loss) in accordance with U.S. GAAP adjusted to
exclude amortization expense recognized in 2001 and 2000                                 |  |      | (12,497 | )    |  |      | 141,401 |   |  |  | 228,709 |  
|                                                                                                                                                      |  |      |         |      |  |      |         |   |  |  |         |  

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Statements of comprehensive
income (loss)Comprehensive income (loss) current periods

|                                                                                                                                                              |                                   |  |         |        |      |  |         |       |  |  |         |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------- |  | ------- | ------ | ---- |  | ------- | ----- |  |  | ------- | ------- | -
|                                                                                                                                                              |                                   |  | 2002    |        | 2001 |  | 2000   
|                                                                                                                                                              |                                   |  | $000    |        | $000 |  | $000   
|Net earnings in accordance with U.S. GAAP                                                                                                                     |                                   |  | (12,497 | )      |      |  | 71,684  |       |  |  | 212,674 |        
|                                                                                                                                                              |                                   |  |         |        |      |  |         |       |  |  |         |        
|Other comprehensive income, net of tax:                                                                                                                       |                                   |  |         |        |      |  |         |       |  |  |         |        
|                                                                                                                                                              | Foreign currency translation gain |  |         | 24,636 |      |  |         | 6,059 |  |  |         | (52,058 | )
|                                                                                                                                                              |                                   |  |         |        |      |  |         |       |  |  |         |        
|Unrealized gains (losses) on interest rate and cross
currency interest rate swaps, net of tax of $16,748 (2001
 $39,804, 2000 - $4,136)                      |                                   |  | 21,316  |        |      |  | (50,660 | )     |  |  | (5,264  | )      
|Less: reclassification of foreign currency translation
gains on US$ denominated debt to statement of earnings,
net of tax of $3,478 (2001 - $404, 2000  nil) |                                   |  | (4,427  | )      |      |  | 515     |       |  |  |        |        
|                                                                                                                                                              |                                   |  |         |        |      |  |         |       |  |  |         |        
|                                                                                                                                                              |                                   |  | 16,889  |        |      |  | (50,145 | )     |  |  | (5,264  | )      
|                                                                                                                                                              |                                   |  |         |        |      |  |         |       |  |  |         |        
|Unrealized gains (losses) on securities available for sale,
net of tax of nil (2001 - $5,755, 2000 - $3,624)                                                  |                                   |  | 31,387  |        |      |  | (73,178 | )     |  |  | 36,460  |        
|Reversal of unrealized gains on sale of security available
for sale, net of tax of $nil (2001  $486, 2000 - $2,529)                                          |                                   |  | 60,000  |        |      |  | (987    | )     |  |  | (7,332  | )      
|                                                                                                                                                              |                                   |  |         |        |      |  |         |       |  |  |         |        
|                                                                                                                                                              |                                   |  | 91,387  |        |      |  | (74,165 | )     |  |  | 29,128  |        
|                                                                                                                                                              |                                   |  |         |        |      |  |         |       |  |  |         |        
|Comprehensive income (loss)                                                                                                                                   |                                   |  | 120,415 |        |      |  | (46,567 | )     |  |  | 184,480 |        
|                                                                                                                                                              |                                   |  |         |        |      |  |         |       |  |  |         |        

Other comprehensive income (loss)  accumulated balances

|                          |  |             |         |             |  |             |         |            |  |  |         |   |  |  |          |  
|------------------------- |  | ----------- | ------- | ----------- |  | ----------- | ------- | ---------- |  |  | ------- | - |  |  | -------- | -
|                          |  |             |         |             |  | Unrealized  |         | Unrealized |  |  |         |  
|                          |  | Foreign     |         | gains       |  | gains       |         |            |  | 
|                          |  | currency    |         | (losses) on |  | (losses) on |         |            |  | 
|                          |  | translation |         | securities  |  | swaps       |         | Total     
|                          |  |             |         |             |  |             |         |           
|                          |  | $000        |         | $000        |  | $000        |         | $000      
|Balance  August 31, 1999 |  |             | (33,725 | )           |  |             | 3,179   |            |  |  | 3,248   |   |  |  | (27,898  | )
|Change during 2000        |  |             | (52,058 | )           |  |             | 29,128  |            |  |  | (5,264  | ) |  |  | (28,194  | )
|                          |  |             |         |             |  |             |         |            |  |  |         |   |  |  |          |  
|Balance  August 31, 2000 |  |             | (85,783 | )           |  |             | 32,307  |            |  |  | (2,016  | ) |  |  | (55,492  | )
|Change during 2001        |  |             | 6,059   |             |  |             | (74,165 | )          |  |  | (50,145 | ) |  |  | (118,251 | )
|                          |  |             |         |             |  |             |         |            |  |  |         |   |  |  |          |  
|Balance  August 31, 2001 |  |             | (79,724 | )           |  |             | (41,858 | )          |  |  | (52,161 | ) |  |  | (173,743 | )
|Change during 2002        |  |             | 24,636  |             |  |             | 91,387  |            |  |  | 16,889  |   |  |  | 132,912  |  
|                          |  |             |         |             |  |             |         |            |  |  |         |   |  |  |          |  
|Balance  August 31, 2002 |  |             | (55,088 | )           |  |             | 49,529  |            |  |  | (35,272 | ) |  |  | (40,831  | )
|                          |  |             |         |             |  |             |         |            |  |  |         |   |  |  |          |  

33



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Consolidated balance sheets

Balance sheet captions restated to reflect the above items are presented below:

|                                              |  |            |           |      |  |  |           |  
|--------------------------------------------- |  | ---------- | --------- | ---- |  |  | --------- | -
|                                              |  | August 31,
|                                              |  |           
|                                              |  | 2002       |           | 2001
|                                              |  |            |           |     
|                                              |  |            | $000      |      |  |  | $000      |  
|Assets                                        |  |            |           |      |  |  |           |  
|Current assets                                |  |            | 634,609   |      |  |  | 538,780   |  
|Investment in Network TEN                     |  |            | 4,494     |      |  |  | 107,210   |  
|Property,
plant and equipment                 |  |            | 660,700   |      |  |  | 689,175   |  
|Intangibles and goodwill                      |  |            | 3,714,768 |      |  |  | 3,895,644 |  
|Due from parent and affiliated companies      |  |            | 466,457   |      |  |  | 408,310   |  
|Other investments                             |  |            | 208,710   |      |  |  | 366,879   |  
|Other assets                                  |  |            | 108,385   |      |  |  | 110,396   |  
|                                              |  |            |           |      |  |  |           |  
|                                              |  |            | 5,798,123 |      |  |  | 6,116,394 |  
|                                              |  |            |           |      |  |  |           |  
|Liabilities                                   |  |            |           |      |  |  |           |  
|Current liabilities                           |  |            | 586,672   |      |  |  | 641,116   |  
|Long-term debt                                |  |            | 3,335,517 |      |  |  | 3,687,962 |  
|Other liabilities                             |  |            | 115,163   |      |  |  | 150,923   |  
|Future income taxes                           |  |            | 403,369   |      |  |  | 399,406   |  
|                                              |  |            |           |      |  |  |           |  
|                                              |  |            | 4,440,721 |      |  |  | 4,879,407 |  
|                                              |  |            |           |      |  |  |           |  
|Shareholders Equity                          |  |            |           |      |  |  |           |  
|Capital stock                                 |  |            | 437,107   |      |  |  | 437,107   |  
|Contributed surplus                           |  |            | 132,953   |      |  |  | 132,953   |  
|Retained earnings                             |  |            | 828,173   |      |  |  | 840,670   |  
|Accumulated other comprehensive income (loss) |  |            | (40,831   | )    |  |  | (173,743  | )
|                                              |  |            |           |      |  |  |           |  
|                                              |  |            | 1,357,402 |      |  |  | 1,236,987 |  
|                                              |  |            |           |      |  |  |           |  
|                                              |  |            | 5,798,123 |      |  |  | 6,116,394 |  
|                                              |  |            |           |      |  |  |           |  



|                                                                                                                    
|--------------------------------------------------------------------------------------------------------------------
|A reconciliation of shareholders equity reflecting the differences
between Canadian and U.S. GAAP is set out below:

|                                                                                                                        |  |                  |           |      |  |  |           |  
|----------------------------------------------------------------------------------------------------------------------- |  | ---------------- | --------- | ---- |  |  | --------- | -
|                                                                                                                        |  | For the years   
|                                                                                                                        |  | Ended August 31,
|                                                                                                                        |  |                 
|                                                                                                                        |  | 2002             |           | 2001
|                                                                                                                        |  |                  | $000      |      |  |  | $000      |  
|Shareholders equity in accordance with Canadian GAAP                                                                   |  |                  | 2,264,977 |      |  |  | 2,145,327 |  
|Adjustments relating to pre-operating costs  net of tax
of $3,608 (2001 - $2,277)                                      |  |                  | (6,473    | )    |  |  | (6,373    | )
|Programming costs imposed by regulatory requirement on business
combination net of tax of $3,212 (2001 - $774)          |  |                  | (4,258    | )    |  |  | (1,026    | )
|Adjustment to goodwill resulting from retroactive equity
accounting of WIC upon regulatory approval  net of tax of nil |  |                  | 38,503    |      |  |  | 38,503    |  
|Reversal of amortization of goodwill related to future
programming expenses, net of tax of nil                          |  |                  | 938       |      |  |  | 938       |  
|Integration costs related to CanWest Publications net of tax of $827                                                    |  |                  | (1,470    | )    |  |  |          |  
|Adjustment to reflect losses on interest rate and
cross currency swaps net of tax of $24,640 (2001  $41,388)           |  |                  | (31,360   | )    |  |  | (52,676   | )
|Equity accounted affiliates in trust net of tax of nil                                                                  |  |                  |          |      |  |  | (3,375    | )
|Foreign exchange gain on US$ denominated debt net of tax of
$3,074 (2001 - $404)                                        |  |                  | (3,913    | )    |  |  | 514       |  
|Reclassification of junior subordinated notes to debt                                                                   |  |                  | (949,071  | )    |  |  | (842,987  | )
|Adjustment to reflect unrealized gain (loss) on other investments
net of tax of nil (2001  nil)                        |  |                  | 49,529    |      |  |  | (41,858   | )
|                                                                                                                        |  |                  |           |      |  |  |           |  
|Shareholders equity in accordance with U.S. GAAP                                                                       |  |                  | 1,357,402 |      |  |  | 1,236,987 |  
|                                                                                                                        |  |                  |           |      |  |  |           |  

34



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Allowance for doubtful accounts and bad debt provision

Included in accounts receivable at August 31, 2002 is an allowance for doubtful
accounts of $13,652,000 (2001  $14,289,000).

Included in operating expenses for the year ended August 31, 2002 are bad debt
expense of $5,662,000 (2001  $7,334,000, 2000  recovery of $300,000).

Accounts payable and accrued liabilities

Included in accrued liabilities for the year ended August 31, 2002 is accrued
salaries of $62,211,000 (2001  $57,006,000).

Rent Expense

Included in operating expenses for the year ended August 31, 2002 is rent
expense of $17,338,000 (2001  $11,863,000, 2000  $8,102,000).

Amortization of intangibles

Amortization expense related to existing finite life intangibles will be $17.5
million per year to 2005, $8.8 million and $1.5 million in 2006 and 2007
respectively.

21. CONSOLIDATING FINANCIAL INFORMATION

The Company has entered into financing arrangements which are guaranteed by the
Company and certain of its wholly-owned subsidiaries (the Guarantor
Subsidiaries). Such guarantees are full, unconditional and joint and several.

The following supplemental financial information sets forth, on an
unconsolidated basis, balance sheets, statements of operations and cash flow
information for the Company, Guarantor Subsidiaries and the Companys other
subsidiaries (the Non-Guarantor Subsidiaries). The supplemental financial
information reflects the investments of the Company in the Guarantor and
Non-Guarantor subsidiaries using the equity method of accounting. As indicated
in note 1 for the years ended August 31, 1999 and 2000 the results of the
Company reflect results identical to those of GTNI on a continuity of interests
basis. As of September 28, 2000 when the Company was created results reflect
the actual results of the Company.

35



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##### Table of Contents



CanWest Media Inc.

Supplemental Consolidating Balance Sheet

August 31, 2002


|                                                                                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|----------------------------------------------------------------------------------------------------------------------- |  | ------------------ | --------- | ------------ |  | ------------- | ---------- | ----------- |  | ------------ | ------- | - |  |  | ---------- | - |  |  | --------- | -
|                                                                                                                        |  | CanWest Media Inc. |           | Consolidated |  | Non-guarantor |            | Elimination |  |              |         |  
|                                                                                                                        |  | parent company     |           | guarantors   |  | subsidiaries  |            | entries     |  | Consolidated
|                                                                                                                        |  |                    |           |              |  |               |            |             |  |             
|                                                                                                                        |  | $000               |           | $000         |  | $000          |            | $000        |  | $000         |        
|Assets                                                                                                                  |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|Current Assets                                                                                                          |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|Cash                                                                                                                    |  |                    | (15,303   | )            |  |               | 62,762     |             |  |              | 2,319   |   |  |  |           |   |  |  | 49,778    |  
|Accounts receivable                                                                                                     |  |                    | 803       |              |  |               | 368,630    |             |  |              | 12,904  |   |  |  |           |   |  |  | 382,337   |  
|Income taxes recoverable                                                                                                |  |                    | 8,589     |              |  |               | 32,288     |             |  |              | (507    | ) |  |  |            |   |  |  | 40,370    |  
|Inventory                                                                                                               |  |                    |          |              |  |               | 19,836     |             |  |              |        |   |  |  |           |   |  |  | 19,836    |  
|Broadcast rights                                                                                                        |  |                    |          |              |  |               | 90,193     |             |  |              | 7,903   |   |  |  |           |   |  |  | 98,096    |  
|Future income taxes                                                                                                     |  |                    |          |              |  |               | 30,013     |             |  |              |        |   |  |  |           |   |  |  | 30,013    |  
|Other                                                                                                                   |  |                    | 1,218     |              |  |               | 11,559     |             |  |              | 454     |   |  |  |           |   |  |  | 13,231    |  
|                                                                                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|                                                                                                                        |  |                    | (4,693    | )            |  |               | 615,281    |             |  |              | 23,073  |   |  |  |           |   |  |  | 633,661   |  
|Investment in Network TEN                                                                                               |  |                    |          |              |  |               | 4,494      |             |  |              |        |   |  |  |           |   |  |  | 4,494     |  
|Investment in equity accounted subsidiaries                                                                             |  |                    | 1,253,792 |              |  |               |           |             |  |              |        |   |  |  | (1,253,792 | ) |  |  |          |  
|Other investments                                                                                                       |  |                    | 7         |              |  |               | 159,173    |             |  |              | 1       |   |  |  |           |   |  |  | 159,181   |  
|Broadcast rights                                                                                                        |  |                    |          |              |  |               | 19,359     |             |  |              | 3,813   |   |  |  |           |   |  |  | 23,172    |  
|Due from parent and affiliated companies                                                                                |  |                    | 3,431,492 |              |  |               | (2,913,040 | )           |  |              | (51,995 | ) |  |  |           |   |  |  | 466,457   |  
|Property, plant and equipment                                                                                           |  |                    | 16,555    |              |  |               | 634,478    |             |  |              | 9,667   |   |  |  |           |   |  |  | 660,700   |  
|Other assets                                                                                                            |  |                    | 67,796    |              |  |               | 24,479     |             |  |              | 3,019   |   |  |  |           |   |  |  | 95,294    |  
|Intangibles                                                                                                             |  |                    |          |              |  |               | 1,093,274  |             |  |              | 3,184   |   |  |  |           |   |  |  | 1,096,458 |  
|Goodwill                                                                                                                |  |                    |          |              |  |               | 2,599,021  |             |  |              | 1,223   |   |  |  |           |   |  |  | 2,600,244 |  
|                                                                                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|                                                                                                                        |  |                    | 4,764,949 |              |  |               | 2,236,519  |             |  |              | (8,015  | ) |  |  | (1,253,792 | ) |  |  | 5,739,661 |  
|                                                                                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|Liabilities                                                                                                             |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|Current liabilities                                                                                                     |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|Accounts payable                                                                                                        |  |                    |          |              |  |               | 154,609    |             |  |              | 3,643   |   |  |  |           |   |  |  | 158,252   |  
|Accrued liabilities                                                                                                     |  |                    | 2,334     |              |  |               | 201,014    |             |  |              | 9,722   |   |  |  |           |   |  |  | 213,070   |  
|Broadcast rights accounts payable                                                                                       |  |                    |          |              |  |               | 34,511     |             |  |              | 783     |   |  |  |           |   |  |  | 35,294    |  
|Deferred revenue                                                                                                        |  |                    |          |              |  |               | 30,522     |             |  |              |        |   |  |  |           |   |  |  | 30,522    |  
|Current portion of long term debt                                                                                       |  |                    | 122,822   |              |  |               |           |             |  |              | 28,043  |   |  |  |           |   |  |  | 150,865   |  
|                                                                                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|                                                                                                                        |  |                    | 125,156   |              |  |               | 420,656    |             |  |              | 42,191  |   |  |  |           |   |  |  | 588,003   |  
|Long term debt                                                                                                          |  |                    | 2,374,816 |              |  |               |           |             |  |              | 4,643   |   |  |  |           |   |  |  | 2,379,459 |  
|Other accrued liabilities                                                                                               |  |                    |          |              |  |               | 85,951     |             |  |              | 266     |   |  |  |           |   |  |  | 86,217    |  
|Future income taxes                                                                                                     |  |                    |          |              |  |               | 423,041    |             |  |              | (2,036  | ) |  |  |           |   |  |  | 421,005   |  
|                                                                                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|                                                                                                                        |  |                    | 2,499,972 |              |  |               | 929,648    |             |  |              | 45,064  |   |  |  |           |   |  |  | 3,474,684 |  
|                                                                                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|Shareholders Equity                                                                                                    |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|Equity instruments                                                                                                      |  |                    | 1,386,178 |              |  |               | 437,110    |             |  |              | 1,246   |   |  |  | (438,356   | ) |  |  | 1,386,178 |  
|Contributed surplus                                                                                                     |  |                    | 132,953   |              |  |               | 132,953    |             |  |              | 2,654   |   |  |  | (135,607   | ) |  |  | 132,953   |  
|Retained earnings                                                                                                       |  |                    | 794,504   |              |  |               | 785,195    |             |  |              | (56,708 | ) |  |  | (728,487   | ) |  |  | 794,504   |  
|Cumulative foreign currency translation
adjustments                                                                     |  |                    | (48,658   | )            |  |               | (48,387    | )           |  |              | (271    | ) |  |  | 48,658     |   |  |  | (48,658   | )
|                                                                                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|                                                                                                                        |  |                    | 2,264,977 |              |  |               | 1,306,871  |             |  |              | (53,079 | ) |  |  | (1,253,792 | ) |  |  | 2,264,977 |  
|                                                                                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|                                                                                                                        |  |                    | 4,764,949 |              |  |               | 2,236,519  |             |  |              | (8,015  | ) |  |  | (1,253,792 | ) |  |  | 5,739,661 |  
|                                                                                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|Shareholders Equity in accordance with Canadian
GAAP                                                                   |  |                    | 2,264,977 |              |  |               | 1,306,371  |             |  |              | (53,079 | ) |  |  | (1,253,792 | ) |  |  | 2,264,977 |  
|Adjustments relating to pre-operating costs  net of
tax of $3,608                                                      |  |                    |          |              |  |               | (3,656     | )           |  |              | (2,817  | ) |  |  |           |   |  |  | (6,473    | )
|Programming costs imposed by regulatory requirement
on business combination net of tax of $3,212                        |  |                    |          |              |  |               | (4,258     | )           |  |              |        |   |  |  |           |   |  |  | (4,258    | )
|Adjustment to goodwill resulting from retroactive
equity accounting of WIC upon regulatory approval 
net of tax of nil |  |                    |          |              |  |               | 38,503     |             |  |              |        |   |  |  |           |   |  |  | 38,503    |  
|Reversal of amortization of goodwill related to
future programming expenses, net of tax of nil                          |  |                    |          |              |  |               | 938        |             |  |              |        |   |  |  |           |   |  |  | 938       |  
|Integration costs related to CanWest Publications
net of tax of $827                                                    |  |                    |          |              |  |               | (1,470     | )           |  |              |        |   |  |  |           |   |  |  | (1,470    | )
|Adjustment to reflect losses on interest rate and
cross currency swaps net of tax of $24,640                            |  |                    | (31,360   | )            |  |               |           |             |  |              |        |   |  |  |           |   |  |  | (31,360   | )
|Foreign exchange gain on US$ denominated debt net of
tax of $3,074                                                      |  |                    | (3,913    | )            |  |               |           |             |  |              |        |   |  |  |           |   |  |  | (3,913    | )
|Reclassification of junior subordinated notes to debt                                                                   |  |                    | (949,071  | )            |  |               |           |             |  |              |        |   |  |  |           |   |  |  | (949,071  | )
|Adjustment to reflect unrealized gain on other
investments net of tax of nil                                            |  |                    |          |              |  |               | 49,529     |             |  |              |        |   |  |  |           |   |  |  | 49,529    |  
|                                                                                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|Shareholders equity in accordance with U.S. GAAP                                                                       |  |                    | 1,280,633 |              |  |               | 1,386,457  |             |  |              | (55,896 | ) |  |  | (1,253,792 | ) |  |  | 1,357,402 |  
|                                                                                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  

36



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##### Table of Contents



CanWest Media Inc.

Supplemental Consolidating Statement of Operations

For the Year Ended August 31, 2002


|                                                                                                               |  |                    |         |              |  |               |           |             |  |              |         |   |  |  |          |   |  |  |           |  
|-------------------------------------------------------------------------------------------------------------- |  | ------------------ | ------- | ------------ |  | ------------- | --------- | ----------- |  | ------------ | ------- | - |  |  | -------- | - |  |  | --------- | -
|                                                                                                               |  | CanWest Media Inc. |         | Consolidated |  | Non-guarantor |           | Elimination |  |              |         |  
|                                                                                                               |  | parent company     |         | guarantors   |  | subsidiaries  |           | entries     |  | Consolidated
|                                                                                                               |  |                    |         |              |  |               |           |             |  |             
|                                                                                                               |  |                    | $000    |              |  |               | $000      |             |  |              | $000    |   |  |  | $000     |   |  |  | $000      |  
|Revenue                                                                                                        |  |                    |        |              |  |               | 2,046,669 |             |  |              | 73,675  |   |  |  |         |   |  |  | 2,120,344 |  
|Operating expenses                                                                                             |  |                    |        |              |  |               | 1,066,135 |             |  |              | 42,807  |   |  |  |         |   |  |  | 1,108,942 |  
|Selling, general and administrative
expenses                                                                   |  |                    | 9,628   |              |  |               | 515,390   |             |  |              | 15,334  |   |  |  |         |   |  |  | 540,352   |  
|                                                                                                               |  |                    |         |              |  |               |           |             |  |              |         |   |  |  |          |   |  |  |           |  
|                                                                                                               |  |                    | (9,628  | )            |  |               | 465,144   |             |  |              | 15,534  |   |  |  |         |   |  |  | 471,050   |  
|Amortization of broadcast licenses,
goodwill and circulation                                                   |  |                    |        |              |  |               | 17,500    |             |  |              |        |   |  |  |         |   |  |  | 17,500    |  
|Amortization of property, plant and
equipment                                                                  |  |                    | 2,356   |              |  |               | 68,033    |             |  |              | 3,041   |   |  |  |         |   |  |  | 73,430    |  
|Other amortization                                                                                             |  |                    |        |              |  |               | 2,994     |             |  |              | 3,676   |   |  |  |         |   |  |  | 6,670     |  
|                                                                                                               |  |                    |         |              |  |               |           |             |  |              |         |   |  |  |          |   |  |  |           |  
|                                                                                                               |  |                    | (11,984 | )            |  |               | 376,617   |             |  |              | 8,817   |   |  |  |         |   |  |  | 373,450   |  
|Financing (expenses) income                                                                                    |  |                    | 129,153 |              |  |               | (373,371  | )           |  |              | (10,788 | ) |  |  |         |   |  |  | (255,006  | )
|Investment gains net of write-down of
investments                                                              |  |                    |        |              |  |               | 33,843    |             |  |              |        |   |  |  |         |   |  |  | 33,843    |  
|Dividend income                                                                                                |  |                    |        |              |  |               | 3,241     |             |  |              |        |   |  |  |         |   |  |  | 3,241     |  
|                                                                                                               |  |                    |         |              |  |               |           |             |  |              |         |   |  |  |          |   |  |  |           |  
|                                                                                                               |  |                    | 117,169 |              |  |               | 40,330    |             |  |              | (1,971  | ) |  |  |         |   |  |  | 155,528   |  
|Provision for (recovery of) income taxes                                                                       |  |                    | 33,338  |              |  |               | 16,281    |             |  |              | (2,009  | ) |  |  |         |   |  |  | 47,610    |  
|                                                                                                               |  |                    |         |              |  |               |           |             |  |              |         |   |  |  |          |   |  |  |           |  
|Earnings before the following                                                                                  |  |                    | 83,831  |              |  |               | 24,049    |             |  |              | 38      |   |  |  |         |   |  |  | 107,918   |  
|Minority interest                                                                                              |  |                    |        |              |  |               | 4,330     |             |  |              |        |   |  |  |         |   |  |  | 4,330     |  
|Interest in loss of Network TEN                                                                                |  |                    |        |              |  |               | (11,815   | )           |  |              |        |   |  |  |         |   |  |  | (11,815   | )
|Interest in earnings of equity
accounted affiliates                                                            |  |                    | 14,079  |              |  |               | (1,523    | )           |  |              |        |   |  |  | (14,079  | ) |  |  | (1,523    | )
|Realized currency translation
adjustments                                                                      |  |                    |        |              |  |               | (1,000    | )           |  |              |        |   |  |  |         |   |  |  | (1,000    | )
|                                                                                                               |  |                    |         |              |  |               |           |             |  |              |         |   |  |  |          |   |  |  |           |  
|Net earnings for the year                                                                                      |  |                    | 97,910  |              |  |               | 14,041    |             |  |              | 38      |   |  |  | (14,079  | ) |  |  | 97,910    |  
|Retained earnings  beginning of year                                                                          |  |                    | 806,574 |              |  |               | 876,133   |             |  |              | (54,456 | ) |  |  | (821,677 | ) |  |  | 806,574   |  
|Adjustment for the adoption of new
accounting pronouncement                                                    |  |                    | (45,269 | )            |  |               | (45,269   | )           |  |              |        |   |  |  | 45,269   |   |  |  | (45,269   | )
|Dividends                                                                                                      |  |                    |        |              |  |               | (59,710   | )           |  |              | (2,290  | ) |  |  | 62,000   |   |  |  |          |  
|Interest on junior subordinated
debentures  net of tax of $41,373                                             |  |                    | (64,711 | )            |  |               |          |             |  |              |        |   |  |  |         |   |  |  | (64,711   | )
|                                                                                                               |  |                    |         |              |  |               |           |             |  |              |         |   |  |  |          |   |  |  |           |  
|Retained earnings  end of year                                                                                |  |                    | 794,504 |              |  |               | 785,195   |             |  |              | (56,708 | ) |  |  | (728,487 | ) |  |  | 794,504   |  
|                                                                                                               |  |                    |         |              |  |               |           |             |  |              |         |   |  |  |          |   |  |  |           |  
|Net earnings in accordance with
Canadian GAAP                                                                  |  |                    | 97,910  |              |  |               | 14,041    |             |  |              | 38      |   |  |  | (14,079  | ) |  |  | 97,910    |  
|Pre-operating costs net of tax of $1,331                                                                       |  |                    |        |              |  |               | (3,656    | )           |  |              | 3,556   |   |  |  |         |   |  |  | (100      | )
|Realization of currency translation
adjustments net of tax of nil                                              |  |                    |        |              |  |               | 1,000     |             |  |              |        |   |  |  |         |   |  |  | 1,000     |  
|Integration costs related to CanWest
Publications net of tax of $827                                           |  |                    |        |              |  |               | (1,470    | )           |  |              |        |   |  |  |         |   |  |  | (1,470    | )
|Programming costs imposed by regulatory
requirement, net of tax of $2,438                                      |  |                    |        |              |  |               | (3,232    | )           |  |              |        |   |  |  |         |   |  |  | (3,232    | )
|Equity accounted affiliates in trust,
net of tax of $nil                                                       |  |                    |        |              |  |               | 3,375     |             |  |              |        |   |  |  |         |   |  |  | 3,375     |  
|Reclassification of interest on junior
subordinated debentures from equity net
of tax of $41,372               |  |                    | (64,711 | )            |  |               |          |             |  |              |        |   |  |  |         |   |  |  | (64,711   | )
|                                                                                                               |  |                    |         |              |  |               |           |             |  |              |         |   |  |  |          |   |  |  |           |  
|Net earnings (loss) in accordance with
U.S. GAAP before cumulative effect of
adoption of new accounting policy |  |                    | 33,199  |              |  |               | 10,058    |             |  |              | 3,594   |   |  |  | (14,079  | ) |  |  | 32,772    |  
|Cumulative effect of adoption of new
goodwill and intangibles accounting
policy net of tax of $2,500           |  |                    |        |              |  |               | (45,269   | )           |  |              |        |   |  |  |         |   |  |  | (45,269   | )
|                                                                                                               |  |                    |         |              |  |               |           |             |  |              |         |   |  |  |          |   |  |  |           |  
|Net earnings (loss) in accordance with
U.S. GAAP                                                               |  |                    | 33,199  |              |  |               | (35,211   | )           |  |              | 3,594   |   |  |  | (14,079  | ) |  |  | (12,497   | )
|                                                                                                               |  |                    |         |              |  |               |           |             |  |              |         |   |  |  |          |   |  |  |           |  

37



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##### Table of Contents



CanWest Media Inc.

Supplemental Consolidating Statement of Cash Flows

For the Year Ended August 31, 2002


|                                            |                                                            |  |                    |         |              |  |               |         |             |  |              |     |  |  |         |        |  |  |          |         |  
|------------------------------------------- | ---------------------------------------------------------- |  | ------------------ | ------- | ------------ |  | ------------- | ------- | ----------- |  | ------------ | --- |  |  | ------- | ------ |  |  | -------- | ------- | -
|                                            |                                                            |  | CanWest Media Inc. |         | Consolidated |  | Non-guarantor |         | Elimination |  |              |     | 
|                                            |                                                            |  | parent company     |         | guarantors   |  | subsidiaries  |         | entries     |  | Consolidated
|                                            |                                                            |  |                    |         |              |  |               |         |             |  |             
|                                            |                                                            |  | $000               |         |              |  | $000          |         |             |  | $000         |     |  |  | $000    |        |  |  | $ 000    |        
|CASH GENERATED (UTILIZED) BY:               |                                                            |  |                    |         |              |  |               |         |             |  |              |     |  |  |         |        |  |  |          |        
|Operating activities                        |                                                            |  |                    |         |              |  |               |         |             |  |              |     |  |  |         |        |  |  |          |        
|Net earnings for the year                   |                                                            |  | 97,910             |         |              |  | 14,041        |         |             |  | 38           |     |  |  | (14,079 | )      |  |  | 97,910   |        
|Items not affecting cash                    |                                                            |  |                    |         |              |  |               |         |             |  |              |     |  |  |         |        |  |  |          |        
|Amortization                                |                                                            |  | 12,298             |         |              |  | 88,527        |         |             |  | 6,717        |     |  |  |        |        |  |  | 107,542  |        
|                                            | Future income taxes                                        |  |                    |        |              |  |               | 11,060  |             |  |              | 150 |  |  |         |       |  |  |          | 11,210  |  
|                                            | Interest in loss of Network TEN                            |  |                    |        |              |  |               | 11,815  |             |  |              |    |  |  |         |       |  |  |          | 11,815  |  
|                                            | Interest in loss (earnings) of equity accounted
affiliates |  |                    | (14,079 | )            |  |               | 1,523   |             |  |              |    |  |  |         | 14,079 |  |  |          | 1,523   |  
|                                            | Minority interests                                         |  |                    |        |              |  |               | (4,330  | )           |  |              |    |  |  |         |       |  |  |          | (4,330  | )
|                                            | Realized translation adjustments                           |  |                    |        |              |  |               | 1,000   |             |  |              |    |  |  |         |       |  |  |          | 1,000   |  
|                                            | Investment gains net of write-down of
investments          |  |                    |        |              |  |               | (33,843 | )           |  |              |    |  |  |         |       |  |  |          | (33,843 | )
|Distributions from Network TEN              |                                                            |  |                   |         |              |  | 60,984        |         |             |  |             |     |  |  |        |        |  |  | 60,984   |        
|                                            |                                                            |  |                    |         |              |  |               |         |             |  |              |     |  |  |         |        |  |  |          |        
|                                            |                                                            |  | 96,129             |         |              |  | 150,777       |         |             |  | 6,905        |     |  |  |        |        |  |  | 253,811  |        
|Changes in non-cash operating accounts      |                                                            |  | 4,061              |         |              |  | (73,790       | )       |             |  | 2,641        |     |  |  |        |        |  |  | (67,088  | )      
|                                            |                                                            |  |                    |         |              |  |               |         |             |  |              |     |  |  |         |        |  |  |          |        
|                                            |                                                            |  | 100,190            |         |              |  | 76,987        |         |             |  | 9,546        |     |  |  |        |        |  |  | 186,723  |        
|                                            |                                                            |  |                    |         |              |  |               |         |             |  |              |     |  |  |         |        |  |  |          |        
|Investing Activities                        |                                                            |  |                    |         |              |  |               |         |             |  |              |     |  |  |         |        |  |  |          |        
|Other investments                           |                                                            |  |                   |         |              |  | (4,400        | )       |             |  | (787         | )   |  |  |        |        |  |  | (5,187   | )      
|Proceeds from sale of investments           |                                                            |  |                   |         |              |  | 87,000        |         |             |  |             |     |  |  |        |        |  |  | 87,000   |        
|Proceeds from divestitures                  |                                                            |  |                   |         |              |  | 390,059       |         |             |  |             |     |  |  |        |        |  |  | 390,059  |        
|Purchase of property, plant and equipment   |                                                            |  | (18,735            | )       |              |  | (33,058       | )       |             |  | (479         | )   |  |  |        |        |  |  | (52,272  | )      
|Advances to parent and affiliated companies |                                                            |  | 329,650            |         |              |  | (374,925      | )       |             |  |             |     |  |  |        |        |  |  | (45,275  | )      
|                                            |                                                            |  |                    |         |              |  |               |         |             |  |              |     |  |  |         |        |  |  |          |        
|                                            |                                                            |  | 310,915            |         |              |  | 64,676        |         |             |  | (1,266       | )   |  |  |        |        |  |  | 374,325  |        
|                                            |                                                            |  |                    |         |              |  |               |         |             |  |              |     |  |  |         |        |  |  |          |        
|Financing Activities                        |                                                            |  |                    |         |              |  |               |         |             |  |              |     |  |  |         |        |  |  |          |        
|Dividends paid                              |                                                            |  | 62,000             |         |              |  | (59,710       | )       |             |  | (2,290       | )   |  |  |        |        |  |  |         |        
|Repayment of long term debt                 |                                                            |  | (488,408           | )       |              |  |              |         |             |  | (5,295       | )   |  |  |        |        |  |  | (493,703 | )      
|Net change in bank loans and advances       |                                                            |  |                   |         |              |  | (28,999       | )       |             |  |             |     |  |  |        |        |  |  | (28,999  | )      
|                                            |                                                            |  |                    |         |              |  |               |         |             |  |              |     |  |  |         |        |  |  |          |        
|                                            |                                                            |  | (426,408           | )       |              |  | (88,709       | )       |             |  | (7,585       | )   |  |  |        |        |  |  | (522,702 | )      
|                                            |                                                            |  |                    |         |              |  |               |         |             |  |              |     |  |  |         |        |  |  |          |        
|Net change in cash                          |                                                            |  | (15,303            | )       |              |  | 52,954        |         |             |  | 695          |     |  |  |        |        |  |  | 38,346   |        
|Cash  beginning of year                    |                                                            |  |                   |         |              |  | 9,808         |         |             |  | 1,624        |     |  |  |        |        |  |  | 11,432   |        
|                                            |                                                            |  |                    |         |              |  |               |         |             |  |              |     |  |  |         |        |  |  |          |        
|Cash  end of year                          |                                                            |  | (15,303            | )       |              |  | 62,762        |         |             |  | 2,319        |     |  |  |        |        |  |  | 49,778   |        
|                                            |                                                            |  |                    |         |              |  |               |         |             |  |              |     |  |  |         |        |  |  |          |        

38



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##### Table of Contents



CanWest Media Inc.

Supplemental Consolidating Balance Sheet

August 31, 2001


|                                                                                                                         |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|------------------------------------------------------------------------------------------------------------------------ |  | ------------------ | --------- | ------------ |  | ------------- | ---------- | ----------- |  | ------------ | ------- | - |  |  | ---------- | - |  |  | --------- | -
|                                                                                                                         |  | CanWest Media Inc. |           | Consolidated |  | Non-guarantor |            | Elimination |  |              |         |  
|                                                                                                                         |  | parent company     |           | guarantors   |  | subsidiaries  |            | entries     |  | Consolidated
|                                                                                                                         |  |                    |           |              |  |               |            |             |  |             
|                                                                                                                         |  | $ 000              |           | $ 000        |  | $ 000         |            | $ 000       |  | $ 000        |        
|Assets                                                                                                                   |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|Current Assets                                                                                                           |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|Cash                                                                                                                     |  |                    |          |              |  |               | 3,480      |             |  |              | 7,952   |   |  |  |           |   |  |  | 11,432    |  
|Accounts receivable                                                                                                      |  |                    | 4,725     |              |  |               | 313,820    |             |  |              | 26,320  |   |  |  |           |   |  |  | 344,865   |  
|Income taxes recoverable                                                                                                 |  |                    | 182       |              |  |               | 11,784     |             |  |              | (6,850  | ) |  |  |           |   |  |  | 5,116     |  
|Inventory                                                                                                                |  |                    |          |              |  |               | 30,817     |             |  |              |        |   |  |  |           |   |  |  | 30,817    |  
|Broadcast rights                                                                                                         |  |                    |          |              |  |               | 86,301     |             |  |              | 10,084  |   |  |  |           |   |  |  | 96,385    |  
|Future income taxes                                                                                                      |  |                    |          |              |  |               | 33,542     |             |  |              | (299    | ) |  |  |           |   |  |  | 33,243    |  
|Other                                                                                                                    |  |                    | 5,875     |              |  |               | 10,644     |             |  |              | 403     |   |  |  |           |   |  |  | 16,922    |  
|                                                                                                                         |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|                                                                                                                         |  |                    | 10,782    |              |  |               | 490,388    |             |  |              | 37,610  |   |  |  |           |   |  |  | 538,780   |  
|Investment in Network TEN                                                                                                |  |                    |          |              |  |               | 107,210    |             |  |              |        |   |  |  |           |   |  |  | 107,210   |  
|Investment in equity accounted subsidiaries                                                                              |  |                    | 1,308,781 |              |  |               |           |             |  |              |        |   |  |  | (1,308,781 | ) |  |  |          |  
|Other investments                                                                                                        |  |                    |          |              |  |               | 412,111    |             |  |              | 1       |   |  |  |           |   |  |  | 412,112   |  
|Broadcast rights                                                                                                         |  |                    |          |              |  |               | 3,635      |             |  |              | 4,700   |   |  |  |           |   |  |  | 8,335     |  
|Due from parent and affiliated companies                                                                                 |  |                    | 3,773,446 |              |  |               | (3,356,125 | )           |  |              | (9,011  | ) |  |  |           |   |  |  | 408,310   |  
|Property, plant and equipment                                                                                            |  |                    |          |              |  |               | 663,802    |             |  |              | 25,373  |   |  |  |           |   |  |  | 689,175   |  
|Other assets                                                                                                             |  |                    | 88,442    |              |  |               | 13,575     |             |  |              | 8,694   |   |  |  |           |   |  |  | 110,711   |  
|Intangibles                                                                                                              |  |                    |          |              |  |               | 1,055,037  |             |  |              | 25,375  |   |  |  |           |   |  |  | 1,080,412 |  
|Goodwill                                                                                                                 |  |                    |          |              |  |               | 2,749,084  |             |  |              | 48,083  |   |  |  |           |   |  |  | 2,797,167 |  
|                                                                                                                         |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|                                                                                                                         |  |                    | 5,181,451 |              |  |               | 2,138,717  |             |  |              | 140,825 |   |  |  | (1,308,781 | ) |  |  | 6,152,212 |  
|                                                                                                                         |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|Liabilities                                                                                                              |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|Current liabilities                                                                                                      |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|Bank loans and advances                                                                                                  |  |                    |          |              |  |               | 28,999     |             |  |              |        |   |  |  |           |   |  |  | 28,999    |  
|Accounts payable                                                                                                         |  |                    |          |              |  |               | 119,655    |             |  |              | 4,740   |   |  |  |           |   |  |  | 124,395   |  
|Accrued liabilities                                                                                                      |  |                    | 27,061    |              |  |               | 221,246    |             |  |              | 10,683  |   |  |  |            |   |  |  | 258,990   |  
|Broadcast rights accounts payable                                                                                        |  |                    |          |              |  |               | 22,189     |             |  |              | 764     |   |  |  |           |   |  |  | 22,953    |  
|Deferred revenue                                                                                                         |  |                    |          |              |  |               | 31,396     |             |  |              |        |   |  |  |           |   |  |  | 31,396    |  
|Current portion of long term debt                                                                                        |  |                    | 116,500   |              |  |               |           |             |  |              |        |   |  |  |           |   |  |  | 116,500   |  
|                                                                                                                         |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|                                                                                                                         |  |                    | 143,561   |              |  |               | 423,485    |             |  |              | 16,187  |   |  |  |           |   |  |  | 583,233   |  
|Long term debt                                                                                                           |  |                    | 2,892,563 |              |  |               | (23,017    | )           |  |              | 37,981  |   |  |  |           |   |  |  | 2,907,527 |  
|Other accrued liabilities                                                                                                |  |                    |          |              |  |               | 88,543     |             |  |              | 266     |   |  |  |           |   |  |  | 88,809    |  
|Future income taxes                                                                                                      |  |                    |          |              |  |               | 410,894    |             |  |              | 16,422  |   |  |  |           |   |  |  | 427,316   |  
|                                                                                                                         |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|                                                                                                                         |  |                    | 3,036,124 |              |  |               | 899,905    |             |  |              | 70,856  |   |  |  |           |   |  |  | 4,006,885 |  
|                                                                                                                         |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|Shareholders Equity                                                                                                     |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|Equity instruments                                                                                                       |  |                    | 1,280,094 |              |  |               | 437,110    |             |  |              | 1,370   |   |  |  | (438,480   | ) |  |  | 1,280,094 |  
|Contributed surplus                                                                                                      |  |                    | 132,953   |              |  |               | 26,097     |             |  |              | 106,856 |   |  |  | (132,953   | ) |  |  | 132,953   |  
|Retained earnings                                                                                                        |  |                    | 806,574   |              |  |               | 850,831    |             |  |              | (39,189 | ) |  |  | (811,642   | ) |  |  | 806,574   |  
|Cumulative foreign currency translation
adjustments                                                                      |  |                    | (74,294   | )            |  |               | (75,226    | )           |  |              | 932     |   |  |  | 74,294     |   |  |  | (74,294   | )
|                                                                                                                         |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|                                                                                                                         |  |                    | 2,145,327 |              |  |               | 1,238,812  |             |  |              | 69,969  |   |  |  | (1,308,781 | ) |  |  | 2,145,327 |  
|                                                                                                                         |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|                                                                                                                         |  |                    | 5,181,451 |              |  |               | 2,138,717  |             |  |              | 140,825 |   |  |  | (1,308,781 | ) |  |  | 6,152,212 |  
|                                                                                                                         |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|Shareholders Equity in accordance with Canadian
GAAP                                                                    |  |                    | 2,145,327 |              |  |               | 1,238,812  |             |  |              | 69,969  |   |  |  | (1,308,781 | ) |  |  | 2,145,327 |  
|Adjustments relating to pre-operating costs  net of
tax of $2,277                                                       |  |                    |          |              |  |               |           |             |  |              | (6,373  | ) |  |  |           |   |  |  | (6,373    | )
|Programming costs imposed by regulatory requirement
on business combination net of tax of $774                           |  |                    |          |              |  |               | (1,026     | )           |  |              |        |   |  |  |           |   |  |  | (1,026    | )
|Adjustment to goodwill resulting from retroactive
equity accounting of WIC upon regulatory approval 
net of tax of $nil |  |                    | 38,503    |              |  |               |           |             |  |              |        |   |  |  |           |   |  |  | 38,503    |  
|Reversal of amortization of goodwill related to
future programming expenses, net of tax of nil                           |  |                    |          |              |  |               | 938        |             |  |              |        |   |  |  |           |   |  |  | 938       |  
|Adjustment to reflect losses on interest rate and
cross currency swaps net of tax of $41,338                             |  |                    | (52,676   | )            |  |               |           |             |  |              |        |   |  |  |           |   |  |  | (52,676   | )
|Equity accounted affiliates in trust net of tax of nil                                                                   |  |                    |          |              |  |               | (3,375     | )           |  |              |        |   |  |  |           |   |  |  | (3,375    | )
|Foreign exchange gain on US$ denominated debt net of
tax of $404                                                         |  |                    | 514       |              |  |               |           |             |  |              |        |   |  |  |           |   |  |  | 514       |  
|Reclassification of junior subordinated notes to debt                                                                    |  |                    | (842,987  | )            |  |               |           |             |  |              |        |   |  |  |           |   |  |  | (842,987  | )
|Adjustment to reflect unrealized gain (loss) on other
investments net of tax of $nil                                     |  |                    |          |              |  |               | (44,960    | )           |  |              | 3,102   |   |  |  |           |   |  |  | (41,858   | )
|                                                                                                                         |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|Shareholders equity in accordance with U.S. GAAP                                                                        |  |                    | 1,288,681 |              |  |               | 1,190,389  |             |  |              | 66,698  |   |  |  | (1,308,781 | ) |  |  | 1,236,987 |  
|                                                                                                                         |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  

39



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##### Table of Contents



CanWest Media Inc.

Supplemental Consolidating Statement of Operations

For the Year Ended August 31, 2001


|                                                                                                                                                         |  |                    |         |              |      |               |           |             |  |              |         |   |  |      |          |   |  |  |           |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ------- | ------------ | ---- | ------------- | --------- | ----------- |  | ------------ | ------- | - |  | ---- | -------- | - |  |  | --------- | -
|                                                                                                                                                         |  | CanWest Media Inc. |         | Consolidated |      | Non-guarantor |           | Elimination |  |              |         |  
|                                                                                                                                                         |  | parent company     |         | guarantors   |      | subsidiaries  |           | entries     |  | Consolidated
|                                                                                                                                                         |  |                    |         |              |      |               |           |             |  |             
|                                                                                                                                                         |  | $000               |         |              | $000 |               |           | $000        |  |              | $000    |   |  | $000 |         
|Revenue                                                                                                                                                  |  |                    |        |              |      |               | 1,594,387 |             |  |              | 172,919 |   |  |      |         |   |  |  | 1,767,306 |  
|Operating expenses                                                                                                                                       |  |                    |        |              |      |               | 828,224   |             |  |              | 137,291 |   |  |      |         |   |  |  | 965,515   |  
|Selling, general and administrative
expenses                                                                                                             |  |                    | (913    | )            |      |               | 359,483   |             |  |              | 9,151   |   |  |      |         |   |  |  | 367,721   |  
|                                                                                                                                                         |  |                    |         |              |      |               |           |             |  |              |         |   |  |      |          |   |  |  |           |  
|                                                                                                                                                         |  |                    | 913     |              |      |               | 406,680   |             |  |              | 26,477  |   |  |      |         |   |  |  | 434,070   |  
|Amortization of intangibles and goodwill                                                                                                                 |  |                    |        |              |      |               | 87,404    |             |  |              | 1,915   |   |  |      |         |   |  |  | 89,319    |  
|Amortization of property, plant and
equipment                                                                                                            |  |                    |        |              |      |               | 54,060    |             |  |              | 5,468   |   |  |      |         |   |  |  | 59,528    |  
|Other amortization                                                                                                                                       |  |                    |        |              |      |               | 2,172     |             |  |              | 3,068   |   |  |      |         |   |  |  | 5,240     |  
|                                                                                                                                                         |  |                    |         |              |      |               |           |             |  |              |         |   |  |      |          |   |  |  |           |  
|                                                                                                                                                         |  |                    | 913     |              |      |               | 263,044   |             |  |              | 16,026  |   |  |      |         |   |  |  | 279,983   |  
|Financing (expenses) income                                                                                                                              |  |                    | 69,974  |              |      |               | (331,986  | )           |  |              | (6,831  | ) |  |      |         |   |  |  | (268,843  | )
|Investment income and gains                                                                                                                              |  |                    |        |              |      |               | 28,630    |             |  |              |        |   |  |      |         |   |  |  | 28,630    |  
|Dividend income                                                                                                                                          |  |                    |        |              |      |               | 2,952     |             |  |              |        |   |  |      |         |   |  |  | 2,952     |  
|                                                                                                                                                         |  |                    |         |              |      |               |           |             |  |              |         |   |  |      |          |   |  |  |           |  
|                                                                                                                                                         |  |                    | 70,887  |              |      |               | (37,360   | )           |  |              | 9,195   |   |  |      |         |   |  |  | 42,722    |  
|Provision for (recovery of) income taxes                                                                                                                 |  |                    | 29,630  |              |      |               | (62,456   | )           |  |              | 5,546   |   |  |      |         |   |  |  | (27,280   | )
|                                                                                                                                                         |  |                    |         |              |      |               |           |             |  |              |         |   |  |      |          |   |  |  |           |  
|Earnings before the following                                                                                                                            |  |                    | 41,257  |              |      |               | 25,096    |             |  |              | 3,649   |   |  |      |         |   |  |  | 70,002    |  
|Minority interest                                                                                                                                        |  |                    |        |              |      |               | (3,196    | )           |  |              |        |   |  |      |         |   |  |  | (3,196    | )
|Interest in earnings of Network TEN                                                                                                                      |  |                    |        |              |      |               | 52,567    |             |  |              |        |   |  |      |         |   |  |  | 52,567    |  
|Interest in earnings of equity
accounted affiliates                                                                                                      |  |                    | 56,425  |              |      |               | (14,491   | )           |  |              |        |   |  |      | (56,425  | ) |  |  | (14,491   | )
|Realized currency translation
adjustments                                                                                                                |  |                    |        |              |      |               | (7,200    | )           |  |              |        |   |  |      |         |   |  |  | (7,200    | )
|                                                                                                                                                         |  |                    |         |              |      |               |           |             |  |              |         |   |  |      |          |   |  |  |           |  
|Net earnings for the year                                                                                                                                |  |                    | 97,682  |              |      |               | 52,776    |             |  |              | 3,649   |   |  |      | (56,425  | ) |  |  | 97,682    |  
|Retained earnings  beginning of year                                                                                                                    |  |                    | 755,549 |              |      |               | 753,870   |             |  |              | 5,257   |   |  |      | (759,127 | ) |  |  | 755,549   |  
|Adjustment for the adoption of new
accounting pronouncement                                                                                              |  |                    | (329    | )            |      |               | (3,910    | )           |  |              |        |   |  |      | 3,910    |   |  |  | (329      | )
|Dividends                                                                                                                                                |  |                    |        |              |      |               | 48,095    |             |  |              | (48,095 | ) |  |      |         |   |  |  |          |  
|Interest on junior subordinated
debentures  net of tax of $29,812                                                                                       |  |                    | (46,328 | )            |      |               |          |             |  |              |        |   |  |      |         |   |  |  | (46,328   | )
|                                                                                                                                                         |  |                    |         |              |      |               |           |             |  |              |         |   |  |      |          |   |  |  |           |  
|Retained earnings  end of year                                                                                                                          |  |                    | 806,574 |              |      |               | 850,831   |             |  |              | (39,189 | ) |  |      | (811,642 | ) |  |  | 806,574   |  
|                                                                                                                                                         |  |                    |         |              |      |               |           |             |  |              |         |   |  |      |          |   |  |  |           |  
|Net earnings in accordance with
Canadian GAAP                                                                                                            |  |                    | 97,682  |              |      |               | 52,776    |             |  |              | 3,649   |   |  |      | (56,425  | ) |  |  | 97,682    |  
|Pre-operating costs net of tax of $1,175                                                                                                                 |  |                    |        |              |      |               |          |             |  |              | 3,337   |   |  |      |         |   |  |  | 3,337     |  
|Realization of currency translation
adjustments net of tax of nil                                                                                        |  |                    |        |              |      |               | 7,200     |             |  |              |        |   |  |      |         |   |  |  | 7,200     |  
|Reversal of amortization of goodwill
related to future programming expenses
imposed by regulatory requirement on
business combination, net of tax of nil |  |                    |        |              |      |               | 938       |             |  |              |        |   |  |      |         |   |  |  | 938       |  
|Programming costs imposed by regulatory
requirement, net of tax of $774                                                                                  |  |                    |        |              |      |               | (1,026    | )           |  |              |        |   |  |      |         |   |  |  | (1,026    | )
|Equity accounted affiliates in trust,
net of tax of nil                                                                                                  |  |                    |        |              |      |               | (3,375    | )           |  |              |        |   |  |      |         |   |  |  | (3,375    | )
|Reclassification of interest on junior
subordinated notes from equity net of
tax of $29,812                                                              |  |                    | (46,328 | )            |      |               |          |             |  |              |        |   |  |      |         |   |  |  | (46,328   | )
|Timing of tax rate enactment                                                                                                                             |  |                    |        |              |      |               | 14,832    |             |  |              |        |   |  |      |         |   |  |  | 14,832    |  
|Amortization of WIC goodwill adjustment
resulting from retroactive equity
accounting of WIC upon regulatory
approval net of tax of nil                   |  |                    |        |              |      |               | (1,576    | )           |  |              |        |   |  |      |         |   |  |  | (1,576    | )
|                                                                                                                                                         |  |                    |         |              |      |               |           |             |  |              |         |   |  |      |          |   |  |  |           |  
|Net earnings in accordance with U.S
GAAP                                                                                                                 |  |                    | 51,354  |              |      |               | 69,769    |             |  |              | 6,986   |   |  |      | (56,425  | ) |  |  | 71,684    |  
|Amortization of goodwill and indefinite
life intangibles net of tax of $11,975                                                                           |  |                    |        |              |      |               | 61,591    |             |  |              | 1,915   |   |  |      |         |   |  |  | 63,506    |  
|Amortization of goodwill and indefinite
life intangibles in equity accounted
affiliates net of tax of nil                                                |  |                    |        |              |      |               | 6,211     |             |  |              |        |   |  |      |         |   |  |  | 6,211     |  
|                                                                                                                                                         |  |                    |         |              |      |               |           |             |  |              |         |   |  |      |          |   |  |  |           |  
|Net earnings in accordance with U.S
GAAP adjusted to exclude amortization
expense recognized in 2001                                                     |  |                    | 51,354  |              |      |               | 137,571   |             |  |              | 8,901   |   |  |      | (56,425  | ) |  |  | 141,401   |  
|                                                                                                                                                         |  |                    |         |              |      |               |           |             |  |              |         |   |  |      |          |   |  |  |           |  

40



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##### Table of Contents



CanWest Media Inc.

Supplemental Consolidating Statement of Cash Flows

For the Year Ended August 31, 2001


|                                              |                                                            |      |                    |         |              |  |               |         |             |  |              |        |   |  |      |   |  |      |            |         |   |  |        |        | 
|--------------------------------------------- | ---------------------------------------------------------- | ---- | ------------------ | ------- | ------------ |  | ------------- | ------- | ----------- |  | ------------ | ------ | - |  | ---- | - |  | ---- | ---------- | ------- | - |  | ------ | ------ | 
|                                              |                                                            |      | CanWest Media Inc. |         | Consolidated |  | Non-guarantor |         | Elimination |  |              |        |  
|                                              |                                                            |      | parent company     |         | guarantors   |  | subsidiaries  |         | entries     |  | Consolidated
|                                              |                                                            |      |                    |         |              |  |               |         |             |  |             
|                                              |                                                            | $000 |                    |         | $000         |  |               | $000    |             |  |              |        |   |  | $000 |   |  | $000 |           
|CASH GENERATED (UTILIZED) BY:                 |                                                            |      |                    |         |              |  |               |         |             |  |              |        |   |  |      |   |  |      |            |         |   |  |        |       
|Operating activities                          |                                                            |      |                    |         |              |  |               |         |             |  |              |        |   |  |      |   |  |      |            |         |   |  |        |       
|Net earnings for the year                     |                                                            |      | 97,682             |         |              |  | 52,776        |         |             |  | 3,649        |        |   |  |      |   |  |      | (56,425    | )       |   |  | 97,682 |       
|Items not affecting cash                      |                                                            |      |                    |         |              |  |               |         |             |  |              |        |   |  |      |   |  |      |            |         |   |  |        |       
|                                              | Amortization                                               |      |                    | 6,583   |              |  |               | 149,945 |             |  |              | 8,600  |   |  |      |  |  |      |            | 165,128 |  
|                                              | Future income taxes                                        |      |                    |        |              |  |               | (89,476 | )           |  |              | (7,530 | ) |  |      |  |  |      |            | (97,006 | )
|                                              | Interest in earnings of Network TEN                        |      |                    |        |              |  |               | (52,567 | )           |  |              |       |   |  |      |  |  |      |            | (52,567 | )
|                                              | Interest in loss (earnings) of equity accounted
affiliates |      |                    | (56,425 | )            |  |               | 14,491  |             |  |              |       |   |  |      |   |  |      |            | 56,425  |   |  |        | 14,491 | 
|                                              | Minority interests                                         |      |                    |        |              |  |               | 3,196   |             |  |              |       |   |  |      |  |  |      |            | 3,196   |  
|                                              | Realized translation adjustments                           |      |                    |        |              |  |               | 7,200   |             |  |              |       |   |  |      |  |  |      |            | 7,200   |  
|                                              | Write-off of deferred financing fees                       |      |                    | 17,900  |              |  |               |        |             |  |              |       |   |  |      |  |  |      |            | 17,900  |  
|                                              | Investment income and gains                                |      |                    |        |              |  |               | (28,630 | )           |  |              |       |   |  |      |  |  |      |            | (28,630 | )
|Distributions from Network TEN                |                                                            |      |                   |         |              |  | 71,096        |         |             |  |             |        |   |  |     |   |  |      | 71,096     |        
|                                              |                                                            |      |                    |         |              |  |               |         |             |  |              |        |   |  |      |   |  |      |            |        
|                                              |                                                            |      | 65,740             |         |              |  | 128,031       |         |             |  | 4,719        |        |   |  |     |   |  |      | 198,490    |        
|Changes in non-cash operating accounts        |                                                            |      | (12,481            | )       |              |  | (16,927       | )       |             |  | 21,661       |        |   |  |     |   |  |      | (7,747     | )      
|                                              |                                                            |      |                    |         |              |  |               |         |             |  |              |        |   |  |      |   |  |      |            |        
|                                              |                                                            |      | 53,259             |         |              |  | 111,104       |         |             |  | 26,380       |        |   |  |     |   |  |      | 190,743    |        
|                                              |                                                            |      |                    |         |              |  |               |         |             |  |              |        |   |  |      |   |  |      |            |        
|Investing Activities                          |                                                            |      |                    |         |              |  |               |         |             |  |              |        |   |  |      |   |  |      |            |         |   |  |        |       
|Acquisitions                                  |                                                            |      |                   |         |              |  | (2,007,291    | )       |             |  |             |        |   |  |     |   |  |      | (2,007,291 | )      
|Other investments                             |                                                            |      |                   |         |              |  | 52,090        |         |             |  | (52,090      | )      |   |  |     |   |  |      |           |        
|Proceeds from sale of investments             |                                                            |      |                   |         |              |  | 64,045        |         |             |  |             |        |   |  |     |   |  |      | 64,045     |        
|Proceeds from divestitures                    |                                                            |      |                   |         |              |  | 32,454        |         |             |  |             |        |   |  |     |   |  |      | 32,454     |        
|Purchase of broadcast facilities and licenses |                                                            |      |                   |         |              |  | (1,106        | )       |             |  | (627         | )      |   |  |     |   |  |      | (1,733     | )      
|Purchase of property, plant and equipment     |                                                            |      |                   |         |              |  | (41,118       | )       |             |  | (618         | )      |   |  |     |   |  |      | (41,736    | )      
|Advances to parent and affiliated companies   |                                                            |      | (3,062,322         | )       |              |  | 2,851,733     |         |             |  | 60,525       |        |   |  |     |   |  |      | (150,064   | )      
|                                              |                                                            |      |                    |         |              |  |               |         |             |  |              |        |   |  |      |   |  |      |            |        
|                                              |                                                            |      | (3,062,322         | )       |              |  | 950,807       |         |             |  | 7,190        |        |   |  |     |   |  |      | (2,104,325 | )      
|                                              |                                                            |      |                    |         |              |  |               |         |             |  |              |        |   |  |      |   |  |      |            |        
|Financing Activities                          |                                                            |      |                    |         |              |  |               |         |             |  |              |        |   |  |      |   |  |      |            |         |   |  |        |       
|Dividends paid                                |                                                            |      |                   |         |              |  | 48,095        |         |             |  | (48,095      | )      |   |  |     |   |  |      |           |        
|Issuance (repayment) of long-term debt        |                                                            |      | 3,009,063          |         |              |  | (1,166,721    | )       |             |  | (10,730      | )      |   |  |     |   |  |      | 1,831,612  |        
|Net change in bank loans and advances         |                                                            |      |                   |         |              |  | 24,682        |         |             |  | (943         | )      |   |  |     |   |  |      | 23,739     |        
|                                              |                                                            |      |                    |         |              |  |               |         |             |  |              |        |   |  |      |   |  |      |            |        
|                                              |                                                            |      | 3,009,063          |         |              |  | (1,093,944    | )       |             |  | (59,768      | )      |   |  |     |   |  |      | 1,855,351  |        
|                                              |                                                            |      |                    |         |              |  |               |         |             |  |              |        |   |  |      |   |  |      |           
|Net change in cash                            |                                                            |      |                   |         |              |  | (32,033       | )       |             |  | (26,198      | )      |   |  |     |   |  |      | (58,231    | )      
|Cash  beginning of year                      |                                                            |      |                   |         |              |  | 35,513        |         |             |  | 34,150       |        |   |  |     |   |  |      | 69,663     |        
|                                              |                                                            |      |                    |         |              |  |               |         |             |  |              |        |   |  |      |   |  |      |            |        
|Cash  end of year                            |                                                            |      |                   |         |              |  | 3,480         |         |             |  | 7,952        |        |   |  |     |   |  |      | 11,432     |        
|                                              |                                                            |      |                    |         |              |  |               |         |             |  |              |        |   |  |      |   |  |      |            |        

41



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CanWest Media Inc.

Supplemental Consolidating Statement of Operations

For the Year ended August 31, 2000


|                                                                                                          |  |                     |         |              |  |               |          |             |  |              |         |   |  |  |          |   |  |  |          |  
|--------------------------------------------------------------------------------------------------------- |  | ------------------- | ------- | ------------ |  | ------------- | -------- | ----------- |  | ------------ | ------- | - |  |  | -------- | - |  |  | -------- | -
|                                                                                                          |  | CanWest Media Inc., |         | Consolidated |  | Non-guarantor |          | Elimination |  |              |         |  
|                                                                                                          |  | parent company      |         | guarantors   |  | subsidiaries  |          | entries     |  | Consolidated
|                                                                                                          |  |                     |         |              |  |               |          |             |  |             
|                                                                                                          |  | $000                |         | $000         |  | $000          |          | $000        |  | $000        
|Revenue                                                                                                   |  |                     | 398,145 |              |  |               | 100,815  |             |  |              | 177,360 |   |  |  | (56,051  | ) |  |  | 620,269  |  
|Operating expenses                                                                                        |  |                     | 215,459 |              |  |               | 79,430   |             |  |              | 152,629 |   |  |  | (55,551  | ) |  |  | 391,967  |  
|Selling, general and administrative expenses                                                              |  |                     | 48,797  |              |  |               | 27,004   |             |  |              | 11,185  |   |  |  |         |   |  |  | 86,986   |  
|                                                                                                          |  |                     |         |              |  |               |          |             |  |              |         |   |  |  |          |   |  |  |          |  
|                                                                                                          |  |                     | 133,889 |              |  |               | (5,619   | )           |  |              | 13,546  |   |  |  | (500     | ) |  |  | 141,316  |  
|Amortization of intangibles and goodwill                                                                  |  |                     | 7,601   |              |  |               | 14,371   |             |  |              | 1,589   |   |  |  | (3,484   | ) |  |  | 20,077   |  
|Amortization of property, plant and equipment                                                             |  |                     | 9,129   |              |  |               | 1,489    |             |  |              | 7,658   |   |  |  |         |   |  |  | 18,276   |  
|Other amortization                                                                                        |  |                     |        |              |  |               | 1,194    |             |  |              | 3,081   |   |  |  |         |   |  |  | 4,275    |  
|                                                                                                          |  |                     |         |              |  |               |          |             |  |              |         |   |  |  |          |   |  |  |          |  
|                                                                                                          |  |                     | 117,159 |              |  |               | (22,673  | )           |  |              | 1,218   |   |  |  | 2,984    |   |  |  | 98,688   |  
|Financing expenses                                                                                        |  |                     | 61,662  |              |  |               | (7,191   | )           |  |              | 5,342   |   |  |  |         |   |  |  | 59,813   |  
|Investment income                                                                                         |  |                     |        |              |  |               | (101,213 | )           |  |              |        |   |  |  |         |   |  |  | (101,213 | )
|Dividend income                                                                                           |  |                     | (2,473  | )            |  |               | (215     | )           |  |              |        |   |  |  |         |   |  |  | (2,688   | )
|                                                                                                          |  |                     |         |              |  |               |          |             |  |              |         |   |  |  |          |   |  |  |          |  
|                                                                                                          |  |                     | 57,970  |              |  |               | 85,946   |             |  |              | (4,124  | ) |  |  | 2,984    |   |  |  | 142,776  |  
|Provision for income taxes                                                                                |  |                     | 20,791  |              |  |               | 14,702   |             |  |              | 6,264   |   |  |  |         |   |  |  | 41,757   |  
|                                                                                                          |  |                     |         |              |  |               |          |             |  |              |         |   |  |  |          |   |  |  |          |  
|Earnings before the following                                                                             |  |                     | 37,179  |              |  |               | 71,244   |             |  |              | (10,388 | ) |  |  | 2,984    |   |  |  | 101,019  |  
|Minority interest                                                                                         |  |                     |        |              |  |               |         |             |  |              | 2,174   |   |  |  |         |   |  |  | 2,174    |  
|Interest in earnings of Network TEN                                                                       |  |                     |        |              |  |               | 72,194   |             |  |              |        |   |  |  |         |   |  |  | 72,194   |  
|Interest in earnings of other equity accounted
affiliates                                                 |  |                     | 139,194 |              |  |               | 1,786    |             |  |              |        |   |  |  | (138,694 | ) |  |  | 2,286    |  
|Realized currency translation adjustments                                                                 |  |                     |        |              |  |               | (1,300   | )           |  |              |        |   |  |  |         |   |  |  | (1,300   | )
|                                                                                                          |  |                     |         |              |  |               |          |             |  |              |         |   |  |  |          |   |  |  |          |  
|Net earnings for the year                                                                                 |  |                     | 176,373 |              |  |               | 143,924  |             |  |              | (8,214  | ) |  |  | (135,710 | ) |  |  | 176,373  |  
|Retained earnings  beginning of year                                                                     |  |                     | 594,008 |              |  |               | 419,016  |             |  |              | 13,238  |   |  |  | (432,254 | ) |  |  | 594,008  |  
|Adjustment for adoption of new accounting
pronouncement                                                   |  |                     | (15,161 | )            |  |               | (20,122  | )           |  |              |        |   |  |  | 20,122   |   |  |  | (15,161  | )
|                                                                                                          |  |                     |         |              |  |               |          |             |  |              |         |   |  |  |          |   |  |  |          |  
|Retained earnings  end of year                                                                           |  |                     | 755,220 |              |  |               | 542,818  |             |  |              | 5,024   |   |  |  | (547,842 | ) |  |  | 755,220  |  
|                                                                                                          |  |                     |         |              |  |               |          |             |  |              |         |   |  |  |          |   |  |  |          |  
|Net earnings in accordance with Canadian
GAAP                                                             |  |                     | 176,373 |              |  |               | 143,924  |             |  |              | (8,214  | ) |  |  | (135,710 | ) |  |  | 176,373  |  
|Pre-operating costs net of tax of $544                                                                    |  |                     |        |              |  |               |         |             |  |              | 2,788   |   |  |  |         |   |  |  | 2,788    |  
|Tax rate change not enacted                                                                               |  |                     |        |              |  |               | (14,832  | )           |  |              |        |   |  |  |         |   |  |  | (14,832  | )
|Realization of currency translation
adjustments net of tax of nil                                         |  |                     |        |              |  |               | 1,300    |             |  |              |        |   |  |  |         |   |  |  | 1,300    |  
|Investment in WIC on an equity basis net of tax
of $22,452                                                |  |                     | 47,045  |              |  |               |         |             |  |              |        |   |  |  |         |   |  |  | 47,045   |  
|                                                                                                          |  |                     |         |              |  |               |          |             |  |              |         |   |  |  |          |   |  |  |          |  
|Net earnings in accordance with U.S. GAAP                                                                 |  |                     | 223,418 |              |  |               | 130,392  |             |  |              | (5,426  | ) |  |  | (135,710 | ) |  |  | 212,674  |  
|Amortization of goodwill and indefinite life
intangibles net of tax of $9,106                             |  |                     |        |              |  |               | 10,221   |             |  |              | 1,589   |   |  |  |         |   |  |  | 11,810   |  
|Amortization of goodwill and indefinite life
intangibles in equity accounted affiliates net
of tax of nil |  |                     |        |              |  |               | 4,225    |             |  |              |        |   |  |  |         |   |  |  | 4,225    |  
|                                                                                                          |  |                     |         |              |  |               |          |             |  |              |         |   |  |  |          |   |  |  |          |  
|Net earnings (loss) in accordance with U.S
GAAP adjusted to exclude amortization expense
recorded in 2000 |  |                     | 223,418 |              |  |               | 144,838  |             |  |              | (3,837  | ) |  |  | (135,710 | ) |  |  | 228,709  |  
|                                                                                                          |  |                     |         |              |  |               |          |             |  |              |         |   |  |  |          |   |  |  |          |  

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CanWest Media Inc.

Supplemental Consolidating Statement of Cash Flows

For the Year Ended August 31, 2000


|                                               |                                                       |  |                    |          |              |  |               |          |             |  |              |        |   |  |          |         |  |  |          |          |  
|---------------------------------------------- | ----------------------------------------------------- |  | ------------------ | -------- | ------------ |  | ------------- | -------- | ----------- |  | ------------ | ------ | - |  | -------- | ------- |  |  | -------- | -------- | -
|                                               |                                                       |  | CanWest Media Inc. |          | Consolidated |  | Non-guarantor |          | Elimination |  |              |        |  
|                                               |                                                       |  | parent company     |          | guarantors   |  | subsidiaries  |          | entries     |  | Consolidated
|                                               |                                                       |  |                    |          |              |  |               |          |             |  |             
|                                               |                                                       |  | $000               |          | $000         |  | $000          |          | $000        |  | $000        
|CASH GENERATED (UTILIZED) BY:                  |                                                       |  |                    |          |              |  |               |          |             |  |              |        |   |  |          |         |  |  |          |         
|Operating activities                           |                                                       |  |                    |          |              |  |               |          |             |  |              |        |   |  |          |         |  |  |          |         
|Net earnings for the year                      |                                                       |  | 176,373            |          |              |  | 143,924       |          |             |  | (8,214       | )      |   |  | (135,710 | )       |  |  | 176,373  |         
|Items not affecting cash                       |                                                       |  |                    |          |              |  |               |          |             |  |              |        |   |  |          |         |  |  |          |         
|                                               | Amortization                                          |  |                    | 13,106   |              |  |               | 22,953   |             |  |              | 9,849  |   |  |          |        |  |  |          | 45,908   |  
|                                               | Future income taxes                                   |  |                    | 6,897    |              |  |               | (37,039  | )           |  |              | 5,062  |   |  |          |        |  |  |          | (25,080  | )
|                                               | Interest in earnings of Network TEN                   |  |                    |         |              |  |               | (72,194  | )           |  |              |       |   |  |          |        |  |  |          | (72,194  | )
|                                               | Interest in earnings of equity accounted
subsidiaries |  |                    | (135,710 | )            |  |               |         |             |  |              | (2,286 | ) |  |          | 135,710 |  |  |          | (2,286   | )
|                                               | Minority interests                                    |  |                    | 1,738    |              |  |               | (1,738   | )           |  |              | (2,174 | ) |  |          |        |  |  |          | (2,174   | )
|                                               | Realized currency translation adjustments             |  |                    |         |              |  |               | 1,300    |             |  |              |       |   |  |          |        |  |  |          | 1,300    |  
|                                               | Loss on write-down of program inventory               |  |                    |         |              |  |               | 12,566   |             |  |              |       |   |  |          |        |  |  |          | 12,566   |  
|                                               | Gain on sale of other investments                     |  |                    |         |              |  |               | (101,787 | )           |  |              |       |   |  |          |        |  |  |          | (101,787 | )
|Distributions from Network TEN                 |                                                       |  |                   |          |              |  | 75,259        |          |             |  |             |        |   |  |         |         |  |  | 75,259   |         
|                                               |                                                       |  |                    |          |              |  |               |          |             |  |              |        |   |  |          |         |  |  |          |         
|                                               |                                                       |  | 62,404             |          |              |  | 43,244        |          |             |  | 2,237        |        |   |  |         |         |  |  | 107,885  |         
|Changes in non-cash operating accounts         |                                                       |  | (8,089             | )        |              |  | 33,902        |          |             |  | (5,431       | )      |   |  |         |         |  |  | 20,382   |         
|                                               |                                                       |  |                    |          |              |  |               |          |             |  |              |        |   |  |          |         |  |  |          |         
|                                               |                                                       |  | 54,315             |          |              |  | 77,146        |          |             |  | (3,194       | )      |   |  |         |         |  |  | 128,267  |         
|                                               |                                                       |  |                    |          |              |  |               |          |             |  |              |        |   |  |          |         |  |  |          |         
|Investing Activities                           |                                                       |  |                    |          |              |  |               |          |             |  |              |        |   |  |          |         |  |  |          |         
|Acquisitions                                   |                                                       |  |                   |          |              |  | (465,727      | )        |             |  | (52,092      | )      |   |  |         |         |  |  | (517,819 | )       
|Proceeds from disposition of other
investments |                                                       |  |                   |          |              |  | 224,782       |          |             |  |             |        |   |  |         |         |  |  | 224,782  |         
|Other investments                              |                                                       |  | (21,182            | )        |              |  | (147,697      | )        |             |  | 49,425       |        |   |  |         |         |  |  | (119,454 | )       
|Purchase of property and equipment             |                                                       |  | (22,649            | )        |              |  | 22,649        |          |             |  | (8,228       | )      |   |  |         |         |  |  | (8,228   | )       
|Advances to affiliated companies               |                                                       |  | (593,587           | )        |              |  | 66,009        |          |             |  | (5,401       | )      |   |  | 272,507  |         |  |  | (260,472 | )       
|                                               |                                                       |  |                    |          |              |  |               |          |             |  |              |        |   |  |          |         |  |  |          |         
|                                               |                                                       |  | (637,418           | )        |              |  | (299,984      | )        |             |  | (16,296      | )      |   |  | 272,507  |         |  |  | (681,191 | )       
|Financing Activities                           |                                                       |  |                    |          |              |  |               |          |             |  |              |        |   |  |          |         |  |  |          |         
|Issuance (redemption) of capital stock         |                                                       |  |                   |          |              |  | 272,773       |          |             |  | (266         | )      |   |  | (272,507 | )       |  |  |         |         
|Issuance (repayment) of long-term debt         |                                                       |  | 597,084            |          |              |  | (8,569        | )        |             |  | 29,814       |        |   |  |         |         |  |  | 618,329  |         
|Net change in bank loans and advances          |                                                       |  | (8,671             | )        |              |  | (20,554       | )        |             |  | 737          |        |   |  |         |         |  |  | (28,488  | )       
|                                               |                                                       |  |                    |          |              |  |               |          |             |  |              |        |   |  |          |         |  |  |          |         
|                                               |                                                       |  | 588,413            |          |              |  | 243,650       |          |             |  | 30,285       |        |   |  | (272,507 | )       |  |  | 589,841  |         
|                                               |                                                       |  |                    |          |              |  |               |          |             |  |              |        |   |  |          |         |  |  |          |         
|Net change in cash                             |                                                       |  | 5,310              |          |              |  | 20,812        |          |             |  | 10,795       |        |   |  |         |         |  |  | 36,917   |         
|Cash  beginning of year                       |                                                       |  |                   |          |              |  | 9,391         |          |             |  | 23,355       |        |   |  |         |         |  |  | 32,746   |         
|                                               |                                                       |  |                    |          |              |  |               |          |             |  |              |        |   |  |          |         |  |  |          |         
|Cash  end of year                             |                                                       |  | 5,310              |          |              |  | 30,203        |          |             |  | 34,150       |        |   |  |         |         |  |  | 69,663   |         
|                                               |                                                       |  |                    |          |              |  |               |          |             |  |              |        |   |  |          |         |  |  |          |         

43



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THE TEN GROUP PTY LIMITED
 
CONSOLIDATED FINANCIAL STATEMENTS
 
FOR THE YEAR ENDED AUGUST 31, 2002
 
(expressed in Australian dollars)





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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
STATEMENTS OF FINANCIAL PERFORMANCE
FOR THE YEAR ENDED 31 AUGUST 2002

|                                                                                                             |  |      |      |       |  |       |          |       |  |      |          |   |  |  |          |  
|------------------------------------------------------------------------------------------------------------ |  | ---- | ---- | ----- |  | ----- | -------- | ----- |  | ---- | -------- | - |  |  | -------- | -
|                                                                                                             |  |      |      |       |  | 2002  |          | 2001  |  | 2000
|                                                                                                             |  | Note |      | $'000 |  | $'000 |          | $'000
|Revenue from ordinary activities                                                                             |  |      | 2    |       |  |       | 667,012  |       |  |      | 664,157  |   |  |  | 556,635  |  
|                                                                                                             |  |      |      |       |  |       |          |       |  |      |          |   |  |  |          |  
|Television costs                                                                                             |  |      |      |       |  |       | (446,110 | )     |  |      | (401,061 | ) |  |  | (357,080 | )
|Out Of Home costs                                                                                            |  |      |      |       |  |       | (272,214 | )     |  |      | (65,683  | ) |  |  |         |  
|Ventures costs                                                                                               |  |      |      |       |  |       |         |       |  |      | (31,099  | ) |  |  | (4,413   | )
|Borrowing costs                                                                                              |  |      | 3(b) |       |  |       | (37,335  | )     |  |      | (93,263  | ) |  |  | (87,786  | )
|Share of net profit of associates and joint ventures
accounted                                               |  |      |      |       |  |       |          |       |  |      |          |   |  |  |          |  
|for using the equity method                                                                                  |  |      | 26   |       |  |       | 916      |       |  |      | 588      |   |  |  |         |  
|                                                                                                             |  |      |      |       |  |       |          |       |  |      |          |   |  |  |          |  
|Profit from ordinary activities before related income tax
expense                                            |  |      |      |       |  |       | (87,751  | )     |  |      | 73,639   |   |  |  | 107,356  |  
|Income tax expense relating to ordinary activities                                                           |  |      | 4(a) |       |  |       | (70,530  | )     |  |      | (23,822  | ) |  |  | (33,559  | )
|                                                                                                             |  |      |      |       |  |       |          |       |  |      |          |   |  |  |          |  
|Net profit from ordinary activities after related income
tax expense                                         |  |      |      |       |  |       | (158,281 | )     |  |      | 49,817   |   |  |  | 73,797   |  
|Net (profit)/loss attributable to outside equity interests                                                   |  |      |      |       |  |       | 29,790   |       |  |      | 5,451    |   |  |  |         |  
|                                                                                                             |  |      |      |       |  |       |          |       |  |      |          |   |  |  |          |  
|Net profit attributable to members of the parent entity                                                      |  |      | 24   |       |  |       | (128,491 | )     |  |      | 55,268   |   |  |  | 73,797   |  
|                                                                                                             |  |      |      |       |  |       |          |       |  |      |          |   |  |  |          |  
|Increase in asset revaluation reserve                                                                        |  |      | 23   |       |  |       | 751,400  |       |  |      |         |   |  |  |         |  
|Net exchange difference on translation of financial
report offoreign controlled entities                     |  |      |      |       |  |       | (81      | )     |  |      | 18       |   |  |  |         |  
|                                                                                                             |  |      |      |       |  |       |          |       |  |      |          |   |  |  |          |  
|Total changes in equity from non-owner related
transactions attributable to the members of the parent
entity |  |      |      |       |  |       | 622,828  |       |  |      | 55,286   |   |  |  | 73,797   |  
|                                                                                                             |  |      |      |       |  |       |          |       |  |      |          |   |  |  |          |  

The above statements of financial performance should be read in conjunction
with the accompanying notes.

Page 2



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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
STATEMENTS OF FINANCIAL POSITION
AS AT 31 AUGUST 2002

|                                                |                                                   |  |      |      |       |  |           |           |      |  |         |         | 
|----------------------------------------------- | ------------------------------------------------- |  | ---- | ---- | ----- |  | --------- | --------- | ---- |  | ------- | ------- | 
|                                                |                                                   |  |      |      |       |  | 2002      |           | 2001
|                                                |                                                   |  | Note |      | $'000 |  | $'000    
|Current Assets                                  |                                                   |  |      |      |       |  |           |           |      |  |         |        
|                                                | Cash                                              |  |      | 5    |       |  |           | 11,799    |      |  |         | 21,769  | 
|                                                | Receivables                                       |  |      | 6    |       |  |           | 116,124   |      |  |         | 103,251 | 
|                                                | Inventories                                       |  |      | 7    |       |  |           | 127,638   |      |  |         | 110,669 | 
|                                                | Current tax receivables                           |  |      | 4(b) |       |  |           | 63,716    |      |  |         | 11,234  | 
|                                                | Other                                             |  |      | 8    |       |  |           | 12,029    |      |  |         | 7,531   | 
|                                                |                                                   |  |      |      |       |  |           |           |      |  |         |        
|Total Current Assets                            |                                                   |  |      |      |       |  | 331,306   |           |      |  | 254,454 |        
|                                                |                                                   |  |      |      |       |  |           |           |      |  |         |        
|Non-Current Assets                              |                                                   |  |      |      |       |  |           |           |      |  |         |        
|                                                | Receivables                                       |  |      | 9    |       |  |           | 2,116     |      |  |         | 4,649   | 
|                                                | Inventories                                       |  |      | 12   |       |  |           | 1,565     |      |  |         | 1,590   | 
|                                                | Investments accounted for using the equity method |  |      | 10   |       |  |           | 2,888     |      |  |         | 2,384   | 
|                                                | Other financial assets                            |  |      | 11   |       |  |           | 2,553     |      |  |         | 19,050  | 
|                                                | Property, plant and equipment                     |  |      | 13   |       |  |           | 84,779    |      |  |         | 75,829  | 
|                                                | Intangibles                                       |  |      | 14   |       |  |           | 1,159,707 |      |  |         | 624,655 | 
|                                                | Deferred tax assets                               |  |      | 4(c) |       |  |           | 8,270     |      |  |         | 2,708   | 
|                                                | Other                                             |  |      | 15   |       |  |           | 626       |      |  |         | 5,009   | 
|                                                |                                                   |  |      |      |       |  |           |           |      |  |         |        
|Total Non-Current Assets                        |                                                   |  |      |      |       |  | 1,262,504 |           |      |  | 735,874 |        
|                                                |                                                   |  |      |      |       |  |           |           |      |  |         |        
|Total Assets                                    |                                                   |  |      |      |       |  | 1,593,810 |           |      |  | 990,328 |        
|                                                |                                                   |  |      |      |       |  |           |           |      |  |         |        
|Current Liabilities                             |                                                   |  |      |      |       |  |           |           |      |  |         |        
|                                                | Payables                                          |  |      | 16   |       |  |           | 159,958   |      |  |         | 225,596 | 
|                                                | Interest-bearing liabilities                      |  |      | 17   |       |  |           | 29,247    |      |  |         | 28,292  | 
|                                                | Current tax liabilities                           |  |      | 4(b) |       |  |           |          |      |  |         |        | 
|                                                | Provisions                                        |  |      | 18   |       |  |           | 40,737    |      |  |         | 122,940 | 
|                                                |                                                   |  |      |      |       |  |           |           |      |  |         |        
|Total Current Liabilities                       |                                                   |  |      |      |       |  | 229,942   |           |      |  | 376,828 |        
|                                                |                                                   |  |      |      |       |  |           |           |      |  |         |        
|Non-Current Liabilities                         |                                                   |  |      |      |       |  |           |           |      |  |         |        
|                                                | Payables                                          |  |      | 19   |       |  |           | 26,521    |      |  |         | 20,532  | 
|                                                | Interest-bearing liabilities                      |  |      | 20   |       |  |           | 510,111   |      |  |         | 344,256 | 
|                                                | Deferred tax liabilities                          |  |      | 4(d) |       |  |           | 32,042    |      |  |         | 8,456   | 
|                                                | Provisions                                        |  |      | 21   |       |  |           | 1,971     |      |  |         | 3,165   | 
|                                                |                                                   |  |      |      |       |  |           |           |      |  |         |        
|Total Non-Current Liabilities                   |                                                   |  |      |      |       |  | 570,645   |           |      |  | 376,409 |        
|                                                |                                                   |  |      |      |       |  |           |           |      |  |         |        
|Total Liabilities                               |                                                   |  |      |      |       |  | 800,587   |           |      |  | 753,237 |        
|                                                |                                                   |  |      |      |       |  |           |           |      |  |         |        
|Net Assets                                      |                                                   |  |      |      |       |  | 793,223   |           |      |  | 237,091 |        
|                                                |                                                   |  |      |      |       |  |           |           |      |  |         |        
|Equity                                          |                                                   |  |      |      |       |  |           |           |      |  |         |        
|                                                | Contributed equity                                |  |      | 22   |       |  |           | 45,500    |      |  |         | 45,500  | 
|                                                | Reserves                                          |  |      | 23   |       |  |           | 752,266   |      |  |         | 947     | 
|                                                | Retained earnings                                 |  |      | 24   |       |  |           | (4,468    | )    |  |         | 124,023 | 
|                                                |                                                   |  |      |      |       |  |           |           |      |  |         |        
|Total parent entity interest                    |                                                   |  |      |      |       |  | 793,298   |           |      |  | 170,470 |        
|Outside equity interests in controlled entities |                                                   |  | 30   |      |       |  | (75       | )         |      |  | 66,621  |        
|                                                |                                                   |  |      |      |       |  |           |           |      |  |         |        
|Total Equity                                    |                                                   |  |      |      |       |  | 793,223   |           |      |  | 237,091 |        
|                                                |                                                   |  |      |      |       |  |           |           |      |  |         |        

The above statements of financial position should be read in conjunction with
the accompanying notes.

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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2002

|                                         |                                                           |                |                                         |       |      |  |         |          |         |          |          |          |         |          |         |          |         |         |  
|---------------------------------------- | --------------------------------------------------------- | -------------- | --------------------------------------- | ----- | ---- |  | ------- | -------- | ------- | -------- | -------- | -------- | ------- | -------- | ------- | -------- | ------- | ------- | -
|                                         |                                                           |                |                                         |       |      |  |         |          | 2002    |          | 2001     |          | 2000   
|                                         |                                                           |                |                                         |       | Note |  | $'000   |          | $'000   |          | $'000   
|Cash and its equivalents                 |                                                           |                |                                         |       |      |  |         |          |         |          |          |          |         |          |         |         
|                                         | Cash at hand                                              |                |                                         | 5     |      |  |         | 65       |         |          |          | 69       |         |          |         | 59       |        
|                                         | Cash at bank                                              |                |                                         | 5     |      |  |         | 11,734   |         |          |          | 21,700   |         |          |         | 38,250   |        
|                                         | Bank overdraft                                            |                |                                         | 17    |      |  |         | (1,791   | )       |          |          | (1,084   | )       |          |         |         |        
|                                         |                                                           |                |                                         |       |      |  |         |          |         |          |          |          |         |          |         |         
|At end of period                         |                                                           |                |                                         |       |      |  | 10,008  |          |         |          | 20,685   |          |         |          | 38,309  |         
|At commencement of period                |                                                           |                |                                         |       |      |  | 20,685  |          |         |          | 38,309   |          |         |          | 21,562  |         
|                                         |                                                           |                |                                         |       |      |  |         |          |         |          |          |          |         |          |         |         
|Net cash (outflow)/inflow for the year   |                                                           |                |                                         |       |      |  | (10,677 | )        |         |          | (17,624  | )        |         |          | 16,747  |         
|                                         |                                                           |                |                                         |       |      |  |         |          |         |          |          |          |         |          |         |         
|Represented
by:                         
|Cash Flows from operating activities     |                                                           |                |                                         |       |      |  |         |          |         |          |          |          |         |          |         |         
|                                         | Receipts from customers                                   |                |                                         |       |      |  |         | 745,199  |         |          |          | 610,972  |         |          |         | 584,687  |        
|                                         | Payments to suppliers and employees                       |                |                                         |       |      |  |         | (609,867 | )       |          |          | (521,070 | )       |          |         | (424,072 | )      
|                                         | Dividends received                                        |                |                                         |       |      |  |         | 346      |         |          |          | 1,959    |         |          |         | 1,849    |        
|                                         | Interest received                                         |                |                                         |       |      |  |         | 933      |         |          |          | 1,424    |         |          |         | 1,240    |        
|                                         | Interest paid                                             |                |                                         |       |      |  |         | (25,503  | )       |          |          | (18,897  | )       |          |         | (3,094   | )      
|                                         | Income
tax paid                                           |                |                                         |       |      |  |         |          |         |          |          |          |         |          |         |          |        
|                                         |                                                           | General        |                                         |       |      |  |         |          | (51,858 | )        |          |          | (55,043 | )        |         |          | (22,277 | )      
|                                         |                                                           | Tax settlement |                                         |       |      |  |         |          | (36,158 | )        |          |          |        |          |         |          |        |        
|                                         |                                                           |                |                                         |       |      |  |         |          |         |          |          |          |         |          |         |         
|Net cash flow from operating activities  |                                                           |                | 36                                      |       |      |  | 23,092  |          |         |          | 19,345   |          |         |          | 138,333 |         
|                                         |                                                           |                |                                         |       |      |  |         |          |         |          |          |          |         |          |         |         
|Cash Flows from financing activities     |                                                           |                |                                         |       |      |  |         |          |         |          |          |          |         |          |         |         
|                                         | Dividend paid                                             |                |                                         |       |      |  |         | (66,221  | )       |          |          | (73,797  | )       |          |         | (67,370  | )      
|                                         | Debenture interest paid                                   |                |                                         |       |      |  |         | (66,221  | )       |          |          | (73,797  | )       |          |         | (67,370  | )      
|                                         | Debenture interest  withholding tax                      |                |                                         |       |      |  |         | (6,622   | )       |          |          | (7,380   | )       |          |         | (6,737   | )      
|                                         | Amounts paid re: Tax Dispute*                             |                |                                         |       |      |  |         | (16,972  | )       |          |          |         |         |          |         |         |        
|                                         | Bank
loan                                                 |                |                                         |       |      |  |         |          |         |          |          |          |         |          |         |          |        
|                                         |                                                           |                | Drawdown                                |       |      |  |         |          |         | 538,000  |          |          |         | 526,435  |         |          |         | 120,000 |  
|                                         |                                                           |                | Repayment                               |       |      |  |         |          |         | (372,359 | )        |          |         | (282,804 | )       |          |         | (70,000 | )
|                                         |                                                           |                |                                         |       |      |  |         |          |         |          |          |          |         |          |         |         
|Net cash flow from financing activities  |                                                           |                |                                         |       |      |  | 9,605   |          |         |          | 88,657   |          |         |          | (91,477 | )       
|                                         |                                                           |                |                                         |       |      |  |         |          |         |          |          |          |         |          |         |         
|Cash Flows from investment activities    |                                                           |                |                                         |       |      |  |         |          |         |          |          |          |         |          |         |         
|                                         | Acquisition of property, plant and equipment              |                |                                         |       |      |  |         | (25,490  | )       |          |          | (23,120  | )       |          |         | (20,027  | )      
|                                         | Proceeds on disposal of property, plant and equipment     |                |                                         |       |      |  |         | 326      |         |          |          | 13,282   |         |          |         | 1,313    |        
|                                         | Purchases of equity investments                           |                |                                         |       |      |  |         |         |         |          |          |         |         |          |         | (8,601   | )      
|                                         | Payment for controlled entities (net of cash acquired)    |                |                                         | 25(b) |      |  |         | (10,000  | )       |          |          | (184,711 | )       |          |         |         |        
|                                         | Payment for Out of Home investments and site
acquisitions |                |                                         |       |      |  |         | (6,361   | )       |          |          |         |         |          |         |         |        
|                                         | Payment for intangible licence rights                     |                |                                         |       |      |  |         |         |         |          |          | (1,000   | )       |          |         |         |        
|                                         | Sale of equity investments                                |                |                                         |       |      |  |         | 142      |         |          |          | 91,682   |         |          |         | 134      |        
|                                         | Advances/(repayments)                                     |                |                                         |       |      |  |         |          |         |          |          |          |         |          |         |          |        
|                                         |                                                           |                | Associated companies and joint ventures |       |      |  |         |          |         | 11       |          |          |         | (12,173  | )       |          |         |        |  
|                                         |                                                           |                | Directors of controlled entities        |       |      |  |         |          |         | (1,017   | )        |          |         | 1,017    |         |          |         |        |  
|                                         |                                                           |                | Other related parties                   |       |      |  |         |          |         | (1,138   | )        |          |         | (7,766   | )       |          |         |        |  
|                                         |                                                           |                | Other                                   |       |      |  |         |          |         | 153      |          |          |         | (2,837   | )       |          |         | (2,928  | )
|                                         |                                                           |                |                                         |       |      |  |         |          |         |          |          |          |         |          |         |         
|Net cash flow from investment activities |                                                           |                |                                         |       |      |  | (43,374 | )        |         |          | (125,626 | )        |         |          | (30,109 | )       
|                                         |                                                           |                |                                         |       |      |  |         |          |         |          |          |          |         |          |         |         
|Net cash (outflow)/inflow for the year   |                                                           |                |                                         |       |      |  | (10,677 | )        |         |          | (17,624  | )        |         |          | 16,747  |         
|                                         |                                                           |                |                                         |       |      |  |         |          |         |          |          |          |         |          |         |         

*: Amount received from the ATO on 6 September 2002.

The above statements of cash flows should be read in conjunction with the
accompanying notes.

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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002



|1 |  | STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
|- |  | --------------------------------------------

This general purpose financial report has been prepared in accordance with
Accounting Standards, other authoritative pronouncements of the Australian
Accounting Standards Board, Urgent Issues Group Consensus Views and the
Corporations Act 2001.

It is prepared in accordance with the historical cost convention except for
certain assets which are at valuation. The accounting policies adopted are
consistent with those of the previous year. Comparative information has been
reclassified where appropriate to enhance comparability.



|(a) |  | Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities
and results of all entities controlled by the Ten Group Pty Limited (the
Company) as detailed in Note 25 to the financial statements. The Ten
Group Pty Limited and its controlled entities together are referred to in
this financial report as the consolidated entity. The financial
statements of controlled entities are included from the date control
commences until the date control ceases.                                                                                                                                                                                                                                                                             
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | All inter-company transactions are eliminated in full. Outside equity
interests in the equity and results of the entities that are controlled
by the Company are shown as a separate item in the consolidated financial
statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(b) |  | Income Tax
Tax effect accounting has been adopted, whereby income tax expense has
been calculated on pre-tax accounting profits after adjustment for
permanent taxation differences. The tax effect of timing differences
which occur where items are assessed or deducted for income tax purposes
in a period different to that for accounting, is shown in the Provision
for Deferred Income Tax and Future Income Tax Benefit, as applicable, at
taxation rates applicable when such timing differences are expected to
reverse, to the extent that realisation of the Future Income Tax Benefit
is considered beyond reasonable doubt. The Future Income Tax Benefit
relating to tax losses is not carried forward as an asset unless the
benefit is virtually certain of realisation.
|   
|(c) |  | Receivables and Revenue Recognition
Revenue is recognised at fair value of the consideration received net of
the amount of goods and services tax (GST). Revenue from core operating
activities consists of advertising and media revenues.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|    |  | Advertising and media revenues are disclosed after making allowance for
commissions paid to advertising agencies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|    |  | Collectability of trade debtors is reviewed on an ongoing basis. Debts
which are known to be uncollectable are written off.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|    |  | The gross proceeds of non-current asset sales are included as revenue at
the date control of the asset passes to the buyer, usually when an
unconditional contract of sale is signed. The gain or loss on disposal
is calculated as the difference between the carrying amount of the asset
at the time of disposal and the net proceeds on disposal.                                                                                                                                                                                                                                                                                                                                                                                                                                     

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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002



|1   |  | STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(d) |  | Inventories                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|    |  | Television Program Rights
Television programs which are available for broadcast are recognised as
an asset and stated at cost. Series programs are written off in full
upon initial airing. Features are amortised over their estimated useful
lives. The carrying values of television program rights are reviewed on
a periodic basis and, where required, written down to their recoverable
amount.                                                                                                                             
|   
|    |  | Television programs at balance date for which the telecast licence period
has commenced or will commence in the succeeding year has been classified
as a current asset.                                                                                                                                                                                                                                                                                                                                                            
|   
|    |  | Other inventories
All other inventories are carried at the lower of cost and net realisable
value.                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(e) |  | Plant and equipment
Depreciation or amortisation is provided on fixed assets other than
freehold land so as to write off the cost of the assets progressively
over their estimated remaining useful lives. The straight line method of
calculating depreciation is applied. The cost of the freehold land and
buildings is supported by independent valuations conducted at least once
every three years. Estimates of remaining useful lives are made on a
regular basis for all assets. The expected useful lives are as follows:

|                    |  |               |  |               |  |               |  |  |  |  |  | 
|------------------- |  | ------------- |  | ------------- |  | ------------- |  |  |  |  |  | 
|                    |  | 2002          |  | 2001          |  | 2000         
|Buildings           |  | 40 years      |  | 40 years      |  | 40 years     
|Plant and Equipment |  | 3 to 10 years |  | 3 to 10 years |  | 3 to 10 years



|    |  | The cost of leasehold improvements is amortised over the unexpired period
of the lease or the estimated useful life of the improvement, whichever
is the shorter.                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(f) |  | Intangibles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|    |  | Television Licences
Television licences are measured at fair value based on a directors
valuation and are supported by an independent valuation received from
Grant Samuel & Associates Pty Limited in October 2002. Revaluations are
made with sufficient regularity to ensure that the carrying amount of
television licences does not differ materially from fair value at the
reporting date. Annual assessments are made by the directors,
supplemented by independent assessments at least every three years. The
revaluation increments are credited directly to the asset revaluation
reserve.
|   
|    |  | The television licences continue to be subject to Government legislation
and regulation by the Australian Broadcasting Authority (ABA). The
Directors have no reason to believe that the licences will not be renewed
in due course.                                                                                                                                                                                                                                                                                                                                                                 
|   
|    |  | No amortisation is provided against these assets as the Directors believe
that the television licences do not have a limited useful life.                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002



|1   |  | STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)                                                                                                                                                                                                                                                                                                                                                                                       
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(f) |  | Intangibles (continued)                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|    |  | Change in accounting policy for television licences
The policy of revaluation was adopted with effect from 31 August 2002.
The previous policy was to carry television licences in the financial
statements at cost. The new policy was adopted to provide more relevant
information about the television licences.                                                                                                                            
|   
|    |  | The change in accounting policy resulted in an increase of $751,401,000
in the consolidated carrying amount of television licences as at 31
August 2002, with a corresponding increase in the consolidated asset
revaluation reserve and consolidated total assets, net assets and total
equity. The change had no effect on revenues or expenses in the
statement of financial performance.                                                   
|   
|    |  | If the new accounting policy had always been applied, the carrying amount
of the television licences in the 2001 financial statements would have
been $1,077,823,131 and the asset revaluation reserve would have been
$752,331,109. This means there would have been nil impact on the 2002
financial statements if this accounting policy had always been applied.                                                                           
|   
|    |  | Other Licences
Other licences represent capitalised outdoor site leases. These
licences are being amortised on a straight line basis over the term of
the site leases (approximately 20 to 40 years).                                                                                                                                                                                                                                          
|   
|    |  | Goodwill
Goodwill represents the excess of the purchase consideration plus
incidental costs over the fair value of the identifiable net assets
acquired. Goodwill is being amortised on a straight line basis over 20
years.                                                                                                                                                                                                                   
|   
|    |  | Directors review goodwill at each reporting date and recognise it as an
expense to the extent that future benefits are no longer probable.                                                                                                                                                                                                                                                                                                     
|   
|(g) |  | Investments                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    |  | Controlled entities
Investments in controlled entities are carried in the Companys financial
statements at the lower of cost and recoverable amount.                                                                                                                                                                                                                                                                                          
|   
|    |  | Associates
Investments in associates are carried in the Companys financial
statements at the lower of cost and recoverable amount.                                                                                                                                                                                                                                                                                                            
|   
|    |  | Investments in associates are detailed in Note 26 and comprise those
investments where the consolidated entity exercises significant influence
but not control.                                                                                                                                                                                                                                                                                
|   
|    |  | Information determined in accordance with the equity method of accounting
is detailed in Note 26 to the financial statements in respect of material
investments in associated companies. The consolidated entitys equity
accounted share of the associates net profit or loss is recognised in
the consolidated statement of financial performance from the date
significant influence commences until the date significant influence
ceases.

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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002



|1   |  | STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)                                                                                                                                                                                                                                                                                                                                                
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(h) |  | Leases                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    |  | Operating leases
Operating leases are those leases under which the lessor effectively
retains substantially all the risks and benefits incident to ownership of
leased non-current assets.                                                                                                                                                                                                              
|   
|    |  | Finance leases
Finance leases are capitalised. A lease asset and a lease liability
equal to the present value of the minimum lease payments are recorded at
the inception of the lease.                                                                                                                                                                                                                 
|   
|    |  | Lease liabilities are reduced by repayments of principal. The interest
components of the lease payments are expensed. Contingent rentals are
expensed as incurred.                                                                                                                                                                                                                                      
|   
|(i) |  | Recoverable Amount of Non-Current Assets Valued on Cost Basis
The recoverable amount of an asset is the net amount expected to be
recovered through the net cash inflows arising from its continued use and
subsequent disposal.                                                                                                                                                                        
|   
|    |  | Where the carrying amount of a non-current asset is greater than its
recoverable amount the asset is written down to its recoverable amount.
The write down is recognised as an expense in the reporting period in
which it occurs. Where the net cash inflows are derived from a group of
assets working together, recoverable amount is determined on the basis of
the relevant group of assets.      
|   
|(j) |  | Payables
These amounts represent liabilities for goods and services provided to
the consolidated entity prior to the end of the financial period and
which are unpaid. The amounts are unsecured and are usually paid within
30 days of recognition.                                                                                                                                                    
|   
|(k) |  | Employee Entitlements
Liabilities for wages and salaries and annual leave are recognised, and
are measured as the amount unpaid at the reporting date at current pay
rates in respect of employees services up to that date.                                                                                                                                                                           
|   
|    |  | A liability for long service leave and Indonesian statutory severance
entitlements is recognised, and measured as the present value of expected
future payments to be made in respect of services provided by employees
up to the reporting date. Consideration is given to expected future wage
and salary levels including related on-costs, experience of employee
departures and periods of service.
|   
|(l) |  | Intercompany Loans
Loans between members of the consolidated entity have no specified terms
of repayment but where it is unlikely that such amounts will be repayable
within 12 months the advances have been included, as appropriate, in
non-current assets or liabilities.                                                                                                                           
|   
|(m) |  | Cash
For purposes of the Statement of Cash Flows, cash includes cash
management deposits at call net of outstanding overdrafts.                                                                                                                                                                                                                                                                         
|   
|(n) |  | Interest Bearing Securities
Interest bearing deposits and borrowings are stated at cost with interest
income or expense brought to account in the periods to which they relate.
Interest expense is accrued at the contracted rate and included in
Payables.                                                                                                                                          

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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002



|1   |  | STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(o) |  | Borrowing Costs
Borrowing costs are recognised as expenses in the period in which they
are incurred. Borrowing costs include interest on bank overdrafts,
finance lease charges, short-term and long-term borrowings and ancillary
costs incurred in connection with arrangement of borrowings.                                                                                                                                                                                                 
|   
|    |  | So as to hedge some or all of the financial exposure of the long-term
borrowings at variable market determined interest rates, the consolidated
entity enters into interest swap contracts. The costs of such contracts
are brought to account in the periods to which they relate and are
included in interest expense.                                                                                                                                                                        
|   
|(p) |  | Program Development
The consolidated entitys long term commitment to program planning and
development requires significant expenditure on an infrequent basis.
Accordingly, where appropriate, amounts are set aside as a charge against
revenue to reflect more properly the ongoing nature of these expenses in
the periods in which they accrue.                                                                                                                                            
|   
|(q) |  | Acquisition of Assets
The cost method of accounting is used for all acquisitions of assets,
regardless of whether shares or other assets are acquired. Cost is
determined as the fair value of the assets given up at the date of
acquisition plus costs incidental to the acquisition.                                                                                                                                                                                                         
|   
|    |  | Where settlement of any part of cash consideration is deferred, the
amounts payable in the future are discounted to their present value as at
the date of the acquisition. The discount rate used is the rate at which
a similar borrowing could be obtained under comparable terms and
conditions.                                                                                                                                                                                             
|   
|    |  | A liability for restructuring costs is recognised as at the date of
acquisition of an entity or part thereof when there is a demonstrable
commitment to a restructuring of the acquired entity and a reliable
estimate of the amount of the liability can be made.                                                                                                                                                                                                                              
|   
|(r) |  | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    |  | (i) Transactions
Foreign currency transactions are translated at the rate applicable at
the date of the transaction. At balance date amounts payable and
receivable are translated at rates of exchange current at that date.
All realised and unrealised currency translation gains and losses are
brought to account in the statement of financial performance.                                                                                                                               
|   
|    |  | (ii) Translation of Controlled Foreign Entities
The assets and liabilities of foreign operations, including associates
and joint ventures, that are self-sustaining are translated at the
rates of exchange ruling at balance date. Equity items are translated
at historical rates. The statements of financial performance are
translated at a weighted average rate for the year. Exchange
differences arising on translation are taken directly to the foreign
currency translation reserve.

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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002



|2 |  | REVENUE FROM ORDINARY ACTIVITIES
|- |  | --------------------------------

|                                                        |       |  |         |     |       |  |         |       |  |  |         |       | 
|------------------------------------------------------- | ----- |  | ------- | --- | ----- |  | ------- | ----- |  |  | ------- | ----- | 
|                                                        |       |  | 2002    |     | 2001  |  | 2000   
|                                                        |       |  | $000   |     | $000 |  | $000  
|Revenue from Operating Activities                       |       |  |         |     |       |  |         |       |  |  |         |      
|Provision of services                                   |       |  | 665,555 |     |       |  | 551,174 |       |  |  | 549,844 |      
|                                                       
|Revenue from Outside the Operating Activities           |       |  |         |     |       |  |         |       |  |  |         |      
|Dividends                                               |       |  |         |     |       |  |         |       |  |  |         |      
|                                                        | Other |  |         | 66  |       |  |         | 5,702 |  |  |         | 4,239 | 
|Interest                                                |       |  |         |     |       |  |         |       |  |  |         |      
|                                                        | Other |  |         | 923 |       |  |         | 1,354 |  |  |         | 1,240 | 
|Gross proceeds on sale of listed investments            |       |  | 142     |     |       |  | 92,645  |       |  |  |        |      
|Gross proceeds on sale of property, plant and equipment |       |  | 326     |     |       |  | 13,282  |       |  |  | 1,312   |      
|                                                        |       |  |         |     |       |  |         |       |  |  |         |      
|Total Revenue from Ordinary Activities                  |       |  | 667,012 |     |       |  | 664,157 |       |  |  | 556,635 |      
|                                                        |       |  |         |     |       |  |         |       |  |  |         |      

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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

3      (LOSS)/PROFIT FROM ORDINARY ACTIVITIES BEFORE INCOME TAX EXPENSE

|                                                                                                                                           |  |                                                                                 |                            |  |      |          |       |  |          |        |       |  |         |        |  |  |      |        | 
|------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------- | -------------------------- |  | ---- | -------- | ----- |  | -------- | ------ | ----- |  | ------- | ------ |  |  | ---- | ------ | 
|                                                                                                                                           |  |                                                                                 |                            |  |      |          |       |  | 2002     |        | 2001  |  | 2000   
|                                                                                                                                           |  |                                                                                 |                            |  | Note |          | $000 |  | $000    |        | $000
|(a) Individually significant items included in profit
from ordinary  activities before related income tax
expense                          |  |                                                                                 |                            |  |      |          |       |  |          |        |       |  |         |        |  | 
|                                                                                                                                           |  | Write down of goodwill and other charges                                        |                            |  |      |          |       |  | (178,421 | )      |       |  | (3,711  | )      |  |  |     |       
|                                                                                                                                           |  | Net profit on sale of listed investments                                        |                            |  |      |          |       |  |         |        |       |  | 58,626  |        |  |  |     |       
|                                                                                                                                           |  | Net profit on sale of land and buildings                                        |                            |  |      |          |       |  |         |        |       |  | 6,989   |        |  |  |     |       
|                                                                                                                                           |  | Writeoff of capitalised costs                                                   |                            |  |      |          |       |  | (3,493   | )      |       |  |        |        |  |  |     |       
|                                                                                                                                           |  | Write down of unlisted online investments                                       |                            |  |      |          |       |  |         |        |       |  | (26,877 | )      |  |  |     |       
|                                                                                                                                           |  | Write down of listed investments                                                |                            |  |      |          |       |  | (16,522  | )      |       |  | (2,366  | )      |  |  |     |       
|                                                                                                                                           |  | Restructure and relocation costs                                                |                            |  |      |          |       |  |         |        |       |  | (2,779  | )      |  |  |     |       
|                                                                                                                                           |  |                                                                                 |                            |  |      |          |       |  |          |        |       |  |         |        | 
|                                                                                                                                           |  |                                                                                 |                            |  |      | (198,436 | )     |  |          | 29,882 |       |  |         |       | 
|                                                                                                                                           |  |                                                                                 |                            |  |      |          |       |  |          |        |       |  |         |        | 
|(b) (Loss)/Profit from ordinary activities before
income tax expense   has been arrived at after
charging/(crediting) the following items: |  |                                                                                 |                            |  |      |          |       |  |          |        |       |  |         |        |  | 
|                                                                                                                                           |  | Net profit on sale of property, plant and equipment                             |                            |  |      |          |       |  | (317     | )      |       |  | (17     | )      |  |  | 77   |       
|                                                                                                                                           |  | Net profit on sale of investments                                               |                            |  |      |          |       |  | (142     | )      |       |  |        |        |  |  |     |       
|                                                                                                                                           |  | Foreign currency losses  realised                                              |                            |  |      |          |       |  | 27       |        |       |  |        |        |  |  | 50   |       
|                                                                                                                                           |  | Net bad and doubtful debts, including movements in
provision for doubtful debts |                            |  |      |          |       |  | 794      |        |       |  | (14     | )      |  |  | (469 | )     
|                                                                                                                                           |  | Operating lease rentals                                                         |                            |  |      |          |       |  |          |        |       |  |         |        |  |  |      |       
|                                                                                                                                           |  |                                                                                 | Minimum lease payments     |  |      |          |       |  |          | 49,134 |       |  |         | 39,548 |  |  |      | 16,441 | 
|                                                                                                                                           |  |                                                                                 | Contingent rental expense  |  |      |          |       |  |          | 6,112  |       |  |         | 6,185  |  |  |      |       | 
|                                                                                                                                           |  | Borrowing costs                                                                 |                            |  |      |          |       |  |          |        |       |  |         |        |  |  |      |       
|                                                                                                                                           |  |                                                                                 | Subordinated debentures    |  |      | 33       |       |  |          | 6,825  |       |  |         | 71,271 |  |  |      | 81,998 | 
|                                                                                                                                           |  |                                                                                 | Other                      |  |      |          |       |  |          | 30,530 |       |  |         | 21,992 |  |  |      | 5,788  | 
|                                                                                                                                           |  |                                                                                 |                            |  |      |          |       |  |          |        |       |  |         |        | 
|                                                                                                                                           |  |                                                                                 |                            |  |      | 37,355   |       |  |          | 93,263 |       |  |         | 87,786 | 
|                                                                                                                                           |  |                                                                                 |                            |  |      |          |       |  |          |        |       |  |         |        | 
|                                                                                                                                           |  | Depreciation and amortisation of property, plant & equipment                    |                            |  |      |          |       |  |          |        |       |  |         |        |  |  |      |       
|                                                                                                                                           |  |                                                                                 | Plant and equipment        |  |      |          |       |  |          | 15,722 |       |  |         | 9,359  |  |  |      | 5,132  | 
|                                                                                                                                           |  |                                                                                 | Leasehold improvements     |  |      |          |       |  |          | 161    |       |  |         | 75     |  |  |      | 43     | 
|                                                                                                                                           |  |                                                                                 | Buildings                  |  |      |          |       |  |          | 253    |       |  |         | 252    |  |  |      | 261    | 
|                                                                                                                                           |  |                                                                                 | Leased plant and equipment |  |      |          |       |  |          | 117    |       |  |         | 995    |  |  |      |       | 
|                                                                                                                                          
|                                                                                                                                          
|                                                                                                                                           |  | Amortisation                                                                    |                            |  |      |          |       |  |          |        |       |  |         |        |  |  |      |       
|                                                                                                                                           |  |                                                                                 | Goodwill                   |  |      |          |       |  |          | 10,043 |       |  |         | 9,342  |  |  |      |       | 
|                                                                                                                                           |  |                                                                                 | Other intangibles          |  |      |          |       |  |          | 711    |       |  |         | 501    |  |  |      |       | 
|                                                                                                                                           |  |                                                                                 | Capitalised digital costs  |  |      |          |       |  |          | 1,543  |       |  |         | 1,019  |  |  |      |       | 

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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

4            INCOME TAX

|                                            |                                                                                                                                                                                                                                                     |                                                                             |                                 |         |         |        |        |         |        |       |        |         |        |   | 
|------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------- | ------------------------------- | ------- | ------- | ------ | ------ | ------- | ------ | ----- | ------ | ------- | ------ | - | 
|                                            |                                                                                                                                                                                                                                                     |                                                                             |                                 |         | 2002    |        | 2001   |         | 2000  
|                                            |                                                                                                                                                                                                                                                     |                                                                             |                                 |         | $000   |        | $000  |         | $000 
|(a) Income tax expense                      |                                                                                                                                                                                                                                                     |                                                                             |                                 |         |         |        |        |         |        |       |        |        
|                                            | The prima facie tax payable at 30% (34% 10 months
to June 2001; 30% 2 months to August 2001) (2000: 36%
10 months to June 2000; 34% 2 months to
August 2000) on the profit from ordinary
activities is reconciled to income tax expense as
follows: |                                                                             |                                 |         |         |        |        |         |        |       |        |         |       
|                                            |                                                                                                                                                                                                                                                    
|                                            | (Loss)/Profit from ordinary activities before related income tax expense                                                                                                                                                                            |                                                                             |                                 | (87,751 | )       |        |        | 73,639  |        |       |        | 107,356 |       
|                                            |                                                                                                                                                                                                                                                     |                                                                             |                                 |         |         |        |        |         |        |       |        |        
|                                            |                                                                                                                                                                                                                                                     | Prima facie tax payable                                                     |                                 |         | (26,326 | )      |        |         | 24,298 |       |        |         | 38,323 |  
|                                            | Increase in income tax expense is due to:                                                                                                                                                                                                           |                                                                             |                                 |         |         |        |        |         |        |       |        |         |       
|                                            |                                                                                                                                                                                                                                                     | Non-recurring tax settlement expenses                                       |                                 |         | 36,158  |        |        |         |       |       |        |         |       |  
|                                            |                                                                                                                                                                                                                                                     | Non deductible expenditure                                                  |                                 |         |         |        |        |         |        |       |        |         |        |  
|                                            |                                                                                                                                                                                                                                                     |                                                                             | Amortisation                    |         |         | 3,226  |        |         |        | 3,248 |        |         |        |  | 
|                                            |                                                                                                                                                                                                                                                     |                                                                             | Writedown of goodwill           |         |         | 51,735 |        |         |        |      |        |         |        |  | 
|                                            |                                                                                                                                                                                                                                                     |                                                                             | Writedown of listed investments |         |         | 4,957  |        |         |        | 710   |        |         |        |  | 
|                                            |                                                                                                                                                                                                                                                     |                                                                             | Other                           |         |         | 1,356  |        |         |        | 875   |        |         |        |  | 
|                                            |                                                                                                                                                                                                                                                     | Tax rate change                                                             |                                 |         |        |        |        |         |       |       |        |         | 279    |  
|                                            |                                                                                                                                                                                                                                                     | Prior year adjustments                                                      |                                 |         |        |        |        |         | 553    |       |        |         |       |  
|                                            | Decrease in income tax expense is due to:                                                                                                                                                                                                           |                                                                             |                                 |         |         |        |        |         |        |       |        |         |       
|                                            |                                                                                                                                                                                                                                                     | Non assessable income                                                       |                                 |         |        |        |        |         |       |       |        |         | (829   | )
|                                            |                                                                                                                                                                                                                                                     | Prior year adjustments                                                      |                                 |         | (576    | )      |        |         |       |       |        |         | (2,688 | )
|                                            |                                                                                                                                                                                                                                                     | Dividend rebate                                                             |                                 |         |        |        |        |         | (1,478 | )     |        |         | (1,526 | )
|                                            |                                                                                                                                                                                                                                                     | Benefit of tax losses of prior years recouped                               |                                 |         |        |        |        |         | (1,421 | )     |        |         |       |  
|                                            |                                                                                                                                                                                                                                                     | Tax rate change                                                             |                                 |         |        |        |        |         | (2,963 | )     |        |         |       |  
|                                            |                                                                                                                                                                                                                                                     |                                                                             |                                 |         |         |        |        |         |        |       |        |        
|                                            | Income tax expense attributable to profit from
ordinary activities                                                                                                                                                                                  |                                                                             |                                 | 70,530  |         |        |        | 23,822  |        |       |        | 33,559  |       
|                                            |                                                                                                                                                                                                                                                     |                                                                             |                                 |         |         |        |        |         |        |       |        |        
|                                            | Income tax expense attributable to profit from
ordinary activities comprises:                                                                                                                                                                       |                                                                             |                                 |         |         |        |        |         |        |       |        |         |       
|                                            |                                                                                                                                                                                                                                                     | Non-recurring tax settlement expense                                        |                                 |         | 36,158  |        |        |         |       |       |        |         |       |  
|                                            |                                                                                                                                                                                                                                                     | Provision for tax                                                           |                                 |         | 16,766  |        |        |         | (1,228 | )     |        |         | 42,004 |  
|                                            |                                                                                                                                                                                                                                                     | Movement in deferred tax balances                                           |                                 |         | 18,023  |        |        |         | 24,935 |       |        |         | (8,445 | )
|                                            |                                                                                                                                                                                                                                                     | Prior year underprovision                                                   |                                 |         | (417    | )      |        |         | 115    |       |        |         |       |  
|                                            |                                                                                                                                                                                                                                                     |                                                                             |                                 |         |         |        |        |         |        |       |        |        
|                                            |                                                                                                                                                                                                                                                     |                                                                             | 70,530                          |         |         |        | 23,822 |         |        |       | 33,559 |        
|                                            |                                                                                                                                                                                                                                                     |                                                                             |                                 |         |         |        |        |         |        |       |        |        
|(b) Current
tax (receivables) / liabilities |                                                                                                                                                                                                                                                     |                                                                             |                                 |         |         |        |        |         |        |       |        |        
|                                            | Provision for income tax                                                                                                                                                                                                                            |                                                                             |                                 | (63,716 | )       |        |        | (11,234 | )      |       |        |         |       
|                                            |                                                                                                                                                                                                                                                     |                                                                             |                                 |         |         |        |        |         |        |       |        |        
|(c) Deferred tax assets                     |                                                                                                                                                                                                                                                     |                                                                             |                                 |         |         |        |        |         |        |       |        |        
|                                            | Future income tax benefit                                                                                                                                                                                                                           |                                                                             |                                 |         |         |        |        |         |        |       |        |         |       
|                                            | Future income tax benefit comprises:                                                                                                                                                                                                                |                                                                             |                                 |         |         |        |        |         |        |       |        |         |       
|                                            |                                                                                                                                                                                                                                                     | Timing differences                                                          |                                 |         | 8,270   |        |        |         | 2,708  |       |        |         |        |  
|                                            |                                                                                                                                                                                                                                                     | Items with common maturity offset against
provision for deferred income tax |                                 |         |        |        |        |         |       |       |        |         |        |  
|                                            |                                                                                                                                                                                                                                                     |                                                                             |                                 |         |         |        |        |         |        |       |        |        
|                                            |                                                                                                                                                                                                                                                     |                                                                             | 8,270                           |         |         |        | 2,708  |         |        |       |        |        
|                                            |                                                                                                                                                                                                                                                     |                                                                             |                                 |         |         |        |        |         |        |       |        |        
|(d) Deferred tax liabilities                |                                                                                                                                                                                                                                                     |                                                                             |                                 |         |         |        |        |         |        |       |        |        
|                                            | Provision for deferred income tax                                                                                                                                                                                                                   |                                                                             |                                 |         |         |        |        |         |        |       |        |         |       
|                                            | Provision for deferred income tax comprises:                                                                                                                                                                                                        |                                                                             |                                 |         |         |        |        |         |        |       |        |         |       
|                                            |                                                                                                                                                                                                                                                     | Timing differences                                                          |                                 |         | 32,042  |        |        |         | 8,456  |       |        |         |        |  
|                                            |                                                                                                                                                                                                                                                     | Items with common maturity offset against
future income tax benefit         |                                 |         |        |        |        |         |       |       |        |         |        |  
|                                            |                                                                                                                                                                                                                                                     |                                                                             |                                 |         |         |        |        |         |        |       |        |        
|                                            |                                                                                                                                                                                                                                                     |                                                                             | 32,042                          |         |         |        | 8,456  |         |        |       |        |        
|                                            |                                                                                                                                                                                                                                                     |                                                                             |                                 |         |         |        |        |         |        |       |        |        

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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

4    INCOME TAX (continued)

The future income tax benefit shown in Note 4(c) includes $4.4m attributable to
tax losses.

|                                                                                          |  |       |       |       |  |       |     |  |  |  |   | 
|----------------------------------------------------------------------------------------- |  | ----- | ----- | ----- |  | ----- | --- |  |  |  | - | 
|                                                                                          |  | 2002  |       | 2001  |  | 2000 
|                                                                                          |  | $'000 |       | $'000 |  | $'000
|The potential future income tax benefit relating to tax
losses not brought to account is: |  |       | 1,071 |       |  |       | 429 |  |  |  |  | 

The benefit for tax losses will only be obtained if:



| | (i)   |  | The consolidated entity derives future assessable income of a
nature and of an amount sufficient to enable the benefit from the
deductions for the losses to be realised;
| | ----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii)  |  | the consolidated entity continues to comply with the conditions for
deductibility imposed by tax legislation; and                                                        
|
| | (iii) |  | no changes in tax legislation adversely affect the consolidated
entity in realising the benefit from the deductions for the losses.                                      

|             |  |  |      |  |       |  |        |  |      |  |        |  | 
|------------ |  |  | ---- |  | ----- |  | ------ |  | ---- |  | ------ |  | 
|             |  |  |      |  |       |  | 2002   |  | 2001
|             |  |  | Note |  | $'000 |  | $'000 
|5    CASH    |  |  |      |  |       |  |        |  |      |  |        | 
|            
|Cash on hand |  |  |      |  |       |  | 65     |  |      |  | 69     | 
|Cash at bank |  |  |      |  |       |  | 11,734 |  |      |  | 21,700 | 
|             |  |  |      |  |       |  |        |  |      |  |        | 
|             |  |  | 31   |  |       |  | 11,799 |  |      |  | 21,769 | 
|             |  |  |      |  |       |  |        |  |      |  |        | 

6    RECEIVABLES (CURRENT)

|                                                     |                                  |  |    |    |  |  |         |     |  |  |         |     | 
|---------------------------------------------------- | -------------------------------- |  | -- | -- |  |  | ------- | --- |  |  | ------- | --- | 
|Trade debtors                                        |                                  |  |    |    |  |  | 127,426 |     |  |  | 112,602 |    
|Provision for doubtful debts and advertising credits |                                  |  |    |    |  |  | (11,677 | )   |  |  | (10,032 | )  
|                                                     |                                  |  |    |    |  |  |         |     |  |  |         |    
|                                                     |                                  |  |    |    |  |  | 115,749 |     |  |  | 102,570 |    
|                                                     |                                  |  |    |    |  |  |         |     |  |  |         |    
|Loans and advances                                   |                                  |  |    |    |  |  |         |     |  |  |         |    
|                                                     | Associated companies             |  |    | 33 |  |  |         | 2   |  |  |         | 2   | 
|                                                     | Directors of controlled entities |  |    | 33 |  |  |         |    |  |  |         | 17  | 
|                                                     | Other                            |  |    |    |  |  |         | 373 |  |  |         | 662 | 
|                                                     |                                  |  |    |    |  |  |         |     |  |  |         |    
|                                                     |                                  |  |    |    |  |  | 375     |     |  |  | 681     |    
|                                                     |                                  |  |    |    |  |  |         |     |  |  |         |    
|                                                     |                                  |  | 31 |    |  |  | 116,124 |     |  |  | 103,251 |    
|                                                     |                                  |  |    |    |  |  |         |     |  |  |         |    

7    INVENTORIES (CURRENT)

|                  |  |  |  |  |  |  |         |  |  |  |         |  | 
|----------------- |  |  |  |  |  |  | ------- |  |  |  | ------- |  | 
|Program rights    |  |  |  |  |  |  | 126,503 |  |  |  | 109,106 | 
|Other inventories |  |  |  |  |  |  | 1,135   |  |  |  | 1,563   | 
|                  |  |  |  |  |  |  |         |  |  |  |         | 
|                  |  |  |  |  |  |  | 127,638 |  |  |  | 110,669 | 
|                  |  |  |  |  |  |  |         |  |  |  |         | 

8    OTHER ASSETS (CURRENT)

|                               |  |  |  |  |  |  |        |  |  |  |       |  | 
|------------------------------ |  |  |  |  |  |  | ------ |  |  |  | ----- |  | 
|Prepayments and sundry debtors |  |  |  |  |  |  | 12,029 |  |  |  | 6,017 | 
|Capitalised costs              |  |  |  |  |  |  |       |  |  |  | 1,514 | 
|                               |  |  |  |  |  |  |        |  |  |  |       | 
|                               |  |  |  |  |  |  | 12,029 |  |  |  | 7,531 | 
|                               |  |  |  |  |  |  |        |  |  |  |       | 

Page 13



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##### Table of Contents



THE TEN GROUP PTY LIMITED AND
CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

|                               |                                  |  |      |    |       |  |       |     |      |  |       |       | 
|------------------------------ | -------------------------------- |  | ---- | -- | ----- |  | ----- | --- | ---- |  | ----- | ----- | 
|                               |                                  |  |      |    |       |  | 2002  |     | 2001
|                               |                                  |  | Note |    | $'000 |  | $'000
|9    RECEIVABLES
(NON-CURRENT) |                                  |  |      |    |       |  |       |     |      |  |       |      
|                              
|Other receivables              |                                  |  |      |    |       |  |      |     |      |  | 81    |      
|Loans and advances             |                                  |  |      |    |       |  |       |     |      |  |       |      
|                               | Associated companies             |  |      | 33 |       |  |       | 791 |      |  |       | 681   | 
|                               | Joint venture entities           |  |      | 33 |       |  |       |    |      |  |       | 138   | 
|                               | Related entities                 |  |      | 33 |       |  |       |    |      |  |       | 665   | 
|                               | Directors of controlled entities |  |      | 33 |       |  |       | 350 |      |  |       | 350   | 
|                               | Other                            |  |      |    |       |  |       | 975 |      |  |       | 2,734 | 
|                               |                                  |  |      |    |       |  |       |     |      |  |       |      
|                               |                                  |  | 31   |    |       |  | 2,116 |     |      |  | 4,649 |      
|                               |                                  |  |      |    |       |  |       |     |      |  |       |      

10    INVESTMENTS
ACCOUNTED FOR USING THE EQUITY METHOD

|           |  |  |        |  |  |  |       |  |  |  |       |  | 
|---------- |  |  | ------ |  |  |  | ----- |  |  |  | ----- |  | 
|Associates |  |  | 26, 33 |  |  |  | 2,888 |  |  |  | 2,384 | 
|           |  |  |        |  |  |  |       |  |  |  |       | 

11    OTHER
FINANCIAL ASSETS

|                                   |                          |  |  |    |  |  |       |         |   |  |        |        |  
|---------------------------------- | ------------------------ |  |  | -- |  |  | ----- | ------- | - |  | ------ | ------ | -
|Investments in listed securities   |                          |  |  |    |  |  |       |         |   |  |        |       
|                                   | Cost                     |  |  |    |  |  |       | 16,522  |   |  |        | 18,888 |  
|                                   | Provision for diminution |  |  |    |  |  |       | (16,522 | ) |  |        | (2,366 | )
|                                   |                          |  |  |    |  |  |       |         |   |  |        |       
|                                   |                          |  |  |    |  |  |      |         |   |  | 16,522 |       
|                                   |                          |  |  |    |  |  |       |         |   |  |        |       
|Investments in unlisted securities |                          |  |  |    |  |  |       |         |   |  |        |       
|                                   | Associated companies     |  |  | 33 |  |  |       | 2,119   |   |  |        | 2,119  |  
|                                   | Other                    |  |  |    |  |  |       | 434     |   |  |        | 409    |  
|                                   |                          |  |  |    |  |  |       |         |   |  |        |       
|                                   |                          |  |  |    |  |  | 2,553 |         |   |  | 19,050 |       
|                                   |                          |  |  |    |  |  |       |         |   |  |        |       

12    INVENTORIES (NON-CURRENT)

|               |  |  |  |  |  |  |       |  |  |  |       |  | 
|-------------- |  |  |  |  |  |  | ----- |  |  |  | ----- |  | 
|Program rights |  |  |  |  |  |  | 1,565 |  |  |  | 1,590 | 
|               |  |  |  |  |  |  |       |  |  |  |       | 

13    PROPERTY,
PLANT AND EQUIPMENT

|                                    |                          |  |  |  |  |  |        |         |   |  |        |         |  
|----------------------------------- | ------------------------ |  |  |  |  |  | ------ | ------- | - |  | ------ | ------- | -
|Freehold land                       |                          |  |  |  |  |  |        |         |   |  |        |        
|                                    | At cost                  |  |  |  |  |  |        | 5,188   |   |  |        | 5,135   |  
|                                    |                          |  |  |  |  |  |        |         |   |  |        |        
|                                    |                          |  |  |  |  |  | 5,188  |         |   |  | 5,135  |        
|                                    |                          |  |  |  |  |  |        |         |   |  |        |        
|Freehold buildings                  |                          |  |  |  |  |  |        |         |   |  |        |        
|                                    | At cost                  |  |  |  |  |  |        | 9,461   |   |  |        | 9,016   |  
|                                    | Accumulated depreciation |  |  |  |  |  |        | (1,748  | ) |  |        | (1,495  | )
|                                    |                          |  |  |  |  |  |        |         |   |  |        |        
|                                    |                          |  |  |  |  |  | 7,713  |         |   |  | 7,521  |        
|                                    |                          |  |  |  |  |  |        |         |   |  |        |        
|Leasehold improvements              |                          |  |  |  |  |  |        |         |   |  |        |        
|                                    | At cost                  |  |  |  |  |  |        | 3,414   |   |  |        | 1,580   |  
|                                    | Accumulated amortisation |  |  |  |  |  |        | (549    | ) |  |        | (388    | )
|                                    |                          |  |  |  |  |  |        |         |   |  |        |        
|                                    |                          |  |  |  |  |  | 2,865  |         |   |  | 1,192  |        
|                                    |                          |  |  |  |  |  |        |         |   |  |        |        
|Plant and equipment                 |                          |  |  |  |  |  |        |         |   |  |        |        
|                                    | At cost                  |  |  |  |  |  |        | 159,237 |   |  |        | 137,320 |  
|                                    | Accumulated depreciation |  |  |  |  |  |        | (94,830 | ) |  |        | (80,062 | )
|                                    |                          |  |  |  |  |  |        |         |   |  |        |        
|                                    |                          |  |  |  |  |  | 64,407 |         |   |  | 57,258 |        
|                                    |                          |  |  |  |  |  |        |         |   |  |        |        
|Leased Plant and Equipment          |                          |  |  |  |  |  |        |         |   |  |        |        
|                                    | At cost                  |  |  |  |  |  |        | 6,541   |   |  |        | 6,541   |  
|                                    | Accumulated amortisation |  |  |  |  |  |        | (1,935  | ) |  |        | (1,818  | )
|                                    |                          |  |  |  |  |  |        |         |   |  |        |        
|                                    |                          |  |  |  |  |  | 4,606  |         |   |  | 4,723  |        
|                                    |                          |  |  |  |  |  |        |         |   |  |        |        
|Total property, plant and equipment |                          |  |  |  |  |  |        |         |   |  |        |        
|                                    | Net book value           |  |  |  |  |  |        | 84,779  |   |  |        | 75,829  |  
|                                    |                          |  |  |  |  |  |        |         |   |  |        |        

Page 14



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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

13  PROPERTY, PLANT AND EQUIPMENT (continued)

|                                                                                                           |                              |  |       |         |  
|---------------------------------------------------------------------------------------------------------- | ---------------------------- |  | ----- | ------- | -
|                                                                                                           |                              |  | 2002 
|                                                                                                           |                              |  | $'000
|Reconciliations                                                                                            |                              |  |       |        
|Reconciliations of the carrying amounts for
each class of property, plant and equipment
are set out below: |                              |  |       |        
|                                                                                                          
|Freehold land                                                                                              |                              |  |       |        
|                                                                                                           | Balance at beginning of year |  |       | 5,135   |  
|                                                                                                           | Additions                    |  |       | 53      |  
|                                                                                                           |                              |  |       |        
|                                                                                                           | Balance at end of year       |  |       | 5,188   |  
|                                                                                                           |                              |  |       |        
|Freehold buildings                                                                                         |                              |  |       |        
|                                                                                                           | Balance at beginning of year |  |       | 7,521   |  
|                                                                                                           | Additions                    |  |       | 445     |  
|                                                                                                           | Depreciation                 |  |       | (253    | )
|                                                                                                           |                              |  |       |        
|                                                                                                           | Balance at end of year       |  |       | 7,713   |  
|                                                                                                           |                              |  |       |        
|Leasehold improvements                                                                                     |                              |  |       |        
|                                                                                                           | Balance at beginning of year |  |       | 1,192   |  
|                                                                                                           | Additions                    |  |       | 1,834   |  
|                                                                                                           | Amortisation                 |  |       | (161    | )
|                                                                                                           |                              |  |       |        
|                                                                                                           | Balance at end of year       |  |       | 2,865   |  
|                                                                                                           |                              |  |       |        
|Plant and equipment                                                                                        |                              |  |       |        
|                                                                                                           | Balance at beginning of year |  |       | 57,258  |  
|                                                                                                           | Additions                    |  |       | 23,155  |  
|                                                                                                           | Disposals                    |  |       | (284    | )
|                                                                                                           | Depreciation                 |  |       | (15,722 | )
|                                                                                                           |                              |  |       |        
|                                                                                                           | Balance at end of year       |  |       | 64,407  |  
|                                                                                                           |                              |  |       |        
|Leased plant and equipment                                                                                 |                              |  |       |        
|                                                                                                           | Balance at beginning of year |  |       | 4,723   |  
|                                                                                                           | Amortisation                 |  |       | (117    | )
|                                                                                                           |                              |  |       |        
|                                                                                                           | Balance at end of year       |  |       | 4,606   |  
|                                                                                                           |                              |  |       |        

|                           |  |      |   |       |  |       |           |      |  |  |         |  
|-------------------------- |  | ---- | - | ----- |  | ----- | --------- | ---- |  |  | ------- | -
|                           |  |      |   |       |  | 2002  |           | 2001
|                           |  | Note |   | $'000 |  | $'000
|14    INTANGIBLES          |  |      |   |       |  |       |           |      |  |  |         |  
|                          
|Television
licences  cost |  |      | 1 | (f)   |  |       | 1,077,822 |      |  |  | 326,422 |  
|                          
|Other Licences  cost      |  |      |   |       |  |       | 29,500    |      |  |  | 42,117  |  
|Accumulated amortisation   |  |      |   |       |  |       | (1,200    | )    |  |  | (501    | )
|                           |  |      |   |       |  |       |           |      |  |  |         |  
|                           |  |      |   |       |  |       | 28,300    |      |  |  | 41,616  |  
|                           |  |      |   |       |  |       |           |      |  |  |         |  
|Goodwill  cost            |  |      |   |       |  |       | 245,421   |      |  |  | 265,959 |  
|Writedown of goodwill      |  |      |   |       |  |       | (172,451  | )    |  |  |        |  
|Accumulated amortisation   |  |      |   |       |  |       | (19,385   | )    |  |  | (9,342  | )
|                           |  |      |   |       |  |       |           |      |  |  |         |  
|                           |  |      |   |       |  |       | (53,585   | )    |  |  | 256,617 |  
|                           |  |      |   |       |  |       |           |      |  |  |         |  
|                           |  |      |   |       |  |       | 1,159,707 |      |  |  | 624,655 |  
|                           |  |      |   |       |  |       |           |      |  |  |         |  

15  OTHER ASSETS (NON-CURRENT)

|                  |  |  |  |  |  |  |     |  |  |  |       | 
|----------------- |  |  |  |  |  |  | --- |  |  |  | ----- | 
|Capitalised costs |  |  |  |  |  |  |    |  |  |  | 3,522 | 
|Other             |  |  |  |  |  |  | 626 |  |  |  | 1,487 | 
|                  |  |  |  |  |  |  |     |  |  |  |       | 
|                  |  |  |  |  |  |  | 626 |  |  |  | 5,009 | 
|                  |  |  |  |  |  |  |     |  |  |  |       | 

Page 15



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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

| |  |  |  |      |       |  |       |  |      |  |  |  | 
| |  |  |  | ---- | ----- |  | ----- |  | ---- |  |  |  | 
| |  |  |  |      |       |  | 2002  |  | 2001
| |  |  |  | Note | $'000 |  | $'000

16    PAYABLES
(CURRENT)

|                 |                                  |  |    |    |  |  |         |       |  |  |         |        | 
|---------------- | -------------------------------- |  | -- | -- |  |  | ------- | ----- |  |  | ------- | ------ | 
|Trade creditors  |                                  |  |    |    |  |  | 145,430 |       |  |  | 143,973 |       
|Unearned income  |                                  |  |    |    |  |  | 4,135   |       |  |  | 3,853   |       
|Loans from       |                                  |  |    |    |  |  |         |       |  |  |         |       
|                 | Directors of
controlled entities |  |    | 33 |  |  |         |      |  |  |         | 1,034  | 
|                 | Other                            |  |    |    |  |  |         |      |  |  |         | 2,750  | 
|Accrued interest |                                  |  |    |    |  |  |         |       |  |  |         |       
|                 | Related entity                   |  |    | 33 |  |  |         | 6,825 |  |  |         | 72,835 | 
|                 | Other                            |  |    |    |  |  |         | 3,568 |  |  |         | 1,151  | 
|                 |                                  |  |    |    |  |  |         |       |  |  |         |       
|                 |                                  |  | 31 |    |  |  | 159,958 |       |  |  | 225,596 |       
|                 |                                  |  |    |    |  |  |         |       |  |  |         |       

17   
INTEREST-BEARING LIABILITIES (CURRENT)

|                  |  |  |        |  |  |  |        |  |  |  |        |  | 
|----------------- |  |  | ------ |  |  |  | ------ |  |  |  | ------ |  | 
|Bank loans        |  |  | 31     |  |  |  | 23,000 |  |  |  | 1,436  | 
|Bank overdraft    |  |  | 31     |  |  |  | 1,791  |  |  |  | 1,084  | 
|Commercial bills  |  |  | 31     |  |  |  | 3,000  |  |  |  | 24,565 | 
|Lease liabilities |  |  | 29, 31 |  |  |  | 987    |  |  |  | 1,207  | 
|Other loans       |  |  |        |  |  |  | 469    |  |  |  |       | 
|                  |  |  |        |  |  |  |        |  |  |  |        | 
|                  |  |  |        |  |  |  | 29,247 |  |  |  | 28,292 | 
|                  |  |  |        |  |  |  |        |  |  |  |        | 

18  PROVISIONS (CURRENT)

|                      |  |  |        |  |  |  |        |  |  |  |         |  | 
|--------------------- |  |  | ------ |  |  |  | ------ |  |  |  | ------- |  | 
|Dividend              |  |  | 31, 38 |  |  |  |       |  |  |  | 66,221  | 
|Employee entitlements |  |  |        |  |  |  | 13,234 |  |  |  | 11,343  | 
|Restructuring         |  |  |        |  |  |  |       |  |  |  | 1,974   | 
|Surplus lease space   |  |  |        |  |  |  | 441    |  |  |  | 657     | 
|Deferred Settlement   |  |  |        |  |  |  | 3,000  |  |  |  | 14,743  | 
|Other                 |  |  |        |  |  |  | 24,062 |  |  |  | 28,002  | 
|                      |  |  |        |  |  |  |        |  |  |  |         | 
|                      |  |  |        |  |  |  | 40,737 |  |  |  | 122,940 | 
|                      |  |  |        |  |  |  |        |  |  |  |         | 

19    PAYABLES (NON-CURRENT)

|                |                  |  |    |  |  |  |        |     |  |  |        |     | 
|--------------- | ---------------- |  | -- |  |  |  | ------ | --- |  |  | ------ | --- | 
|Trade creditors |                  |  |    |  |  |  | 26,256 |     |  |  | 20,075 |    
|Loans           |                  |  |    |  |  |  |        |     |  |  |        |    
|                | Related entities |  |    |  |  |  |        | 265 |  |  |        |    | 
|                | Other            |  |    |  |  |  |        |    |  |  |        | 457 | 
|                |                  |  |    |  |  |  |        |     |  |  |        |    
|                |                  |  | 31 |  |  |  | 26,521 |     |  |  | 20,532 |    
|                |                  |  |    |  |  |  |        |     |  |  |        |    

20    INTEREST-BEARING LIABILITIES (NON-CURRENT)

|                  |              |  |        |        |  |  |         |        |  |  |         |        | 
|----------------- | ------------ |  | ------ | ------ |  |  | ------- | ------ |  |  | ------- | ------ | 
|Bank loan         |              |  | 31     |        |  |  | 460,000 |        |  |  | 295,000 |       
|Debentures        |              |  |        |        |  |  |         |        |  |  |         |       
|                  | Subordinated |  |        | 31, 33 |  |  |         | 45,500 |  |  |         | 45,500 | 
|                  | Convertible  |  |        | 31, 33 |  |  |         | 45     |  |  |         | 45     | 
|Lease liabilities |              |  | 29, 31 |        |  |  | 4,566   |        |  |  | 3,711   |       
|                  |              |  |        |        |  |  |         |        |  |  |         |       
|                  |              |  |        |        |  |  | 510,111 |        |  |  | 344,256 |       
|                  |              |  |        |        |  |  |         |        |  |  |         |       

Page 16



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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

| |  |  |       |       |  |  |  | 
| |  |  | ----- | ----- |  |  |  | 
| |  |  | 2002  | 2001 
| |  |  | $'000 | $'000
|

21    PROVISIONS
(NON-CURRENT)

|                      |  |  |  |       |  |  |       | 
|--------------------- |  |  |  | ----- |  |  | ----- | 
|Employee entitlements |  |  |  | 1,971 |  |  | 2,313 | 
|Other                 |  |  |  |      |  |  | 852   | 
|                      |  |  |  |       |  |  |       | 
|                      |  |  |  | 1,971 |  |  | 3,165 | 
|                      |  |  |  |       |  |  |       | 

22    CONTRIBUTED EQUITY

|                                                           |  |  |  |        |  |  |        | 
|---------------------------------------------------------- |  |  |  | ------ |  |  | ------ | 
|Paid
up capital                                           
|455,000,000 ordinary shares fully paid (2001: 455,000,000) |  |  |  | 45,500 |  |  | 45,500 | 
|                                                           |  |  |  |        |  |  |        | 

Holders of ordinary shares are entitled to receive dividends as declared from
time to time and are entitled to one vote per share at shareholders meetings.

In the event of winding up of the Company ordinary shareholders rank after all
creditors and are fully entitled to any proceeds of liquidation.

23    RESERVES

|                                                |  |         |   |         |   |     |  |     | 
|----------------------------------------------- |  | ------- | - | ------- | - | --- |  | --- | 
|                                                |  |         |   |         |   |     |  |    
|Asset revaluation                               |  | 752,329 |   |         |   | 929 | 
|Foreign currency translation                    |  | (63     | ) |         |   | 18  | 
|                                                |  |         |   |         |   |     | 
|                                                |  | 752,266 |   |         |   | 947 | 
|                                                |  |         |   |         |   |     | 
|Movements during the year                       |  |         |   |         |   |     | 
|Asset revaluation                               |  |         |   |         |   |     | 
|Balance at beginning of year                    |  |         |   | 929     |   |     |  | 929 | 
|Increment on revaluation of television licences |  |         |   | 751,400 |   |     |  |    | 
|                                                |  |         |   |         |   |     |  |    
|Balance at end of year                          |  |         |   | 752,329 |   |     |  | 929 | 
|                                                |  |         |   |         |   |     |  |    
|Foreign currency translation                    |  |         |   |         |   |     |  |    
|Balance at beginning of year                    |  |         |   | 18      |   |     |  |    | 
|Net translation adjustment                      |  |         |   | (81     | ) |     |  | 18  | 
|                                                |  |         |   |         |   |     |  |    
|Balance at end of year                          |  |         |   | (63     | ) |     |  | 18  | 
|                                                |  |         |   |         |   |     |  |    

Nature and purpose of reserves

Asset Revaluation
The asset revaluation reserve includes the net revaluation increments and
decrements arising from the revaluation to independent valuations in 1995 of
land and buildings and a Directors valuation of television licences in 2002.

Foreign currency translation
The foreign currency translation reserve records the foreign currency
differences arising from the translation of self-sustaining foreign operations,
as disclosed in accounting policy note 1(r)(ii).

24    RETAINED EARNINGS

|                                                        |  |  |          |   |  |  |         |  
|------------------------------------------------------- |  |  | -------- | - |  |  | ------- | -
|Retained earnings at beginning of year                  |  |  | 124,023  |   |  |  | 134,976 |  
|Net profit attributable to members of the parent entity |  |  | (128,491 | ) |  |  | 55,268  |  
|Dividends proposed                                      |  |  |         |   |  |  | (66,221 | )
|                                                        |  |  |          |   |  |  |         |  
|Retained earnings at end of year                        |  |  | (4,468   | ) |  |  | 124,023 |  
|                                                        |  |  |          |   |  |  |         |  

Page 17



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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

25  CONTROLLED ENTITIES

|                                                   |  |                                                       |                                                 |                                               |     |                     |     |      |     |     |    | 
|-------------------------------------------------- |  | ----------------------------------------------------- | ----------------------------------------------- | --------------------------------------------- | --- | ------------------- | --- | ---- | --- | --- | -- | 
|                                                   |  |                                                       |                                                 |                                               |     | Ordinary Share     
|                                                   |  |                                                       |                                                 |                                               |     | Consolidated Entity
|                                                   |  |                                                       |                                                 |                                               |     | Interest           
|                                                   |  |                                                       |                                                 |                                               |     |                    
|                                                   |  |                                                       |                                                 |                                               |     | 2002                |     | 2001
|                                                   |  |                                                       |                                                 |                                               |     | %                   |     | %   
|(a) Particulars in relation to controlled entities |  |                                                       |                                                 |                                               |     |                     |     |     
|Parent entity                                      |  |                                                       |                                                 |                                               |     |                     |     |     
|The Ten Group Pty Limited                          |  |                                                       |                                                 |                                               |     |                     |     |     
|Controlled entities                                |  |                                                       |                                                 |                                               |     |                     |     |     
|Ten Pay TV Pty Limited (i)                         |  |                                                       | 100                                             |                                               |     |                     | 100 |     
|Network Ten Pty Limited (i)                        |  |                                                       | 100                                             |                                               |     |                     | 100 |     
|                                                   |  | Network Ten (Sydney) Pty Limited (i)                  |                                                 |                                               | 100 |                     |     |      | 100 |    
|                                                   |  | Network Ten (Melbourne) Pty Limited (i)               |                                                 |                                               | 100 |                     |     |      | 100 |    
|                                                   |  | Network Ten (Brisbane) Pty Limited (i)                |                                                 |                                               | 100 |                     |     |      | 100 |    
|                                                   |  | Television & Telecasters (Properties) Pty Limited (i) |                                                 |                                               | 100 |                     |     |      | 100 |    
|                                                   |  | Network Ten Nominees Pty Limited                      |                                                 |                                               | 100 |                     |     |      | 100 |    
|                                                   |  | Caprice Pty Limited (i)                               |                                                 |                                               | 100 |                     |     |      | 100 |    
|                                                   |  |                                                       | Network Ten (Adelaide) Pty Limited (i)          |                                               |     | 100                 |     |      |     | 100 |   
|                                                   |  | Chartreuse Pty Limited (i)                            |                                                 |                                               | 100 |                     |     |      | 100 |    
|                                                   |  |                                                       | Network Ten (Perth) Pty Limited (i)             |                                               |     | 100                 |     |      |     | 100 |   
|Ten Ventures Pty Limited                           |  |                                                       | 100                                             |                                               |     |                     | 100 |     
|                                                   |  | Ten Online Pty Limited                                |                                                 |                                               | 100 |                     |     |      | 100 |    
|Eye Corp Pty Limited                               |  |                                                       | 100                                             |                                               |     |                     | 60  |     
|                                                   |  | Eye Corp Australia Pty Limited (ii)                   |                                                 |                                               | 100 |                     |     |      | 60  |    
|                                                   |  |                                                       | Eye Fly (Sydney) Pty Limited (ii)               |                                               |     | 100                 |     |      |     | 60  |   
|                                                   |  |                                                       |                                                 | Eye Drive Sydney No. 2 Pty Limited (ii)*      |     |                     | 100 |      |     |     | 60 | 
|                                                   |  |                                                       |                                                 | Pimington Pty Limited (ii)*                   |     |                     | 100 |      |     |     | 60 | 
|                                                   |  |                                                       |                                                 | Olympic Murals 2000 Pty Limited (ii)*         |     |                     | 100 |      |     |     | 60 | 
|                                                   |  |                                                       |                                                 | Boyd Outdoor Advertising Pty Limited (ii)*    |     |                     | 100 |      |     |     | 60 | 
|                                                   |  |                                                       | Eye Digital Pty Limited (ii)                    |                                               |     | 100                 |     |      |     | 60  |   
|                                                   |  |                                                       | NLD Pty Limited (ii)                            |                                               |     | 100                 |     |      |     | 60  |   
|                                                   |  |                                                       | Australian Airport Advertising Pty Limited (ii) |                                               |     | 100                 |     |      |     | 60  |   
|                                                   |  |                                                       |                                                 | Eye Corp Airport Advertising Pty Limited (ii) |     |                     | 100 |      |     |     | 60 | 
|                                                   |  |                                                       | Eye Drive Sydney Pty Limited (ii)               |                                               |     | 100                 |     |      |     | 60  |   
|                                                   |  |                                                       | NLD Mall Media Pty Limited (ii)                 |                                               |     | 100                 |     |      |     | 60  |   
|                                                   |  |                                                       | Eye Nex Corp Pty Limited (ii)                   |                                               |     | 100                 |     |      |     | 60  |   
|                                                   |  | Eye Corp Asia Limited                                 |                                                 |                                               | 100 |                     |     |      | 60  |    
|                                                   |  |                                                       | Eye Corp Limited                                |                                               |     | 100                 |     |      |     | 60  |   
|                                                   |  |                                                       | PT Netra Estha Muda                             |                                               |     | 95                  |     |      |     | 57  |   
|                                                   |  |                                                       |                                                 | PT Agung Bali                                 |     |                     | 67  |      |     |     | 41 | 
|                                                   |  |                                                       | PT Eye Corp (iii)                               |                                               |     |                    |     |      |     |    |   
|                                                   |  | Eye Corp Media Pty Limited (ii)                       |                                                 |                                               | 100 |                     |     |      | 60  |    
|                                                   |  |                                                       | Adval Holdings Pty Limited (ii)                 |                                               |     | 100                 |     |      |     | 60  |   
|                                                   |  |                                                       | Adval Australia Pty Limited (ii)                |                                               |     | 100                 |     |      |     | 60  |   

All the above controlled entities are incorporated in Australia, except for the following:



|-     |  | Eye Corp Asia Limited (incorporated in Mauritius);                                
|----- |  | ----------------------------------------------------------------------------------
|-     |  | Eye Corp Limited (incorporated in Myanmar); and                                   
|-     |  | PT Netra Estha Muda, PT Agung Bali and PT Eye Corp (incorporated in Indonesia).   
|(i)   |  | Refer to Note 37 for details of The Ten Group Pty Limited Deed of Cross
Guarantee.
|(ii)  |  | Refer to Note 37 for details of the Eye Corp Pty Limited Deed of Cross Guarantee. 
|(iii) |  | Eye Corp Asia Limited has a 100% beneficial ownership interest in PT Eye Corp.    

*: In liquidation

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THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

25 CONTROLLED ENTITIES (continued)



|(b) | Acquisition of controlled
entities                                                                                                                                                                                                                                                                                                                        
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | During the financial year the Ten Group Pty Limited acquired the remaining
40% of the voting shares of Eye Corp Pty Limited and its controlled entities.
During the previous financial year, the Ten Group Pty Limited purchased 60%
of the voting shares of Eye Corp Pty Limited and its controlled entities.
Details of the acquisitions are as follows:

|                                             |                               |  |        |         |       |  |         |         |  
|-------------------------------------------- | ----------------------------- |  | ------ | ------- | ----- |  | ------- | ------- | -
|                                             |                               |  | 2002   |         | 2001 
|                                             |                               |  | $000  |         | $000
|Fair value of net assets of entity acquired: |                               |  |        |         |       |  |         |        
|                                             | Property, plant and equipment |  |        | 8,990   |       |  |         | 21,914  |  
|                                             | Future income tax benefit     |  |        | 2,752   |       |  |         | 2,924   |  
|                                             | Cash assets                   |  |        |        |       |  |         | 5,235   |  
|                                             | Inventories                   |  |        | 480     |       |  |         | 1,249   |  
|                                             | Trade debtors                 |  |        | 5,622   |       |  |         | 17,892  |  
|                                             | Investments                   |  |        | 1,167   |       |  |         | 1,825   |  
|                                             | Intangibles                   |  |        | 29,874  |       |  |         | 26,500  |  
|                                             | Other assets                  |  |        | 3,677   |       |  |         | 5,377   |  
|                                             | Bank overdraft                |  |        | (215    | )     |  |         |        |  
|                                             | Bank loans- secured           |  |        | (9,200  | )     |  |         | (25,522 | )
|                                             | Trade creditors               |  |        | (7,955  | )     |  |         | (33,339 | )
|                                             | Net loans payable             |  |        | (20,194 | )     |  |         | (24,723 | )
|                                             | Other provisions              |  |        | (4,998  | )     |  |         | (19,005 | )
|                                             |                               |  |        |         |       |  |         |         |  
|                                             |                               |  | 10,000 |         |       |  | (19,673 | )      
|Outside equity interests at acquisition      |                               |  |       |         |       |  | 71,956  |        
|                                             |                               |  |        |         |       |  |         |         |  
|                                             |                               |  | 10,000 |         |       |  | (91,629 | )      
|Goodwill on acquisition                      |                               |  |       |         |       |  | 281,575 |        
|                                             |                               |  |        |         |       |  |         |         |  
|Consideration (cash)                         |                               |  | 10,000 |         |       |  | 189,946 |        
|                                             |                               |  |        |         |       |  |         |         |  

|                |  |  |        |  |  |       |         |   | 
|--------------- |  |  | ------ |  |  | ----- | ------- | - | 
|                |  |  | 2002   |  |  | 2001 
|                |  |  | $000  |  |  | $000
|Consideration   |  |  | 10,000 |  |  |       | 189,946 |  
|Cash acquired   |  |  |       |  |  |       | (5,235  | )
|                |  |  |        |  |  |       |         |  
|Outflow of cash |  |  | 10,000 |  |  |       | 184,711 |  
|                |  |  |        |  |  |       |         |  

26    INVESTMENTS ACCOUNTED
FOR USING THE EQUITY METHOD

|                                                                                                                            |  |  |       |  |  |       |     | 
|--------------------------------------------------------------------------------------------------------------------------- |  |  | ----- |  |  | ----- | --- | 
|                                                                                                                            |  |  | 2002  |  |  | 2001 
|                                                                                                                            |  |  | $000 |  |  | $000
|Share of net profits accounted for using
the equity method
included in the
statement of financial performance
   Associates |  |  | 916   |  |  |       | 588 | 
|                                                                                                                            |  |  |       |  |  |       |     | 

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THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

26      INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD (Continued)

Investments in equity accounted associates

|                                              |  |               |    |         |  |        |  |      |    |                    |  |            |    |  |  |  |       |                        |  |  |       |  |  | 
|--------------------------------------------- |  | ------------- | -- | ------- |  | ------ |  | ---- | -- | ------------------ |  | ---------- | -- |  |  |  | ----- | ---------------------- |  |  | ----- |  |  | 
|                                              |  |               |    |         |  |        |  |      |    |                    |  |            |    |  |  |  |       | Consolidated Amount of
|                                              |  |               |    |         |  |        |  |      |    | Ownership interest |  | investment
|                                              |  | Principal     |    | Balance |  | 2002   |  | 2001 |    | 2002               |  | 2001      
|Name                                          |  | Activity/Note |    | date    |  | %      |  | %    |    | $000              |  | $000     
|                                             
|Held by Eye Corp Pty Limited
Big Tree Sdn Bhd |  |               | (i | )       |  | 31 Dec |  |      | 30 |                    |  |            | 30 |  |  |  | 2,888 |                        |  |  | 2,384 | 

The principal activities of the associated companies are:



|(i) |  | Outdoor advertising
|--- |  | -------------------

|                                                                                                 |  |       |        |       |  |  |        |  
|------------------------------------------------------------------------------------------------ |  | ----- | ------ | ----- |  |  | ------ | -
|                                                                                                 |  | 2002  |        | 2001 
|                                                                                                 |  | $'000 |        | $'000
|Results of associates                                                                            |  |       |        |       |  |  |        |  
|Share of associates profit from ordinary activities before income
tax expense                   |  |       | 1,390  |       |  |  | 846    |  
|Share of associates income tax expense relating to profit from
ordinary activities              |  |       | (474   | )     |  |  | (258   | )
|                                                                                                 |  |       |        |       |  |  |        |  
|Share of associates net profit                                                                  |  |       | 916    |       |  |  | 588    |  
|                                                                                                 |  |       |        |       |  |  |        |  
|Share of post-acquisition retained profits and reserves attributable
to associates               |  |       |        |       |  |  |        |  
|Retained profits                                                                                 |  |       |        |       |  |  |        |  
|Share of associates retained profits at beginning of year                                       |  |       | 588    |       |  |  |       |  
|Share of associates net profits accounted for using the equity method                           |  |       | 916    |       |  |  | 588    |  
|                                                                                                 |  |       |        |       |  |  |        |  
|Share of associates retained profits at end of year                                             |  |       | 1,504  |       |  |  | 588    |  
|                                                                                                 |  |       |        |       |  |  |        |  
|Foreign Currency Translation Reserve                                                             |  |       |        |       |  |  |        |  
|Share of associates reserve at beginning of year                                                |  |       | 21     |       |  |  |       |  
|Share of increment in associates reserve                                                        |  |       | (128   | )     |  |  | 21     |  
|                                                                                                 |  |       |        |       |  |  |        |  
|Share of associates asset revaluation reserve at end of year                                    |  |       | (107   | )     |  |  | 21     |  
|                                                                                                 |  |       |        |       |  |  |        |  
|Movements in carrying amount of investments                                                      |  |       |        |       |  |  |        |  
|Carrying amount at the beginning of the financial year                                           |  |       | 2,384  |       |  |  |       |  
|Investments in associates acquired during the year                                               |  |       |       |       |  |  | 1,775  |  
|Share of associates net profit                                                                  |  |       | 916    |       |  |  | 588    |  
|Dividends received/receivable                                                                    |  |       | (284   | )     |  |  |       |  
|                                                                                                 |  |       |        |       |  |  |        |  
|                                                                                                 |  |       | 3,016  |       |  |  | 2,363  |  
|Share of increment in associates asset revaluation reserves                                     |  |       | (128   | )     |  |  | 21     |  
|                                                                                                 |  |       |        |       |  |  |        |  
|Carrying amount at the end of the financial year                                                 |  |       | 2,888  |       |  |  | 2,384  |  
|                                                                                                 |  |       |        |       |  |  |        |  
|Summary financial position of associates                                                         |  |       |        |       |  |  |        |  
|The consolidated entitys share of aggregate assets and liabilities
of associates is as follows: |  |       |        |       |  |  |        |  
|                                                                                                 |  |       |        |       |  |  |        |  
|Current assets                                                                                   |  |       | 1,459  |       |  |  | 1,198  |  
|Non-current assets                                                                               |  |       | 3,645  |       |  |  | 3,585  |  
|                                                                                                 |  |       |        |       |  |  |        |  
|Total assets                                                                                     |  |       | 5,104  |       |  |  | 4,783  |  
|                                                                                                 |  |       |        |       |  |  |        |  
|Current liabilities                                                                              |  |       | (2,216 | )     |  |  | (2,399 | )
|Non-current liabilities                                                                          |  |       |       |       |  |  |       |  
|                                                                                                 |  |       |        |       |  |  |        |  
|Total liabilities                                                                                |  |       | (2,216 | )     |  |  | (2,399 | )
|                                                                                                 |  |       |        |       |  |  |        |  
|Net assets                                                                                       |  |       | 2,888  |       |  |  | 2,384  |  
|                                                                                                 |  |       |        |       |  |  |        |  

There were no commitments or contingencies in respect of associates at the end of the financial year.

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THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

|                                                                                                                                                                                                                                                                  |                                 |                                        |       |       |     |  |       |       |       |   |       |       |       |   |  |     |  |   | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------- | -------------------------------------- | ----- | ----- | --- |  | ----- | ----- | ----- | - | ----- | ----- | ----- | - |  | --- |  | - | 
|27      DIRECTORS REMUNERATION                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                  |                                 |                                        |       |       |     |  |       |       | 2002  |   | 2001  |       | 2000 
|                                                                                                                                                                                                                                                                  |                                 |                                        |       |       |     |  |       |       | $000 |   | $000 |       | $000
|Income paid or payable, or otherwise
made available, to Directors of the
Company and controlled entities by
entities in the consolidated entity
and related parties in connection
with the management of affairs of the
parent entity or its controlled
entities. |                                 |                                        |       | 4,835 |     |  |       | 2,453 |       |   |       | 1,247 |      
|                                                                                                                                                                                                                                                                  |                                 |                                        |       |       |     |  |       |       |       |   |       |       |       |   |  |     | 
|                                                                                                                                                                                                                                                                  |                                 |                                        |       |       |     |  |       |       | 2002  |   | 2001  |       | 2000 
|The number of Directors of the
Company whose income from the Company
or any related party falls within the
following bands:                                                                                                                                       |                                 |                                        |       |       |     |  |       |       |       |   |       |       |      
|                                                                                                                                                                                                                                                                  |                                 |                                        | $000 |       |     |  | $000 |       |       |   |       |       |       |   |  |     |  |  
|                                                                                                                                                                                                                                                                  |                                 |                                        | 0     |       |    |  | 10    |       |       | 2 |       |       |       | 6 |  |     |  | 6 | 
|                                                                                                                                                                                                                                                                  |                                 |                                        | 10    |       |    |  | 20    |       |       | 7 |       |       |       | 8 |  |     |  | 7 | 
|                                                                                                                                                                                                                                                                  |                                 |                                        | 20    |       |    |  | 30    |       |       | 2 |       |       |       |  |  |     |  |  | 
|                                                                                                                                                                                                                                                                  |                                 |                                        | 30    |       |    |  | 40    |       |       | 1 |       |       |       |  |  |     |  |  | 
|                                                                                                                                                                                                                                                                  |                                 |                                        | 50    |       |    |  | 60    |       |       | 1 |       |       |       |  |  |     |  |  | 
|                                                                                                                                                                                                                                                                  |                                 |                                        | 150   |       |    |  | 160   |       |       |  |       |       |       |  |  |     |  | 1 | 
|                                                                                                                                                                                                                                                                  |                                 |                                        | 190   |       |    |  | 200   |       |       |  |       |       |       | 1 |  |     |  |  | 
|                                                                                                                                                                                                                                                                  |                                 |                                        | 590   |       |    |  | 600   |       |       | 1 |       |       |       |  |  |     |  |  | 
|                                                                                                                                                                                                                                                                  |                                 |                                        | 970   |       |    |  | 980   |       |       |  |       |       |       |  |  |     |  | 1 | 
|                                                                                                                                                                                                                                                                  |                                 |                                        | 1,160 |       |    |  | 1,170 |       |       |  |       |       |       | 1 |  |     |  |  | 
|                                                                                                                                                                                                                                                                  |                                 |                                        | 1,180 |       |    |  | 1,190 |       |       | 1 |       |       |       |  |  |     |  |  | 
|                                                                                                                                                                                                                                                                  |                                 |                                        | 1,320 |       |    |  | 1,330 |       |       | 1 |       |       |       |  |  |     |  |  | 
|                                                                                                                                                                                                                                                                  |                                 |                                        |       |       |     |  |       |       |       |   |       |       |      
|28      AUDITORS REMUNERATION                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                  |                                 |                                        |       |       |     |  |       |       | 2002  |   | 2001  |       | 2000 
|                                                                                                                                                                                                                                                                  |                                 |                                        |       |       |     |  |       |       | $000 |   | $000 |       | $000
|Audit and other assurance services:                                                                                                                                                                                                                               |                                 |                                        |       |       |     |  |       |       |       |   |       |      
|                                                                                                                                                                                                                                                                  | Auditors
of the Company    PwC |                                        |       |       |     |  |       |       |       |   |       |       |      
|                                                                                                                                                                                                                                                                  |                                 | - Audit or review of financial reports |       |       | 434 |  |       |       | 266   |   |       |       | 161   |  
|                                                                                                                                                                                                                                                                  |                                 | - Other audit related work             |       |       | 98  |  |       |       | 40    |   |       |       |      |  
|                                                                                                                                                                                                                                                                  |                                 | - Other assurance services             |       |       | 292 |  |       |       | 576   |   |       |       |      |  
|                                                                                                                                                                                                                                                                  |                                 |                                        |       |       |     |  |       |       |       |   |       |       |       |   |  |     | 
|                                                                                                                                                                                                                                                                  |                                 |                                        |       |       |     |  |       | 824   |       |   |       | 882   |       |   |  | 161 | 
|                                                                                                                                                                                                                                                                  |                                 |                                        |       |       |     |  |       |       |       |   |       |       |       |   |  |     | 
|Other services:                                                                                                                                                                                                                                                   |                                 |                                        |       |       |     |  |       |       |       |   |       |      
|                                                                                                                                                                                                                                                                  | Auditors
of the Company    PwC |                                        |       |       |     |  |       |       |       |   |       |       |      
|                                                                                                                                                                                                                                                                  |                                 | - Advisory services                    |       |       | 23  |  |       |       | 80    |   |       |       | 65    |  
|                                                                                                                                                                                                                                                                  |                                 | - Taxation                             |       |       | 745 |  |       |       | 508   |   |       |       | 472   |  
|                                                                                                                                                                                                                                                                  |                                 |                                        |       |       |     |  |       |       |       |   |       |       |       |   |  |     | 
|                                                                                                                                                                                                                                                                  |                                 |                                        |       |       |     |  |       | 768   |       |   |       | 588   |       |   |  | 537 | 
|                                                                                                                                                                                                                                                                  |                                 |                                        |       |       |     |  |       |       |       |   |       |       |       |   |  |     | 
|                                                                                                                                                                                                                                                                  |                                 |                                        |       |       |     |  |       | 1,592 |       |   |       | 1,470 |       |   |  | 698 | 
|                                                                                                                                                                                                                                                                  |                                 |                                        |       |       |     |  |       |       |       |   |       |       |       |   |  |     | 

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THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

29      COMMITMENTS

|                                                         |                                                         |                                                   |    |      |  |       |         |       |        |      |         |  |         | 
|-------------------------------------------------------- | ------------------------------------------------------- | ------------------------------------------------- | -- | ---- |  | ----- | ------- | ----- | ------ | ---- | ------- |  | ------- | 
|                                                         |                                                         |                                                   |    |      |  |       |         | 2002  |        | 2001
|                                                         |                                                         |                                                   |    | Note |  | $'000 |         | $'000
|                                                         |                                                         |                                                   |    |      |  |       |         |      
|(a)   Capital expenditure commitments                    |                                                         |                                                   |    |      |  |       |         |       |        |      |         | 
|                                                         | Amounts contracted but not provided for:                |                                                   |    |      |  |       |         |       |        |      |         |  |        
|                                                         |                                                         | No later than one year                            |    |      |  |       |         |       | 4,166  |      |         |  | 6,993   | 
|                                                         |                                                         | Later than one year and not later than five years |    |      |  |       |         |       |       |      |         |  | 820     | 
|                                                         |                                                         |                                                   |    |      |  |       |         |       |        |      |         |  |         | 
|                                                         |                                                         |                                                   |    |      |  |       | 4,166   |       |        |      | 7,813   | 
|                                                         |                                                         |                                                   |    |      |  |       |         |       |        |      |         | 
|(b)   Program expenditure commitments                    |                                                         |                                                   |    |      |  |       |         |       |        |      |         | 
|                                                         | Amounts contracted but not provided for:                |                                                   |    |      |  |       |         |       |        |      |         |  |        
|                                                         |                                                         | No later than one year                            |    |      |  |       |         |       | 77,767 |      |         |  | 57,707  | 
|                                                         |                                                         | Later than one year and not later than five years |    |      |  |       |         |       | 13,721 |      |         |  | 58,544  | 
|                                                         |                                                         |                                                   |    |      |  |       |         |       |        |      |         |  |         | 
|                                                         |                                                         |                                                   |    |      |  |       | 91,488  |       |        |      | 116,251 | 
|                                                         |                                                         |                                                   |    |      |  |       |         |       |        |      |         | 
|(c)   Non-cancellable Operating lease commitments        |                                                         |                                                   |    |      |  |       |         |       |        |      |         | 
|                                                         | Minimum lease payments contracted but not provided for: |                                                   |    |      |  |       |         |       |        |      |         |  |        
|                                                         |                                                         | No later than one year                            |    |      |  |       |         |       | 39,643 |      |         |  | 46,829  | 
|                                                         |                                                         | Later than one year and not later than five years |    |      |  |       |         |       | 91,274 |      |         |  | 127,694 | 
|                                                         |                                                         | Later than five years                             |    |      |  |       |         |       | 34,246 |      |         |  | 50,988  | 
|                                                         |                                                         |                                                   |    |      |  |       |         |       |        |      |         |  |         | 
|                                                         |                                                         |                                                   |    |      |  |       | 165,163 |       |        |      | 225,511 | 
|                                                         |                                                         |                                                   |    |      |  |       |         |       |        |      |         | 
|(d)   Finance lease commitments                          |                                                         |                                                   |    |      |  |       |         |       |        |      |         | 
|                                                         | Finance lease commitments are payable:                  |                                                   |    |      |  |       |         |       |        |      |         |  |        
|                                                         |                                                         | No later than one year                            |    |      |  |       |         |       | 1,370  |      |         |  | 1,257   | 
|                                                         |                                                         | Later than one year and not later than five years |    |      |  |       |         |       | 4,579  |      |         |  | 3,777   | 
|                                                         |                                                         |                                                   |    |      |  |       |         |       |        |      |         | 
|                                                         |                                                         |                                                   |    |      |  |       | 5,949   |       |        |      | 5,034   | 
|Less: Total future minimum sub lease payments receivable |                                                         |                                                   |    |      |  |       | 396     |       |        |      | 116     | 
|                                                         |                                                         |                                                   |    |      |  |       |         |       |        |      |         |  |         | 
|                                                         |                                                         |                                                   |    |      |  |       | 5,553   |       |        |      | 4,918   | 
|                                                         |                                                         |                                                   |    |      |  |       |         |       |        |      |         |  |         | 
|Represented by:                                          |                                                         |                                                   |    |      |  |       |         |       |        |      |         | 
|Current                                                  |                                                         |                                                   | 17 |      |  |       | 987     |       |        |      | 1,207   | 
|Non-current                                              |                                                         |                                                   | 20 |      |  |       | 4,566   |       |        |      | 3,711   | 
|                                                         |                                                         |                                                   |    |      |  |       |         |       |        |      |         |  |         | 
|                                                         |                                                         |                                                   |    |      |  |       | 5,553   |       |        |      | 4,918   | 
|                                                         |                                                         |                                                   |    |      |  |       |         |       |        |      |         | 

(e)   Superannuation

| |  | The consolidated entity contributes superannuation benefits to numerous, but
solely accumulation-type superannuation funds including personal, award based
and the company administered fund at various percentages of salary pursuant
to employee contracts and statutory obligations.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The assets of the company administered fund are at all times sufficient to
satisfy all benefits that would have been payable in the event of the
termination of the fund, and voluntary or compulsory termination of
employment by each employee.                                      

30      OUTSIDE EQUITY INTERESTS

|                                                              |  |       |      |       |  |  |        |  
|------------------------------------------------------------- |  | ----- | ---- | ----- |  |  | ------ | -
|                                                              |  | 2002  |      | 2001 
|                                                              |  | $'000 |      | $'000
|Outside equity interests in controlled entities comprise:     |  |       |      |       |  |  |        |  
|Interest in share capital                                     |  |       | 104  |       |  |  | 72,922 |  
|Interest in reserves                                          |  |       | (3   | )     |  |  | 12     |  
|Interest in retained profits at the end of the financial year |  |       | (176 | )     |  |  | (6,313 | )
|                                                              |  |       |      |       |  |  |        |  
|Total outside equity interests                                |  |       | (75  | )     |  |  | 66,621 |  
|                                                              |  |       |      |       |  |  |        |  

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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

31 FINANCIAL INSTRUMENTS

|                                   |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  |          |  
|---------------------------------- |  | ---- | ----- | ----- |  | -------- | -------- | --------- |  | ------------ | ------ | ------- |  | --------- | ------- | ------------ |  |  | ------ |  |  |  | -------- | - |  |  | -------- | -
|                                   |  |      |       |       |  | Floating |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  | 
|                                   |  |      |       |       |  | interest |          | 1 year or |  |              |        |         |  | More than |         | Non-interest |  |  |        | 
|                                   |  |      |       |       |  | rate     |          | less      |  | 1 to 5 years |        | 5 years |  | bearing   |         | Total       
|                                   |  | Note |       | $000 |  | $000    |          | $000     |  | $000        |        | $000    |  | $000     
|                                   |  |      |       |       |  |          |          |           |  |              |        |         |  |          
|2002                               |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  |          |  
|Financial assets                   |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  |          |  
|Cash                               |  |      | 5     |       |  |          | 11,734   |           |  |              |       |         |  |           |        |              |  |  |       |  |  |  | 65       |   |  |  | 11,799   |  
|Receivables                        |  |      | 6,9   |       |  |          |         |           |  |              |       |         |  |           |        |              |  |  |       |  |  |  | 118,240  |   |  |  | 118,240  |  
|Investments                        |  |      | 11    |       |  |          |         |           |  |              |       |         |  |           |        |              |  |  |       |  |  |  | 434      |   |  |  | 434      |  
|                                   |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  |          |  
|                                   |  |      |       |       |  |          | 11,734   |           |  |              |       |         |  |           |        |              |  |  |       |  |  |  | 118,739  |   |  |  | 130,473  |  
|                                   |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  |          |  
|Financial liabilities              |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  |          |  
|Payables                           |  |      | 16,19 |       |  |          |         |           |  |              |       |         |  |           |        |              |  |  |       |  |  |  | 186,479  |   |  |  | 186,479  |  
|Bank overdrafts and
loans          |  |      | 17,20 |       |  |          | 484,791  |           |  |              |       |         |  |           |        |              |  |  |       |  |  |  |         |   |  |  | 484,791  |  
|Commercial bills                   |  |      | 17    |       |  |          | 3,000    |           |  |              |       |         |  |           |        |              |  |  |       |  |  |  |         |   |  |  | 3,000    |  
|Subordinated debentures            |  |      | 20    |       |  |          | 45,500   |           |  |              |       |         |  |           |        |              |  |  |       |  |  |  |         |   |  |  | 45,500   |  
|Convertible debentures             |  |      | 20    |       |  |          | 45       |           |  |              |       |         |  |           |        |              |  |  |       |  |  |  |         |   |  |  | 45       |  
|Lease liabilities                  |  |      | 17,20 |       |  |          |         |           |  |              | 987    |         |  |           | 4,566   |              |  |  |       |  |  |  |         |   |  |  | 5,553    |  
|                                   |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  |          |  
|                                   |  |      |       |       |  |          | 533,336  |           |  |              | 987    |         |  |           | 4,566   |              |  |  |       |  |  |  | 186,479  |   |  |  | 725,368  |  
|                                   |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  |          |  
|Net financial assets (liabilities) |  |      |       |       |  |          | (521,602 | )         |  |              | (987   | )       |  |           | (4,566  | )            |  |  |       |  |  |  | (67,740  | ) |  |  | (594,895 | )
|                                   |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  |          |  
|Interest rate swaps *              |  |      |       |       |  |          |         |           |  |              | 50,000 |         |  |           | 165,000 |              |  |  | 50,000 |  |  |  |         |   |  |  | 265,000  |  
|                                   |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  |          |  
|Weighted average
interest rate     |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  | 5.8      | %
|                                  
|2001                               |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  |          |  
|Financial assets                   |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  |          |  
|Cash                               |  |      | 5     |       |  |          | 21,700   |           |  |              |       |         |  |           |        |              |  |  |       |  |  |  | 69       |   |  |  | 21,769   |  
|Receivables                        |  |      | 6,9   |       |  |          |         |           |  |              |       |         |  |           |        |              |  |  |       |  |  |  | 107,900  |   |  |  | 107,900  |  
|Investments                        |  |      | 11    |       |  |          |         |           |  |              |       |         |  |           |        |              |  |  |       |  |  |  | 16,931   |   |  |  | 16,931   |  
|                                   |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  |          |  
|                                   |  |      |       |       |  |          | 21,700   |           |  |              |       |         |  |           |        |              |  |  |       |  |  |  | 124,900  |   |  |  | 146,600  |  
|                                   |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  |          |  
|Financial liabilities              |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  |          |  
|Payables                           |  |      | 16,19 |       |  |          |         |           |  |              |       |         |  |           |        |              |  |  |       |  |  |  | 246,128  |   |  |  | 246,128  |  
|Bank overdrafts and
loans          |  |      | 17,20 |       |  |          | 297,520  |           |  |              |       |         |  |           |        |              |  |  |       |  |  |  |         |   |  |  | 297,520  |  
|Commercial bills                   |  |      | 17    |       |  |          | 24,565   |           |  |              |       |         |  |           |        |              |  |  |       |  |  |  |         |   |  |  | 24,565   |  
|Subordinated debentures            |  |      | 20    |       |  |          | 45,500   |           |  |              |       |         |  |           |        |              |  |  |       |  |  |  |         |   |  |  | 45,500   |  
|Convertible debentures             |  |      | 20    |       |  |          | 45       |           |  |              |       |         |  |           |        |              |  |  |       |  |  |  |         |   |  |  | 45       |  
|Lease liabilities                  |  |      | 17,20 |       |  |          |         |           |  |              | 1,207  |         |  |           | 3,711   |              |  |  |       |  |  |  |         |   |  |  | 4,918    |  
|Dividends payable                  |  |      | 18    |       |  |          |         |           |  |              |       |         |  |           |        |              |  |  |       |  |  |  | 66,221   |   |  |  | 66,221   |  
|                                   |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  |          |  
|                                   |  |      |       |       |  |          | 367,630  |           |  |              | 1,207  |         |  |           | 3,711   |              |  |  |       |  |  |  | 312,349  |   |  |  | 684,897  |  
|                                   |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  |          |  
|Net financial assets
(liabilities) |  |      |       |       |  |          | (345,930 | )         |  |              | (1,207 | )       |  |           | (3,711  | )            |  |  |       |  |  |  | (187,449 | ) |  |  | (538,297 | )
|                                   |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  |          |  
|Interest
rate swaps *              |  |      |       |       |  |          |         |           |  |              | 25,000 |         |  |           | 125,000 |              |  |  | 50,000 |  |  |  |         |   |  |  | 200,000  |  
|                                   |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  |          |  
|Weighted average interest rate     |  |      |       |       |  |          |          |           |  |              |        |         |  |           |         |              |  |  |        |  |  |  |          |   |  |  | 5.3      | %





|* |  | Notional principal amounts
|- |  | --------------------------

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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

31      FINANCIAL INSTRUMENTS (Continued)

The terms and conditions of financial instruments at balance date are:

|                        |  |           |  |       |         |                    |  |                                 |  |  |  | 
|----------------------- |  | --------- |  | ----- | ------- | ------------------ |  | ------------------------------- |  |  |  | 
|                        |  |           |  |       |         | Facility           |  |                                 |  | 
|                        |  | Security  |  | $'000 |         | Period to Maturity
|Bank loan               |  | Unsecured |  |       | 700,000 |                    |  | 3 years                        
|Commercial Bills        |  | Secured   |  |       | 3,000   |                    |  | 91 days  Note (iii)           
|Bank Loan               |  | Secured   |  |       | 23,000  |                    |  | Rolling 7 day term  Note (iii)
|Bank overdraft          |  | Secured   |  |       | 2,500   |                    |  | On demand  Note (iii)         
|Subordinated debentures |  | Unsecured |  |       | 45,500  |                    |  | 41 years  Note (i)            
|Convertible debentures  |  | Unsecured |  |       | 45      |                    |  | 36 years  Note (ii)           
|Swap contracts          |  | Unsecured |  |       | 265,000 |                    |  | Up to 9 years                  

Notes:

|(i)   |  | The 45,500,000 subordinated debentures of $1 each fully paid have a base
interest rate of 15%. The
rate of interest paid will be adjusted to the rate of dividend distribution
(grossed up for Australian non- resident interest withholding tax to the
extent such dividends are franked) should the dividend distribution amount
exceed the base rate in any year. An equivalent amount of interest is also
payable in the same proportion to any additional dividend distributions
that may be paid from retained earnings. The notes cannot be redeemed
until 30 December 2042, except to the extent that convertible debentures
have to be converted.
Since inception of the subordinated debentures, The Ten Group Pty Limited,
has claimed a tax deduction for the interest paid on the debentures each
year. As part of the settlement reached with the Australian Taxation
Office during the year, The Ten Group Pty Limited will receive debenture
interest tax deductions until 30 June 2004.
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(ii)  |  | The 455,000 convertible debentures of $1.01 each partly paid to 10 cents
have a market linked interest rate and can each be converted to 1,000
ordinary shares at the option of the debenture holder in certain
circumstances within 45 years from date of issue.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(iii) |  | The Eye Corp Pty Limited consolidated entity has granted a fixed and
floating charge over all assets as security for the commercial bills, bank
loan and bank overdraft.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Off-balance sheet financial assets and liabilities:

Except for the interest rate swap contracts, the consolidated entity has no
other off-balance sheet financial assets and liabilities.


Interest rate risk exposures:

The consolidated entity enters into interest rate swaps to manage cash flow
risks associated with the interest rates on borrowings that are floating.
Interest rate swaps allow the consolidated entity to swap floating rate
borrowings into fixed rates.


Credit risk exposures:

The credit risk on financial assets of the consolidated entity which have been
recognised in the balance sheet is the carrying amount, net of any provisions
for doubtful debts.


Net fair value of financial assets and liabilities:

The net fair value of financial assets and liabilities of the consolidated
entity is their carrying value. For equity investments, the net fair value is
an assessment by the Directors based on any special circumstances pertaining to
a particular investment.


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THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

32      EMPLOYEE ENTITLEMENTS

|                                |  |       |       |       |  |  |       | 
|------------------------------- |  | ----- | ----- | ----- |  |  | ----- | 
|                                |  | 2002  |       | 2001 
|                                |  | $'000 |       | $'000
|Number of employees             |  |       |       |       |  |  |       | 
|Number of employees at year end |  |       | 1,289 |       |  |  | 1,243 | 
|                                |  |       |       |       |  |  |       | 

The Ten Executive Option Plan

The Ten Executive Option Plan involves the issue of options in Ten Network Holdings
Limited to executives and senior management of
the Company and its controlled entities. The
total number of options that may be issued have
been limited to 5% of the issued capital of The
Ten Group Pty Limited. At balance date total
options issued amounted to 17,855,000. A total
of 3,125,000 of these options are exercisable
subject to performance hurdles at a price of
$1.92 per share over the following year. A
total of 4,475,000 of these options are
exercisable subject to performance hurdles at a
price of $2.11 per share over the following
three years. A total of 500,000 of these
options are exercisable subject to performance
hurdles at a price of $2.09 per share over the
following four years. A total of 1,505,000 of
these options are exercisable subject to
performance hurdles at a price of $2.41 per
share over the next four years. A total of
750,000 of these options are exercisable
subject to performance hurdles at a price of
$2.25 per share over the next five years. A
total of 7,500,000 of these options are
exercisable on certain nominated dates at a
price of $1.90 per share over the next ten
years. All issued options are also subject to
various vesting date arrangements. As of the
date of this report, 8,127,000 options may be
exercised, due to hurdle and vesting date
preconditions having been met. As of the date
of this report no options have been converted
into shares.


Directors have had regard to the particular
capital structure of the Company and Ten
Network Holdings Limited and have implemented
arrangements to ensure that dilution arising
from the issue of new shares in Ten Network
Holdings Limited under the terms of the Plan
are matched at the Company level.

The Ten Employee Award Plan

This plan was established as a reward and
incentive plan for employees of The Ten Group
Pty Limited and its controlled entities. A
controlled entity contributed $1,000 per
employee in 1998 for the on-market purchase of
shares of Ten Network Holdings Limited on
behalf of each employee. Although the shares
are registered in the name of each employee,
these shares are restricted from being traded
for a period of three years from the date of
grant, except for the termination of the
employee or hardship circumstances. The plan
is also designed to accommodate further
contributions by The Ten Group Pty Limited and
its controlled entities, however there is no
commitment by the Company to make future
contributions.


The Ten Employee Savings Plan

The Ten Employee Savings Plan was established
as a mechanism for employees of the Company and
its controlled entities for the purchase of
shares in Ten Network Holdings Limited.
Employees may set aside amounts from their
remuneration and reward arrangements for the
on-market purchase of such shares.


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THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

33      RELATED PARTY INFORMATION

|                                                      |                         |         |       |      |    |       |         |         |       |      |          |         |       | 
|----------------------------------------------------- | ----------------------- | ------- | ----- | ---- | -- | ----- | ------- | ------- | ----- | ---- | -------- | ------- | ----- | 
|                                                      |                         |         |       |      |    |       |         | 2002    |       | 2001
|                                                      |                         |         |       | Note |    | $000 |         | $000  
|Ownership interest in related entities                |                         |         |       |      |    |       |         |         |       |      |          |        
|Associated
companies  equity accounted               |                         |         | 10,26 |      |    |       | 2,888   |         |       |      | 2,384    |        
|                                                      |                         |  other |       |      | 11 |       |         |         | 2,119 |      |          |         | 2,119 | 
|                                                      |                         |         |       |      |    |       |         |         |       |      |          |        
|                                                      |                         |         |       |      |    |       | 5,007   |         |       |      | 4,503    |        
|                                                      |                         |         |       |      |    |       |         |         |       |      |          |        
|Dividends                                             |                         |         |       |      |    |       |         |         |       |      |          |        
|Dividends to controlling entities                     |                         |         |       |      |    |       |        |         |       |      | 55,424   |        
|                                                      |                         |         |       |      |    |       |         |         |       |      |          |        
|Amounts receivable from/(payable to) related entities |                         |         |       |      |    |       |         |         |       |      |          |        
|Associated
companies                                 
|Receivable                                            |                         |         | 6,9   |      |    |       | 793     |         |       |      | 683      |        
|                                                      |                         |         |       |      |    |       |         |         |       |      |          |        
|Joint
venture entities                               
|Receivable                                            |                         |         | 9     |      |    |       |        |         |       |      | 138      |        
|                                                      |                         |         |       |      |    |       |         |         |       |      |          |        
|Related entities                                      |                         |         |       |      |    |       |         |         |       |      |          |        
|                                                      | Receivable              |         |       | 9    |    |       |         |        |       |      |          | 665     |      
|                                                      | Payable                 |         |       | 16   |    |       |         | (6,825  | )     |      |          | (72,835 | )    
|                                                      | Subordinated debentures |         |       | 20   |    |       |         | (45,500 | )     |      |          | (45,500 | )    
|                                                      | Convertible debentures  |         |       | 20   |    |       |         | (45     | )     |      |          | (45     | )    
|                                                      |                         |         |       |      |    |       |         |         |       |      |          |        
|                                                      |                         |         |       |      |    |       | (52,370 | )       |       |      | (117,715 | )      
|                                                      |                         |         |       |      |    |       |         |         |       |      |          |        

The amount of interest ultimately payable is dependent on the amount of any
dividend paid.

Financial transactions with related entities

|                                            |  |      |  |                                                                                                                                                
|------------------------------------------- |  | ---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------
|                                            |  |      |  | Nature of transaction at normal                                                                                                                
|Entity's name                               |  | Note |  | commercial terms                                                                                                                               
|                                            |  |      |  |                                                                                                                                                
|Between controlled entities:                |  |      |  |                                                                                                                                                
|Network Ten Pty Limited                     |  | 2    |  | Interest on loans $26.4m (2001-$26.4m)                                                                                                         
|Eye Corp Pty Limited                        |  | 2    |  | Interest on loans $3.2m (2001-$0.8m)                                                                                                           
|Eye Corp Pty Limited                        |  |      |  | Purchase of Out-of-Home advertising by
Network Ten Pty Limited of $0.7m
(2001- $nil)                                                           
|Eye Corp Pty Limited                        |  |      |  | Rental income charged by Network Ten Pty
Limited, Network Ten (Adelaide) Pty
Limited,
and Network Ten (Perth) Pty Limited of
$0.2m
(2001- $nil)
|Network Ten Pty Limited                     |  | 3    |  | Debt collection fee revenue of $79.4m
(2001- $nil)
Management fees of $425.9m
(2001-$296.2m)                                                   
|Network Ten (Adelaide) Pty Limited          |  | 3    |  | Debt collection fee revenue of $10.1m
(2001- $nil)
Management fees of $29.9m (2001-$15.9m)                                                     
|Network Ten (Perth) Pty Limited             |  | 3    |  | Debt collection fee revenue of $13.2m
(2001- $nil)
Management fees of $36.2m (2001-$18.7m)                                                     
|With related entities:                      |  |      |  |                                                                                                                                                
|CanWest Global Communications Corp. (Group) |  | 3    |  | Interest on subordinated and
convertible debentures $6.8m
(2001-$71.3m)                                                                        

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THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

33      RELATED PARTY INFORMATION (Continued)

Contracts with Directors

During the financial year, Competitive Foods Australia Limited entered into
agreements in respect of the purchase of television airtime (through an
advertising agency) from a controlled entity on normal commercial terms and
conditions. Mr JJ Cowin, a Director of the Company, is Chairman of, and has a
substantial interest in, Competitive Foods Australia Limited. Also during the financial year, Investec Wentworth Pty Limited provided the
consolidated entity with corporate consultancy services on normal commercial
terms and conditions. Mr GH Levy, a Director of the Company, is a director of
Investec Wentworth Pty Limited.


Loans to/from Directors

Loans to Directors of controlled entities disclosed in Notes 6 and 9 are
secured and mature in two years or on the date of employment termination. No
interest is payable on the loans and there have been no repayments in the
current period.

Loans provided by Directors disclosed in Note 16 have been provided on normal
terms and conditions.

Network Agreements

The Company has networking agreements with a number of its controlled entities
whereby advertising revenues derived by those controlled entities are assigned
to the Company. Revenues assigned by those controlled entities totalled
$513.3m (2001: $438.9m). Management fees payable by the Company to controlled
entities under the agreements totalled $492.1m (2001: $330.8m). Debt
collection fees are also collected by the Company totalling $102.7m (2001:
$nil).

Controlling Entities

The ultimate parent entity in the wholly owned group is The Ten Group Pty
Limited. The ultimate parent entity is Ten Network Holdings Limited, a company
listed on the Australian Stock Exchange, which at 31 August 2002 had a
beneficial interest of 83.73% (2001:83.70%) and an economic interest of 41.865%
(2001:41.85%).

34      CONTINGENT LIABILITIES

General

As part of its normal operations as a television broadcaster, the consolidated
entity has received writs for defamation and various claims for damages. At
balance date, the aggregate of all such claims will not give rise to any
material liability.

Details and estimates of other maximum amounts of contingent liabilities are as
follows:

|                                                                                                                                                                                                                                                       |  |       |        |       |  |  |        | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----- | ------ | ----- |  |  | ------ | 
|                                                                                                                                                                                                                                                       |  | 2002  |        | 2001 
|                                                                                                                                                                                                                                                       |  | $'000 |        | $'000
|Unsecured guarantees by the parent entity and
consolidated entity in respect of leases of controlled
entities                                                                                                                                          |  |       | 39,053 |       |  |  | 46,419 | 
|Secured guarantees by a controlled entity, Eye Corp Pty
Limited, in respect of leases of certain of its
controlled entities. The guarantees are secured by a
fixed and floating charge over all assets of the Eye
Corp Pty Limited consolidated entity |  |       | 1,768  |       |  |  | 21,072 | 
|                                                                                                                                                                                                                                                       |  |       |        |       |  |  |        | 
|                                                                                                                                                                                                                                                       |  |       | 40,821 |       |  |  | 67,491 | 
|                                                                                                                                                                                                                                                       |  |       |        |       |  |  |        | 

No material losses are anticipated in respect of any of the above contingent
liabilities.

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THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

35      SEGMENT INFORMATION

Business Segments

The consolidated entity is organised into the following divisions by service
type.


Television

Operation of commercial television licences TEN-10 (Sydney), ATV-10
(Melbourne), TVQ-10 (Brisbane), ADS-10 (Adelaide) and NEW-10 (Perth).


Out Of Home

Advertising media outside the home environment.


Ventures

Investments in the online industry.


Geographical segments

The consolidated entity operates principally within Australia.


Inter-segment transactions

Segment revenues, expenses and results include transactions between segments.
Such transactions are priced on an arms-length basis and are eliminated on
consolidation.


Primary reporting  business segments

|                                                                              |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  |           |  
|----------------------------------------------------------------------------- |  | ---------- | --------- | ----------- |  | -------- | -------- | ----------- |  | ------------ | --- |  |  | ------------- | ---- | - |  |  | --------- | -
|                                                                              |  |            |           |             |  |          |          |             |  |              |     |  |  | Eliminations/ |      |   |  | 
|                                                                              |  | Television |           | Out Of Home |  | Ventures |          | Unallocated |  | Consolidated
|2002                                                                          |  | $000      |           | $000       |  | $000    |          | $000       |  | $000       
|                                                                             
|Revenue                                                                       |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  |           |  
|Sales to external customers                                                   |  |            | 587,453   |             |  |          | 78,102   |             |  |              |    |  |  |               |     |   |  |  | 665,555   |  
|Inter-segment sales                                                           |  |            | 171       |             |  |          | 667      |             |  |              |    |  |  |               | (838 | ) |  |  |          |  
|                                                                              |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  |           |  
|Total sales revenue                                                           |  |            | 587,624   |             |  |          | 78,769   |             |  |              |    |  |  |               | (838 | ) |  |  | 665,555   |  
|Other revenue                                                                 |  |            | 1,172     |             |  |          | 143      |             |  |              | 142 |  |  |               |     |   |  |  | 1,457     |  
|                                                                              |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  |           |  
|Total revenue                                                                 |  |            | 588,796   |             |  |          | 78,912   |             |  |              | 142 |  |  |               | (838 | ) |  |  | 667,012   |  
|                                                                              |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  |           |  
|                                                                             
|Result                                                                        |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  |           |  
|Segment result before non-recurring items                                     |  |            | 161,095   |             |  |          | (15,036  | )           |  |              | 142 |  |  |               |     |   |  |  | 146,201   |  
|Non-recurring items                                                           |  |            | (20,015   | )           |  |          | (178,421 | )           |  |              |    |  |  |               |     |   |  |  | (198,436  | )
|                                                                              |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  |           |  
|Segment result                                                                |  |            | 141,080   |             |  |          | (193,457 | )           |  |              | 142 |  |  |               |     |   |  |  | (52,235   | )
|Share of associates profit/(loss)                                            |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  | 916       |  
|Borrowing costs                                                               |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  | (37,355   | )
|Interest revenue                                                              |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  | 923       |  
|                                                                              |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  |           |  
|Profit (loss) before tax                                                      |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  | (87,751   | )
|Income tax expense (includes
non-recurring tax settlement expenses of
$36.2m) |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  | (70,530   | )
|                                                                              |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  |           |  
|Net profit (loss)                                                             |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  | (158,281  | )
|                                                                              |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  |           |  
|Depreciation and amortisation                                                 |  |            | 12,496    |             |  |          | 16,054   |             |  |              |    |  |  |               |     |   |  |  | 28,550    |  
|Other non-cash expenses                                                       |  |            | 16,522    |             |  |          | 169,540  |             |  |              |    |  |  |               |     |   |  |  | 186,062   |  
|                                                                              |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  |           |  
|                                                                             
|Assets                                                                        |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  |           |  
|Segment assets                                                                |  |            | 1,451,437 |             |  |          | 137,366  |             |  |              |    |  |  |               |     |   |  |  | 1,588,803 |  
|Investments in associates                                                     |  |            | 2,119     |             |  |          | 2,888    |             |  |              |    |  |  |               |     |   |  |  | 5,007     |  
|                                                                              |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  |           |  
|Consolidated total assets                                                     |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  | 1,593,810 |  
|                                                                              |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  |           |  
|                                                                             
|Liabilities                                                                   |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  |           |  
|Segment liabilities                                                           |  |            | 731,547   |             |  |          | 69,040   |             |  |              |    |  |  |               |     |   |  |  | 800,587   |  
|                                                                              |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  |           |  
|                                                                             
|Acquisitions of non-current assets                                            |  |            | 20,509    |             |  |          | 5,004    |             |  |              |    |  |  |               |     |   |  |  | 25,513    |  
|                                                                              |  |            |           |             |  |          |          |             |  |              |     |  |  |               |      |   |  |  |           |  
|                                                                             

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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

35      SEGMENT INFORMATION (continued)

|                                          |  |            |         |             |  |          |         |              |  |  |         |   |  |  |         |  
|----------------------------------------- |  | ---------- | ------- | ----------- |  | -------- | ------- | ------------ |  |  | ------- | - |  |  | ------- | -
|                                          |  | Television |         | Out Of Home |  | Ventures |         | Consolidated
|2001                                      |  | $000      |         | $000       |  | $000    |         | $000       
|                                          |  |            |         |             |  |          |         |             
|Revenue                                   |  |            |         |             |  |          |         |              |  |  |         |   |  |  |         |  
|Sales to external customers               |  |            | 501,823 |             |  |          | 49,359  |              |  |  |        |   |  |  | 551,182 |  
|Inter-segment sales                       |  |            |        |             |  |          |        |              |  |  |        |   |  |  |        |  
|                                          |  |            |         |             |  |          |         |              |  |  |         |   |  |  |         |  
|Total sales revenue                       |  |            | 501,823 |             |  |          | 49,359  |              |  |  |        |   |  |  | 551,182 |  
|Other revenue                             |  |            | 7,102   |             |  |          | 49      |              |  |  |        |   |  |  | 7,151   |  
|Non-recurring revenue                     |  |            | 105,824 |             |  |          |        |              |  |  |        |   |  |  | 105,824 |  
|                                          |  |            |         |             |  |          |         |              |  |  |         |   |  |  |         |  
|Total revenue                             |  |            | 614,749 |             |  |          | 49,408  |              |  |  |        |   |  |  | 664,157 |  
|                                          |  |            |         |             |  |          |         |              |  |  |         |   |  |  |         |  
|                                         
|Result                                    |  |            |         |             |  |          |         |              |  |  |         |   |  |  |         |  
|Segment result before
non-recurring items |  |            | 147,498 |             |  |          | (10,562 | )            |  |  | (1,858  | ) |  |  | 135,078 |  
|Non-recurring items                       |  |            | 65,615  |             |  |          | (6,490  | )            |  |  | (29,243 | ) |  |  | 29,882  |  
|                                          |  |            |         |             |  |          |         |              |  |  |         |   |  |  |         |  
|Segment result                            |  |            | 213,113 |             |  |          | (17,052 | )            |  |  | (31,101 | ) |  |  | 164,960 |  
|Share of associates profit/(loss)        |  |            |         |             |  |          |         |              |  |  |         |   |  |  | 588     |  
|Borrowing costs                           |  |            |         |             |  |          |         |              |  |  |         |   |  |  | (93,263 | )
|Interest revenue                          |  |            |         |             |  |          |         |              |  |  |         |   |  |  | 1,354   |  
|                                          |  |            |         |             |  |          |         |              |  |  |         |   |  |  |         |  
|Profit before tax                         |  |            |         |             |  |          |         |              |  |  |         |   |  |  | 73,639  |  
|Income tax expense                        |  |            |         |             |  |          |         |              |  |  |         |   |  |  | (23,822 | )
|                                          |  |            |         |             |  |          |         |              |  |  |         |   |  |  |         |  
|Net profit                                |  |            |         |             |  |          |         |              |  |  |         |   |  |  | 49,817  |  
|                                          |  |            |         |             |  |          |         |              |  |  |         |   |  |  |         |  
|Depreciation and amortisation             |  |            | 8,800   |             |  |          | 12,743  |              |  |  |        |   |  |  | 21,543  |  
|Other non-cash expenses                   |  |            | 11,189  |             |  |          |        |              |  |  | 29,243  |   |  |  | 40,432  |  
|                                          |  |            |         |             |  |          |         |              |  |  |         |   |  |  |         |  
|                                         
|Assets                                    |  |            |         |             |  |          |         |              |  |  |         |   |  |  |         |  
|Segment assets                            |  |            | 637,116 |             |  |          | 350,371 |              |  |  | 457     |   |  |  | 987,944 |  
|Investments in associates                 |  |            |        |             |  |          | 2,384   |              |  |  |        |   |  |  | 2,384   |  
|                                          |  |            |         |             |  |          |         |              |  |  |         |   |  |  |         |  
|Consolidated total assets                 |  |            |         |             |  |          |         |              |  |  |         |   |  |  | 990,328 |  
|                                          |  |            |         |             |  |          |         |              |  |  |         |   |  |  |         |  
|                                         
|Liabilities                               |  |            |         |             |  |          |         |              |  |  |         |   |  |  |         |  
|Segment liabilities                       |  |            | 649,477 |             |  |          | 76,603  |              |  |  | 27,157  |   |  |  | 753,237 |  
|                                          |  |            |         |             |  |          |         |              |  |  |         |   |  |  |         |  
|                                         
|Acquisitions of non-current assets        |  |            | 18,852  |             |  |          | 4,405   |              |  |  |        |   |  |  | 23,257  |  
|                                          |  |            |         |             |  |          |         |              |  |  |         |   |  |  |         |  
|                                         

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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

35      SEGMENT INFORMATION (continued)

|                                          |  |            |         |             |  |          |   |              |  |  |       |  |  |  |         |  
|----------------------------------------- |  | ---------- | ------- | ----------- |  | -------- | - | ------------ |  |  | ----- |  |  |  | ------- | -
|                                          |  | Television |         | Out Of Home |  | Ventures |   | Consolidated
|2000                                      |  | $000      |         | $000       |  | $000    |   | $000       
|                                          |  |            |         |             |  |          |   |             
|Revenue                                   |  |            |         |             |  |          |   |              |  |  |       |  |  |  |         |  
|Sales to external customers               |  |            | 549,844 |             |  |          |  |              |  |  |      |  |  |  | 549,844 |  
|Inter-segment sales                       |  |            |        |             |  |          |  |              |  |  |      |  |  |  |        |  
|                                          |  |            |         |             |  |          |   |              |  |  |       |  |  |  |         |  
|Total sales revenue                       |  |            | 549,844 |             |  |          |  |              |  |  |      |  |  |  | 549,844 |  
|Other revenue                             |  |            | 6,791   |             |  |          |  |              |  |  |      |  |  |  | 6,791   |  
|                                          |  |            |         |             |  |          |   |              |  |  |       |  |  |  |         |  
|Total revenue                             |  |            | 556,635 |             |  |          |  |              |  |  |      |  |  |  | 556,635 |  
|                                          |  |            |         |             |  |          |   |              |  |  |       |  |  |  |         |  
|                                         
|Result                                    |  |            |         |             |  |          |   |              |  |  |       |  |  |  |         |  
|Segment result before
non-recurring items |  |            | 189,489 |             |  |          |  |              |  |  | 4,413 |  |  |  | 193,902 |  
|                                          |  |            |         |             |  |          |   |              |  |  |       |  |  |  |         |  
|Segment result                            |  |            |         |             |  |          |   |              |  |  |       |  |  |  | 193,902 |  
|Share of associates
profit/(loss)        |  |            |         |             |  |          |   |              |  |  |       |  |  |  |        |  
|Borrowing costs                           |  |            |         |             |  |          |   |              |  |  |       |  |  |  | (87,786 | )
|Interest revenue                          |  |            |         |             |  |          |   |              |  |  |       |  |  |  | 1,240   |  
|                                          |  |            |         |             |  |          |   |              |  |  |       |  |  |  |         |  
|Profit before tax                         |  |            |         |             |  |          |   |              |  |  |       |  |  |  | 107,356 |  
|Income tax expense                        |  |            |         |             |  |          |   |              |  |  |       |  |  |  | (33,559 | )
|                                          |  |            |         |             |  |          |   |              |  |  |       |  |  |  |         |  
|Net profit                                |  |            |         |             |  |          |   |              |  |  |       |  |  |  | 73,797  |  
|                                          |  |            |         |             |  |          |   |              |  |  |       |  |  |  |         |  
|Depreciation and amortisation             |  |            | 5,436   |             |  |          |  |              |  |  |      |  |  |  | 5,436   |  
|Other non-cash expenses                   |  |            |        |             |  |          |  |              |  |  |      |  |  |  |        |  
|                                         

36      NOTES TO THE STATEMENTS OF CASH FLOWS

|                                                                                                              |  |       |          |       |  |       |         |   |  |  |         |  
|------------------------------------------------------------------------------------------------------------- |  | ----- | -------- | ----- |  | ----- | ------- | - |  |  | ------- | -
|                                                                                                              |  | 2002  |          | 2001  |  | 2000 
|                                                                                                              |  | $000 |          | $000 |  | $000
|Reconciliation of profit from ordinary activities
after income tax to net cash flow from operating
activities |  |       |          |       |  |       |         |   |  |  |         |  
|Net (loss)/profit from ordinary activities after
related tax expense                                          |  |       | (158,281 | )     |  |       | 49,817  |   |  |  | 73,797  |  
|                                                                                                              |  |       |          |       |  |       |         |   |  |  |         |  
|Non-cash revenue                                                                                              |  |       | (916     | )     |  |       | (4,331  | ) |  |  | (4,560  | )
|Non-cash expenses                                                                                             |  |       | 28,550   |       |  |       | 20,524  |   |  |  | 12,368  |  
|Dividends from associates                                                                                     |  |       | 280      |       |  |       |        |   |  |  |        |  
|Profit on sale of non-current assets                                                                          |  |       | (459     | )     |  |       | (65,632 | ) |  |  | (77     | )
|Writedown of Out Of Home goodwill and other assets                                                            |  |       | 178,422  |       |  |       |        |   |  |  |        |  
|Writedown of non-current assets                                                                               |  |       | 20,015   |       |  |       | 29,243  |   |  |  |        |  
|Debenture interest                                                                                            |  |       | 6,825    |       |  |       | 71,271  |   |  |  | 81,998  |  
|Amount (paid)/refunded from provisions                                                                        |  |       | (10,111  | )     |  |       | (879    | ) |  |  | 1,778   |  
|Net increase/(decrease) in tax provisions                                                                     |  |       | (17,486  | )     |  |       | (31,222 | ) |  |  | 11,282  |  
|Net increase/(decrease) in accrued revenue and
expense items in payables/(receivables)                        |  |       | (23,747  | )     |  |       | (49,446 | ) |  |  | (38,253 | )
|                                                                                                              |  |       |          |       |  |       |         |   |  |  |         |  
|                                                                                                              |  |       | 23,092   |       |  |       | 19,345  |   |  |  | 138,333 |  
|                                                                                                              |  |       |          |       |  |       |         |   |  |  |         |  

Non cash financing and investing activities

During the year Ten Network Holdings Limited issued 150,000 shares to
Copplemere Pty Limited in consideration for the acquisition by Ten Network
Holdings Limited from Coplemere Pty Limited of 150,000 shares in The Ten Group
Pty Limited Pursuant to the relevant exchange deeds detailed in the Prospectus.
This resulted in Ten Network Holdings Limiteds issued capital increasing to
380,964,092 shares and the number of shares it owns in The Ten Group Pty
Limited increasing to 380,964,092 representing an increase in its voting
interest in The Ten Group Pty Limited from 83.723% to 83.728%.


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THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

37       DEED OF CROSS GUARANTEE

There are two separate Deeds of Cross Guarantee within the consolidated entity.
The Ten Group Pty Limited is the holding company under the first of the Deeds
and those wholly owned subsidiaries party to The Ten Group Pty Limited Deed are
listed in Note 25(a), reference note (i).

Eye Corp Pty Limited is the holding company under the second Deed of Cross
Guarantee and those wholly owned subsidiaries party to the Eye Corp Pty Limited
Deed are listed in Note 25(a), reference note (ii).

The controlled entities party to the Deeds of Cross Guarantee have been granted
relief from the necessity to prepare a financial report and directors report
under Class Order 98/1418 issued by the Australian Securities and Investments
Commission. Under the Deeds of Cross Guarantee each of the companies party to
each of the Deeds guarantees the debts of the other named companies.

An abridged consolidated statement of financial performance and consolidated
statement of financial position, comprising The Ten Group Pty Limited and
controlled entities which are a party to The Ten Group Pty Limited Deed, after
eliminating all transactions between parties to the Deed of Cross Guarantee, at
31 August is set out below:

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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

37       DEED OF CROSS GUARANTEE

|                                                                                                                        |                                                   |  |           |           |       |  |         |         | 
|----------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------- |  | --------- | --------- | ----- |  | ------- | ------- | 
|                                                                                                                        |                                                   |  | 2002      |           | 2001 
|                                                                                                                        |                                                   |  | $000     |           | $000
|Abridged Statement of financial performance                                                                             |                                                   |  |           |           |       |  |         |        
|(Loss)/Profit from ordinary activities before income tax                                                                |                                                   |  | (67,335   | )         |       |  | 115,910 |        
|Income tax expense relating to ordinary activities                                                                      |                                                   |  | (72,247   | )         |       |  | (25,422 | )      
|                                                                                                                        |                                                   |  |           |           |       |  |         |        
|(Loss)/Profit from ordinary activities after related income tax expense                                                 |                                                   |  | (139,582  | )         |       |  | 90,488  |        
|Profit/(loss) from extraordinary items after related income tax expense                                                 |                                                   |  |          |           |       |  |        |        
|                                                                                                                        |                                                   |  |           |           |       |  |         |        
|Net profit                                                                                                              |                                                   |  | (139,582  | )         |       |  | 90,488  |        
|Retained profits at the beginning of year                                                                               |                                                   |  | 161,675   |           |       |  | 137,408 |        
|Adjustment to retained profits at beginning of year on initial
adoption of AASB 1041 Revaluations of Non-Current Assets |                                                   |  |          |           |       |  |        |        
|Reduction in retained profits on share buy-back                                                                         |                                                   |  |          |           |       |  |        |        
|Aggregate of amounts transferred from reserves                                                                          |                                                   |  |          |           |       |  |        |        
|                                                                                                                        |                                                   |  |           |           |       |  |         |        
|                                                                                                                        |                                                   |  | 22,093    |           |       |  | 227,896 |        
|Dividends provided or paid                                                                                              |                                                   |  |          |           |       |  | 66,221  |        
|                                                                                                                        |                                                   |  |           |           |       |  |         |        
|Retained profits at end of year                                                                                         |                                                   |  | 22,093    |           |       |  | 161,675 |        
|                                                                                                                        |                                                   |  |           |           |       |  |         |        
|Statement of financial position                                                                                         |                                                   |  |           |           |       |  |         |        
|                                                                                                                        | Cash assets                                       |  |           | 11,799    |       |  |         | 17,606  | 
|                                                                                                                        | Receivables                                       |  |           | 147,241   |       |  |         | 116,139 | 
|                                                                                                                        | Inventories                                       |  |           | 126,503   |       |  |         | 109,106 | 
|                                                                                                                        | Current tax receivable                            |  |           | 65,542    |       |  |         | 13,139  | 
|                                                                                                                        | Other                                             |  |           | 3,883     |       |  |         | 3,909   | 
|                                                                                                                        |                                                   |  |           |           |       |  |         |        
|Total current assets                                                                                                    |                                                   |  | 354,968   |           |       |  | 259,899 |        
|                                                                                                                        |                                                   |  |           |           |       |  |         |        
|                                                                                                                        | Receivables                                       |  |           | 30,517    |       |  |         | 31,619  | 
|                                                                                                                        | Inventories                                       |  |           | 1,565     |       |  |         | 1,590   | 
|                                                                                                                        | Investments accounted for using the equity method |  |           |          |       |  |         |        | 
|                                                                                                                        | Other financial assets                            |  |           | 27,528    |       |  |         | 208,587 | 
|                                                                                                                        | Property, plant and equipment                     |  |           | 62,698    |       |  |         | 53,098  | 
|                                                                                                                        | Intangibles                                       |  |           | 1,077,823 |       |  |         | 326,422 | 
|                                                                                                                        | Deferred tax assets                               |  |           |          |       |  |         |        | 
|                                                                                                                        | Other                                             |  |           |          |       |  |         | 3,522   | 
|                                                                                                                        |                                                   |  |           |           |       |  |         |        
|Total non-current assets                                                                                                |                                                   |  | 1,200,131 |           |       |  | 624,838 |        
|                                                                                                                        |                                                   |  |           |           |       |  |         |        
|Total assets                                                                                                            |                                                   |  | 1,555,099 |           |       |  | 884,737 |        
|                                                                                                                        |                                                   |  |           |           |       |  |         |        
|                                                                                                                        | Payables                                          |  |           | 143,137   |       |  |         | 205,588 | 
|                                                                                                                        | Interest-bearing liabilities                      |  |           |          |       |  |         |        | 
|                                                                                                                        | Current tax liabilities                           |  |           |          |       |  |         |        | 
|                                                                                                                        | Provisions                                        |  |           | 24,155    |       |  |         | 100,317 | 
|                                                                                                                        |                                                   |  |           |           |       |  |         |        
|Total current liabilities                                                                                               |                                                   |  | 167,292   |           |       |  | 305,905 |        
|                                                                                                                        |                                                   |  |           |           |       |  |         |        
|                                                                                                                        | Payables                                          |  |           | 28,326    |       |  |         | 19,977  | 
|                                                                                                                        | Interest-bearing liabilities                      |  |           | 505,545   |       |  |         | 340,545 | 
|                                                                                                                        | Deferred tax liabilities                          |  |           | 32,042    |       |  |         | 8,456   | 
|                                                                                                                        | Provisions                                        |  |           | 1,971     |       |  |         | 1,749   | 
|                                                                                                                        |                                                   |  |           |           |       |  |         |        
|Total non-current liabilities                                                                                           |                                                   |  | 567,884   |           |       |  | 370,727 |        
|                                                                                                                        |                                                   |  |           |           |       |  |         |        
|Total liabilities                                                                                                       |                                                   |  | 735,176   |           |       |  | 676,632 |        
|                                                                                                                        |                                                   |  |           |           |       |  |         |        
|Net assets                                                                                                              |                                                   |  | 819,923   |           |       |  | 208,105 |        
|                                                                                                                        |                                                   |  |           |           |       |  |         |        
|                                                                                                                        | Contributed equity                                |  |           | 45,500    |       |  |         | 45,500  | 
|                                                                                                                        | Reserves                                          |  |           | 752,330   |       |  |         | 930     | 
|                                                                                                                        | Retained earnings                                 |  |           | 22,093    |       |  |         | 161,675 | 
|                                                                                                                        |                                                   |  |           |           |       |  |         |        
|Total Equity                                                                                                            |                                                   |  | 819,923   |           |       |  | 208,105 |        
|                                                                                                                        |                                                   |  |           |           |       |  |         |        

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THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

38       DIVIDENDS

Dividends proposed or paid by the Company are:

|                                   |  |                 |      |                    |  |                 |        |                 |  |                    |     |  |    |              |     |  |     |   |     | 
|---------------------------------- |  | --------------- | ---- | ------------------ |  | --------------- | ------ | --------------- |  | ------------------ | --- |  | -- | ------------ | --- |  | --- | - | --- | 
|                                   |  |                 |      |                    |  |                 |        |                 |  |                    |     |  |    | Tax rate for |     |  |     |  
|                                   |  | Cents per share |      | Total amount $'000 |  | Date of Payment |        | franking credit |  | Percentage franked
|                                   |  |                 |      |                    |  |                 |        |                 |  |                   
|2002                               |  |                 |      |                    |  |                 |        |                 |  |                    |     |  |    |              |     |  |     |   |     | 
|Final ordinary dividend proposed  |  |                 |     |                    |  |                 |       |                 |  |                    | n/a |  |    |              | n/a |  |     |   | n/a | 
|Final  ordinary dividend paid     |  |                 | 14.2 |                    |  |                 | 66,221 |                 |  | 20 December 2001   |     |  | 30 | %            |     |  | 100 | %
|2001                               |  |                 |      |                    |  |                 |        |                 |  |                    |     |  |    |              |     |  |     |   |     | 
|Final  ordinary dividend proposed |  |                 | 14.2 |                    |  |                 | 66,221 |                 |  | 20 December 2001   |     |  | 30 | %            |     |  | 100 | %
|Final  ordinary dividend paid     |  |                 | 16.2 |                    |  |                 | 73,797 |                 |  | 20 December 2000   |     |  | 34 | %            |     |  | 100 | %

|                                                                   |  |       |        |       |  |             |       |  |  |  |        | 
|------------------------------------------------------------------ |  | ----- | ------ | ----- |  | ----------- | ----- |  |  |  | ------ | 
|                                                                   |  |       |        |       |  | The Company |       |  |  | 
|                                                                   |  | 2002  |        | 2001  |  | 2000       
|                                                                   |  | $'000 |        | $'000 |  | $'000      
|Dividend franking account                                          |  |       |        |       |  |             |       |  |  |  |        | 
|Franking credits (30%) available for the subsequent financial year |  |       | 37,488 |       |  |             | 8,970 |  |  |  | 33,220 | 
|                                                                   |  |       |        |       |  |             |       |  |  |  |        | 

The above amounts represent the balances of the franking accounts as at the end
of the financial year, adjusted for:



|(a) |  | franking credits that will arise from the payment of income tax payable
as at the reporting date;              
|--- |  | ---------------------------------------------------------------------------------------------------------------
|    |  |                                                                                                                
|(b) |  | franking debits that will arise from the payment of dividends proposed or
provided as at the reporting date;   
|    |  |                                                                                                                
|(c) |  | franking credits that will arise from the receipt of dividends recognised
as receivables at reporting date; and
|    |  |                                                                                                                
|(d) |  | franking credits that may be prevented from being distributed in the
subsequent year.                          

Legislation took effect on 1 July 2002, under which the amount recorded in the
franking account is the amount of income tax paid rather than franking credits
based on after tax profits. Amounts debited to the franking account in respect
of dividends paid after 30 June 2002 will be the franking credits attaching to
those dividends rather than the gross amount of the dividends. In accordance
with this legislation, the franking account balances as at 30 June 2002 have
been converted so that the franking account reflects from 1 July 2002, tax paid
amounts rather than franking credits based on after tax profits.

39       SUBSEQUENT EVENTS

At the date of this report, no matters or circumstances have arisen since
balance date that has significantly affected or may significantly affect:



| |  | the operations in financial years subsequent to 31 August 2002 of the consolidated entity and the entities it controls from
time to time; or
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------
|  |  |                                                                                                                                             
| |  | the results of those operations; or                                                                                                         
|  |  |                                                                                                                                             
| |  | the state of affairs in financial years subsequent to 31 August 2002 of the consolidated entity.                                            

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THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

40      UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

The consolidated financial statements of The Ten Group Pty Limited are prepared
in accordance with Generally Accepted Accounting Principles applicable in
Australia (AUS GAAP) (refer Note 1), which differ in some respects from
Generally Accepted Accounting Principles in the United States (US GAAP).

The following are reconciliations of the net profit and shareholders equity
applying US GAAP. This summary is not intended to be a comprehensive US GAAP
report. All amounts are in Australian dollars.



|(a) |  | Revaluation of Non-Current Assets
Under AUS GAAP the consolidated entity may revalue certain assets from time
to time to amounts supported by independent valuations. The revaluation
increments and decrements are included in the consolidated entitys asset
revaluation reserve. Revalued buildings are depreciated over their
estimated useful lives to the entity (land is not depreciated). Under US
GAAP, revaluations of land and buildings, and profit and loss on sale of
revalued buildings, are adjusted to reinstate the historical cost basis for
US GAAP purposes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Intangible Assets
Under AUS GAAP, amounts paid on the acquisition of television licenses are
not amortised. Under US GAAP, in the years prior to 2002, these intangible
assets were amortised on a straight-line basis over forty years. Upon
adoption of SFAS142 on September 1, 2001, the Company deemed these licenses
to have an indefinite life and therefore ceased amortisation (see note 40(m)
for further discussion on the adoption of SFAS142).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(c) |  | Dividends
Under AUS GAAP, dividends declared after balance sheet date and prior to the
approval of the financial statements are accrued for in the financial
statements. Under US GAAP, provisions for dividends are only recognised as
liabilities if the dividends are formally declared prior to the balance
sheet date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(d) |  | Investment Securities
Under AUS GAAP, shares in listed securities (refer note 11) are carried at
original cost unless a permanent diminution in the value of an equity
security occurs. In circumstances where there has been a permanent
diminution the loss is taken to the profit and loss statement. For US GAAP
purposes, the Company, in accordance with SFAS No. 115, Accounting for
Certain Investments in Debt and Equity Securities, classifies its quoted
equity securities as available-for-sale. Accordingly, the securities are
carried at fair value with changes in fair value (net of tax) being recorded
as an item of other comprehensive income until realised. Realised gains and
losses on securities classified as available-for-sale, along with the
associated deferred tax, are recorded in earnings in the year of sale based
on the specific identification of each individual security sold. A decline
in the fair value of available-for-sale securities below cost that is deemed
other than temporary is charged to earnings, resulting in the establishment
of a new cost basis for the security.
|   
|(e) |  | Executive Option Plan
Under AUS GAAP, no charge attributable to the options issued under the Ten
Executive Option Plan has been recognised in the profit and loss statements.
Under US GAAP, the Company, as permitted by SFAS No. 123,, Accounting for
Stock Based Compensation, follows the provisions of Accounting Principles
Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees,
and related provisions in accounting for compensation expense related to the
issuance of stock options. Under APB No. 25, the Ten Executive Option Plan
would be treated as a variable stock award plan and, as such, the
compensation expense recognised over the life of the plan would be adjusted
in each accounting period for changes in the quoted market price of the
shares. Compensation cost for stock options is measured as the excess, if
any, of the quoted market price of the Companys stock at the measurement
date over the exercise price, multiplied by the number of options issued.
The total compensation cost is amortised over the service (vesting) period.                               

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THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

40      UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (Continued)



|(f) |  | Purchase Price Allocation
Under AUS GAAP a deferred tax asset was not recognised on the acquisition of
a number of controlled entities on the basis that the test for recognition
had not been satisfied.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | US GAAP required deferred tax amounts to be recorded in purchase
combinations if it is more likely than not that those amounts will be
realised. Recognition of such deferred tax asset created negative goodwill,
which the Company has proportionately allocated against certain non-current
assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(g) |  | Developing Business
Under AUS GAAP, costs incurred in the development of major new activities
are capitalised until the operations have commenced on a commercial basis.
Thereafter, these costs are amortised over the period that benefits are
expected to be received. In 1999/2000, the Company invested in a joint
venture which capitalised its development costs on this basis. In the
following year, these costs were fully written off under AUS GAAP upon the
closure of the joint venture. Under US GAAP, expenditures not satisfying
the criteria for deferral are charged to operating income in the period
incurred.                                                                                                                                                                                                                                
|   
|(h) |  | Capitalised Costs
Under AUS GAAP material items of expenditure relating to the introduction of
digital television are capitalised to the extent that management consider
that it is probable that future economic benefits embodied in the
expenditure will eventuate and can be reliably measured. Under US GAAP such
development costs are written off as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(i) |  | Comprehensive Income
SFAS No. 130, Reporting Comprehensive Income requires the reporting and
display of comprehensive income and its components in financial statements.
Comprehensive income consists of net income and other gains and losses
affecting shareholders equity that, under US GAAP are excluded from net
income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(j) |  | Deferred Tax
Under AUS GAAP, the Company follows the liability method of tax-effect
accounting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    |  | For US GAAP purposes, the Company utilises SFAS 109 Accounting for Income
Taxes. In addition to the deferred tax asset recognised in respect of
business combinations, as described in note 40 (f), the deferred tax effects
of the various differences between US GAAP and AUS GAAP are also recorded.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(k) |  | Derivative Instruments
Under AUS GAAP derivative instruments are recognized in the financial
statements to the extent described in note 31. For US GAAP purposes, SFAS
133 Accounting for Derivative Instruments and Hedging Activities became
applicable on September 1, 2000 and requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. If certain conditions
are met, a derivative may be specifically designated as a hedge and changes
in the fair value of the hedge recorded as a component of other
comprehensive income. The Ten Group Pty has not designated its interest
rate swaps as hedges in accordance with SFAS 133 and as a result the changes
in the fair value are required to be recognized in earnings for US GAAP
purposes.
|   
|(l) |  | Cash Flow Statement
The preparation of the Companys Australian GAAP consolidated cash flow
statement does not differ in any material respect from the preparation under
US GAAP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002



|(m) |  | Goodwill and Other Intangible Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | On September 1, 2001, the Company adopted Statement of Financial Accounting
Standards No. 142 Goodwill and Other Intangible Assets (SFAS 142) for
USGAAP reporting purposes. In accordance with SFAS 142, the Company ceased
amortizing goodwill and other indefinite lived intangibles upon adoption.
Historically, the Company had classified amortization of goodwill and other
intangibles as a non-operating expense. In accordance with SFAS 142, 2001
results have not been restated for the effects of ceasing goodwill
amortization.                  
|   
|    |  | The adoption of SFAS 142 required the performance of a goodwill impairment
test upon adoption. As of September 1, 2001, the Company had approximately
$257 million of goodwill related to the acquisition of Eye Corp., in 2000.
As the carrying amount of this goodwill exceeded its fair value it was
determined to be impaired by $102 million. A charge was therefore recorded
as the cumulative effect of a change in accounting principle in the
Statement of Operations for the year ended August 31, 2002 to reduce the
goodwill to its recoverable amount.
|   
|    |  | SFAS 142 further requires the performance of an impairment test for goodwill
and other indefinite lived intangibles on an annual basis and between annual
tests if an event occurs or circumstances change that would more likely than
not reduce the fair value of a reporting unit below its carrying amount.
The remaining goodwill carrying value of $155 million was determined to be
further impaired by $70 million and a charge was recorded as a non-operating
expense to reduce the goodwill to its recoverable amount.                                  

The application of accounting principles generally accepted in the United
States, as described above, would have had the following approximate effect on
consolidated net income and stockholders equity.

|                                                                        |                                                                        |  |          |         |          |  |          |         |   |  |        |        |  
|----------------------------------------------------------------------- | ---------------------------------------------------------------------- |  | -------- | ------- | -------- |  | -------- | ------- | - |  | ------ | ------ | -
|                                                                        |                                                                        |  | 2002     |         | 2001     |  | 2000    
|                                                                        |                                                                        |  | (A$'000) |         | (A$'000) |  | (A$'000)
|Net income as reported in the profit and loss statements under
AUS GAAP |                                                                        |  | (128,491 | )       |          |  | 55,268   |         |   |  | 73,797 |       
|Adjustments
required to accord with US GAAP                             |                                                                        |  |          |         |          |  |          |         |   |  |        |       
|                                                                        | Depreciation
expense (a)                                               |  |          | 56      |          |  |          | 56      |   |  |        | 205    |  
|                                                                        | Intangible assets  amortisation expense (b)                           |  |          |        |          |  |          | (6,776  | ) |  |        | (6,776 | )
|                                                                        | Executive Option Plan (e)                                              |  |          | (568    | )        |  |          | 3,192   |   |  |        | (2,720 | )
|                                                                        | Developing business (g)                                                |  |          |        |          |  |          | 2,021   |   |  |        | (2,021 | )
|                                                                        | Capitalised costs (h)                                                  |  |          | 5,036   |          |  |          | (748    | ) |  |        | (4,288 | )
|                                                                        | Increase in profit on sale of revalued assets (a)                      |  |          |        |          |  |          | 1,059   |   |  |        |       |  
|                                                                        | Fair value of financial instruments (k)                                |  |          | 2,302   |          |  |          | (3,774  | ) |  |        |       |  
|                                                                        | Amortisation of goodwill (m)                                           |  |          | 10,043  |          |  |          |        |   |  |        |       |  
|                                                                        | Additional writedown of goodwill to recoverable amount (m)             |  |          | (10,043 | )        |  |          |        |   |  |        |       |  
|                                                                        | Tax effect of adjustments (j)                                          |  |          | 2,218   |          |  |          | (2,211  | ) |  |        | 2,380  |  
|                                                                        |                                                                        |  |          |         |          |  |          |         |   |  |        |       
|Net income under US GAAP                                                |                                                                        |  | (123,883 | )       |          |  | 48,087   |         |   |  | 60,577 |       
|                                                                        |                                                                        |  |          |         |          |  |          |         |   |  |        |       
|Other comprehensive income:                                             |                                                                        |  |          |         |          |  |          |         |   |  |        |       
|                                                                        | Unrealised holding gains on available-for-sale securities
(net of tax) |  |          | 4,708   |          |  |          | (16,555 | ) |  |        | 4,855  |  
|                                                                        |                                                                        |  |          |         |          |  |          |         |   |  |        |       
|Comprehensive income                                                    |                                                                        |  | (119,175 | )       |          |  | 31,532   |         |   |  | 65,432 |       
|                                                                        |                                                                        |  |          |         |          |  |          |         |   |  |        |       

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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2002

40      UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (Continued)

|                                                                     |                                                            |  |          |          |          |  |          |         |   |  |         |         |  
|-------------------------------------------------------------------- | ---------------------------------------------------------- |  | -------- | -------- | -------- |  | -------- | ------- | - |  | ------- | ------- | -
|                                                                     |                                                            |  | 2002     |          | 2001     |  | 2000    
|                                                                     |                                                            |  | (A$000) |          | (A$000) |  | (A$000)
|Shareholders equity as reported in the balance sheet under
AUS GAAP |                                                            |  | 793,298  |          |          |  | 170,470  |         |   |  | 181,405 |        
|Adjustments
required to accord with US GAAP                          |                                                            |  |          |          |          |  |          |         |   |  |         |        
|                                                                     | Revaluation of assets  current year(a)                    |  |          | (751,400 | )        |  |          |        |   |  |         |        |  
|                                                                     | Revaluation
of assets  prior years (a)                    |  |          | 130      |          |  |          | 130     |   |  |         | (929    | )
|                                                                     | Accumulated depreciation  PPE (a)                         |  |          | 12,909   |          |  |          | 12,853  |   |  |         | 12,795  |  
|                                                                     | Accumulated amortisation  Intangibles (b)                 |  |          | (50,629  | )        |  |          | (50,629 | ) |  |         | (43,853 | )
|                                                                     | Dividends proposed (c)                                     |  |          |         |          |  |          | 66,221  |   |  |         | 73,797  |  
|                                                                     | Equity securities (d)                                      |  |          |         |          |  |          | (6,726  | ) |  |         | 58,026  |  
|                                                                     | Developing business (g)                                    |  |          |         |          |  |          |        |   |  |         | (2,021  | )
|                                                                     | Capitalised costs (h)                                      |  |          |         |          |  |          | (5,036  | ) |  |         | (4,288  | )
|                                                                     | Fair value of financial instruments (k)                    |  |          | (1,472   | )        |  |          | (3,774  | ) |  |         |        |  
|                                                                     | Amortisation of goodwill (m)                               |  |          | 10,043   |          |  |          |         |   |  |         |         |  
|                                                                     | Additional writedown of goodwill to recoverable amount (m) |  |          | (10,043  | )        |  |          |         |   |  |         |         |  
|                                                                     | Tax effect of adjustments (j)                              |  |          | 19,660   |          |  |          | 23,895  |   |  |         | 17,986  |  
|                                                                     |                                                            |  |          |          |          |  |          |         |   |  |         |        
|Shareholders equity under US GAAP                                   |                                                            |  | 22,496   |          |          |  | 207,404  |         |   |  | 292,918 |        
|                                                                     |                                                            |  |          |          |          |  |          |         |   |  |         |        

Page 37



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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
DIRECTORS DECLARATION

The directors declare that the financial statements and notes set out on pages 2 to 37:



|(a) |  | comply with Accounting Standards and other mandatory professional
reporting requirements;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | give a true and fair view of the companys and consolidated entitys
financial position as at 31 August 2002 and of their performance, as
represented by the results of their operations and their cash flows, for
the financial year ended on that date; and                                                                                                                                                                                                                                                                                                                                        
|   
|(c) |  | accounting principles generally accepted in Australia vary in certain
significant respects from accounting principles generally accepted in the
United States of America. The application of accounting principles
generally accepted in the United States of America would have affected the
determination of consolidated shareholders equity and financial position,
as of 31 August 2002 and 2001 and the determination of the consolidated
results of operations for each of the three years ended 31 August 2002 to
the extent summarised in Note 40 to the consolidated financial statements.

In the directors opinion:



|(a) |  | there are reasonable grounds to believe that the company will be able to
pay its debts as and when they become due and payable; and                                                                                                                                                                                                                                                 
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | at the date of this declaration, there are reasonable grounds to believe
that the Company and the subsidiaries identified in Note 25(a), reference
note (i), will be able to meet any obligations or liabilities to which
they are, or may become, subject by virtue of the deed of cross guarantee
between the Company and those subsidiaries pursuant to ASIC Class Order
98/1418.

SIGNED at Sydney on 10 October 2002
except for note 40 which is dated 26
February 2003, in accordance with a resolution of the Directors.

SIGNATURE
Director

Page 38



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##### Table of Contents



THE TEN GROUP PTY LIMITED AND CONTROLLED ENTITIES
INDEPENDENT AUDITORS REPORT
TO THE MEMBERS OF THE TEN GROUP PTY LIMITED

Scope

We have audited the accompanying consolidated balance sheets of The Ten Group
Pty Limited and its controlled entities as of 31 August, 2002 and 2001, and the
related consolidated profit and loss statements and statements of cash flows
for each of the three years in the period ended 31 August 2002. These
consolidated 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 Australia and the United States of America. Those standards
require that we plan and perform the audits to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

Audit Opinion

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of The Ten Group Pty
Limited and its controlled entities at 31 August 2002 and 2001 and the results
of their operations and cash flows for each of the three years in the period
ended 31 August 2002, in conformity with accounting principles generally
accepted in Australia.

Accounting principles generally accepted in Australia vary in certain
significant respects from accounting principles generally accepted in the
United States of America. The application of accounting principles generally
accepted in the United States of America would have affected the determination
of consolidated shareholders equity and financial position, as of 31 August
2002 and 2001 and the determination of the consolidated results of operations
for each of the three years ended 31 August 2002 to the extent summarized in
Note 40 to the consolidated financial statements.

PRICEWATERHOUSECOOPERS SIGNATURE

PricewaterhouseCoopers
Chartered Accountants

Sydney, Australia
10 October 2002, except for note 40 which is dated 26 February 2003.

Page 39



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##### Table of Contents






ITEM 18.  FINANCIAL STATEMENTS

Not applicable.



---



##### Table of Contents






ITEM 19.  EXHIBITS

|            |  |                                                                                                                                                                                                                                                                                                                         |  |          |  | 
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- |  | 
|Exhibit No. |  | Exhibit                                                                                                                                                                                                                                                                                                                 |  | Page No.
|            |  |                                                                                                                                                                                                                                                                                                                         |  |         
|1.1         |  | Articles of Incorporation of CanWest Media Inc., as amended
(1)                                                                                                                                                                                                                                                        
|            |  |                                                                                                                                                                                                                                                                                                                        
|1.2         |  | By-laws of CanWest Media Inc.(1)                                                                                                                                                                                                                                                                                       
|            |  |                                                                                                                                                                                                                                                                                                                        
|4.1         |  | Purchase Agreement, dated May 10, 2001, among CanWest Media Inc., the
Guarantors identified therein, CIBC World Markets Corp., Salomon Smith
Barney Inc., Banc of America Securities LLC, Scotia Capital (USA)
Inc., BMO Nesbitt Burns Corp., RBC Dominion Securities Corp. and TD
Securities (USA) Inc.(1)            
|            |  |                                                                                                                                                                                                                                                                                                                        
|4.2         |  | Indenture, dated as of May 17, 2001, among CanWest Media Inc., the
Guarantors named therein and The Bank of New York, as Trustee.(1)                                                                                                                                                                                   
|            |  |                                                                                                                                                                                                                                                                                                                        
|4.3         |  | Registration Rights Agreement, dated as of May 17, 2001, among
CanWest Media Inc., the Guarantors named therein, CIBC World Markets
Corp., Salomon Smith Barney Inc., Banc of America Securities LLC,
Scotia Capital (USA) Inc., BMO Nesbitt Burns Corp., RBC Dominion
Securities Corp. and TD Securities (USA) Inc.(1)
|            |  |                                                                                                                                                                                                                                                                                                                        
|4.4         |  | Guarantee, dated as of May 17, 2001, executed by the Guarantors
identified therein.(1)                                                                                                                                                                                                                                 
|            |  |                                                                                                                                                                                                                                                                                                                        
|4.5         |  | Demand Registration Rights Agreement, dated as of May 17, 2001, among
CanWest Media Inc., CanWest Communications Corporation and the
Guarantors named therein.(1)                                                                                                                                                      
|            |  |                                                                                                                                                                                                                                                                                                                        
|4.6         |  | License Agreement #2000-13, dated October 6, 2000, between CanWest
Global Broadcasting Inc. and Fireworks Distributing Corporation.(1)                                                                                                                                                                                 
|            |  |                                                                                                                                                                                                                                                                                                                        
|4.7         |  | Development Letter Agreement, dated as of August 31, 1999, between
CanWest Global Broadcasting Inc. and Fireworks Media Inc.(1)                                                                                                                                                                                        
|            |  |                                                                                                                                                                                                                                                                                                                        
|4.8         |  | License Agreement #2000-12, dated August 16, 2000, between CanWest
Global Broadcasting Inc. and Fireworks Distributing Corporation.(1)                                                                                                                                                                                 
|            |  |                                                                                                                                                                                                                                                                                                                        
|4.9         |  | Letter Agreement, dated as of August 25, 2000, between Global
Television Network Inc. and Fireworks Entertainment.(1)                                                                                                                                                                                                  
|            |  |                                                                                                                                                                                                                                                                                                                        
|4.10        |  | Employment Agreement, dated April 18, 2000, between CanWest Global
Communications Corp. and Gerry Noble.(1)                                                                                                                                                                                                            
|            |  |                                                                                                                                                                                                                                                                                                                        
|4.11        |  | Television License Agreement, dated November 20, 2000, between CanWest
Entertainment International Distribution and TV3 Network Service Ltd.
(1)                                                                                                                                                                       
|            |  |                                                                                                                                                                                                                                                                                                                        
|4.12        |  | Television License Agreement, dated November 20, 2000, between CanWest
Entertainment International Distribution and TV3 Network                                                                                                                                                                                        

76



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##### Table of Contents



|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |          |  | 
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- |  | 
|Exhibit No. |  | Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | Page No.
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |         
|            |  | Services Ltd.(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.13        |  | Standard Television Agreement, dated August 12, 1998, between CanWest
Global Broadcasting Inc. and Fireworks Entertainment Inc., as amended.
(1)                                                                                                                                                                                                                                                                                                                                         
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.14        |  | Transaction Agreement, dated July 30, 2000, among Hollinger
International Inc., Southam Inc. (n/k/a XSTM Holdings (2000) Inc.),
Hollinger Canadian Newspapers, Limited Partnership and HCN
Publications Company and CanWest Global Communications Corporation.
(1)                                                                                                                                                                                                                       
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.15        |  | Amending Agreement to the Transaction Agreement, dated November 15,
2000, among Hollinger International Inc., Southam Inc. (n/k/a XSTM
Holdings (2000) Inc.), Hollinger Canadian Newspapers, Limited
Partnership and HCN Publications Company and CanWest Global
Communications Corporation.(1)                                                                                                                                                                                          
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.16        |  | Services Agreement, dated as of November 15, 2000, among CanWest
Global Communications Corporation, The National Post Company and
Hollinger International Inc.(1)                                                                                                                                                                                                                                                                                                                        
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.17        |  | Transition Services Agreement, dated as of November 15, 2000, among
CanWest Global Communications Corporation, Hollinger Canadian
Newspapers G.P. Inc. and Hollinger Canadian Operating Company.(1)                                                                                                                                                                                                                                                                                      
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.18        |  | Services Agreement, dated as of November 15, 2000, among CanWest
Global Communications Corporation, Hollinger Canadian Newspapers G.P.
Inc. and Hollinger Canadian Operating Company.(1)                                                                                                                                                                                                                                                                                                 
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.19        |  | Employee Interim Services Agreement, dated as of November 15, 2000,
among Hollinger International Inc., Hollinger Canadian Newspapers,
Limited Partnership and CanWest Global Communications Corporation.
(1)                                                                                                                                                                                                                                                                            
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.20        |  | Pension and Employee Benefit Plans Agreement, dated as of November 15,
2000, among Hollinger International Inc., Southam Inc. (n/k/a XSTM
Holdings (2000) Inc.), Hollinger Canadian Newspapers, Limited
Partnership, HCN Publications Company, Hollinger Canadian Operating
Company ULC and CanWest Global Communications Corporation.(1)                                                                                                                                                
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.21        |  | Asset Transfer Agreement, dated November 15, 2000, between 3815668
Canada Inc. and CanWest Media Inc.(1)                                                                                                                                                                                                                                                                                                                                                                                 
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.22        |  | Trust Indenture, dated as of November 15, 2000, between CanWest Media
Inc. and CanWest Global Communications Corporation.(1)                                                                                                                                                                                                                                                                                                                                                             
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.23        |  | Credit Agreement, dated as of November 7, 2000, among CanWest Media
Inc., as borrower, CanWest Global Communications Corp., as guarantor,
the financial institutions identified on the signature pages thereto,
as lenders, Canadian Imperial Bank of Commerce, as co-lead arranger,
joint bookrunner and syndication agent, The Bank of Nova Scotia, as
co-lead arranger, joint bookrunner and administrative agent, and Bank
of America Canada, as arranger and documentation agent.(1)

77



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##### Table of Contents



|            |  |                                                                                                                                                                                                                                                              |  |          |  | 
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------- |  | 
|Exhibit No. |  | Exhibit                                                                                                                                                                                                                                                      |  | Page No.
|            |  |                                                                                                                                                                                                                                                              |  |         
|4.24        |  | Collateral Covenant Agreement, dated as of November 16, 2000, among
each of the parties listed in Schedule A thereto, as guarantors, and
The Bank of Nova Scotia, as administrative agent.(1)                                                             
|            |  |                                                                                                                                                                                                                                                             
|4.25        |  | Form of Guarantee among each of the entities listed in Exhibit 10.1
hereto, as guarantors, The Bank of Nova Scotia, as administrative
agent and the persons listed as lenders in the Credit Agreement dated
November 7, 2000 (included in Exhibit 10.19).(1)
|            |  |                                                                                                                                                                                                                                                             
|4.26        |  | Form of Securities Pledge Agreement between each of the entities
listed in Exhibit 10.2 hereto and The Bank of Nova Scotia, as
administrative agent.(1)                                                                                                     
|            |  |                                                                                                                                                                                                                                                             
|4.27        |  | Form of Security Agreement between each of the entities listed in
Exhibit 10.3 hereto and The Bank of Nova Scotia, as administrative
agent.(1)                                                                                                              
|            |  |                                                                                                                                                                                                                                                             
|4.28        |  | Form of Note Pledge Agreement between each of the entities listed in
Exhibit 10.4 hereto and The Bank of Nova Scotia, as administrative
agent.(1)                                                                                                           
|            |  |                                                                                                                                                                                                                                                             
|4.29        |  | Southam Executive Retirement Plan, dated as of June 6, 1994, between
Southam Inc. (n/k/a XSTM Holdings (2000) Inc.) and Don Babick.
(1)                                                                                                                     
|            |  |                                                                                                                                                                                                                                                             
|4.30        |  | Amendment to Southam Executive Retirement Plan, dated as of June 29,
1994, between Southam Inc. (n/k/a XSTM Holdings (2000) Inc.) and Don
Babick.(1)                                                                                                        
|            |  |                                                                                                                                                                                                                                                             
|4.31        |  | Share Purchase Agreement, dated as of November 8, 1999, between
CanWest Global Communications Corp. and Cathton Holdings Ltd.(1)                                                                                                                            
|            |  |                                                                                                                                                                                                                                                             
|4.32        |  | Amended and Restated Master Agreement, dated November 8, 1999, among
CanWest Global Communications Corp., Shaw Communications Inc., Corus
Entertainment Inc. and WIC Western International Communications Ltd.
(1)                                          
|            |  |                                                                                                                                                                                                                                                             
|4.33        |  | Proposed Purchase of Corus Class B Shares, dated as of February 18,
2000, among Liberty CJR Inc., Corus Entertainment Inc., Shaw
Communications Inc., CanWest Global Communications Corp., and WIC
Western International Communications Ltd.(1)             
|            |  |                                                                                                                                                                                                                                                             
|4.34        |  | Amalgamation Agreement, dated as of March 27, 2000, between WIC
Western International Communications Ltd. and CW Newco Inc.(1)                                                                                                                              
|            |  |                                                                                                                                                                                                                                                             
|4.35        |  | Management Services Agreement, dated as of November 15, 2000, among
The Ravelston Corporation Limited, CanWest Global Communications
Corporation and The National Post Company.(1)                                                                          
|            |  |                                                                                                                                                                                                                                                             
|4.36        |  | Amended and Restated Partnership Agreement, dated as of November 15,
2000, among Global Communications Limited, NP Holdings Company and
3048510 Nova Scotia Company.(1)                                                                                     
|            |  |                                                                                                                                                                                                                                                             
|4.37        |  | Asset Transfer Agreement, dated November 15, 2000, between CanWest
Media Inc. and Global Television Network Inc.(1)                                                                                                                                         

78



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##### Table of Contents



|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |          |  | 
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- |  | 
|Exhibit No. |  | Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | Page No.
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |         
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.38        |  | Asset Transfer Agreement, dated November 15, 2000, between Global
Television Network Inc. and Global Communications Limited.(1)                                                                                                                                                                                                                                                                                                                                                                                                   
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.39        |  | Variation Deed, entered into in August 1998, among CanWest Global
Communications Corp., CGS International Holdings (Netherlands) B.V.,
CGS Shareholding (Netherlands) B.V., CGS Debenture Holding
(Netherlands) B.V., The Ten Group Pty. Limited, Ten Network Holdings
Limited, Telecasters North Queensland Limited, TNQ Television Limited,
Donholken Pty. Limited, Selli Pty. Limited, Turnand Pty. Limited and
Numeration Pty. Limited.(1)                                                                                    
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.40        |  | Deed of Guarantee and Indemnity, dated as of November 7, 2000, among
CanWest Television NZ Limited, TV3 Network Services Limited, TV4
Network Limited, Global Television Properties Limited, CanWest NZ
Television Holdings Limited, CanWest NZ Finance Limited, CanWest NZ
Radio Holdings Limited, CanWest Radio NZ Limited and Media Investments
Limited and The Bank of Nova Scotia.(1)                                                                                                                                        
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.41        |  | Share Pledge Agreement, dated November 13, 2000, between CGS
International Holdings (Netherlands) B.V. and The Bank of Nova Scotia.
(1)                                                                                                                                                                                                                                                                                                                                                                                           
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.42        |  | Form of Deed of Mortgaged Shares between each of the entities listed
in Exhibit 10.5 hereto and The Bank of Nova Scotia.(1)                                                                                                                                                                                                                                                                                                                                                                                                       
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.43        |  | Form of Charge between each of the entities listed in Exhibit 10.6
hereto and The Bank of Nova Scotia.(1)                                                                                                                                                                                                                                                                                                                                                                                                                         
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.44        |  | Form of Pledge Agreement by each of the entities listed in Exhibit
10.7 hereto in favor of The Bank of Nova Scotia.(1)                                                                                                                                                                                                                                                                                                                                                                                                            
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.45        |  | Form of Exchange Agent Agreement between CanWest Media Inc. and The
Bank of New York, as exchange agent.(1)                                                                                                                                                                                                                                                                                                                                                                                                                       
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.46        |  | Share Purchase Agreement, dated April 12, 2001, among L.R. Sherman,
CanWest Television Inc., CHUM Limited and Global Television Network
Inc.(2)                                                                                                                                                                                                                                                                                                                                                                                   
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.47        |  | Amalgamation Agreement, dated as of September 1, 2001, among Global
Communications Limited, CanWest Broadcasting (2001) LTD., CanWest
Television Inc., CanWest Properties Limited, and 4434129 Manitoba
LTD., Formerly 3649091 Canada LTD.                                                                                                                                                                                                                                                                                        
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.48        |  | Amending Agreement to the Senior Secured Credit Facilities, dated as
of September 5, 2001, among CanWest Media Inc., as borrower, CanWest
Global Communications Corp., as guarantor, the financial
institutions identified on the signature pages thereto, as lenders,
Canadian Imperial Bank of Commerce, as co-lead arranger, joint
bookrunner and syndication agent, The Bank of Nova Scotia, as co-lead
arranger, joint bookrunner and administration agent, and Bank of
America Canada, as arranger and documentation agent. 
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.49        |  | Retirement Compensation Arrangement Plan, dated January 1, 2002,
approved on behalf of CanWest Global Communications Corp.                                                                                                                                                                                                                                                                                                                                                                                                        
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.50        |  | Retirement Compensation Arrangement Trust Agreement, dated as of
February 7, 2002, between CanWest Global Communications Corp. and
Royal Trust Corporation of Canada.                                                                                                                                                                                                                                                                                                                                                             
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.51        |  | General Conveyance, dated as of March 31, 2002, between NP Holdings
Company and Global Television Network Inc.                                                                                                                                                                                                                                                                                                                                                                                                                    
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.52        |  | Letter Agreement, dated May 22,2002, between CanWest Global
Communications Corp. and Richard C. Camilleri.                                                                                                                                                                                                                                                                                                                                                                                                                        
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.53        |  | Amending Agreement No. 2 to the Senior Secured Credit Facilities,
dated as of July 15, 2002, among CanWest Media Inc., as borrower,
CanWest Global Communications Corp., as guarantor, the financial
institutions identified on the signature pages thereto, as lenders,
The Bank of Nova Scotia, as co-lead arranger, joint bookrunner and
administrative agent, Canadian Imperial Bank of Commerce, as co-lead
arranger, joint bookrunner and syndication agent, and Bank of
America, N.A., as arranger and documentation agent.
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.54        |  | Supplemental Indenture, dated as of August 6, 2002, between CanWest
Media Inc. and The Bank of New York.                                                                                                                                                                                                                                                                                                                                                                                                                          
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.55        |  | Letter Agreement, dated August 6, 2002, between CanWest Global
Communications Corp. and TV3 Television Network Limited.                                                                                                                                                                                                                                                                                                                                                                                                           
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.56        |  | Share Purchase Agreement, dated August 8, 2002, among Global
Communications Limited, G.T.C. Transcontinental Group LTD., and
CanWest Global Communications Corp.                                                                                                                                                                                                                                                                                                                                                                  
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.57        |  | Letter Agreement, dated January 8, 2003, between CanWest Media Inc.
on behalf of CanWest Publications Inc. and Donald Babick.                                                                                                                                                                                                                                                                                                                                                                                                     
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.58        |  | Share Purchase Agreement, dated January 24, 2003, among Global
Communications Limited, CanWest Global Communications Corp., and
Osprey Media Holdings Inc.                                                                                                                                                                                                                                                                                                                                                                        
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.59        |  | Letter Agreement, dated February 3, 2003, between CanWest Global
Communications Corp. on behalf of Global Television Network Inc. and
Gerry Noble.                                                                                                                                                                                                                                                                                                                                                                                
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.60        |  | Non-Competition, Non-Solicitation, and Confidentiality Agreement,
dated as of February 14, 2003, between CanWest Global Communications
Corp. and Global Communications Limited, and Osprey Media Holdings
Inc.                                                                                                                                                                                                                                                                                                                    
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.61        |  | Form of Amended and Restated Advertising Representation Agreement,
dated February 14, 2003, between each of the entities listed in
Exhibit 10.8 and CanWest Media Sales Limited.                                                                                                                                                                                                                                                                                                                                                  
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.62        |  | Form of Amended and Restated CanWest News Services Agreement, dated
February 14, 2003, between each of the entities listed in Exhibit
10.9 and CanWest Publications Inc.                                                                                                                                                                                                                                                                                                                                                          
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.63        |  | Pension and Employee Benefit Plans Agreement, dated as of February
14, 2003, among Global Communications Limited, CanWest Global
Communications Corp., and Osprey Media Holdings Inc.                                                                                                                                                                                                                                                                                                                                             
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.64        |  | Transitional Services Agreement, dated February 14, 2003, between
CanWest Publications Inc. and Osprey Media Holdings Inc.                                                                                                                                                                                                                                                                                                                                                                                                        
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.65        |  | Form of Amended and Restated CanWest Editorial Services Agreement,
dated February 14, 2003, between each of the entities listed in
Exhibit 10.10 and CanWest Publications Inc.                                                                                                                                                                                                                                                                                                                                                    
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.66        |  | Form of Amended and Restated Electronic Distribution Agreement, dated
February 14, 2003, between each of the entities listed in Exhibit
10.11 and Infomart Limited.                                                                                                                                                                                                                                                                                                                                                               
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|7           |  | Statement Regarding Computation of Ratios                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|8           |  | See Item 4C. Organizational Structure in Part I of this Annual Report.                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.1        |  | List of entities party to the form of agreement in Exhibit 4.25.
(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.2        |  | List of entities party to the form of agreement in Exhibit 4.26.
(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.3        |  | List of entities party to the form of agreement in Exhibit 4.27.
(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.4        |  | List of entities party to the form of agreement in Exhibit 4.28.
(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.5        |  | List of entities party to the form of agreement in Exhibit 4.42.
(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                              

79



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|            |  |                                                                     |  |         
|----------- |  | ------------------------------------------------------------------- |  | --------
|Exhibit No. |  | Exhibit                                                             |  | Page No.
|            |  |                                                                     |  |         
|10.6        |  | List of entities party to the form of agreement in Exhibit 4.43.(1)
|            |  |                                                                    
|10.7        |  | List of entities party to the form of agreement in Exhibit 4.44.(1)
|            |  |                                                                    
|10.8        |  | List of entities party to the form of agreement in Exhibit 4.60.   
|           
|10.9        |  | List of entities party to the form of agreement in Exhibit 4.61.   
|           
|10.10       |  | List of entities party to the form of agreement in Exhibit 4.64.   
|           
|10.11       |  | List of entities party to the form of agreement in Exhibit 4.65.   
|           

(1)  Previously filed as an Exhibit to the Registration Statement on Form F-4
of the Company filed on September 4, 2001, SEC File Number 333-00000 and
incorporated by reference herein.

(2)  Previously filed as an Exhibit to the Annual Report on Form 20-F of the
Company filed on February 28, 2002, SEC File
Number 333-13878 and incorporated by reference herein.

80



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##### Table of Contents



SIGNATURES

The registrant hereby certifies that it meets all of the requirements for
filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.

| |  |                    |  |                                                        
| |  | ------------------ |  | -------------------------------------------------------
| |  | CANWEST MEDIA INC.
| |  |                    |  |                                                        
| |  | By:                |  | /S/ JOHN MAGUIRE                                       
| |  |                    |  |                                                        
| |  | Name:
Date:        |  | John Maguire, Chief Financial Officer
February 28, 2003



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##### Table of Contents



CERTIFICATION

I, Leonard Asper, certify that:

1.     I have reviewed this annual report on Form 20-F of CanWest Media Inc.:

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

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

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

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the Evaluation Date); and

c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

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

6.     a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

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

Date: February 28, 2003

/S/ LEONARD ASPER




Name: Leonard Asper
Title:   President and Chief Executive Officer




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##### Table of Contents



CERTIFICATION

I, John Maguire, certify that:

I have reviewed this annual report on Form 20-F of CanWest Media Inc.:

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

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

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

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the Evaluation Date); and

c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

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

5.     a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

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

Date: February 28, 2003

/S/ JOHN MAGUIRE




Name:  John Maguire
Title:    Vice-President, Finance and
             Chief Financial Officer