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FORM 20-F/A

|  |  |                                                                                               
|- |  | ----------------------------------------------------------------------------------------------
|o |  | 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

|  |  |                                                                                         
|- |  | ----------------------------------------------------------------------------------------
|o |  | 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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EXPLANATORY NOTE

CanWest Media Inc. (the Company) hereby amends its Annual Report on Form
20-F for the fiscal year ended August 31, 2002 (originally filed February 28,
2003) (the Original Form 20-F) to (i) replace Item 5 Operating and Financial
Review and Prospects of the Original Form 20-F with revised Item 5 Operating and
Financial Review and Prospects set out below and (ii) replace Item 17 audited
consolidated financial statements and notes thereto for the fiscal years ended
August 31, 2002, 2001 and 2000, together with the report of the auditors thereon of
the Original Form 20-F with revised Item 17 audited consolidated financial
statements and notes thereto for the fiscal years ended
August 31, 2002,
2001 and 2000, together with the report of the auditors thereon set out below. In
addition, in connection with the filing of this Form 20-F/A and pursuant to the
rules of the Securities and Exchange Commission, the Company is including with
this Form 20-F/A certain currently dated certifications. No other changes have
been made to the Original Form 20-F. This Form 20-F/A does not reflect events
occurring after the filing of the original Form 20-F (except for
the Auditors Report and note 18 and the revisions to notes 9(b) and
20 in the notes to the financial statements) and does not modify or
update the disclosure therein in any way other than as required to reflect the
amendments discussed above and reflected below.

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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 supplemental 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, 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.

9



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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.

10



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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 $934 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.

11



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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.

12



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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.

13



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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.

14



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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 alternatives 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.

15



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ITEM 17. FINANCIAL STATEMENTS

16



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##### 



CANWEST MEDIA INC.

CONSOLIDATED FINANCIAL STATEMENTS

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

(expressed in Canadian dollars)

(Revised)

17



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##### 



(PRICEWATERHOUSECOOPERS LOGO)

---

| |  |                                                                                                                                                                       
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | PricewaterhouseCoopers LLP
Chartered Accountants
One Lombard Place
Suite 2300
Winnipeg Manitoba
Canada R3B 0X6
Telephone +1 (204) 926 2400
Facsimile +1 (204) 944 1020

November 1, 2002, except as to note 18, which is as of April 3, 2003
and the revisions to notes 9(b) and 20, which are as of June 6, 2003

Auditors Report

To the Directors of
CanWest Media Inc.

We have audited the consolidated balance sheets of CanWest Media Inc.as at
August 31, 2002 and August 31, 2001 and the consolidated statements of
earnings, retained earnings and cash flows for the years then ended. These
financial statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our 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
the years then ended in accordance with Canadian generally accepted accounting
principles.

Our previous report dated November 1, 2002 has been withdrawn and the financial
statements have been revised for the revisions referred to in notes 9(b) and 20
under the heading Revision of 2002 and prior years information.

(PRICEWATERHOUSECOOPERS LLP)

Chartered Accountants

November 1, 2002, except for 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.

(PRICEWATERHOUSECOOPERS LLP)

Chartered Accountants

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

18



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##### 



CANWEST MEDIA INC.

CONSOLIDATED BALANCE SHEETS

As at August 31


|                                                        |  |         |           |         |  |  |           |  
|------------------------------------------------------- |  | ------- | --------- | ------- |  |  | --------- | -
|                                                        |  | 2002    |           | 2001   
|                                                        |  |         |           |        
|                                                        |  | $000    |           | $000   
|                                                        |  | Revised |           | Revised
|ASSETS                                                 
|Current assets                                          |  |         |           |         |  |  |           |  
|Cash                                                    |  |         | 49,778    |         |  |  | 11,432    |  
|Accounts receivable                                     |  |         | 382,337   |         |  |  | 344,865   |  
|Income taxes recoverable                                |  |         | 34,623    |         |  |  | 4,204     |  
|Inventory                                               |  |         | 19,836    |         |  |  | 30,817    |  
|Broadcast rights                                        |  |         | 98,096    |         |  |  | 96,385    |  
|Future income taxes                                     |  |         | 30,013    |         |  |  | 33,243    |  
|Other                                                   |  |         | 13,231    |         |  |  | 16,922    |  
|                                                        |  |         |           |         |  |  |           |  
|                                                        |  |         | 627,914   |         |  |  | 537,868   |  
|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 |  
|                                                        |  |         |           |         |  |  |           |  
|                                                        |  |         | 5,733,914 |         |  |  | 6,151,300 |  
|                                                        |  |         |           |         |  |  |           |  
|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                                      |  |         | 1,371,442 |         |  |  | 1,277,756 |  
|Contributed surplus                                     |  |         | 132,953   |         |  |  | 132,953   |  
|Retained earnings                                       |  |         | 803,493   |         |  |  | 808,000   |  
|Cumulative foreign currency translation
    adjustments |  |         | (48,658   | )       |  |  | (74,294   | )
|                                                        |  |         |           |         |  |  |           |  
|                                                        |  |         | 2,259,230 |         |  |  | 2,144,415 |  
|                                                        |  |         |           |         |  |  |           |  
|                                                        |  |         | 5,733,914 |         |  |  | 6,151,300 |  
|                                                        |  |         |           |         |  |  |           |  

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

Signed on behalf of the Board

|             |  |             
|------------ |  | ------------
|-s- Director |  | -s- Director

19



---



##### 



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.

20



---



##### 



CANWEST MEDIA INC.

CONSOLIDATED STATEMENTS OF RETAINED
EARNINGS

For the Years Ended August 31


|                                                                                        |  |         |         |         |  |      |         |   |  |  |         |  
|--------------------------------------------------------------------------------------- |  | ------- | ------- | ------- |  | ---- | ------- | - |  |  | ------- | -
|                                                                                        |  | 2002    |         | 2001    |  | 2000
|                                                                                        |  |         |         |         |  |     
|                                                                                        |  | $000    |         | $000    |  | $000
|                                                                                        |  | Revised |         | Revised |  |     
|Retained earnings  beginning of year,
    as revised                                   |  |         | 808,000 |         |  |      | 755,549 |   |  |  | 594,008 |  
|Adjustment for adoption of new accounting
    pronouncements                            |  |         | (45,269 | )       |  |      | (329    | ) |  |  | (15,161 | )
|                                                                                        |  |         |         |         |  |      |         |   |  |  |         |  
|Retained earnings, beginning of year, as adjusted                                       |  |         | 762,731 |         |  |      | 755,220 |   |  |  | 578,847 |  
|Net earnings for the year                                                               |  |         | 97,910  |         |  |      | 97,682  |   |  |  | 176,373 |  
|Interest on junior subordinated debentures net of
    tax of $36,538
    (2001-$28,900) |  |         | (57,148 | )       |  |      | (44,902 | ) |  |  |        |  
|                                                                                        |  |         |         |         |  |      |         |   |  |  |         |  
|Retained earnings  end of year                                                         |  |         | 803,493 |         |  |      | 808,000 |   |  |  | 755,220 |  
|                                                                                        |  |         |         |         |  |      |         |   |  |  |         |  

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

21



---



##### 



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.

22



---



##### 



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

23



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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.



| |                 
| | ----------------
| | 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.

24



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



| |                    
| | -------------------
| | 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 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.

25



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



| |                 
| | ----------------
| | 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.

(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.

26



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                                                                                                                        |  |      |        |      |  |      |         |  |  |  |         | 
|--------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------- |  |  |  | ------- | 
|                                                                                                                                        |  | 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 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

27



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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.

28



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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

|                                                                                  |  |          |         |                 |  |            |           |      |  |       |        |     |  |  |        |     |  |  |           |  
|--------------------------------------------------------------------------------- |  | -------- | ------- | --------------- |  | ---------- | --------- | ---- |  | ----- | ------ | --- |  |  | ------ | --- |  |  | --------- | -
|                                                                                  |  |          |         |                
|                                                                                  |  | 2002     |         | 2001           
|                                                                                  |  |          |         |                
|                                                                                  |  | National |         | CanWest         |  |           
|                                                                                  |  | 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.                                                                        

29



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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. | 



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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  | 

30



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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

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 |  
|                                                                                            |  |      |         |      |  |      |         |   |  |  |         |  

31



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



| |                                           
| | ------------------------------------------
| | 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  |  
|                                                                                       |  |      |          |      |  |      |          |   |  |  |          |  



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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).

32



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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.                      

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 | 
|                                |  |      |         |              |  |      |         |  |  |  |         | 

33



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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 | 
|                      |  |      |           |              |  |      |         |  |  |  |           | 

|                      |  |      |           |              |  |      |         |  |  |  |           | 
|--------------------- |  | ---- | --------- | ------------ |  | ---- | ------- |  |  |  | --------- | 
|                      |  |     
|                      |  | 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
    $47 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.                                                                                                      

34



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

7.     Long Term
Debt

|                                                            |  |          |      |      |  |          |           |      |  |  |      |   |  |  |           |  
|----------------------------------------------------------- |  | -------- | ---- | ---- |  | -------- | --------- | ---- |  |  | ---- | - |  |  | --------- | -
|                                                            |  | Interest |      |      |  | Interest |           |     
|                                                            |  | Rate(1)  |      | 2002 |  | Rate(1)  |           | 2001
|                                                            |  |          |      |      |  |          |           |     
|                                                            |  |          |      | $000 |  |          |           | $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.

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.

35



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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

|                      |      |  |      |         | 
|--------------------- | ---- |  | ---- | ------- | 
|Year Ended August 31, |      |  | $000 |        
|                     
|                      | 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.

9.     Equity
Instruments

(a) 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   
|                                                     |  | Revised |           | Revised
|22,785 common shares                                 |  |         | 437,107   |         |  |  | 437,107   | 
|Junior subordinated notes, due November 15,
    2020 |  |         | 934,335   |         |  |  | 840,649   | 
|                                                     |  |         |           |         |  |  |           | 
|                                                     |  |         | 1,371,442 |         |  |  | 1,277,756 | 
|                                                     |  |         |           |         |  |  |           | 

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

36



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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.

(b) Revision of 2002 and prior years
information

The Companys 2002 and 2001 retained
earnings, equity instruments, and income taxes recoverable have
been revised to reflect certain adjustments to previously
reported amounts. The Company has determined that interest on
the junior subordinated notes was overstated in each of fiscal
2002 and 2001. These adjustments resulted in a decrease to
junior subordinated notes in the amounts of $14.7 million
and $2.3 million in 2002 and 2001 respectively; an increase
to retained earnings in the amounts of $9.0 million and
$1.4 million in 2002 and 2001 respectively; and a decrease
in income taxes recoverable in the amounts of $5.7 million
and $0.9 million in 2002 and 2001 respectively.

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.

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 | 
|                   |  |      |        |      |  |      |        |   |  |  |        | 

37



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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  |  
|                                                                                           |  |      |         |      |  |      |         |   |  |  |         |  

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  |        
|                           |         |      |        |        |  |      |         |         |   |  |         |        

38



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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.

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 | 

39



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

13.     Retirement
Assets and Obligations

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

|                                                                  |  |                  |         |                 |  |      |         |      |  |  |         |   |  |  |         |  
|----------------------------------------------------------------- |  | ---------------- | ------- | --------------- |  | ---- | ------- | ---- |  |  | ------- | - |  |  | ------- | -
|                                                                  |  |                  |         |                 |  |     
|                                                                  |  |                  |         | Post Retirement
|                                                                  |  | Pension Benefits |         | 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 | )
|                                                                  |  |                  |         |                 |  |      |         |      |  |  |         |   |  |  |         |  

40



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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 | %

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  |      |  |      |       |  |  |  |      | 

41



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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   
|                                           |  | Revised  |           | Revised |  | Revised  |           | Revised
|Short term assets                          |  |          | 466,738   |         |  |          | 466,738   |         |  |  | 360,501   |  |  |  | 360,501   | 
|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.

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.

42



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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.



|    |                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------
|(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

43



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | 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.

In February 2003, the Company sold its interest
in community newspapers and related assets in Southern Ontario
for cash proceeds of $193.5 million. The accounting gain on
this sale was $20.7; assets and liabilities disposed amounted to
$179.6 million (including goodwill of $157.0 million)
and $6.8 million respectively.

In April 2003, the Company issued
US$200 million in 7.625% senior unsecured notes due
April 15, 2013. The proceeds were used to finance the
repayment of $275 million of obligations under the 12.125%
junior subordinated notes issued by the Companys parent.

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:

44



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                                            |      |            |  |              |   |             |  |         |  |       |  |              |   |      |  |        |  |  |  |         |   |  |  |          |   |  |  |           | 
|----------------------------------------------------------- | ---- | ---------- |  | ------------ | - | ----------- |  | ------- |  | ----- |  | ------------ | - | ---- |  | ------ |  |  |  | ------- | - |  |  | -------- | - |  |  | --------- | 
|                                                            |      | Publishing |  |              |   | Corporate   |  |        
|                                                            |      | and Online |  | Broadcasting |   |             |  |        
|                                                            |      |            |  |              |   |             |  |        
|                                                            |      |            |  |              |   |             |  |         |  | 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   | 

45



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                                                                                 |      |            |          |              |  |             |        |           |  |       |         |              |  |      |        |         |  |  |        |        |  |  |         |         |  |  |         |           | 
|------------------------------------------------------------------------------------------------ | ---- | ---------- | -------- | ------------ |  | ----------- | ------ | --------- |  | ----- | ------- | ------------ |  | ---- | ------ | ------- |  |  | ------ | ------ |  |  | ------- | ------- |  |  | ------- | --------- | 
|                                                                                                 |      | Publishing |          |              |  | Corporate   |        |          
|                                                                                                 |      | and Online |          | Broadcasting |  |             |        |          
|                                                                                                 |      |            |          |              |  |             |        |          
|                                                                                                 |      |            |          |              |  |             |        |           |  | 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 |  |  |         | 612,685 |  |  |         | 5,733,914 | 
|                                                                                                 | 2001 |            |          | 3,360,423    |  |             |        | 1,721,356 |  |       |         | 133,018      |  |      |        | 141,761 |  |  |        | 21,950 |  |  |         | 772,792 |  |  |         | 6,151,300 | 
|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  |          
|                                                                                                 |      |            |          |              |  |             |        |           |  |       |         |              |  |      |        |         |  |  |        |        |  |  |         |         |  |  |         |          

46



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                                                                                 |  |            |   |              |  |             |         |         |  |       |         |              |  |      |        |   |  |  |         |   |  |  |         |   |  |  |         |  
|------------------------------------------------------------------------------------------------ |  | ---------- | - | ------------ |  | ----------- | ------- | ------- |  | ----- | ------- | ------------ |  | ---- | ------ | - |  |  | ------- | - |  |  | ------- | - |  |  | ------- | -
|                                                                                                 |  | Publishing |   |              |  | Corporate   |         |        
|                                                                                                 |  | and Online |   | Broadcasting |  |             |         |        
|                                                                                                 |  |            |   |              |  |             |         |        
|                                                                                                 |  |            |   |              |  |             |         |         |  | and   |         |             
|                                                                                                 |  | Canada     |   | Canada       |  | New Zealand |         | Ireland |  | Other |         | Consolidated
|                                                                                                 |  |            |   |              |  |             |         |         |  |       |         |             
|                                                                                                 |  |            |   |              |  | TV          |         | Radio   |  |       |         |              |  |     
|                                                                                                 |  |            |   |              |  |             |         |         |  |       |         |              |  |     
|                                                                                                 |  | $000       |   | $000         |  | $000        |         | $000    |  | $000  |         | $000         |  | $000
|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 |  
|                                                                                                 |  |            |   |              |  |             |         |         |  |       |         |              |  |      |        |   |  |  |         |   |  |  |         |   |  |  |         |  

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.

47



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



| |                                     
| | ------------------------------------
| | 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.



| |                                    
| | -----------------------------------
| | 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.

48



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



| |                                                                 
| | ----------------------------------------------------------------
| | 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 in the statement of earnings. 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.



| |                                                  
| | -------------------------------------------------
| | Revision of 2002 and prior years
    information

The Companys 2001 and subsequent periods
net income and shareholders equity have been revised to
reflect certain adjustments to previously reported net income
and shareholders equity in accordance with US GAAP for the
accounting for derivative financial instruments. The Company has
determined, notwithstanding their designation as hedges and
achievement of their intended economic purpose, its cross
currency interest rate and interest rate swaps did not meet all
of the criteria for hedge accounting under FAS 133. As result,
the unrealized gains and losses on derivative financial
instruments are included in net income as they arise, whereas
previously these amounts were included in other comprehensive
income. These adjustments resulted in increasing net income for
2002 by $27.5 million (net of income taxes of
$1.3 million), decreasing net income for 2001 by
$55.6 million (net of income taxes of $37.0 million).
The effect on shareholders equity resulting from this adjustment
as at August 31, 2002 was an increase of $4.8 million
(net of income taxes of $9.4 million) and as at
August 31, 2001 a decrease of $5.9 million (net of
income taxes of $2.5 million). In addition, the Company
determined as explained in Note 9 (b) that interest on
the CMI notes was computed incorrectly. This adjustment resulted
in increasing net income for 2002 by $7.6 million (net of
income taxes of $4.8 million) and for 2001 by
$1.4 million (net of income taxes of $0.9 million).
The effect on shareholders equity resulting from this adjustment
as at August 31, 2002 was an increase of $9.0 million
(net of income taxes of $5.7 million) and as at
August 31, 2001 an increase of $1.4 million (net of
income taxes of $0.9 million).

49



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



| |                         
| | ------------------------
| | 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.

50



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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
|                                                                                                                                                              |  | Revised |         | Revised |  |     
|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 $36,537
    (2001  $28,900)                                          |  |         | (57,148 | )       |  |      | (44,902 | ) |  |  |        |  
|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  | ) |  |  |        |  
|Unrealized gains (losses) on interest rate and
    cross currency swaps net of tax of $1,268 (2001 
    $37,016)                                             |  |         | 27,535  |         |  |      | (55,618 | ) |  |  |        |  
|                                                                                                                                                              |  |         |         |         |  |      |         |   |  |  |         |  
|Net earnings in accordance with U.S. GAAP
    before cumulative effect of adoption of new accounting policy                                                   |  |         | 67,870  |         |  |      | 17,492  |   |  |  | 212,674 |  
|Cumulative effect of adoption of new goodwill and
    intangibles accounting policy net of tax of $2,500                                                      |  |         | (45,269 | )       |  |      |        |   |  |  |        |  
|                                                                                                                                                              |  |         |         |         |  |      |         |   |  |  |         |  
|Net earnings in accordance with U.S. GAAP                                                                                                                     |  |         | 22,601  |         |  |      | 17,492  |   |  |  | 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 in accordance with U.S. GAAP
    adjusted to exclude amortization expense recognized in 2001 and
    2000                                        |  |         | 22,601  |         |  |      | 87,209  |   |  |  | 228,709 |  
|                                                                                                                                                              |  |         |         |         |  |      |         |   |  |  |         |  

51



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Statements of Comprehensive Income
(Loss)

Comprehensive Income (Loss) 
Current Periods

|                                                                                                                                   |                                   |         |         |         |  |      |         |       |  |  |         |         |  
|---------------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | ------- | ------- | ------- |  | ---- | ------- | ----- |  |  | ------- | ------- | -
|                                                                                                                                   |                                   | 2002    |         | 2001    |  | 2000
|                                                                                                                                   |                                   |         |         |         |  |     
|                                                                                                                                   |                                   | $000    |         | $000    |  | $000
|                                                                                                                                   |                                   | Revised |         | Revised |  |     
|Net earnings in accordance with U.S. GAAP                                                                                          |                                   |         | 22,601  |         |  |      | 17,492  |       |  |  | 212,674 |        
|                                                                                                                                   |                                   |         |         |         |  |      |         |       |  |  |         |        
|Other comprehensive income, net of tax:                                                                                            |                                   |         |         |         |  |      |         |       |  |  |         |        
|                                                                                                                                   | Foreign currency translation gain |         |         | 24,636  |  |      |         | 6,059 |  |  |         | (52,058 | )
|                                                                                                                                   |                                   |         |         |         |  |      |         |       |  |  |         |        
|Reclassification of transition adjustment related
    to interest rate swaps net of tax of $69 (2001-$70)                          |                                   |         | 115     |         |  |      | 114     |       |  |  |        |        
|                                                                                                                                   |                                   |         |         |         |  |      |         |       |  |  |         |        
|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 loss (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)                                                                                                        |                                   |         | 138,739 |         |  |      | (50,500 | )     |  |  | 184,480 |        
|                                                                                                                                   |                                   |         |         |         |  |      |         |       |  |  |         |        

Other Comprehensive Income (Loss) 
Accumulated Balances

|                               |  |             |         |             |  |            |         |         |  |  |        |   |  |  |          |  
|------------------------------ |  | ----------- | ------- | ----------- |  | ---------- | ------- | ------- |  |  | ------ | - |  |  | -------- | -
|                               |  |             |         | Unrealized  |  |            |         |        
|                               |  | Foreign     |         | Gains       |  | Transition |         |        
|                               |  | Currency    |         | (Losses) on |  | Adjustment |         |        
|                               |  | Translation |         | Securities  |  | on Swaps   |         | Total  
|                               |  |             |         |             |  |            |         |        
|                               |  |             |         |             |  | $000       |         | $000   
|                               |  | $000        |         | $000        |  | Revised    |         | Revised
|Balance  August 31, 2000      |  |             | (85,783 | )           |  |            | 32,307  |         |  |  |       |   |  |  | (53,476  | )
|Transition adjustment on swaps |  |             |        |             |  |            |        |         |  |  | (2,577 | ) |  |  | (2,577   | )
|Change during 2001             |  |             | 6,059   |             |  |            | (74,165 | )       |  |  | 114    |   |  |  | (67,992  | )
|                               |  |             |         |             |  |            |         |         |  |  |        |   |  |  |          |  
|Balance  August 31, 2001      |  |             | (79,724 | )           |  |            | (41,858 | )       |  |  | (2,463 | ) |  |  | (124,045 | )
|Change during 2002             |  |             | 24,636  |             |  |            | 91,387  |         |  |  | 115    |   |  |  | 116,138  |  
|                               |  |             |         |             |  |            |         |         |  |  |        |   |  |  |          |  
|Balance  August 31, 2002      |  |             | (55,088 | )           |  |            | 49,529  |         |  |  | (2,348 | ) |  |  | (7,907   | )
|                               |  |             |         |             |  |            |         |         |  |  |        |   |  |  |          |  

52



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



| |                            
| | ---------------------------
| | Consolidated Balance Sheets

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

|                                              |  |            |           |         |  |  |           |  
|--------------------------------------------- |  | ---------- | --------- | ------- |  |  | --------- | -
|                                              |  |           
|                                              |  | August 31,
|                                              |  |           
|                                              |  | 2002       |           | 2001   
|                                              |  |            |           |        
|                                              |  | $000       |           | $000   
|                                              |  | Revised    |           | Revised
|Assets                                        |  |            |           |         |  |  |           |  
|Current assets                                |  |            | 628,862   |         |  |  | 537,868   |  
|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                                  |  |            | 186,394   |         |  |  | 121,417   |  
|                                              |  |            |           |         |  |  |           |  
|                                              |  |            | 5,870,385 |         |  |  | 6,126,503 |  
|                                              |  |            |           |         |  |  |           |  
|Liabilities                                   |  |            |           |         |  |  |           |  
|Current liabilities                           |  |            | 586,670   |         |  |  | 641,116   |  
|Long-term debt                                |  |            | 3,320,781 |         |  |  | 3,685,624 |  
|Other liabilities                             |  |            | 197,751   |         |  |  | 165,349   |  
|Future income taxes                           |  |            | 393,950   |         |  |  | 401,921   |  
|                                              |  |            |           |         |  |  |           |  
|                                              |  |            | 4,499,152 |         |  |  | 4,894,010 |  
|                                              |  |            |           |         |  |  |           |  
|Shareholders Equity                          |  |            |           |         |  |  |           |  
|Capital stock                                 |  |            | 437,107   |         |  |  | 437,107   |  
|Contributed surplus                           |  |            | 132,953   |         |  |  | 132,953   |  
|Retained earnings                             |  |            | 809,080   |         |  |  | 786,478   |  
|Accumulated other comprehensive income (loss) |  |            | (7,907    | )       |  |  | (124,045  | )
|                                              |  |            |           |         |  |  |           |  
|                                              |  |            | 1,371,233 |         |  |  | 1,232,493 |  
|                                              |  |            |           |         |  |  |           |  
|                                              |  |            | 5,870,385 |         |  |  | 6,126,503 |  
|                                              |  |            |           |         |  |  |           |  

53



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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   
|                                                                                                                                |  | Revised             |           | Revised
|Shareholders equity in accordance with
    Canadian GAAP                                                                       |  |                     | 2,259,230 |         |  |  | 2,144,415 |  
|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 $35,748 (2001 
    $37,016)           |  |                     | (28,083   | )       |  |  | (55,618   | )
|Equity accounted affiliates in trust net of tax
    of nil                                                                      |  |                     |          |         |  |  | (3,376    | )
|Transition adjustment on interest rate swaps, net
    of tax of $1,383 (2001-$1,452)                                            |  |                     | (2,348    | )       |  |  | (2,463    | )
|Reclassification of junior subordinated notes to
    debt                                                                       |  |                     | (934,335  | )       |  |  | (840,649  | )
|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                                                                           |  |                     | 1,371,233 |         |  |  | 1,232,493 |  
|                                                                                                                                |  |                     |           |         |  |  |           |  



| |                                                           
| | ----------------------------------------------------------
| | 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.

54



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                    
|--- | -----------------------------------
|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 year ended August 31, 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.

55



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

SUPPLEMENTAL CONSOLIDATING BALANCE
SHEET

August 31, 2002


Revised


|                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|------------------------------------------------------- |  | ------------------ | --------- | ------------ |  | ------------- | ---------- | ----------- |  | ------------ | ------- | - |  |  | ---------- | - |  |  | --------- | -
|                                                        |  | 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                                |  |                    | 2,842     |              |  |               | 32,288     |             |  |              | (507    | ) |  |  |           |   |  |  | 34,623    |  
|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    |  
|                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|                                                        |  |                    | (10,440   | )            |  |               | 615,281    |             |  |              | 23,073  |   |  |  |           |   |  |  | 627,914   |  
|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 |  
|                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|                                                        |  |                    | 4,759,202 |              |  |               | 2,236,519  |             |  |              | (8,015  | ) |  |  | (1,253,792 | ) |  |  | 5,733,914 |  
|                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|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                                      |  |                    | 1,371,442 |              |  |               | 437,110    |             |  |              | 1,246   |   |  |  | (438,356   | ) |  |  | 1,371,442 |  
|Contributed surplus                                     |  |                    | 132,953   |              |  |               | 132,953    |             |  |              | 2,654   |   |  |  | (135,607   | ) |  |  | 132,953   |  
|Retained earnings                                       |  |                    | 803,493   |              |  |               | 785,195    |             |  |              | (56,708 | ) |  |  | (728,487   | ) |  |  | 803,493   |  
|Cumulative foreign currency translation
    adjustments |  |                    | (48,658   | )            |  |               | (48,387    | )           |  |              | (271    | ) |  |  | 48,658     |   |  |  | (48,658   | )
|                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|                                                        |  |                    | 2,259,230 |              |  |               | 1,306,871  |             |  |              | (53,079 | ) |  |  | (1,253,792 | ) |  |  | 2,259,230 |  
|                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|                                                        |  |                    | 4,759,202 |              |  |               | 2,236,519  |             |  |              | (8,015  | ) |  |  | (1,253,792 | ) |  |  | 5,733,914 |  
|                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  

56



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



SUPPLEMENTAL CONSOLIDATING BALANCE
SHEET  (Continued)


August 31, 2002


Revised


|                                                                                                                                |  |                    |           |              |  |               |           |             |  |              |         |   |  |  |            |   |  |  |           |  
|------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | --------- | ------------ |  | ------------- | --------- | ----------- |  | ------------ | ------- | - |  |  | ---------- | - |  |  | --------- | -
|                                                                                                                                |  | CanWest Media Inc. |           | Consolidated |  | Non-Guarantor |           | Elimination |  |             
|                                                                                                                                |  | Parent Company     |           | Guarantors   |  | Subsidiaries  |           | Entries     |  | Consolidated
|                                                                                                                                |  |                    |           |              |  |               |           |             |  |             
|                                                                                                                                |  | $000               |           | $000         |  | $000          |           | $000        |  | $000        
|Shareholders Equity in accordance with
    Canadian GAAP                                                                       |  |                    | 2,259,230 |              |  |               | 1,306,871 |             |  |              | (53,079 | ) |  |  | (1,253,792 | ) |  |  | 2,259,230 |  
|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 $35,748                                |  |                    | (28,083   | )            |  |               |          |             |  |              |        |   |  |  |           |   |  |  | (28,083   | )
|Transition adjustment on interest rate swaps net
    of tax of $1,383                                                           |  |                    | (2,348    | )            |  |               |          |             |  |              |        |   |  |  |           |   |  |  | (2,348    | )
|Reclassification of junior subordinated notes to
    debt                                                                       |  |                    | (934,335  | )            |  |               |          |             |  |              |        |   |  |  |           |   |  |  | (934,335  | )
|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                                                                           |  |                    | 1,294,464 |              |  |               | 1,386,457 |             |  |              | (55,896 | ) |  |  | (1,253,792 | ) |  |  | 1,371,233 |  
|                                                                                                                                |  |                    |           |              |  |               |           |             |  |              |         |   |  |  |            |   |  |  |           |  

57



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

SUPPLEMENTAL CONSOLIDATING STATEMENT OF
OPERATIONS

For the Year Ended August 31,
2002


Revised


|                                                                                                                   |  |                    |         |              |  |               |           |             |  |              |         |   |  |  |          |   |  |  |           |  
|------------------------------------------------------------------------------------------------------------------ |  | ------------------ | ------- | ------------ |  | ------------- | --------- | ----------- |  | ------------ | ------- | - |  |  | -------- | - |  |  | --------- | -
|                                                                                                                   |  | 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 $36,537               |  |                    | (57,148 | )            |  |               |          |             |  |              |        |   |  |  |         |   |  |  | (57,148   | )
|Unrealized gain (loss) on interest rate and cross
    currency interest rate swaps net of tax of $1,268            |  |                    | 27,535  |              |  |               |          |             |  |              |        |   |  |  |         |   |  |  | 27,535    |  
|                                                                                                                   |  |                    |         |              |  |               |           |             |  |              |         |   |  |  |          |   |  |  |           |  
|Net earnings (loss) in accordance with U.S. GAAP
    before cumulative effect of adoption of new accounting policy |  |                    | 68,297  |              |  |               | 10,058    |             |  |              | 3,594   |   |  |  | (14,079  | ) |  |  | 67,870    |  
|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                                                               |  |                    | 68,297  |              |  |               | (35,211   | )           |  |              | 3,594   |   |  |  | (14,079  | ) |  |  | 22,601    |  
|                                                                                                                   |  |                    |         |              |  |               |           |             |  |              |         |   |  |  |          |   |  |  |           |  

58



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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   |        
|                                            |                                                                |                    |          |              |   |               |          |             |   |              |        |     |  |  |         |        |  |  |          |        

59



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

SUPPLEMENTAL CONSOLIDATING BALANCE
SHEET

August 31, 2001


Revised


|                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|------------------------------------------------------- |  | ------------------ | --------- | ------------ |  | ------------- | ---------- | ----------- |  | ------------ | ------- | - |  |  | ---------- | - |  |  | --------- | -
|                                                        |  | 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                                |  |                    | (730      | )            |  |               | 11,784     |             |  |              | (6,850  | ) |  |  |           |   |  |  | 4,204     |  
|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    |  
|                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|                                                        |  |                    | 9,870     |              |  |               | 490,388    |             |  |              | 37,610  |   |  |  |           |   |  |  | 537,868   |  
|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 |  
|                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|                                                        |  |                    | 5,180,539 |              |  |               | 2,138,717  |             |  |              | 140,825 |   |  |  | (1,308,781 | ) |  |  | 6,151,300 |  
|                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|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                                      |  |                    | 1,277,756 |              |  |               | 437,110    |             |  |              | 1,370   |   |  |  | (438,480   | ) |  |  | 1,277,756 |  
|Contributed surplus                                     |  |                    | 132,953   |              |  |               | 26,097     |             |  |              | 106,856 |   |  |  | (132,953   | ) |  |  | 132,953   |  
|Retained earnings                                       |  |                    | 808,000   |              |  |               | 850,831    |             |  |              | (39,189 | ) |  |  | (811,642   | ) |  |  | 808,000   |  
|Cumulative foreign currency translation
    adjustments |  |                    | (74,294   | )            |  |               | (75,226    | )           |  |              | 932     |   |  |  | 74,294     |   |  |  | (74,294   | )
|                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|                                                        |  |                    | 2,144,415 |              |  |               | 1,238,812  |             |  |              | 69,969  |   |  |  | (1,308,781 | ) |  |  | 2,144,415 |  
|                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  
|                                                        |  |                    | 5,180,539 |              |  |               | 2,138,717  |             |  |              | 140,825 |   |  |  | (1,308,781 | ) |  |  | 6,151,300 |  
|                                                        |  |                    |           |              |  |               |            |             |  |              |         |   |  |  |            |   |  |  |           |  

60



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



SUPPLEMENTAL CONSOLIDATING BALANCE
SHEET  (Continued)


Revised


|                                                                                                                                 |  |                    |           |              |  |               |           |             |  |              |        |   |  |  |            |   |  |  |           |  
|-------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | --------- | ------------ |  | ------------- | --------- | ----------- |  | ------------ | ------ | - |  |  | ---------- | - |  |  | --------- | -
|                                                                                                                                 |  | CanWest Media Inc. |           | Consolidated |  | Non-Guarantor |           | Elimination |  |             
|                                                                                                                                 |  | Parent Company     |           | Guarantors   |  | Subsidiaries  |           | Entries     |  | Consolidated
|                                                                                                                                 |  |                    |           |              |  |               |           |             |  |             
|                                                                                                                                 |  | $000               |           | $000         |  | $000          |           | $000        |  | $000        
|Shareholders Equity in accordance with
    Canadian GAAP                                                                        |  |                    | 2,144,415 |              |  |               | 1,238,812 |             |  |              | 69,969 |   |  |  | (1,308,781 | ) |  |  | 2,144,415 |  
|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 $37,016                                 |  |                    | (55,618   | )            |  |               |          |             |  |              |       |   |  |  |           |   |  |  | (55,618   | )
|Equity accounted affiliates in trust net of tax
    of nil                                                                       |  |                    |          |              |  |               | (3,375    | )           |  |              |       |   |  |  |           |   |  |  | (3,375    | )
|Transition adjustment on interest rate swap, net
    of tax of $1,452                                                            |  |                    | (2,463    | )            |  |               |          |             |  |              |       |   |  |  |           |   |  |  | (2,463    | )
|Reclassification of junior subordinated notes to
    debt                                                                        |  |                    | (840,649  | )            |  |               |          |             |  |              |       |   |  |  |           |   |  |  | (840,649  | )
|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                                                                            |  |                    | 1,284,188 |              |  |               | 1,190,389 |             |  |              | 66,698 |   |  |  | (1,308,781 | ) |  |  | 1,232,494 |  
|                                                                                                                                 |  |                    |           |              |  |               |           |             |  |              |        |   |  |  |            |   |  |  |           |  

61



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

SUPPLEMENTAL CONSOLIDATING STATEMENT OF
OPERATIONS

For the Year Ended August 31,
2001


Revised


|                                                                                                                                                                 |  |                |         |              |  |              |           |             |  |              |         |   |  |  |          |   |  |  |           |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ------- | ------------ |  | ------------ | --------- | ----------- |  | ------------ | ------- | - |  |  | -------- | - |  |  | --------- | -
|                                                                                                                                                                 |  | CanWest        |         |              |  | Non-         |           |             |  |             
|                                                                                                                                                                 |  | Media Inc.,    |         | Consolidated |  | 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 $28,900                                                                  |  |                | (44,902 | )            |  |              |          |             |  |              |        |   |  |  |         |   |  |  | (44,902   | )
|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    | )
|Unrealized gain (loss) on interest rate and cross
    currency interest rate swaps, net of tax of $37,016                                                        |  |                | (55,618 | )            |  |              |          |             |  |              |        |   |  |  |         |   |  |  | (55,618   | )
|                                                                                                                                                                 |  |                |         |              |  |              |           |             |  |              |         |   |  |  |          |   |  |  |           |  
|Net earnings in accordance with U.S. GAAP                                                                                                                        |  |                | (2,838  | )            |  |              | 69,769    |             |  |              | 6,986   |   |  |  | (56,425  | ) |  |  | 17,492    |  
|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                                                        |  |                | (2,838  | )            |  |              | 137,571   |             |  |              | 8,901   |   |  |  | (56,425  | ) |  |  | 87,209    |  
|                                                                                                                                                                 |  |                |         |              |  |              |           |             |  |              |         |   |  |  |          |   |  |  |           |  

62



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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     |        
|                                              |                                                                |                    |            |              |   |               |            |             |   |              |         |        |   |  |         |        |  |  |            |        

63



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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  |  
|                                                                                                                   |  |                     |         |              |  |               |          |             |  |              |         |   |  |  |          |   |  |  |          |  

64



---



##### 



CANWEST MEDIA INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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   |         
|                                               |                                                           |                    |          |              |   |               |          |             |   |              |         |        |   |  |          |         |  |  |          |         

65



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##### 



The Ten Group Pty Limited Consolidated Financial
Statements for the years ended August 31, 2002 and 2001 are
hereby incorporated by reference from the CanWest Media Inc. Annual
Report on Form 20-F for the fiscal year ended August 31,
2002 filed with the SEC on February 28, 2003.

66



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##### 



ITEM 19 EXHIBITS

|     |  |                                                                                                                                                                                             
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|11.1 |  | Certification
Pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 of Leonard Asper, President and Chief
Executive Officer.             
|    
|11.2 |  | Certification
Pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 of John Maguire, Vice-President,
Finance and Chief
Financial Officer.

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for
filing on Form 20-F/A and that it has duly caused and authorized the
undersigned to sign this amendment to the annual report on its behalf.

| |  |                                       |  |                 
| |  | ------------------------------------- |  | ----------------
| |  | CANWEST MEDIA INC.                   
| |  |                                       |  |                 
| |  | By:                                   |  | /s/ John Maguire
| |  |                                       |  |                 
| |  | John Maguire, Chief Financial Officer
| |  | Date: June 18, 2003                  

CERTIFICATION

I, Leonard Asper, certify that:

1.     I have reviewed this amendment to the annual report on Form 20-F/A of
CanWest Media Inc.:

2.     Based on my knowledge, this amendment to the 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 amendment to the annual report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this amendment to the 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 amendment
to the 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 amendment to the 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
amendment to the annual report (the Evaluation Date); and

c) presented in this amendment to the annual report our conclusions about
the effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

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





---



##### 



a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in this
amendment to the 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: June 18, 2003 |  |                                      
|                    |  |                                       |  | 
|/s/ Leonard Asper   |  |                                      
|                    |  |                                      
|Name:               |  | Leonard Asper                         |  | 
|Title:              |  | President and Chief Executive Officer |  | 

CERTIFICATION

I, John Maguire, certify that:

1.     I have reviewed this amendment to the annual report on Form 20-F/A of
CanWest Media Inc.:

2.     Based on my knowledge, this amendment to the 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 amendment to the annual report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this amendment to the 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 amendment
to the 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 amendment to the 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
amendment to the annual report (the Evaluation Date); and

c) presented in this amendment to the annual report our conclusions about
the effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

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





---



##### 



a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in this
amendment to the 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: June 18, 2003 |  |                            
|                    |  |                             |  | 
|/s/ John Maguire    |  |                            
|                    |  |                            
|Name:               |  | John Maguire                |  | 
|Title:              |  | Vice-President, Finance and |  | 
|                    |  | Chief Financial Officer     |  |