20-F

United States Securities and Exchange Commission

Washington, DC  20549

FORM 20-F

[  ]

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF 1934.

OR

[x ]

ANNUAL REPORT PURSUANT TO SECTIONS “13” OR “15(d)” OF THE SECURITIES EXCHANGE ACT OF 1934.

For the fiscal year ended ………December 31, 2004…………………………………

OR

[ ]

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

For the transition period from …………………………………………………………….…

Commission file number:          0-30942

STREAM COMMUNICATIONS NETWORK AND MEDIA INC.

________________________________________________________________________

(Exact name of registrant as specified in its charter)

Not Applicable

(Translation of registrant’s name into English)

British Columbia, Canada

(Jurisdiction of incorporation or organization)

Suite 1020 – 400 Burrard Street

Vancouver, British Columbia, V6C 3A6

(Address of principal executive offices)

__________

-- Form 20-FR  --

-- Stream Communications Network, Inc.  --

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

None.

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

Common Shares, without par value.

(Title of Class)

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

None.

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

 37,833,800 common shares at December 31, 2004

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: ___ü___

No:

N/A

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

Item 17

ü

Item 18 _______

II

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

FORM 20-F

INDEX

-- Form 20-FR  --

-- Stream Communications Network, Inc.  --

CONVERSION TABLE

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

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

GLOSSARY OF NAMES AND TERMS

Broadband	Broadband refers to telecommunication that provides multiple channels of data over a single communications medium, typically using some form of frequency or wave division
CATV	Community Antenna Television, the original name for Cable TV.
Coaxial cable	Coaxial cable is called "coaxial" because it includes one physical channel that carries the signal surrounded (after a layer of insulation) by another concentric physical channel, both running along the same axis. The outer channel serves as a ground. Many of these cables or pairs of coaxial tubes can be placed in a single outer sheathing and, with repeaters, can carry information for a great distance.
Czestochowa	A city of southern Poland north of Katowice. It is heavily industrialized. Population,  251,000
Digital	Describes any system based on discontinuous data or events. Computers are digital machines because at their most basic level they can distinguish between just two values, 0 and 1, or off and on. There is no simple way to represent all the values in between, such as 0.25. All data that a computer processes must be encoded digitally, as a series of zeroes and ones. The opposite of digital is analog. A typical analog device is a clock in which the hands move continuously around the face. Such a clock is capable of indicating every possible time of day. In contrast, a digital clock is capable of representing only a finite number of times (every tenth of a second, for example).
EU (European Union)	An economic association of European countries founded by the Treaty of Rome in 1957 as a common market for six nations. It was known as the European Community until January 1, 1994 and since 1 May 2004 comprises 25 European countries. Its goals are a single market for goods and services without any economic barriers, and a common currency with one monetary authority. The 25 countries are, Austria, Belgium, the Czech Republic, Cyprus, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Slovenia, Slovakia, Spain, Sweden and the United Kingdom.
Euro	The basic unit of currency among 12 European Union countries.
GSM	Global System for Mobile communications. A world standard for digital cellular communications using narrowband TDMA (Time Division Multiple Access), which allows up to eight calls at a time on 900 MHz and 1800 MHz frequencies. Introduced in 1991, it is the standard most commonly used in Europe and Asia, but not in the United States.
Headend	A headend is the originating point of a signal in a cable television system (distribution center). Headend equipment receives satellite and local broadcast TV signals and converts them to a form that can travel down coaxial cable to subscribers.
HFC	A hybrid fibre coaxial (HFC) network is a telecommunication technology in which optical fibre (glass or plastic wire) cable and coaxial cable are used in different portions of a network to carry broadband content (such as video, data, and voice). Using HFC, a local CATV company installs fibre optic cable from the cable head-end to serving nodes located close to business and residential users and from these nodes uses coaxial cable to individual businesses and homes. An advantage of HFC is that some of the characteristics of fibre optic cable can be brought close to the user without having to replace the existing coaxial cable that is installed all the way to the home and business. Both cable TV and telephone companies are using HFC in new and upgraded networks and, in some cases, sharing the same infrastructure to carry both video and voice conversations in the same system.
ISDN	Integrated Services Digital Network, a fast method of service access and transferring data world-wide and an international communications standard for sending voice, video, and data over digital telephone lines or normal telephone wires.
Katowice	A city of southern Poland 50 miles west-northwest of Krakow. Chartered in 1865, it is an important mining and industrial center. Population, 328,000.
Krakow	A city of southern Poland on the Vistula River south-southeast of Warsaw. Founded in the eighth century A.D., it was the national capital from 1305 to 1595. Population, 758,000.
KRRiT	National Council for Radio and Television in Poland.
MDU	Multiple dwelling units
OIGKK	The Polish Cable Communications Chamber of Commerce with headquarters in Warsaw unites 136 companies. Its members are cable TV operators representing over 80% of the domestic cable TV market as well as manufacturers and distributors of equipment and services used by operators in their business activity. Services rendered by operators - members of the Chamber - are used by 4.5 million households in the whole country. OIGKK is a member of the National Economic Chamber and the European Cable Communication Association.
Rzeszów	A city, capital of Podkarpackie Province in southeastern Poland. Population 160,000.
Silesia	Region in Southwest Poland bordering on the Sudety Mountains
URTiP	The Telecommunication and Post Regulation Office in Poland.
UOKiK	Office of Competition and Consumer Protection in Poland.
Voice mail	A computerized system for receiving, recording, and sometimes forwarding audio messages. A voice mail system plays a pre-recorded message to the caller when the line is not answered, and may provide choices such as paging, talking to an operator, or selecting a number by touchtone to choose between message boxes.
VoIP	An acronym for Voice Over Internet Protocol. An emerging technology, voice delivered using the Internet Protocol, is a term used in IP telephony for a set of facilities for managing the delivery of voice information using the Internet Protocol (IP). In general, this means sending voice information in digital form in discrete packets rather than in the traditional circuit committed protocols of the public switched telephone network. A major advantage of VOIP and Internet telephony is that it avoids the tolls charged by ordinary telephone service.
Warsaw	The capital of Poland, in the east-central part of the country on the Vistula River. Founded in the 13th century, it replaced Kraków as Poland's capital in 1596. Warsaw was ruled by Russia as an independent kingdom (1815–1917) and became capital of Poland again in 1918. Warsaw was rebuilt after 1945 and is today a major cultural, commercial, and industrial center. Population:1,689,000.
Wroclaw	A city of southwest Poland on the Oder River, assigned to Poland by the Potsdam Conference (1945). Population, 641,000.

1

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

FORWARD-LOOKING STATEMENTS

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

PART 1

Item 1 – Identity Of Directors, Senior Management and Advisers

Not applicable

Item 2 - Offer Statistics and Expected Timetable

Not applicable

Item 3 – Key Information

A. Selected Financial Data

Financial Highlights

The following table sets forth our selected consolidated financial data for the years ended December 31, 2004, December 31, 2003, December 31, 2002, the two months ended December 31, 2001 and the two years ended October 31, 2001 prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”). The table also summarizes certain corresponding information prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). This selected consolidated financial data include the accounts of our parent and our subsidiaries.  

	Year ended December 31,	Year ended December 31,	Year ended December 31,	Two months Ended December 31,	Year ended October 31,
	2004	2003	2002	2001	2001
	$CDN	$CDN	$CDN	$CDN	$CDN
Revenues	4,415,461	3,700,160	3,736,716	639,871	2,079,504
Net income (loss) from continuing operations
Canadian GAAP	(6,564,715)	(6,254,620)	(3,626,325)	(773,491)	(2,301,619)
US GAAP	(5,248,173)	(8,064,275)	(3,626,325)	(773,491)	(2,301,619)
Net income (loss) from discontinued operations
Canadian GAAP	-	-	(2,362,877)	(267,198)	(2,231,941)
US GAAP	-	-	(2,362,877)	(267,198)	(1,097,691)
Income (loss) per share
Canadian GAAP	(0.22)	(0.21)	(0.21)	(0.05)	(0.21)
US GAAP	(0.17)	(0.27)	(0.19)	(0.04)	(0.16)
Total assets
Canadian GAAP	14,131,087	10,204,158	17,582,966	16,222,495	15,055,326
US GAAP	14,131,087	10,204,158	17,582,966	16,222,495	15,055,326
Net assets
Canadian GAAP	4,553,393	4,934,090	11,733,817	13,375,490	12,724,982
US GAAP	4,553,393	4,934,090	11,733,817	13,375,490	12,724,982
Long-term debt	814,707	67,997	52,975	-	–
Capital stock	36,005,421	33,209,455	31,229,685	26,110,367	21,310,084
Cash dividends declared	-	-	-	-	–
Weighted average number of common shares outstanding	30,027,489	29,333,427	28,023,911	22,163,416	21,837,002

2

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Exchange Rates

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

Since June 1, 1970, the Government of Canada has permitted a floating exchange rate to determine the value of the Canadian dollar against the U.S. dollar.  The high and low exchange rates, the average rates (average of the exchange rates on the last day of each month during the period) and the end of the period rates for Canadian dollars, expressed in U.S. dollars, from November 1, 2001 to December 31, 2004 were as follows:

U.S. DOLLARS PER $1.00 (CDN.)

	Year ended December 31,	Year ended December 31,	Two months ended December 31,	Year ended October 31,	Year ended October 31,
	2004	2003	2002	2001	2001
High	.8532	.7747	.6653	.6418	.6714
Low	.7138	.6327	.6175	.6227	.6316
Average	.7701	.7163	.63724	.6306	.6498
End of Period	.8303	.7727	.6344	.6287	.6340

The high and low exchange rates for Canadian dollars, expressed in U.S. dollars, for each month from January 1, 2005 to May 31, 2005 were as follows:

U.S. DOLLARS PER $1.00 (CDN.)

Monthly

	January 2005	February 2005	March 2005	April 2005	May 2005
High	.8368	.8173	.8347	.8286	.8091
Low	.8016	.7944	.8001	.7923	.7851

In this report, several references are made to business in Poland and the Polish currency, the zloty. The high and low exchange rates, the average rates (average of the exchange rates on the last day of each month during the period) and the end of the period rates for Polish zloty (zloty), expressed in U.S. dollars, from November 1, 2001 to December 31, 2004 were as follows:

3

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

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

	Year ended December 31,	Year ended December 31,	Two months ended December 31,	Year ended October 31,	Year ended October 31,
	2004	2003	2002	2001	2001
High	.3366	.2825	.3065	.2538	.2549
Low	.2453	.2428	.2325	.2428	.2132
Average	.2757	.2577	.2463	.2468	.2410
End of Period	.3339	.2665	.2603	.2518	.2450

The high and low exchange rates for Polish zloty, expressed in U.S. dollars, for each month from January 31, 2005 to May 31, 2005 were as follows:

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

Monthly

	January 2005	February 2005	March 2005	April 2005	May 2005
High	.3351	.3393	.3442	.3210	.3138
Low	.3125	.3164	.3066	.2994	.2971

On June 15, 2005 the Canadian dollar and the Polish zloty closed at the following rates:

$1.00 USD

= $1.2534 CDN

$1.00 USD

=  3.3565 Polish Zloty (zloty)

B. Capitalization and Indebtedness

N/A

C. Risk Factors

History of losses, likelihood of future losses and dependence on additional financing

We have not been profitable in the past. The aggregate of our net losses (accumulated deficit) of $36,589,727 CDN to December 31, 2004, has been financed by private placements and the exercise of stock options and warrants. We may not be profitable in the future.

The continued development and improvement of our business will require substantial amounts of additional financing. If we are unable to secure such financing on acceptable terms and on a timely basis, our financial results may be adversely affected.  

In addition, our future prospects must be considered in light of the risks, expenses and difficulties frequently encountered in establishing new businesses, which can be characterised by intense competition and rapidly changing events. Our auditors have included an explanatory paragraph regarding our ability to continue as a going concern in the notes to the financial statements for the year ended December 31, 2004. The financial statements have been prepared on a going concern basis, however, indicating that the concern is not a probability, but a possibility.

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

Further acquisitions of cable television and Internet access businesses

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

Competition

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

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

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

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

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

4

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Agreements with TPSA

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

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

Loss of key personnel

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

Regulation and permitting requirements

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

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

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

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

5

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

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

Risks relating to the amended Polish Copyright Act

Before 1 May 2004 (i.e. the date of Poland’s accession to the European Union), cable operators in Poland, including us, re-transmitted works that were broadcast by radio and television stations in a given area pursuant to a so-called “statutory licence”.  In order to be effective, the statutory licence required the cable operator to broadcast all programmes simultaneously and integrally with the primary broadcast.  With an effective statutory licence, it was possible to show such works without being required to enter into separate agreements with their primary broadcasters, except in the case of encoded programmes.

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

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

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

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

6

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Currency risk

We do not hedge currency risk. Our revenues are generated in zlotys, while our programming costs (constituting 20.4% compared to our revenues in 2004) and our expenditures for technical equipment purchases, among certain other costs, are denominated in foreign currencies. Accordingly, significant fluctuations of the zloty in relation to those currencies may adversely affect our business and our financial results.

Dilution of share capital

As at June 15, 2005, there exist options to purchase a total of 3,810,000 of our shares and warrants to purchase an additional 2,976,579 shares (6,786,579 shares in total). If all of these options and warrants were exercised, shares issued as a result of such exercise would constitute 17.0% of all of our outstanding shares. The exercise of these options and warrants and the resale of the resulting shares on a public market may adversely affect the market price of our shares and our ability to raise future equity financing upon favourable terms.  

As of June 15, 2005, our constituent documents authorise the issuance of up to 150,000,000 shares of common stock. Consistent with our strategy, we may issue some or all of such shares to acquire one or more businesses or other types of property or to provide additional financing. In addition, we may grant additional options and issue additional warrants in the future. The issuance of those shares may result in a reduction of the market price of our outstanding shares. The issuance of any additional shares will cause a reduction in the proportionate ownership and voting power of all other shareholders. Further, any such issuance may result in a change of our voting control.

No dividends

In the past, we have not paid any dividends to our shareholders in any form. We do not intend to pay any dividends in the foreseeable future.   

Conflicts between the interests of large shareholders and minority shareholders

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

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

7

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Shareholders’ rights are different in Canadian corporations

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

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

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

We are subject to Canadian taxation

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

Item 4 - Information on the Company

General

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

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

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

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

Our registered office is Suite 703-938 Howe Street, Vancouver, British Columbia, V6Z 1N9, Canada. Our principal offices are located at 1020 – 400 Burrard Street, Vancouver, British Columbia, V6C 3A6, Canada, telephone (604) 669-2826.

We have the following operating subsidiary company:

1.

Stream Communications Sp. z o.o. (“Stream Poland”) was incorporated on October 26, 1999, under the laws of Poland. We own a 100% interest in Stream Poland which is in the business of operating cable television and high-speed Internet in Poland. Stream Poland’s growth is being accomplished through acquisitions of small, independent cable TV and high-speed Internet providers and through its own marketing efforts. Stream Poland is located at al. 29 Listopada 130, 31-406 Krakow, Poland.

8

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

The following companies are subsidiaries, but no longer have operating businesses. We had previously decided to dispose of these companies as there was no purpose to have them, however, since we are expanding in the cable TV and Internet business, these companies may serve some useful purpose in the near future. Accordingly we will keep these entities as non-operating subsidiaries.

1.

Streamline Media Sp. z o.o., (formerly Polvoice.com, “Streamline”) is a wholly owned subsidiary of our Company being organized on August 11, 1999, under the laws of Poland;

2.

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

We are a reporting issuer in the Province of British Columbia, Canada and our common shares are listed for trading on the OTC BB under the trading symbol “SCNWF”.

Office Space in Canada

We utilize about 2,500 square feet of office space in Vancouver, British Columbia. Our rent is $6,875 CDN per month increasing 6% per annum in October of each year until May 2009. In addition, we pay approximately $8,000 CDN per month for office support that includes a photocopier, telephones, a fax machine, computers, printers, scanners, secretarial services, reception services and consumables.

Stream Communications Sp. z o.o.

Overview

Stream provides cable television services and high-speed Internet access in the Polish districts of Slaskie, Malopolskie, Swietokrzyskie and Podkarpackie through its hybrid fibre coax (“HFC”) networks.  Recently, it has also begun offering limited Internet telephony services based on Voice over Internet Protocol (“VoIP”), on a trial basis. Stream has approximately 54,400 cable television subscribers (as of 15 June 2005), which represents a penetration rate of approximately 69% of homes passed. In addition Stream has some 4,100 internet subscribers. Stream Poland provides its customers with a high quality product by employing modern, reliable networks, a broad selection of programmes, professional management and customer service.  

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

Bielsat.com Sp. z o.o. (“Bielsat”)

Telewizja Kablowa Gimsat Sp. z o.o. (“Gimsat”)

ASK Stream Sp. z o.o.  (“ASK”)

Vega Sp. z o.o. (“Vega”)

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-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Business Description

Stream Communications Network & Media Inc. and Stream Poland are collectively referred to as “Stream”. Stream provides cable television services and high-speed Internet access in the Polish districts of Slaskie, Malopolskie, Swietokrzyskie, and Podkarpackie through its hybrid fibre coax (“HFC”) networks.  Recently, it has also begun offering limited Internet telephony services based on Voice over Internet Protocol (“VoIP”). As of the release of the first quarter 2005 financials Stream has approximately 54,400 cable television subscribers, which represents a penetration rate of approximately 69% of homes passed in its network region. Stream provides its customers with a high quality product by employing modern, reliable networks, a broad selection of programmes, professional management, and customer service.  Although cable television services account ed for over 92% of its consolidated net sales in 2004, Stream has a growing number of Internet subscribers. The Company has been introducing high-speed Internet access over all its networks and currently has 4,100 Internet subscribers bringing the total revenue generating units or (RGU’s) to 58,500 subscribers.

Stream conducts its business in Southern Poland’s most densely populated region, with approximately 11.5 million inhabitants and 3.2 million television homes but only about 0.8 million cable subscribers.  Stream has targeted this area of Poland because of the number of mid-sized cities that remain underserved by larger cable operators.  Stream has funded its growth and operations principally through equity.  Stream’s management possesses cable-business expertise and experience and, in particular, knowledge of its local target markets.

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

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

Date	Name of acquisition	Region of operation
April 2005	Vega II	Czestochowa
April 2005	Internet in Bytom	Bytom
Oct 2004	98% of Vega	Czestochowa
Sept 2004	Miechowice	Bytom
May 2004	60% of ASK	Sosnowiec
March 2004	Channel 69	Sosnowiec
June 2001	100% of Gimsat	Jaslo, Sanok, Brzozow
July 2001	MTK	Czestochowa
July 2001	A portion of the assets of AZART S.C.:
	AZART SC Telekom	Kielce
	AZART TK Trybinowski	Busko, Zdroj

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-- Form 20-F  --

-- Stream Communications Network, Inc.  --

September 2000	A portion of the assets of Elektromontaz Rzeszow S.A. El-Rzeszow “Telekab”	Rzeszow, Bochnia, Sankomierz
August 2000	A portion of the assets of Bister Sp.     Z o.o.	Jaworzno, Czechowice-Dziedzice
July 2000	A portion of the assets of Telemedia Sp. Z o.o.	Czestochowa
July 2000	A portion of the assets of Marsat S.C.	Czestochowa
June 2000	51% of the shares of Bielsat	Beilsko-Biala, Czechowice-Dziedzice

Bielsat

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

Gimsat

Stream Poland owns 100% of Gimsat, having made the final payment in May 2004. On 5 June 2001 Stream Poland and the Gimsat Shareholders concluded the agreement to sell 0,21% of the Gimsat share capital and a preliminary agreement to sell to Stream Poland shares representing 99.79% of the Gimsat share capital.  

ASK

ASK was purchased on May 5, 2004, wherein we paid some $200,000 for a 60% interest in share capital of ASK. ASK currently has approximately 1,300 Internet subscribers.

Miechowice

Some 4,300 CATV subscribers were purchased in September 2004 in the Bytom region. In April 2005 some 2,000 Internet subscribers were purchased in the same region.

Vega

 A 98% interest in Vega was purchased in October 2004 by Stream Poland to acquire some 4,200 subscribers. In addition, within the Vega area, Stream has added additional 1,500 CATV subscribers in June 2005 by way of the issuance of 260,000 shares from treasury (and the additional 1% of interest in Vega).

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

Stream’s Cable Television Services

Stream Poland currently offers four programme packages and one bundled package:

*

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

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-- Form 20-F  --

-- Stream Communications Network, Inc.  --

*

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

*

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

*

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

*

TELE Strada: the Top Tier along with high-speed always-on Internet access.

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

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

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

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

Stream’s Cable Television Programmes

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

Cable TV attracted a rate of 22% VAT in 2003, which was reduced to 7% in 2004. Internet access was at a rate of 7% VAT and; and on March 1, 2005 it changed to 22%.

Stream’s programming providers are: (a) Polish public television; (b) Polish private terrestrial television stations licensed by KRRiT; (c) Polish and foreign satellite programme providers; and (d) local programme producers.

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-- Form 20-F  --

-- Stream Communications Network, Inc.  --

The table below contains the list of programmes for which Stream has signed licence agreements or obtained broadcasting permits from programme providers.

Table: List of programmes licensed by Stream

Channel No.	Name	Characteristics	Language
1	TVP 1	public television	Polish
2	TVP 2	public television	Polish
3	TVP POLONIA	public television	Polish
4	TVP 3	public television	Polish
5	POLSAT	private terrestrial	Polish
6	TVN	private terrestrial	Polish
7	TVN 7	entertainment	Polish
8	POLSAT 2	entertainment	Polish
9	TV 4	private terrestrial	Polish
10	TV Puls	general	Polish
11	Polonia 1	entertainment	Polish
12	Tele 5	entertainment	Polish
13	TV Trwam	catholic	Polish
14	BBC World	information	English
15	BBC Prime	entertainment	English
16	POLSAT Sport	sport	Polish
17	TVN Meteo	weather	Polish
18	TVN Turbo	cars etc.	Polish
19	TVN 24	information	Polish
20	Explorer	science	Polish
21	History	science	Polish
22	MINI MINI	children	Polish
23	Kino Polska	movies	Polish
24	TVN Style	entertainment	Polish
25	Ale Kino!	movies	Polish
26	Zig Zap	children	Polish
27	National Geographic	science	Polish
28	Planete	documentary	Polish

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-- Form 20-F  --

-- Stream Communications Network, Inc.  --

29	VIVA  PL	music	Polish
30	VIVA	music	German
31	VIVA+	music	German
32	RTL	entertainment	German
33	RTL 2	entertainment	German
34	SAT 1	entertainment	German
35	VOX	entertainment	German
36	Club	entertainment	Polish
37	Jetix	Children	Polish
38	Eurosport	Sport	Polish
39	Canal+	Entertainment	English
40	Canal+ sport	Entertainment	English
41	Canal+ film	Entertainment	English

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

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

Stream’s data services

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

Stream’s VoIP service

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

Marketing and sales

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

14

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

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

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

Overview of the Polish cable television industry

Poland has approximately 38.2 million inhabitants and 12.5 million households with a TV set.  Prior to 1989, during the Communist political regime, the Polish government controlled and regulated the television industry.  All frequencies and channel offerings were limited principally to government broadcast programmes.  In the early years of the post-Communist era, there was no effective regulatory authority.  This led to a proliferation of small cable operators building low-cost, poorly constructed cable systems in densely populated urban areas of Poland.

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

Despite these developments, the Polish cable television market remains underdeveloped.  According to the OIGKK, there are currently about 518 operators with 1,086 networks providing services to 4.5 million of the country’s 12.5 million TV-homes, of which 70% are passed by cable.  The average monthly salary as of 31 December 2004 was approximately Cdn $1,200, while the average monthly cable subscription rates of the five biggest Polish cable operators was approximately Cdn $16.00 (including VAT).

Stream believes that there is significant potential for further consolidation among Polish cable television providers. Stream believes that currently the top twelve operators (including Stream) control approximately 65% of the built-out market, with the remaining 35% serviced by 506 operators.  Stream expects consolidation among these providers, particularly as smaller operator’s face the regulatory compliance burdens of being required to meet minimum cable television network technical standards and pay for programming produced by others.

Stream believes that there are several reasons why Poland represents a favorable market for the provision of multi-channel cable services.  First, Poland is one of the largest single-language markets in Central Europe.

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

Third, middle-income families living in multiple dwelling units, or MDUs, account for approximately 70% of residential housing in Polish cities.  This high housing density results in comparatively low costs for building cable television networks.  Currently Stream’s average network density is about 320 homes passed per kilometre of cable plant.  By comparison, the average housing density in the United States is 48 homes per kilometre of cable plant.

Fourth, in Poland the right to build cable television networks reaching MDUs is acquired through agreement with the owner of the MDU and does not require any permits from regulatory telecommunications authorities.  Under such agreements, the operator is allowed to connect all apartments located in a given building to its network.  Stream has entered into such agreements for renewable terms varying from ten to 20 years.

Technology

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

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

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-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Configuration of a typical cable television network

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

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

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

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

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-- Form 20-F  --

-- Stream Communications Network, Inc.  --

The process of merging headends is related to the construction of new fibre optic cables, which, to the extent possible, are laid in a ring as shown in the diagram above.  In this process, a part of the network and headends are being replaced with fibre optic nodes.  This will allow the number of series or cascade amplifiers to be reduced, leading to improved signal quality and reduced line maintenance costs.  Additionally, whilst modernising the network, Stream Poland intends to replace local power sources with a smaller number of power supplies equipped with stand-by power capability.  This will help eliminate power failure as the principal reason for network disruption.

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

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

·

5.0 - 60.0 MHz for path return;

·

87.5 - 108.0 MHz for radio channels; and

·

110.0 - 862.0 MHz for television channels.

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

At present, 75% of Stream Poland’s networks are engineered for the 862 MHz bandwidth, 20% operate at the 606 MHz bandwidth and 5% operate at 550 MHz.  Stream Poland estimates that, by the end of 2005, all of its networks will have been upgraded to the maximum 862 MHz bandwidth.

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

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

Stream Poland’s customer base and market share

Stream Poland has a total of approximately 54,000 CATV subscribers, which, as Stream Poland estimates, represents a seven percent market share in the districts in which Stream Poland operates.  Nearly all of Stream Poland’s customers are in MDUs.  As of the end of December 2004, Stream Poland’s penetration rate, calculated as the number of Stream Poland’s subscribers divided by the number of homes passed by Stream Poland, was approximately 69%.  Stream Poland has generally been able to improve upon the penetration rates of it’s acquired companies shortly after their acquisition.

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-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Stream Poland experienced customer churn of approximately 9% in 2004 (an average of 0.75% per month), approximately 12% in 2002 (an average of 1% per month) and approximately 11% in 2003.

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

Locations of Stream Poland’s cable television networks

Stream Poland’s market has approximately 11.5 million people and 3.2 million television households, but only about 0.8 million cable television subscribers.  The region is the most densely populated in Poland, containing roughly 30% of the nation’s population.  There are 92 towns with more than 50,000 inhabitants in all of Poland, and 35 of them are located in this region.  

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

Competition

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

·

UPC Telewizja Kablowa, a subsidiary of the European cable television operator UGC Europe Inc. (formerly United Pan-Europe Communications) with approximately 1,000,000 subscribers in eight out of the ten of largest cities in Poland.

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-- Form 20-F  --

-- Stream Communications Network, Inc.  --

·

·

Vectra, with approximately 600,000 subscribers in Poland and operates in Wroclaw, Walbrzych, Bielsko Biala, Elblag, Olsztyn, Slupsk, Bialystok, Radom, Zabrze, and 80 other Polish cities.

·

Aster, a subsidiary of a consortium of investments funds, with 380,000 subscribers in Warsaw (Aster), Krakow (Autocom) and Zielona Gora (ZTP).

·

Multimedia Polska, with approximately 500,000 subscribers in Poland, mainly in Kalisz, Szczecin, Gorzow Wielkopolski, Lublin, Rzeszow, Gdynia, Torun and Plock.

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

·

Cyfra+, which has approximately 650,000 subscribers, and

·

Polsat Cyfrowy, which has approximately 280,000 subscribers.

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

Regulation of Stream Poland’s services

Radio and Television Act

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

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

The Radio and Television Act requires cable operators to obtain a licence to produce and broadcast radio and television programmes.  In addition, cable operators who distribute entire channels of a domestic or foreign broadcasting organisation must register such channels in the register kept by the Chairman of KRRiT.  The Chairman of KRRiT is authorised to issue such licences and to register channels.  The registration requirement applies to all channels, except for nation-wide public radio and television and other programmes of domestic broadcasting organisations which can be received within such cable operator’s area with common aerial reception equipment.

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

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

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

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

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

Copyrights

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

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

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

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-- Stream Communications Network, Inc.  --

The amended Copyright Act, which became effective as of 1 May 2004, removed a statutory licence that enabled cable operators to broadcast the works broadcast by other radio and television broadcasters in a given area provided the programme was broadcasted simultaneously and integrally with the primary broadcast, it being understood that the initial broadcaster retained its right to remuneration. The removal of the statutory licence follows from the approximation of the Copyright Act to EU law, in particular to the provisions of Directive No. 93/83 on the Co-ordination of Certain Rules Concerning Copyright and Rights Related to Copyright Applicable to Satellite Broadcasting and Cable Broadcasting of 27 September 1993.

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

Telecommunications law

All Polish telecommunications activities are regulated by under the Polish Telecommunications Act, which took effect on January 1, 2001. The Telecommunications Act imposes regulations on telecommunications activities and technical requirements for equipment to be used for telecommunications activities.  The term “telecommunications activity” is defined as the providing or making available of any type of telecommunications service and the use of telecommunications networks.  Moreover, the Telecommunications Act contains detailed provisions concerning telecommunications permits, radio permits, frequency usage, telecommunications secrecy, the  connection of networks, the co-operation of operators, telecommunications infrastructure and the functioning and organisation of the Telecommunications and Post Regulation Office  (“URTiP”), among other pr ovisions. The Telecommunications Act replaced provisions concerning telecommunications activities contained in the Communications Act of November 23, 1990.

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

The Telecommunications Act does not separately regulate Internet telephony services, because these services are considered data transmission services rather than the operation of a public telephone network.  As described above, Stream Poland needs only to notify URTiP that it is providing such services. Since URTiP’s President did not object to Stream Poland providing these services, Stream Poland is permitted to provide them throughout Poland.

Competition and consumer protection

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

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-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Competition Protection Act

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

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

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

Competition and the Telecommunications Act

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

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

The President of URTiP publishes a list of operators that hold a significant and dominant position once a year.

Special obligations in exceptional situations

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

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

Stream Poland’s Organization, Management and Personnel

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

Management Board; and

Supervisory Board.

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

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

Management Board:  

Stream Poland’s Management Board comprises of:

Adam Wójcik

- President and CEO

Supervisory Board:

Stream Poland ’s Supervisory Board currently comprises of the following members:

Grzegorz Namyslowski,

Tadeusz Fox,

 Robert Dziublowski

22

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Stream Poland Locations

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

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

Office

Stream Poland utilizes about 8,000 square feet of office space in Krakow, Poland. Stream Poland’s rent is approximately $17,512 CDN per month.

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

IEWS was in the business of constructing and operating rendering plants in Poland. IEWS does not currently have any rendering plants in operation; however, it was planned to construct three animal-waste rendering plants in Zabokliki, Torun and Rawa Mazowiecka, Poland.  

In view of developments and uncertainty with BSE issues and as a result of our focus on cable TV and the operations of Stream Poland, we decided that the operations of IEWS did not fit with our current objectives.

Stream owns 100% of shares of IEWS. Stream has liquidated the business affairs of IEWS and intends to launch new activities compatible with the telecommunication services.

23

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

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

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

Polvoice’s business objective was to become an Internet, data transmission, and VOoIP provider in Poland. Polvoice services did include VoIP services, data transmission, teleconferencing, web site development, and maintenance.  Polvoice is presently inactive, but the Company may launch new activities sometime in the future.

Item 5 – Operating and Financing Review and Prospects

Overview

We prepare our financial statements in Canadian dollars and in accordance with Canadian GAAP reconciled to US GAAP.

Our core business is considered to be our cable TV operations. At December 31, 2004 some $15 million CDN had been spent on the acquisition of cable television network equipment and $6.6 million CDN on the acquisition of licenses and subscribers. Our future business growth is expected to consist of buying subscribers from independent operators, building networks in areas where existing operators are unwilling to sell us their subscribers, buying interests in existing cable operations and reconstructing old systems by preparing them for the transmission of new services, including pay-per-view, internet, and video-on-demand.

Results of Operations

Year ended December 31, 2004 compared to the year ended December 31, 2003

Revenue increased by 32.5% in the 4^th quarter period ended December 31, 2004 and 19.3% for the current year compared with last year. In terms of the Polish zloty, the currency in which revenue is actually realized, sales increased by 20.1% in the current year as compared to the previous year. Over the comparable periods the exchange rate changed to 2.8049 from to 2.7850, or approximately 0.7%.

One of our main objectives is to increase revenue which we are achieving through continuing to make acquisitions of subscribers, building out new services, continuing to offer new services and increased channels for viewing and spending money on marketing campaigns. Last year we acquired approximately 10,000 subscribers and the full effect of these additions will be seen in 2005. Using a weighted average the effect of the 10,000 subscribers acquired in 2004 is equivalent to some 3,500 subscribers on a full-year basis. This then would account for an 8.3% increase in revenues for 2004. From the advertising campaigns carried out there was an increase in the Internet subscribers late in 2004. In May of 2004 the VAT rate on CATV services decreased from 22% to 7%; since we did not alter the prices we charged our customers this amounts to an effective price increase for us. Additional marketing campa igns target new users to take on new channels and new products not previously available to them.

24

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Loss from operations (before amortization and other items) created a loss of $2,297,842. Included in the loss are stock-based compensation charges of $2,071,510 being a non-cash expense created from the granting of stock options in 2004. Also business development and other costs of some $680,000 were paid by the issuance of shares and represent costs that are not recurring. Adjusting these items, there would be a profit from operations of some $400,000 as compared to the previous year’s loss of some $900,000. On average there has been a decrease in the cost of line maintenance, billing, access to the Internet and customer services.

As the number of subscribers increases there are variable costs that increase, some in direct proportion and some at a lesser rate. Our fixed operating costs should support our existing subscriber base plus a 50% or better increase. The 2004 expenses show some moderation as compared to 2003 with the exception of sales and marketing that increased as a result of various cable TV and Internet sales campaigns. The sale and marketing cost will vary according to opportunity, corporate mission, and competition. As Stream operates in non-competitive areas as a result of selective acquisitions, competition is not presently a major factor.

Included in the financing expenses is the issuance of 1.1 million shares from treasury at $0.41 USD per share for a total expense of $543,365. Mr. Mazur, a previous director, received 1.1 million shares as a bonus for providing capital to the Company by way of private placements and loans at prices and rates which were very favourable to the Company. Mr. Mazur is owed a total of $4.2 million at December 31, 2004.

In addition to cable TV and Internet services, Stream does offer VoIP services and has some VoIP customers. This is a sector of unknown direction, but Stream is ready and able to handle a demand for VoIP services.

During 2004 Stream begun the development of providing television program content. The Company is in the development of various strategies to market and provide content in Poland and neighbouring areas. To this end Stream conducted various surveys. Pursuant to the development of content, Stream issued 3 million shares from treasury at a deemed price of $0.49 per share. The next phase of development will require an operating budget of $2 million per annum.

Year ended December 31, 2003 compared to the year ended December 31, 2002

In the year ended December 31, 2003, Revenue decreased 0.98% compared with last year in terms of Canadian dollars. The actual net sales increased from 9,705,000 to 10,304,982 Polish zloty in 2003.  The increase of net sales in Polish zloty was 6.18%. The difference is attributable to the change in the exchange rates between the Canadian dollar and the Polish zloty. The average exchange rate for the year increased from 2.5972 to 2.7850 in 2003. The increase in net sales is attributable to existing subscribers’ switching to more expensive programme packages and to increases in the rates charged for each programme package. Some of the increase in revenue has been offset as a result of churn. Churn is a measure of the turnover of Stream’s customer base.  Stream’s churn rate has been approximately 12% over the past year; for an average of approximately 1% of Stream’s c ustomer base being disconnected and replaced by new customers each month.  In 2002, Stream’s churn amounted to approximately 8% (or approximately 0.65% per month) whilst significantly adding to its subscriber base through acquisitions.  The increase in churn is attributable to Stream continuing to raise prices throughout its network, to Stream vigorously applying its policy of prompt disconnection of non-paying subscribers and to the loss of some customers.

Total expenses for the current year has increased 8.95 % compare with last year. Excluding one-time write-off of deferred charges being the amount of $2,400,713, the total expenses were decreased by 18.16%.

25

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

To test for impairment of intangibles, the Company hired Evans & Evans to write a report on the carrying values for the acquisition of MTK and Gimsat. According to the report, a value of $249.50 per subscriber acquired gave a fair value below the book value of $1,960,000. This amount was written off in the statement of operations for the year ended December 31, 2003.

Year ended December 31, 2002 compared to the Two Months ended December 31, 2001

Average monthly revenue is relatively unchanged from the previous period, as the subscriber base has not materially changed in the past fourteen months. On a calendar year basis revenue has increased 41%. This growth was due principally to Stream’s take-over of subscribers of other operators through the acquisition of those operators. The increase in net sales was also attributable to existing subscribers’ switching to more expensive programme packages and to increases in the rates charged for each programme package. Although there has been an increase in rates charged to subscribers in 2002, revenue did not change as a result of churn. Churn is a measure of the turnover of Stream Poland’s customer base.  In 2002, Stream’s churn rate was approximately 12%; therefore, during 2002 on average of approximately 1% of Stream’s customer base was disconnected and replaced by new customers each month.  In 2001, Stream’s churn amounted to approximately 8% (or approximately 0.65% per month) whilst significantly adding to its subscriber base through acquisitions.  The increase in churn from 2001 to 2002 is attributable to Stream continuing to raise prices throughout its network, to Stream vigorously applying its policy of prompt disconnection of non-paying subscribers and to the loss of some customers in the months following Stream’s acquisition of their accounts from their former cable service providers. Bad debt expense for the year ended December 31, 2002 was approximately 1.5% of sales.

The average monthly costs of expenses for the year ended December 31, 2002 was Cdn $484,785 before amortization for a total of $5,817,419 for the year as compared to the two months ended December 31, 2001 of Cdn $645,400 per month. This shows a decrease of about 25%.  On a calendar year basis there was a decrease in the cost of line maintenance, billing, access to the internet and customer services. On the other hand, the cost of television programmes and licence fees increased, as did sales and marketing costs.

In June of 2001, Stream Poland and the Gimsat shareholders concluded a preliminary purchase and sale agreement by which Stream Poland would acquire 100% of Gimsat shares. This preliminary agreement contemplated the consummation of the purchase and sale to occur on or before June 30, 2003. Pursuant to the preliminary agreement an irrevocable power of attorney covering 99.79% of Gimsat’s shares and a registered pledge agreement covering 99.79% of Gimsat’s shares secures the repayment of Stream Poland’s advance in the event the purchase of Gimsat does not close on or before June 30, 2003. The closing date was re-negotiated to 29 May 2004. As at December 27, 2001, Stream Poland had advanced a total sum of Cdn $3.5 million to the Gimsat shareholders. Under Canadian GAAP the operations of Gimsat were consolidated as of January 1, 2002. The remaining amount of Cdn $1.6 million was paid to the Gimsat shareholders on 28 May 2004 thereby completing the transaction.

In July 2001, the Canadian Institute of Chartered Accountants approved the new handbook section 1581, “Business Combinations”, replacing section 1580, that require all business combinations to use the purchase method of accounting. It has also approved a new section 3062, “Goodwill and Other Intangible Assets”, that will require intangible assets with an indefinite life and goodwill to be tested for impairment on an annual basis. Goodwill and indefinite life intangibles will no longer be amortized. Intangible assets with a definite life will continue to be amortized over their useful lives. The company determined that the cable TV licences have indefinite life. The company evaluated its existing intangible assets and goodwill and concluded that no provisions for impairment were required. The subscriber base is amortized using the straight-line method at rate of 5%.

26

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Exchange Rates

Stream is exposed to the risk of exchange rate fluctuations. Programming costs, which constituted about 13.5% of Stream’s operating costs (defined as cost of sales, selling and marketing costs and general administrative expenses of continuing operations, net of amortisation/depreciation) in 2002, are incurred primarily in US dollars, while all revenues are realised in Polish zlotys. Certain other costs are incurred in Canadian dollars. Under its subscription agreements, Stream may modify its subscription rates to adjust for major fluctuations of currency exchange rates. However, high increases in subscription rates could decrease demand for Stream’s services. Most of Stream’s technical equipment is purchased locally, but prices are indexed in US dollars. Moreover, in connection with the agreement for the purchase of Gimsat, the price of which is set in US dollars, Stream has not taken steps to hedge against the risk of exchange rate fluctuations. The amount owing was some $1.2 million USD. At December 31, 2002 this amount translated to Cdn $1,637,715. At December 31, 2003 the amount booked to Gimsat was Cdn $1,519,281. On May 28, 2004 the amount was paid in full including interest charges of Cdn $1,654,000. The table below reflects changes in the exchange rates of the currencies in which Stream conducts its operations as at the end of and as average during each year.

Rates of exchange of PLN/USD, PLN/EUR and PLN/CAD in the years 2003-2004

	31 December 2004	Average Rate for 2004	31 December 2003	Average Rate for 2003
USD	2.9987	3.6523	3.7569	3.8887
EUR	4.0914	4.5338	4.7175	4.400
CAD	2.4898	2.8049	2.9029	2.7850

The effect of foreign currency fluctuations has affected the book value of property, plant and equipment and intangibles. The value of the property, plant, and equipment was $7.2 million at December 31, 2003 or approximately 20.9 million zloty. This same value at December 31, 2004 translates in the financial statements at a rate of 2.4898 approximately $8.4 million. See note 11 in the financial statements that gives an analysis of the cumulative translation account.

Liquidity, Capital Resources and Subsequent Events

Our working capital deficiency as at December 31, 2004 was $2,845,579. As over 93% of our assets are plant, property and equipment and intangibles pursuant to the subscriber base, there is room to finance our activities with commercial loans. At December 31, 2004 we had a bank credit facility in Poland of $500,000 USD.

Most of the capital flowing into Stream during 2004 was loans of some $4 million from Edward Mazur, a former director. Mr. Mazur has loaned the sum of some $3.4 million USD of which $2 million USD is secured by certain Polish cable TV networks. The loan is repayable on demand by giving notice of one year and presently is not repayable before March 31, 2006.

In December 2004, Stream borrowed the sum of $650,000 from Quest Capital Corp. (“Quest”) to cover short-term needs. This loan is to be repaid on or before June 30, 2005. The loan is personally guaranteed by Stan Lis, Casey Forward and Edward Mazur. In addition, Quest has a general security over the assets of Stream and 3 million shares of Stream as collateral security. The loan attracts interest at 1% per month, with interest payable monthly. A fee of 175,000 shares of Stream was paid to Quest as a loan fee. Stream is endeavouring to find additional equity capital or debt to repay the Quest loan and to make further acquisitions.

27

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

In 2005 the Company has conducted a private placement of up to 1,500,000 units ("Unit") at a price of $0.60 USD per unit. Each Unit is comprised of one common share and one half non-transferable share purchase warrant, with each two warrants entitling the holder to purchase an additional common share of the Company at a purchase price of $0.80 USD per common share for a period of two years. Originally the Company had proposed pricing of $0.75 per unit, but market pressure caused a price reduction. In response to the private placement Stream has additionally received various financing proposals that are being evaluated either as an adjunct to the private placement or as a separate issue.

For the year ended December 31, 2003, we received Cdn $1,264,542 (2002 - $2,005,646) from the exercise of warrants to purchase 702,526 (2002 – 986,470) shares.

For the two months ended December 31, 2001, we raised an additional Cdn $1,557,095 from private placement of equity in the company’s stock. During the year ended October 31, 2001, we raised Cdn $347,300 from the exercise of stock options and $6,983,523 CDN from private placements. For the years ended December 31, 2003 and 2002 the following warrants were exercised:

	Year	Number of Units	Price ($CDN)	Amount ($CDN)	Cash Commission ($CDN)	Net ($CDN)
Subscriptions	2002			1,136,728		1,136,728
Exercise of warrants	2002	200,000	2.85	570,000		570,000
Exercise of warrants	2002	100,000	2.00	100,000		100,000
Exercise of warrants	2002	1,036,770	1.80	1,866,186		1,866,186
Exercise of warrants	2003	702,526	1.80	1,264,542		1,264,542
Stock options		Nil

We continue to raise cash from equity sources and we will continue with this program until we achieve sufficient cash flow to allow for debt financing and debt servicing. We believe the Company is at the threshold of being able to make acquisitions by way of debt financing.

Our senior management establishes our overall funding and capital policies, monitors the availability of sources of financing and reviews the foreign exchange risk. We will continue to raise funds by way of private placements in our capital stock and exercise of stock options and warrants although there can be no guarantee that such funds will be available in the future. We have received the majority of funding by way of private placement of our common shares.

Contractual Obligations

Contractual obligations at December 31, 2004 are as follows:

	Total	Less than 1 year	1-3 years	4-5 years	After 5 years
Contractual Obligations	$ 916,237	$ 101,530	$ 86,827	$ 69,744	$ 61,129

Off-Balance Sheet Arrangements

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

Critical Accounting Estimates

The preparation of financial statements in conformity with Canadian GAAP requires the Company to select from possible alternative accounting principles, and to make estimates and assumptions that determine the reported amounts of assets and liabilities at the balance sheet date, and reported costs and expenditures during the reporting period.  Estimates and assumptions may be revised as new information is obtained, and are subject to change.  The Company’s accounting policies and estimates used in the preparation of the Financial Statements are considered appropriate in the circumstances, but are subject to judgments and uncertainties inherent in the financial reporting process.

28

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

The Company follows accounting guidelines in determining the fair value of stock-based compensation, as disclosed in Note 11(c) to the Financial Statements.  This calculated amount is not based on historical cost, but is derived based on subjective assumptions input into an option-pricing mode.  The model requires that management made several assumptions as to future events: 1) estimate the average future hold period of issued stock options before exercise, expiry or cancellation; 2) future volatility of the Company’s share price in the expected hold period (using historical volatility as a reference); 3) and the appropriate risk-free rate of interest.  The resulting value calculated is not necessarily the value which the holder of the option could receive in an arm’s length transaction, given that there is no market for the options and they are not transferable.   ;It is management’s view that the value derived is highly subjective and dependent entirely upon the input assumptions made.

The Company records an allowance for doubtful accounts for estimated credit losses based on the Company’s knowledge of the financial condition of its customers.  A change to these various assumptions could impact the valuation of accounts receivable.

Changes in Accounting Policies including Initial Adoption

There was no change in accounting policies in 2004. Effective January 1, 2003, the Company changed its accounting policy on a prospective basis with respect to the method of accounting for stock-based compensation. The Company adopted Canadian Institute of Chartered Accountants Handbook section 3870, Stock-based Compensation and Other Stock-based Payments, and has chosen to account for all grants of options to employees, non-employees and directors after January 1, 2003 in accordance with the fair value method for accounting for stock-based compensation as defined by accounting principles generally accepted in Canada. Stock-based compensation awards are calculated using the Black-Scholes option-pricing model ("Black-Scholes"). Previously, the Company used the intrinsic value method for valuing stock-based compensation awards granted to employees and directors where compensation expen se was only recognized for the excess, if any, of the quoted market price of the Company's common shares over the common share exercise price on the day that options are granted.

Financial Instruments and Other Instruments

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

IFRS implementation

The Company may have to adopt International Financial Reporting Standards (“IFRS”) by fiscal year 2005/2006 ending December 31, 2005, as required under European Regulation applicable to European public companies. The full set of IFRS remains subject to changes and endorsement by the European Commission.

In March 2004, the SEC proposed an amendment to the Form 20-F that would allow foreign private issuers that change their basis of accounting to IFRS to include only two years of audited financial statements in their SEC filings. This amendment would apply for the first year of reporting under IFRS. As we are a Canadian based company we also have to prepare our statements in accordance with Canadian GAAP. Under new rules provided by the British Columbia Securities Commission, we will be able to utilize US GAAP statements by providing Canadian GAAP reconciliation. We will have to conform to all standards, but we wish to minimize our auditing costs.

We are currently assessing the impact, that the application of IFRS will have on our 2004/05 financial statements and will disclose, as soon as practically possible the full impact of these changes.

ITEM 6 – Directors, Senior Management and Employees

Our board of directors is elected by our shareholders as indicated in our Articles. Directors have not entered into any service agreements and do not receive any remuneration. Our executive officers are appointed by our board of directors and have service agreements with us. The normal notice period for executive officers is 12 months. In the case of Stream Poland, both the Supervisory Board and the Management Board are elected by the General Meeting of Shareholders (in practice – by the only shareholder i.e. the Parent Company). The following sets out our directors and officers.

29

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Directors and Senior Management

The Company
Stanislaw L. Lis	President, CEO, Director
Adam Wójcik	COO, Director
Iwona Kozak	Vice-President of Corporate Affairs, Secretary, Director
Casey Forward, CGA	Chief Financial Officer
Robert Wussler	Director
Robert Wooldridge	Director
Boyce Butler	Director
Stream Communications Sp. z o.o.
Adam Wójcik	President
Dobroslaw Ploskonka	General Manager
Tadeusz Fox	Supervisory Board
Robert Dziublowski	Supervisory Board
Grzegorz Namyslowski	Supervisory Board

Stanislaw Lis has been a Director and President of the Company since 25 February 1994. He is a Canadian national. Since 23 April 1999 he has also been performing the function of Chief Executive Officer. He commenced his education in Poland. In 1976 he had emigrated to Canada where he continued his studies at the management and administration department at Simon Fraser University in Vancouver. At the beginning of the 1980’s he worked in the finance economy department of the company Allcorp in Vancouver controlling a number of public companies. In 1988 he founded International UNP Holdings, an investment company engaged in the business of buying and financing Polish State-owned companies. In the years 1989-1992 he was the president of that company. In 1992 he created a joint venture company with the participation of the American company Emergency One and WSK Mielec whose business act ivities included the production and sale of fire trucks. In the years 1992-1994 he was the vice-president of that company.

Adam Wójcik since 2 November 1999 he has been President of the Management Board of Stream Poland. He is also our Chief Operating Officer. He graduated from the Jagiellonian University of Krakow, Department of Mathematics and Physics and holds a Ph.D. in mathematical sciences. In the years 1978-1995 he held a research and teaching position at the Mathematics Department of Akademia Górniczo-Hutnicza. That time he also spoke many lectures at the universities in Sweden, France and USA. In the years 1993-1995 he was Marketing Manager at Polska Telewizja Kablowa Krakow S.A and in the years 1995-1997 Vice-President of that company. In the years 1997-1999, Adam Wójcik was Vice-President and South Regional Director of Polska Telewizja Kablowa Operator Sp. z o.o.

Iwona Kozak since 1 March 1996 she has been a Director and Vice President for Corporate Affairs and since 23 April 1999 she has been its Secretary. Born in Poland, she has been living in British Columbia since 1984. She graduated from the British Columbia Institute of Technology with a diploma in marketing. She has a broad experience in the area of marketing and public relations. She perfected her managerial and business skills as the co-founder and president of a division of the Canadian Polish Chamber of Commerce in British Columbia. In the years 1993-1995 she published a magazine dedicated to economics called ”Partners with Poland” (“Partnerstwo z Polska”) and provided advisory services to Canadian companies in the area of investments in Polish markets.

30

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Casey Forward became Chief Financial Officer of the Company on 18 January 2001. As a Certified General Accountant he has been running an independent accountancy practice in Canada since 1990. He has worked for public companies in Canada, the United States, and Great Britain. He has owned companies in Canada and, in particular, in the years 1980-1985 he was the owner and president of a company which was active in the sector of building investments in Edmonton, Canada, and in the years from 1977-1982 he was the owner and president of Gateway Cartage & Storage Ltd, with its seat in Edmonton, engaged in the business of storage and transport.

Robert Wussler was appointed on May 4, 2004. Bringing an impressive background in broadcasting and telecommunications to the company, Mr. Wussler is currently President and Chief Executive Officer of Ted Turner Pictures and Ted Turner Documentaries. An acknowledged leader in the television industry for over three decades, he has been responsible for groundbreaking advances in news production at CBS News and CNN. The former President of both CBS Sports, and the CBS Television Network, Mr. Wussler was a co-founder of CNN, TNT and WTBS, and Senior Executive Vice President of Turner Broadcasting. Bringing an extraordinary background in cable telecommunications to his work with Stream, Mr. Wussler was also President and CEO of Comsat Video Enterprises, where he led the company through unprecedented growth.

Robert Wooldridge was appointed June 8, 2005. Mr. Wooldridge has extensive experience in many areas of investment banking including equity fundraising and mergers and acquisitions advice with a focus on Poland and other emerging markets. Since 2003 he has worked as a senior executive at EMG Corporate Finance Limited, a specialist investment banking operation based in London, UK and previously was a Managing Director in the Equity Capital Markets department at HSBC Investment Bank where he worked for nearly ten years. He is a member of the Institute of Chartered Accountants of England & Wales and a graduate of Cambridge University.

Boyce Butler was appointed to the board on May 29, 2003. Mr. Butler has been a practising accountant in the Province of British Columbia since 1964. He has been in public practice since 1973 and was the auditor for 30 public companies. He also was an auditor for Canada Customs and Revenue agency for four years. Mr. Butler has been a member of the Rotary Club since 1972 and served as president for the chapters in Kelowna and Vancouver.

Grzegorz Namyslowski has been a director since 2001. He graduated from the Warsaw Polytechnic with a M.Sc. in engineering. He held the position of the chief designer responsible for the design and construction of major power plants in Poland in the 1970s. He was a senior manager at Solco Basel, a Swiss pharmaceutical firm in Warsaw. Since 1991 he has been an active co-worker at INVESCO. In the years 1992-1999 he was a member of the supervisory board of the company ZP Zywiec S.A. and in the years 1993-2001 a member of the supervisory board of Zywiec Trade Sp. z o.o. At present he is a member of the supervisory board of IEWS. He is at present the president of the Supervisory Board of Stream.

Dobroslaw Ploskonka was one of co-founders of Stream Poland in October 1999. He has worked in the Polish Internet business for the years 1999 and 2000, and has successfully established Kraknet S.A., an Internet services provider in Kraków (acquired by Stream Poland). Mr. Ploskonka also has real estate business interests and is very conversant with the procedures to obtain building permits, etc. Mr. Ploskonka also has very good relationships with many housing co-operatives throughout Southern Poland.

31

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Executive Compensation

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

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

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

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

The total compensation we paid during the last fiscal period to all of our directors and officers as a group for services in all capacities was $755,341 CDN.

The following table details the compensation paid to our executive officers for the year ended December 31, 2004

Summary Compensation Table
Name	Salary ($CDN)	Bonus ($)	All Other and annual Compensation and LTIP Payouts ($CDN)	Securities under Option	Restricted Shares or Restricted Share Units
Stanislaw Lis	$119,790	Nil	$209,224	600,000	Nil
Iwona Kozak	$95,832	Nil	$49,507	250,000	Nil
Adam Wójcik	$83,990	Nil	Nil	450,000	Nil
Casey Forward	$95,832	Nil	$101,166	400,000	Nil

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

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

Defined Benefit Plans

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

32

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Options to Purchase Securities From Our Company

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

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

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

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

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

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

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

(c) Shares allocated to all persons employed in contacts with investors may not exceed 2% of the outstanding shares, unless the rules of the TSX allow for a different limit; and

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

In the event that an option has lapsed for any reason whatsoever without having been exercised in full, the shares with respect to which the option has lapsed may again be issued for the purposes of the Plan. The expiration date of an option is the date determined by the Board of Directors with respect to individual options, which date, however, may not be later than ten years after the option was granted.  

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

33

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

The following tables provide options granted to all directors and officers

Director, Officer	Date Granted	Stock Options at June 15, 2005	Price per Share	Expiry Date
Adam Wójcik	June 2, 2004	250,000	USD $0.60	June 2, 2009
Adam Wójcik	January 7, 2005	200,000	USD $0.60	December 17, 2009
Casey Forward	June 2, 2004	150,000	USD $0.60	June 2, 2009
Casey Forward	January 7, 2005	250,000	USD $0.60	December 17, 2009
Dobroslaw Ploskonka	June 2, 2004	225,000	USD $0.60	June 2, 2009
Dobroslaw Ploskonka	January 7, 2005	200,000	USD $0.60	December 17, 2009
Grzegorz Namyslowski	June 2, 2004	200,000	USD $0.60	June 2, 2009
Iwona Kozak	June 2, 2004	250,000	USD $0.60	June 2, 2009
Stanislaw Lis	June 2, 2004	300,000	USD $0.60	June 2, 2009
Stanislaw Lis	January 7, 2005	300,000	USD $0.60	December 17, 2009

Employees

The average number of employees was as follows:

	Year ended December 31, 2004	Year ended December 31, 2003	Year ended December 31, 2002
Parent	5	3	3
Stream	76	75	76

34

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

ITEM 7 – Major Shareholders and Related Party Transactions

Major Shareholders

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

As at the date of this annual statement the following persons or groups are known to us to each own more than 10% of our issued and outstanding common shares, which as of June 10, 2005 was.

Name and Address of Shareholder	Number of Securities owned	Percentage of Securities owned
CDS & Co NCI Account 25 The Esplanade Toronto, Ontario, M5W 1G5 Canada (Canadian depository for brokerage houses)	14,403,388 Common shares	36.0%
Cede & Co PO Box 20 Bowling Green Station New York, NY, 10274 (US depository for brokerage houses)	4,840,779 Common shares	12.1%
Edward Mazur Glenview, IL 60025	5,257,195 Common shares	13.2%

To the best of our knowledge, there are no arrangements, the operation of which at a subsequent date will result in a change in control of our company. Registered shareholders in the United States account for 764 holders having 17,726,051 shares of 44.4% of the total issued.

Related Party Transactions

The amount due to a related party, Mr. Edward Mazur, a former director, bears interest at 5%, compounded annually. Mr. Mazur has agreed that the loan will not be repaid before March 31, 2006. The total amount due (including accrued interest) is $3,516,054 USD (equivalent to $4.2 million CAD), of which $2,000,000 USD was secured by various cable TV networks, with the remaining debt being unsecured. Accrued interest of $113,333 USD (equivalent to $136,544 CAD) was included at December 31, 2004.

35

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

ITEM 8 – Financial Information

Legal Proceedings

The Company is defending an action from 310047 B.C. Ltd. S.C.B.C. No. S040725, Vancouver, British Columbia pursuant to unpaid legal invoices submitted to us by Clark Wilson. The lawsuit demands the sum of $17,245 CDN. The plaintiff has offered to settle for $11,000 and we have offered to pay some $9,000 CDN to settle the account.

ITEM 9 – The Listing

Nature of Trading Market

Our common shares are listed on the OTC BB Exchange n the United States, under the symbol “SCNWF. We started trading on the OTC BB on March 11, 2004.

Trading on the OTC BB

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

Month Ended	High	Low	Volume
May 31, 2005	USD $ 0.76	USD $ 0.56	1,983,900
April 30, 2005	USD $ 0.86	USD $ 0.65	3,868,600
Mar 31, 2005	USD $ 0.90	USD $ 0.66	2,043,400
Feb 28, 2005	USD $ 1.01	USD $ 0.67	2,848,300
Jan 31, 2005	USD $ 1.14	USD $ 0.57	1,428,400
Dec 31, 2004	USD $ 0.70	USD $ 0.46	575,000

For the period of the start of trading to December 31, 2004, the following table following table sets forth the high and low sale prices

Period from March 12, 2004 (start) to December 31, 2004	High	Low	Volume
	USD $ 1.45	USD $ 0.30	10,711,556

Trading on the TSX Venture Exchange

Our shares used to trade on the TSX Venture Exchange (the “TSX”) in Canada under the symbol “TPP”. The last trade was at $2.00 CDN on January 25, 2001. Our shares halted trading on the TSX in connection with a change in business.

According to the TSX Policy 5.2, a “Change of Business” or “COB” means:

“A transaction or series of transactions which will redirect an Issuer’s resource towards a business which is of a substantially different nature than its current business, so that over the next 12 months at least 25% of the assets, liabilities, planned expenditures or revenues, management time commitment or issued shares of the Issuer will be devoted to the new business.”

36

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Since a majority of our resources are directed towards the operations of Stream that is different than our original business of constructing and operating rendering plants in Poland, we are required by Policy 5.2 to issue a news release and notify the TSX of the proposed Change of Business. We did not complete our change of business with the TSX, but we applied to the TSX to be delisted from the TSX exchange. Following the approval of the listing on the OTC BB, the TSX allowed the delisting of Stream on the TSX.

The following table sets forth the high and low sale prices on the TSX Venture Exchange (“TSX”) for our common shares for the past five years ended October 31, 1999 to December 31, 2003.

Year Ended	High	Low	Volume
	$CDN	$CDN
Dec 31, 2002	-	-	-
Dec 31, 2001	-	-	-
Oct 31, 2001	2.24	1.93	1,075,621
Oct 31, 2000	4.70	1.18	9,853,601
Oct 31, 1999	1.80	1.01	3,209,466

Item 10 – Additional Information   

Share Capital

Our authorized share capital as at December 31, 2004 was 150,000,000 common shares without par value. Our issued and outstanding share capital at December 31, 2004 was 37,833,800. At June 15, 2005 our issued and outstanding share capital was 39,961,058.

All our shares, both issued and unissued, are common shares of the same class and rank equally as to dividends, voting powers and participation in assets upon liquidation. At any general meeting, subject to the restrictions on joint registered owners of our common shares, on a show of hands every shareholder who is present in person and entitled to vote has one vote and on a poll every shareholder has one vote for each share of which he or she is the registered owner and may exercise such vote either in person or by proxy. Our directors may, from time to time, declare and authorize payment of dividends. No common shares have been issued subject to call or assessment. There are no pre-emptive or conversion rights. There are no provisions for surrender, sinking or purchase funds. There are no issued and outstanding escrow or performance shares. On April 23, 1997, 246,999 escrowed common shares w ere cancelled.

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

Memorandum and Articles

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

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

37

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Voting Rights

(i)

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

Variation of Class Rights and Alteration of Capital

(i)

We may by ordinary resolution increase the share capital, and cancel any shares which at the date of the passing of the resolution have not been taken or agreed to be taken by any person.

(ii)

By special resolution that requires a three-fourths majority, we may consolidate and divide all or any of the share capital into shares of larger amount, sub-divide the shares into shares of smaller amount.

Transfer of Shares

(i)

Any member can transfer shares by delivering an instrument of transfer to our transfer agent.

Directors

(i)

Our business is managed by the Directors who may exercise all powers subject to the provisions of the Articles of Association and the Company Act of British Columbia.

(ii)

The number of Directors shall be not less than three. At our last annual general meeting, the number of directors was five. A Director shall not be required to hold any shares in the capital of our Company. At each annual general meeting of our Company, all of the board of directors retire and our shareholders elect a new board.

(iii)

A Director shall not vote but can be counted in the quorum present on any motion in respect of any contract, arrangement, transaction or any other proposal in which he has an interest that is to his knowledge a material interest.

(iv)

The Directors shall be paid for their services as Directors such sums (if any) as the Directors may from time to time determine.

(v)

The Directors may be paid all reasonable travelling, hotel and other expenses properly incurred by them in attending and returning from meetings of the Directors or any committee of the Directors or general meetings or otherwise in connection with our business.

(vi)

Directors can vote to remove a director at a directors meeting.

Borrowing Powers

(i)

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

38

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Dividends and Distributions on Liquidation to Shareholders

(i)

The Directors may declare dividends, and need not give notice to any member. Subject to any priority, preference or special rights, all dividends shall be declared and paid according to the number of shares held on a specified date with respect of the period of which the dividend is paid.

(ii)

The Directors may pay such interim dividends as they may determine.

(iii)

No dividend shall bear interest.

General Meetings

(i)

Each year we hold a general meeting as the annual general meeting in addition to any other meetings in that year, and not more than 13 months shall elapse between the date of one annual general meeting and that of the next. The annual general meeting shall be held at such time and place, as the Directors shall appoint.

(ii)

All general meetings other than annual general meetings are extraordinary general meetings. The Directors may, whenever they think fit, convene an extraordinary general meeting.

Committees of the Board of Directors

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

Audit Committee Members:

1.

Stan Lis

2.

Robert Wooldridge – independent director with financial experience

3.

Robert Wussler – independent director with financial experience

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

Compensation Committee Members:

1.

Stan Lis

2.

Adam Wojcik

3.

Robert Wussler

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

39

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Corporate Governance Committee

1.

Stan Lis

2.

Iwona Kozak

3.

Robert Wooldridge

Exchange Control and Other Limitations Affecting Security Holders

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

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

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

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

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

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

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

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

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

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

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

40

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

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

TAXATION OF DIVIDENDS

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

DISPOSITION OF COMMON SHARES

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

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

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

Passive Foreign Investment Company

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

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

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

We do not believe the Company was a passive foreign investment company during the fiscal period ended December 31, 2001 or any other year.

41

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Future Developments

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

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

Taxation in Poland

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

Corporate Profits Tax

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

Corporations are subject to corporate income tax at a rate of 19% in 2004 and in 2005.

Depreciation and depletion

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

Net operating losses

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

Payments to foreign affiliates

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

Deduction for taxes paid

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

Non-deductible expenditures

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

Costs of assets subject to depreciation,

Expenditure borne on abandoned investments,

Unrealised foreign exchange losses,

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

42

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Value-Added Tax

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

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

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

Item 11 - Quantitative and Qualitative Disclosures about Market Risk

Currency and Exchange Rate Risk

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

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

We do not hedge currency risk. All of the business operations are in Poland that do not normally import or export products or supplies. The functional currency is the Polish zloty.

If there were a large fluctuation in the exchange rates between Poland and Canada this will impact on the operating results of the company. This could impact in a positive or negative manner. If the Canadian dollar increased against the zloty, then any Canadian funds invested in Poland would be exchanged for a larger number of zloty, thereby making more money available in Poland for the businesses. The converse would create a shortfall of funding. Advancing funds as required so that the time interval for currency fluctuations is as short as possible minimizes risk.

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

We did not have any foreign currency derivatives outstanding at December 31, 2004. Accordingly, no market risk existed for such instruments at this date.

Rates of exchange of PLN/USD, PLN/EUR and PLN/CAD in the years 2003-2004

	31 December 2004	Average Rate for 2004	31 December 2003	Average Rate for 2003
USD	2.9987	3.6523	3.7569	3.8887
EUR	4.0914	4.5338	4.7175	4.400
CAD	2.4898	2.8049	2.9029	2.7850

The effect of foreign currency fluctuations has affected the book value of property, plant and equipment and intangibles. The value of the property, plant and equipment was $7.2 million at December 31, 2003 or approximately 20.9 million zloty. This same value at December 31, 2004 translates in the financial statements at a rate of 2.4898 approximately $8.4 million. See note 11 in the financial statements that gives an analysis of the cumulative translation account.

43

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Item 12 – Description of Securities Other than Equity Securities

Warrants

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

The changes in warrants were as follows:		Number of common shares permitted to be purchased
	Number of warrants		Price per share	Expiry date	Fair value of Warrants
Total balance December 31, 2002	4,530,391	4,029,749			$   2,740,669
Expired	(701,286)	(350,644)	1.80	28-Dec-03	$     (228,318)
Exercised	(702,526)	(702,526)	$           1.80	28-Dec-03	$     (486,904)
Total Balance December 31, 2003	3,126,579	2,976,579			$   2,025,447
Outstanding December 31, 2003	300,000	150,000	1.80	28-Dec-04	103,962
	2,701,579	2,701,579	1.80	28-Dec-04	1,872,405
	125,000	125,000	2.25 USD	28-Dec-04	49,080
Total Balance December 31, 2003	3,126,579	2,976,579			$   2,025,447
Expired	nil
Exercised	nil
Total Balance December 31, 2004	3,126,579	2,976,579		28-Dec-05	$   2,025,447

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

PART II

ITEM 13 – Defaults, Dividends, Arrearages and Delinquencies

Not applicable

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

Not applicable

IITEM15 - Disclosure Controls and Procedures

Within 90 days prior to the date of this report, we performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Disclosure controls and procedures are designed to ensure that the material financial and non-financial information required to be disclosed in the Annual Report on Form 20-F and filed with the Securities and Exchange Commission is recorded, processed, summarized and reported timely. The evaluation was performed with the participation of each senior manager who reports to our Chief Executive Officer and under the supervision of our Chief Executive Officer (CEO), Stan Lis. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable, rather than absolute, assurance of achieving the desired control o bjectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the foregoing, our management, including the CEO and our Chief Financial Officer, concluded that our disclosure controls and procedures were effective. There have been no significant changes in our internal controls or in other factors that could significantly affect internal controls subsequent to the date of the evaluation. Therefore, no corrective actions were taken.

44

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Under Sarbanes-Oxley and in view of the attestation requirement where the Company’s auditor will be required to provide a report on management’s assessment of its internal control over financing reporting, the Company is preparing to implement fully assessable procedures by the end of 2005. We are required to have attestation done for our year ended December 31, 2006.

In addition the audit committee is playing a larger role in this process. The primary roles and responsibilities of the Audit Committee include:

·

reviewing and recommending to the Board for approval, the Company’s annual financial statements and the related discussion and analysis of management;

·

reviewing and approving the Company’s interim financial statements (prior to their publication, filing or delivery to securityholders) and the related discussion and analysis of management;

·

reviewing and approving, as prescribed, other financial information;

·

evaluating and ensuring the independence of the Company’s auditor;  

·

reviewing and pre-approving the terms of the annual external audit engagement plan, as well as non-audit services the auditor is to perform; reviewing results of external audit activities;

·

reviewing the Company’s ongoing relationship with its auditor;  

·

reviewing and assessing regularly:

o

the quality and acceptability of accounting policies and financial reporting practices used by the Company;

o

any significant proposed changes in financial reporting and accounting policies and practices to be adopted by the Company;

o

any new or pending developments, in accounting and reporting standards that may affect the Company;

·

reviewing and obtaining reasonable assurance that the Company’s internal financial control and information systems are properly designed and effectively implemented to produce accurate, appropriate and timely financial information;

·

receiving a report on the Company’s material subsidiaries concerning any material non-routine structures; reviewing corporate policies within the scope of its responsibility and monitoring compliance with such policies;

·

in respect of matters within the Audit Committee’s purview and delegation, assisting the Board in its oversight of the Company’s compliance with legal and regulatory requirements; and,

·

reporting to the Board at each regularly scheduled meeting following any Audit Committee meeting.

The Audit Committee has the authority to engage independent counsel and other advisers having special competencies, as it determines necessary to carry out its duties, and it determines the appropriate amount of funding the Company is to provide for compensation of such advisors. Since the commencement of the Company's most recently completed financial year, the Audit Committee has not made any recommendations to nominate or compensate an external auditor which were not adopted by the board of directors of the Company.

ITEM 16A - AUDIT COMMITTEE FINANCIAL EXPERT

The chairman of our audit committee is Mr. Robert Wooldridge. Mr. Wooldridge is an independent director of the Company and he is a chartered accountant. His attributes as an audit committee expert are:

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

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

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

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

(5) An understanding of audit committee functions.

ITEM 16B - CODE OF ETHICS

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

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

ITEM 16C - PRINCIPAL ACCOUNTANT FEES AND SERVICES

During the financial years ended 2003 to 2004 we employed the following auditing firms. Their remunerations and services performed are as follows:

Year ended December 31, 2004

Firm	Services	Fees
MacKay LLP, Chartered Accountants	Audit services Other fees	$50,000 CDN $2,000 CDN

Year ended December 31, 2003

Firm	Services	Fees
MacKay LLP, Chartered Accountants	Audit services Disbursements	$60,000 CDN $5,286 CDN

PART III

ITEM 17 - FINANCIAL STATEMENTS

See Financial Statements attached hereto.

ITEM 18 - FINANCIAL STATEMENTS

Not applicable.

ITEM 19 - FINANCIAL STATEMENTS AND EXHIBITS

Financial Statements

1.

Auditors’ Report;

2.

Consolidated Balance Sheet;

3.

Consolidated Statement of Operations and Deficit;

4.

Consolidated Statement of Cash Flow; and

5.

Notes to Consolidated Financial Statements.

45

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

Exhibits

1.

Articles

99.1

2.

Financial statements

99.2

3.

Certifications

99.3

4.

Certifications

99.4

5.

Auditors consent

99.5

46

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

SIGNATURE PAGE

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

Dated:

ON BEHALF OF THE COMPANY,

STREAM COMMUNICATIONS NETWORK, INC.

Per:

“Casey Forward”

    Casey Forward, Chief Financial Officer

47

-- Form 20-F  --

-- Stream Communications Network, Inc.  --

EX-99.1

Articles

Stream Communications Network Inc.

(the “Company”)

The Company has as its articles the following articles.

Full name and signature of each incorporator	Date of signing
Stream Communications Network Inc. [Full name of incorporator]	August 9, 2004

Incorporation number:BC0188691                     

[name of company]
(the “Company”)

ARTICLES

1.

Interpretation

1.1

Definitions

In these Articles, unless the context otherwise requires:

(1)

“board of directors”, “directors” and “board” mean the directors or sole director of the Company for the time being;

(2)

“Business Corporations Act” means the Business Corporations Act (British Columbia) from time to time in force and all amendments thereto and includes all regulations and amendments thereto made pursuant to that Act;

(3)

“legal personal representative” means the personal or other legal representative of the shareholder;

(4)

“registered address” of a shareholder means the shareholder’s address as recorded in the central securities register;

(5)

“seal” means the seal of the Company, if any.

1.2

Business Corporations Act and Interpretation Act Definitions Applicable

The definitions in the Business Corporations Act and the definitions and rules of construction in the Interpretation Act, with the necessary changes, so far as applicable, and unless the context requires otherwise, apply to these Articles as if they were an enactment. If there is a conflict between a definition in the Business Corporations Act and a definition or rule in the Interpretation Act relating to a term used in these Articles, the definition in the Business Corporations Act will prevail in relation to the use of the term in these Articles. If there is a conflict between these Articles and the Business Corporations Act, the Business Corporations Act will prevail.

2.

Shares and Share Certificates

2.1

Authorized Share Structure

The authorized share structure of the Company consists of shares of the class or classes and series, if any, described in the Notice of Articles of the Company.

2.2

Form of Share Certificate

Each share certificate issued by the Company must comply with, and be signed as required by, the Business Corporations Act.

2.3

Shareholder Entitled to Certificate or Acknowledgment

Each shareholder is entitled, without charge, to (a) one share certificate representing the shares of each class or series of shares registered in the shareholder’s name or (b) a non-transferable written acknowledgment of the shareholder’s right to obtain such a share certificate, provided that in respect of a share held jointly by several persons, the Company is not bound to issue more than one share certificate and delivery of a share certificate for a share to one of several joint shareholders or to one of the shareholders’ duly authorized agents will be sufficient delivery to all.

2.4

Delivery by Mail

Any share certificate or non-transferable written acknowledgment of a shareholder’s right to obtain a share certificate may be sent to the shareholder by mail at the shareholder’s registered address and neither the Company nor any director, officer or agent of the Company is liable for any loss to the shareholder because the share certificate or acknowledgement is lost in the mail or stolen.

2.5

Replacement of Worn Out or Defaced Certificate or Acknowledgement

If the directors are satisfied that a share certificate or a non-transferable written acknowledgment of the shareholder’s right to obtain a share certificate is worn out or defaced, they must, on production to them of the share certificate or acknowledgment, as the case may be, and on such other terms, if any, as they think fit:

(1)

order the share certificate or acknowledgment, as the case may be, to be cancelled; and

(2)

issue a replacement share certificate or acknowledgment, as the case may be.

2.6

Replacement of Lost, Stolen or Destroyed Certificate or Acknowledgment

If a share certificate or a non-transferable written acknowledgment of a shareholder’s right to obtain a share certificate is lost, stolen or destroyed, a replacement share certificate or acknowledgment, as the case may be, must be issued to the person entitled to that share certificate or acknowledgment, as the case may be, if the directors receive:

(1)

proof satisfactory to them that the share certificate or acknowledgment is lost, stolen or destroyed; and

(2)

any indemnity the directors consider adequate.

2.7

Splitting Share Certificates

If a shareholder surrenders a share certificate to the Company with a written request that the Company issue in the shareholder’s name two or more share certificates, each representing a specified number of shares and in the aggregate representing the same number of shares as the share certificate so surrendered, the Company must cancel the surrendered share certificate and issue replacement share certificates in accordance with that request.

2.8

Certificate Fee

There must be paid to the Company, in relation to the issue of any share certificate under Articles 2.5, 2.6 or 2.7, the amount, if any and which must not exceed the amount prescribed under the Business Corporations Act, determined by the directors.

2.9

Recognition of Trusts

Except as required by law or statute or these Articles, no person will be recognized by the Company as holding any share upon any trust, and the Company is not bound by or compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any share or fraction of a share or (except as by law or statute or these Articles provided or as ordered by a court of competent jurisdiction) any other rights in respect of any share except an absolute right to the entirety thereof in the shareholder.

3.

Issue of Shares

3.1

Directors Authorized

Subject to the Business Corporations Act and the rights of the holders of issued shares of the Company, the Company may issue, allot, sell or otherwise dispose of the unissued shares, and issued shares held by the Company, at the times, to the persons, including directors, in the manner, on the terms and conditions and for the issue prices (including any premium at which shares with par value may be issued) that the directors may determine. The issue price for a share with par value must be equal to or greater than the par value of the share.

3.2

Commissions and Discounts

The Company may at any time pay a reasonable commission or allow a reasonable discount to any person in consideration of that person purchasing or agreeing to purchase shares of the Company from the Company or any other person or procuring or agreeing to procure purchasers for shares of the Company.

3.3

Brokerage

The Company may pay such brokerage fee or other consideration as may be lawful for or in connection with the sale or placement of its securities.

3.4

Conditions of Issue

Except as provided for by the Business Corporations Act, no share may be issued until it is fully paid. A share is fully paid when:

(1)

consideration is provided to the Company for the issue of the share by one or more of the following:

(a)

past services performed for the Company;

(b)

property;

(c)

money; and

(2)

the value of the consideration received by the Company equals or exceeds the issue price set for the share under Article 3.1.

3.5

Share Purchase Warrants and Rights

Subject to the Business Corporations Act, the Company may issue share purchase warrants, options and rights upon such terms and conditions as the directors determine, which share purchase warrants, options and rights may be issued alone or in conjunction with debentures, debenture stock, bonds, shares or any other securities issued or created by the Company from time to time.

4.

Share Registers

4.1

Central Securities Register

As required by and subject to the Business Corporations Act, the Company must maintain in British Columbia a central securities register. The directors may, subject to the Business Corporations Act, appoint an agent to maintain the central securities register. The directors may also appoint one or more agents, including the agent which keeps the central securities register, as transfer agent for its shares or any class or series of its shares, as the case may be, and the same or another agent as registrar for its shares or such class or series of its shares, as the case may be. The directors may terminate such appointment of any agent at any time and may appoint another agent in its place.

4.2

Closing Register

The Company must not at any time close its central securities register.

5.

Share Transfers

5.1

Registering Transfers

A transfer of a share of the Company must not be registered unless:

(1)

a duly signed instrument of transfer in respect of the share has been received by the Company;

(2)

if a share certificate has been issued by the Company in respect of the share to be transferred, that share certificate has been surrendered to the Company; and

(3)

if a non-transferable written acknowledgment of the shareholder’s right to obtain a share certificate has been issued by the Company in respect of the share to be transferred, that acknowledgment has been surrendered to the Company.

5.2

Form of Instrument of Transfer

The instrument of transfer in respect of any share of the Company must be either in the form, if any, on the back of the Company’s share certificates or in any other form that may be approved by the directors from time to time.

5.3

Transferor Remains Shareholder

Except to the extent that the Business Corporations Act otherwise provides, the transferor of shares is deemed to remain the holder of the shares until the name of the transferee is entered in a securities register of the Company in respect of the transfer.

5.4

Signing of Instrument of Transfer

If a shareholder, or his or her duly authorized attorney, signs an instrument of transfer in respect of shares registered in the name of the shareholder, the signed instrument of transfer constitutes a complete and sufficient authority to the Company and its directors, officers and agents to register the number of shares specified in the instrument of transfer or specified in any other manner, or, if no number is specified, all the shares represented by the share certificates or set out in the written acknowledgments deposited with the instrument of transfer:

(1)

in the name of the person named as transferee in that instrument of transfer; or

(2)

if no person is named as transferee in that instrument of transfer, in the name of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered.

5.5

Enquiry as to Title Not Required

Neither the Company nor any director, officer or agent of the Company is bound to inquire into the title of the person named in the instrument of transfer as transferee or, if no person is named as transferee in the instrument of transfer, of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered or is liable for any claim related to registering the transfer by the shareholder or by any intermediate owner or holder of the shares, of any interest in the shares, of any share certificate representing such shares or of any written acknowledgment of a right to obtain a share certificate for such shares.

5.6

Transfer Fee

There must be paid to the Company, in relation to the registration of any transfer, the amount, if any, determined by the directors.

6.

Transmission of Shares

6.1

Legal Personal Representative Recognized on Death

In case of the death of a shareholder, the legal personal representative, or if the shareholder was a joint holder, the surviving joint holder, will be the only person recognized by the Company as having any title to the shareholder’s interest in the shares. Before recognizing a person as a legal personal representative, the directors may require proof of appointment by a court of competent jurisdiction, a grant of letters probate, letters of administration or such other evidence or documents as the directors consider appropriate.

6.2

Rights of Legal Personal Representative

The legal personal representative has the same rights, privileges and obligations that attach to the shares held by the shareholder, including the right to transfer the shares in accordance with these Articles, provided the documents required by the Business Corporations Act and the directors have been deposited with the Company.

7.

Purchase of Shares

7.1

Company Authorized to Purchase Shares

Subject to Article 7.2, the special rights and restrictions attached to the shares of any class or series and the Business Corporations Act, the Company may, if authorized by the directors, purchase or otherwise acquire any of its shares at the price and upon the terms specified in such resolution.

7.2

Purchase When Insolvent

The Company must not make a payment or provide any other consideration to purchase or otherwise acquire any of its shares if there are reasonable grounds for believing that:

(1)

the Company is insolvent; or

(2)

making the payment or providing the consideration would render the Company insolvent.

7.3

Sale and Voting of Purchased Shares

If the Company retains a share redeemed, purchased or otherwise acquired by it, the Company may sell, gift or otherwise dispose of the share, but, while such share is held by the Company, it:

(1)

is not entitled to vote the share at a meeting of its shareholders;

(2)

must not pay a dividend in respect of the share; and

(3)

must not make any other distribution in respect of the share.

8.

Borrowing Powers

The Company, if authorized by the directors, may:

(1)

borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate;

(2)

issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as they consider appropriate;

(3)

guarantee the repayment of money by any other person or the performance of any obligation of any other person; and

(4)

mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Company.

9.

Alterations

9.1

Alteration of Authorized Share Structure

Subject to Article 9.2 and the Business Corporations Act, the Company may by special resolution:

(1)

create one or more classes or series of shares or, if none of the shares of a class or series of shares are allotted or issued, eliminate that class or series of shares;

(2)

increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue out of any class or series of shares or establish a maximum number of shares that the Company is authorized to issue out of any class or series of shares for which no maximum is established;

(3)

subdivide or consolidate all or any of its unissued, or fully paid issued, shares;

(4)

if the Company is authorized to issue shares of a class of shares with par value:

(a)

decrease the par value of those shares; or

(b)

if none of the shares of that class of shares are allotted or issued, increase the par value of those shares;

(5)

change all or any of its unissued, or fully paid issued, shares with par value into shares without par value or any of its unissued shares without par value into shares with par value;

(6)

alter the identifying name of any of its shares; or

(7)

otherwise alter its shares or authorized share structure when required or permitted to do so by the Business Corporations Act.

9.2

Special Rights and Restrictions

Subject to the Business Corporations Act, the Company may by special resolution:

(1)

create special rights or restrictions for, and attach those special rights or restrictions to, the shares of any class or series of shares, whether or not any or all of those shares have been issued; or

(2)

vary or delete any special rights or restrictions attached to the shares of any class or series of shares, whether or not any or all of those shares have been issued.

9.3

Change of Name

The Company may by special resolution authorize an alteration of its Notice of Articles in order to change its name.

9.4

Other Alterations

If the Business Corporations Act does not specify the type of resolution and these Articles do not specify another type of resolution, the Company may by special resolution alter these Articles.

10.

Meetings of Shareholders

10.1

Annual General Meetings

Unless an annual general meeting is deferred or waived in accordance with the Business Corporations Act, the Company must hold its first annual general meeting within 18 months after the date on which it was incorporated or otherwise recognized, and after that must hold an annual general meeting at least once in each calendar year and not more than 15 months after the last annual reference date at such time and place as may be determined by the directors.

10.2

Resolution Instead of Annual General Meeting

If all the shareholders who are entitled to vote at an annual general meeting consent by a unanimous resolution under the Business Corporations Act to all of the business that is required to be transacted at that annual general meeting, the annual general meeting is deemed to have been held on the date of the unanimous resolution. The shareholders must, in any unanimous resolution passed under this Article 10.2, select as the Company’s annual reference date a date that would be appropriate for the holding of the applicable annual general meeting.

10.3

Calling of Meetings of Shareholders

The directors may, whenever they think fit, call a meeting of shareholders.

10.4

Notice for Meetings of Shareholders

The Company must send notice of the date, time and location of any meeting of shareholders, in the manner provided in these Articles, or in such other manner, if any, as may be prescribed by ordinary resolution (whether previous notice of the resolution has been given or not), to each shareholder entitled to attend the meeting, to each director and to the auditor of the Company, unless these Articles otherwise provide, at least the following number of days before the meeting:

(1)

if and for so long as the Company is a public company, 21 days;

(2)

otherwise, 10 days.

10.5

Record Date for Notice

The directors may set a date as the record date for the purpose of determining shareholders entitled to notice of any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act, by more than four months. The record date must not precede the date on which the meeting is held by fewer than:

(1)

if and for so long as the Company is a public company, 21 days;

(2)

otherwise, 10 days.

If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

10.6

Record Date for Voting

The directors may set a date as the record date for the purpose of determining shareholders entitled to vote at any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act, by more than four months. If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

10.7

Failure to Give Notice and Waiver of Notice

The accidental omission to send notice of any meeting to, or the non-receipt of any notice by, any of the persons entitled to notice does not invalidate any proceedings at that meeting. Any person entitled to notice of a meeting of shareholders may, in writing or otherwise, waive or reduce the period of notice of such meeting.

10.8

Notice of Special Business at Meetings of Shareholders

If a meeting of shareholders is to consider special business within the meaning of Article 11.1, the notice of meeting must:

(1)

state the general nature of the special business; and

(2)

if the special business includes considering, approving, ratifying, adopting or authorizing any document or the signing of or giving of effect to any document, have attached to it a copy of the document or state that a copy of the document will be available for inspection by shareholders:

(a)

at the Company’s records office, or at such other reasonably accessible location in British Columbia as is specified in the notice; and

(b)

during statutory business hours on any one or more specified days before the day set for the holding of the meeting.

11.

Proceedings at Meetings of Shareholders

11.1

Special Business

At a meeting of shareholders, the following business is special business:

(1)

at a meeting of shareholders that is not an annual general meeting, all business is special business except business relating to the conduct of or voting at the meeting;

(2)

at an annual general meeting, all business is special business except for the following:

(a)

business relating to the conduct of or voting at the meeting;

(b)

consideration of any financial statements of the Company presented to the meeting;

(c)

consideration of any reports of the directors or auditor;

(d)

the setting or changing of the number of directors;

(e)

the election or appointment of directors;

(f)

the appointment of an auditor;

(g)

the setting of the remuneration of an auditor;

(h)

business arising out of a report of the directors not requiring the passing of a special resolution or an exceptional resolution;

(i)

any other business which, under these Articles or the Business Corporations Act, may be transacted at a meeting of shareholders without prior notice of the business being given to the shareholders.

11.2

Special Majority

The majority of votes required for the Company to pass a special resolution at a meeting of shareholders is two-thirds of the votes cast on the resolution.

11.3

Quorum

Subject to the special rights and restrictions attached to the shares of any class or series of shares, the quorum for the transaction of business at a meeting of shareholders is two persons who are, or who represent by proxy, shareholders who, in the aggregate, hold at least one-third of the issued shares entitled to be voted at the meeting.

11.4

One Shareholder May Constitute Quorum

If there is only one shareholder entitled to vote at a meeting of shareholders:

(1)

the quorum is one person who is, or who represents by proxy, that shareholder, and

(2)

that shareholder, present in person or by proxy, may constitute the meeting.

11.5

Other Persons May Attend

The directors, the president (if any), the secretary (if any), the assistant secretary (if any), any lawyer for the Company, the auditor of the Company and any other persons invited by the directors are entitled to attend any meeting of shareholders, but if any of those persons does attend a meeting of shareholders, that person is not to be counted in the quorum and is not entitled to vote at the meeting unless that person is a shareholder or proxy holder entitled to vote at the meeting.

11.6

Requirement of Quorum

No business, other than the election of a chair of the meeting and the adjournment of the meeting, may be transacted at any meeting of shareholders unless a quorum of shareholders entitled to vote is present at the commencement of the meeting, but such quorum need not be present throughout the meeting.

11.7

Lack of Quorum

If, within one-half hour from the time set for the holding of a meeting of shareholders, a quorum is not present:

(1)

in the case of a general meeting requisitioned by shareholders, the meeting is dissolved, and

(2)

in the case of any other meeting of shareholders, the meeting stands adjourned to the same day in the next week at the same time and place.

11.8

Lack of Quorum at Succeeding Meeting

If, at the meeting to which the meeting referred to in Article 11.7(2) was adjourned, a quorum is not present within one-half hour from the time set for the holding of the meeting, the person or persons present and being, or representing by proxy, one or more shareholders entitled to attend and vote at the meeting constitute a quorum.

11.9

Chair

The following individual is entitled to preside as chair at a meeting of shareholders:

(1)

the chair of the board, if any; or

(2)

if the chair of the board is absent or unwilling to act as chair of the meeting, the president, if any.

11.10

Selection of Alternate Chair

If, at any meeting of shareholders, there is no chair of the board or president present within 15 minutes after the time set for holding the meeting, or if the chair of the board and the president are unwilling to act as chair of the meeting, or if the chair of the board and the president have advised the secretary, if any, or any director present at the meeting, that they will not be present at the meeting, the directors present must choose one of their number to be chair of the meeting or if all of the directors present decline to take the chair or fail to so choose or if no director is present, the shareholders entitled to vote at the meeting who are present in person or by proxy may choose any person present at the meeting to chair the meeting.

11.11

Adjournments

The chair of a meeting of shareholders may, and if so directed by the meeting must, adjourn the meeting from time to time and from place to place, but no business may be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

11.12

Notice of Adjourned Meeting

It is not necessary to give any notice of an adjourned meeting or of the business to be transacted at an adjourned meeting of shareholders except that, when a meeting is adjourned for 30 days or more, notice of the adjourned meeting must be given as in the case of the original meeting.

11.13

Decisions by Show of Hands or Poll

Subject to the Business Corporations Act, every motion put to a vote at a meeting of shareholders will be decided on a show of hands unless a poll, before or on the declaration of the result of the vote by show of hands, is directed by the chair or demanded by at least one shareholder entitled to vote who is present in person or by proxy.

11.14

Declaration of Result

The chair of a meeting of shareholders must declare to the meeting the decision on every question in accordance with the result of the show of hands or the poll, as the case may be, and that decision must be entered in the minutes of the meeting. A declaration of the chair that a resolution is carried by the necessary majority or is defeated is, unless a poll is directed by the chair or demanded under Article 11.13, conclusive evidence without proof of the number or proportion of the votes recorded in favour of or against the resolution.

11.15

Motion Need Not be Seconded

No motion proposed at a meeting of shareholders need be seconded unless the chair of the meeting rules otherwise, and the chair of any meeting of shareholders is entitled to propose or second a motion.

11.16

Casting Vote

In case of an equality of votes, the chair of a meeting of shareholders does not, either on a show of hands or on a poll, have a second or casting vote in addition to the vote or votes to which the chair may be entitled as a shareholder.

11.17

Manner of Taking Poll

Subject to Article 11.18, if a poll is duly demanded at a meeting of shareholders:

(1)

the poll must be taken:

(a)

at the meeting, or within seven days after the date of the meeting, as the chair of the meeting directs; and

(b)

in the manner, at the time and at the place that the chair of the meeting directs;

(2)

the result of the poll is deemed to be the decision of the meeting at which the poll is demanded; and

(3)

the demand for the poll may be withdrawn by the person who demanded it.

11.18

Demand for Poll on Adjournment

A poll demanded at a meeting of shareholders on a question of adjournment must be taken immediately at the meeting.

11.19

Chair Must Resolve Dispute

In the case of any dispute as to the admission or rejection of a vote given on a poll, the chair of the meeting must determine the dispute, and his or her determination made in good faith is final and conclusive.

11.20

Casting of Votes

On a poll, a shareholder entitled to more than one vote need not cast all the votes in the same way.

11.21

Demand for Poll

No poll may be demanded in respect of the vote by which a chair of a meeting of shareholders is elected.

11.22

Demand for Poll Not to Prevent Continuance of Meeting

The demand for a poll at a meeting of shareholders does not, unless the chair of the meeting so rules, prevent the continuation of a meeting for the transaction of any business other than the question on which a poll has been demanded.

11.23

Retention of Ballots and Proxies

The Company must, for at least three months after a meeting of shareholders, keep each ballot cast on a poll and each proxy voted at the meeting, and, during that period, make them available for inspection during normal business hours by any shareholder or proxyholder entitled to vote at the meeting. At the end of such three month period, the Company may destroy such ballots and proxies.

12.

Votes of Shareholders

12.1

Number of Votes by Shareholder or by Shares

Subject to any special rights or restrictions attached to any shares and to the restrictions imposed on joint shareholders under Article 12.3:

(1)

on a vote by show of hands, every person present who is a shareholder or proxy holder and entitled to vote on the matter has one vote; and

(2)

on a poll, every shareholder entitled to vote on the matter has one vote in respect of each share entitled to be voted on the matter and held by that shareholder and may exercise that vote either in person or by proxy.

12.2

Votes of Persons in Representative Capacity

A person who is not a shareholder may vote at a meeting of shareholders, whether on a show of hands or on a poll, and may appoint a proxy holder to act at the meeting, if, before doing so, the person satisfies the chair of the meeting, or the directors, that the person is a legal personal representative or a trustee in bankruptcy for a shareholder who is entitled to vote at the meeting.

12.3

Votes by Joint Holders

If there are joint shareholders registered in respect of any share:

(1)

any one of the joint shareholders may vote at any meeting, either personally or by proxy, in respect of the share as if that joint shareholder were solely entitled to it; or

(2)

if more than one of the joint shareholders is present at any meeting, personally or by proxy, and more than one of them votes in respect of that share, then only the vote of the joint shareholder present whose name stands first on the central securities register in respect of the share will be counted.

12.4

Legal Personal Representatives as Joint Shareholders

Two or more legal personal representatives of a shareholder in whose sole name any share is registered are, for the purposes of Article 12.3, deemed to be joint shareholders.

12.5

Representative of a Corporate Shareholder

If a corporation, that is not a subsidiary of the Company, is a shareholder, that corporation may appoint a person to act as its representative at any meeting of shareholders of the Company, and:

(1)

for that purpose, the instrument appointing a representative must:

(a)

be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice for the receipt of proxies, or if no number of days is specified, two business days before the day set for the holding of the meeting; or

(b)

be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting;

(2)

if a representative is appointed under this Article 12.5:

(a)

the representative is entitled to exercise in respect of and at that meeting the same rights on behalf of the corporation that the representative represents as that corporation could exercise if it were a shareholder who is an individual, including, without limitation, the right to appoint a proxy holder; and

(b)

the representative, if present at the meeting, is to be counted for the purpose of forming a quorum and is deemed to be a shareholder present in person at the meeting.

Evidence of the appointment of any such representative may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages.

12.6

Proxy Provisions Do Not Apply to All Companies

Articles 12.7 to 12.15 do not apply to the Company if and for so long as it is a public company or a pre-existing reporting company which has the Statutory Reporting Company Provisions as part of its Articles or to which the Statutory Reporting Company Provisions apply.

12.7

Appointment of Proxy Holders

Every shareholder of the Company, including a corporation that is a shareholder but not a subsidiary of the Company, entitled to vote at a meeting of shareholders of the Company may, by proxy, appoint one or more (but not more than five) proxy holders to attend and act at the meeting in the manner, to the extent and with the powers conferred by the proxy.

12.8

Alternate Proxy Holders

A shareholder may appoint one or more alternate proxy holders to act in the place of an absent proxy holder.

12.9

When Proxy Holder Need Not Be Shareholder

A person must not be appointed as a proxy holder unless the person is a shareholder, although a person who is not a shareholder may be appointed as a proxy holder if:

(1)

the person appointing the proxy holder is a corporation or a representative of a corporation appointed under Article 12.5;

(2)

the Company has at the time of the meeting for which the proxy holder is to be appointed only one shareholder entitled to vote at the meeting; or

(3)

the shareholders present in person or by proxy at and entitled to vote at the meeting for which the proxy holder is to be appointed, by a resolution on which the proxy holder is not entitled to vote but in respect of which the proxy holder is to be counted in the quorum, permit the proxy holder to attend and vote at the meeting.

12.10

Deposit of Proxy

A proxy for a meeting of shareholders must:

(1)

be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice, or if no number of days is specified, two business days before the day set for the holding of the meeting; or

(2)

unless the notice provides otherwise, be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting.

A proxy may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages.

12.11

Validity of Proxy Vote

A vote given in accordance with the terms of a proxy is valid notwithstanding the death or incapacity of the shareholder giving the proxy and despite the revocation of the proxy or the revocation of the authority under which the proxy is given, unless notice in writing of that death, incapacity or revocation is received:

(1)

at the registered office of the Company, at any time up to and including the last business day before the day set for the holding of the meeting at which the proxy is to be used; or

(2)

by the chair of the meeting, before the vote is taken.

12.12

Form of Proxy

A proxy, whether for a specified meeting or otherwise, must be either in the following form or in any other form approved by the directors or the chair of the meeting:

[name of company]
(the “Company”)

The undersigned, being a shareholder of the Company, hereby appoints [name] or, failing that person, [name], as proxy holder for the undersigned to attend, act and vote for and on behalf of the undersigned at the meeting of shareholders of the Company to be held on [month, day, year] and at any adjournment of that meeting.

Number of shares in respect of which this proxy is given (if no number is specified, then this proxy if given in respect of all shares registered in the name of the shareholder): _____________________

Signed [month, day, year]

[Signature of shareholder]

[Name of shareholder—printed]

12.13

Revocation of Proxy

Subject to Article 12.14, every proxy may be revoked by an instrument in writing that is:

(1)

received at the registered office of the Company at any time up to and including the last business day before the day set for the holding of the meeting at which the proxy is to be used; or

(2)

provided, at the meeting, to the chair of the meeting.

12.14

Revocation of Proxy Must Be Signed

An instrument referred to in Article 12.13 must be signed as follows:

(1)

if the shareholder for whom the proxy holder is appointed is an individual, the instrument must be signed by the shareholder or his or her legal personal representative or trustee in bankruptcy;

(2)

if the shareholder for whom the proxy holder is appointed is a corporation, the instrument must be signed by the corporation or by a representative appointed for the corporation under Article 12.5.

12.15

Production of Evidence of Authority to Vote

The chair of any meeting of shareholders may, but need not, inquire into the authority of any person to vote at the meeting and may, but need not, demand from that person production of evidence as to the existence of the authority to vote.

13.

Directors

13.1

First Directors; Number of Directors

The first directors are the persons designated as directors of the Company in the Notice of Articles that applies to the Company when it is recognized under the Business Corporations Act. The number of directors, excluding additional directors appointed under Article 14.8, is set at:

(1)

subject to paragraphs (2) and (3), the number of directors that is equal to the number of the Company’s first directors;

(2)

if the Company is a public company, the greater of three and the most recently set of:

(a)

the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and

(b)

the number of directors set under Article 14.4;

(3)

if the Company is not a public company, the most recently set of:

(a)

the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and

(b)

the number of directors set under Article 14.4.

13.2

Change in Number of Directors

If the number of directors is set under Articles 13.1(2)(a) or 13.1(3)(a):

(1)

the shareholders may elect or appoint the directors needed to fill any vacancies in the board of directors up to that number;

(2)

if the shareholders do not elect or appoint the directors needed to fill any vacancies in the board of directors up to that number contemporaneously with the setting of that number, then the directors may appoint, or the shareholders may elect or appoint, directors to fill those vacancies.

13.3

Directors’ Acts Valid Despite Vacancy

An act or proceeding of the directors is not invalid merely because fewer than the number of directors set or otherwise required under these Articles is in office.

13.4

Qualifications of Directors

A director is not required to hold a share in the capital of the Company as qualification for his or her office but must be qualified as required by the Business Corporations Act to become, act or continue to act as a director.

13.5

Remuneration of Directors

The directors are entitled to the remuneration for acting as directors, if any, as the directors may from time to time determine. If the directors so decide, the remuneration of the directors, if any, will be determined by the shareholders. That remuneration may be in addition to any salary or other remuneration paid to any officer or employee of the Company as such, who is also a director.

13.6

Reimbursement of Expenses of Directors

The Company must reimburse each director for the reasonable expenses that he or she may incur in and about the business of the Company.

13.7

Special Remuneration for Directors

If any director performs any professional or other services for the Company that in the opinion of the directors are outside the ordinary duties of a director, or if any director is otherwise specially occupied in or about the Company’s business, he or she may be paid remuneration fixed by the directors, or, at the option of that director, fixed by ordinary resolution, and such remuneration may be either in addition to, or in substitution for, any other remuneration that he or she may be entitled to receive.

13.8

Gratuity, Pension or Allowance on Retirement of Director

Unless otherwise determined by ordinary resolution, the directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any director who has held any salaried office or place of profit with the Company or to his or her spouse or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.

14.

Election and Removal of Directors

14.1

Election at Annual General Meeting

At every annual general meeting and in every unanimous resolution contemplated by Article 10.2:

(1)

the shareholders entitled to vote at the annual general meeting for the election of directors must elect, or in the unanimous resolution appoint, a board of directors consisting of the number of directors for the time being set under these Articles; and

(2)

all the directors cease to hold office immediately before the election or appointment of directors under paragraph (1), but are eligible for re-election or re-appointment.

14.2

Consent to be a Director

No election, appointment or designation of an individual as a director is valid unless:

(1)

that individual consents to be a director in the manner provided for in the Business Corporations Act;

(2)

that individual is elected or appointed at a meeting at which the individual is present and the individual does not refuse, at the meeting, to be a director; or

(3)

with respect to first directors, the designation is otherwise valid under the Business Corporations Act.

14.3

Failure to Elect or Appoint Directors

If:

(1)

the Company fails to hold an annual general meeting, and all the shareholders who are entitled to vote at an annual general meeting fail to pass the unanimous resolution contemplated by Article 10.2, on or before the date by which the annual general meeting is required to be held under the Business Corporations Act; or

(2)

the shareholders fail, at the annual general meeting or in the unanimous resolution contemplated by Article 10.2, to elect or appoint any directors;

then each director then in office continues to hold office until the earlier of:

(3)

the date on which his or her successor is elected or appointed; and

(4)

the date on which he or she otherwise ceases to hold office under the Business Corporations Act or these Articles.

14.4

Places of Retiring Directors Not Filled

If, at any meeting of shareholders at which there should be an election of directors, the places of any of the retiring directors are not filled by that election, those retiring directors who are not re-elected and who are asked by the newly elected directors to continue in office will, if willing to do so, continue in office to complete the number of directors for the time being set pursuant to these Articles until further new directors are elected at a meeting of shareholders convened for that purpose. If any such election or continuance of directors does not result in the election or continuance of the number of directors for the time being set pursuant to these Articles, the number of directors of the Company is deemed to be set at the number of directors actually elected or continued in office.

14.5

Directors May Fill Casual Vacancies

Any casual vacancy occurring in the board of directors may be filled by the directors.

14.6

Remaining Directors Power to Act

The directors may act notwithstanding any vacancy in the board of directors, but if the Company has fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the directors may only act for the purpose of appointing directors up to that number or of summoning a meeting of shareholders for the purpose of filling any vacancies on the board of directors or, subject to the Business Corporations Act, for any other purpose.

14.7

Shareholders May Fill Vacancies

If the Company has no directors or fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the shareholders may elect or appoint directors to fill any vacancies on the board of directors.

14.8

Additional Directors

Notwithstanding Articles 13.1 and 13.2, between annual general meetings or unanimous resolutions contemplated by Article 10.2, the directors may appoint one or more additional directors, but the number of additional directors appointed under this Article 14.8 must not at any time exceed:

(1)

one-third of the number of first directors, if, at the time of the appointments, one or more of the first directors have not yet completed their first term of office; or

(2)

in any other case, one-third of the number of the current directors who were elected or appointed as directors other than under this Article 14.8.

Any director so appointed ceases to hold office immediately before the next election or appointment of directors under Article 14.1(1), but is eligible for re-election or re-appointment.

14.9

Ceasing to be a Director

A director ceases to be a director when:

(1)

the term of office of the director expires;

(2)

the director dies;

(3)

the director resigns as a director by notice in writing provided to the Company or a lawyer for the Company; or

(4)

the director is removed from office pursuant to Articles 14.10 or 14.11.

14.10

Removal of Director by Shareholders

The Company may remove any director before the expiration of his or her term of office by special resolution. In that event, the shareholders may elect, or appoint by ordinary resolution, a director to fill the resulting vacancy. If the shareholders do not elect or appoint a director to fill the resulting vacancy contemporaneously with the removal, then the directors may appoint or the shareholders may elect, or appoint by ordinary resolution, a director to fill that vacancy.

14.11

Removal of Director by Directors

The directors may remove any director before the expiration of his or her term of office if the director is convicted of an indictable offence, or if the director ceases to be qualified to act as a director of a company and does not promptly resign, and the directors may appoint a director to fill the resulting vacancy.

15.

Alternate Directors

15.1

Appointment of Alternate Director

Any director (an “appointor”) may by notice in writing received by the Company appoint any person (an “appointee”) who is qualified to act as a director to be his or her alternate to act in his or her place at meetings of the directors or committees of the directors at which the appointor is not present unless (in the case of an appointee who is not a director) the directors have reasonably disapproved the appointment of such person as an alternate director and have given notice to that effect to his or her appointor within a reasonable time after the notice of appointment is received by the Company.

15.2

Notice of Meetings

Every alternate director so appointed is entitled to notice of meetings of the directors and of committees of the directors of which his or her appointor is a member and to attend and vote as a director at any such meetings at which his or her appointor is not present.

15.3

Alternate for More Than One Director Attending Meetings

A person may be appointed as an alternate director by more than one director, and an alternate director:

(1)

will be counted in determining the quorum for a meeting of directors once for each of his or her appointors and, in the case of an appointee who is also a director, once more in that capacity;

(2)

has a separate vote at a meeting of directors for each of his or her appointors and, in the case of an appointee who is also a director, an additional vote in that capacity;

(3)

will be counted in determining the quorum for a meeting of a committee of directors once for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, once more in that capacity;

(4)

has a separate vote at a meeting of a committee of directors for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, an additional vote in that capacity.

15.4

Consent Resolutions

Every alternate director, if authorized by the notice appointing him or her, may sign in place of his or her appointor any resolutions to be consented to in writing.

15.5

Alternate Director Not an Agent

Every alternate director is deemed not to be the agent of his or her appointor.

15.6

Revocation of Appointment of Alternate Director

An appointor may at any time, by notice in writing received by the Company, revoke the appointment of an alternate director appointed by him or her.

15.7

Ceasing to be an Alternate Director

The appointment of an alternate director ceases when:

(1)

his or her appointor ceases to be a director and is not promptly re-elected or re-appointed;

(2)

the alternate director dies;

(3)

the alternate director resigns as an alternate director by notice in writing provided to the Company or a lawyer for the Company;

(4)

the alternate director ceases to be qualified to act as a director; or

(5)

his or her appointor revokes the appointment of the alternate director.

15.8

Remuneration and Expenses of Alternate Director

The Company may reimburse an alternate director for the reasonable expenses that would be properly reimbursed if he or she were a director, and the alternate director is entitled to receive from the Company such proportion, if any, of the remuneration otherwise payable to the appointor as the appointor may from time to time direct.

16.

Powers and Duties of Directors

16.1

Powers of Management

The directors must, subject to the Business Corporations Act and these Articles, manage or supervise the management of the business and affairs of the Company and have the authority to exercise all such powers of the Company as are not, by the Business Corporations Act or by these Articles, required to be exercised by the shareholders of the Company.

16.2

Appointment of Attorney of Company

The directors may from time to time, by power of attorney or other instrument, under seal if so required by law, appoint any person to be the attorney of the Company for such purposes, and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the directors under these Articles and excepting the power to fill vacancies in the board of directors, to remove a director, to change the membership of, or fill vacancies in, any committee of the directors, to appoint or remove officers appointed by the directors and to declare dividends) and for such period, and with such remuneration and subject to such conditions as the directors may think fit. Any such power of attorney may contain such provisions for the protection or convenience of persons dealing with such attorney as the directors think fit. Any such attorney may be a uthorized by the directors to sub-delegate all or any of the powers, authorities and discretions for the time being vested in him or her.

17.

Disclosure of Interest of Directors

17.1

Obligation to Account for Profits

A director or senior officer who holds a disclosable interest (as that term is used in the Business Corporations Act) in a contract or transaction into which the Company has entered or proposes to enter is liable to account to the Company for any profit that accrues to the director or senior officer under or as a result of the contract or transaction only if and to the extent provided in the Business Corporations Act.

17.2

Restrictions on Voting by Reason of Interest

A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter is not entitled to vote on any directors’ resolution to approve that contract or transaction, unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution.

17.3

Interested Director Counted in Quorum

A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter and who is present at the meeting of directors at which the contract or transaction is considered for approval may be counted in the quorum at the meeting whether or not the director votes on any or all of the resolutions considered at the meeting.

17.4

Disclosure of Conflict of Interest or Property

A director or senior officer who holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual’s duty or interest as a director or senior officer, must disclose the nature and extent of the conflict as required by the Business Corporations Act.

17.5

Director Holding Other Office in the Company

A director may hold any office or place of profit with the Company, other than the office of auditor of the Company, in addition to his or her office of director for the period and on the terms (as to remuneration or otherwise) that the directors may determine.

17.6

No Disqualification

No director or intended director is disqualified by his or her office from contracting with the Company either with regard to the holding of any office or place of profit the director holds with the Company or as vendor, purchaser or otherwise, and no contract or transaction entered into by or on behalf of the Company in which a director is in any way interested is liable to be voided for that reason.

17.7

Professional Services by Director or Officer

Subject to the Business Corporations Act, a director or officer, or any person in which a director or officer has an interest, may act in a professional capacity for the Company, except as auditor of the Company, and the director or officer or such person is entitled to remuneration for professional services as if that director or officer were not a director or officer.

17.8

Director or Officer in Other Corporations

A director or officer may be or become a director, officer or employee of, or otherwise interested in, any person in which the Company may be interested as a shareholder or otherwise, and, subject to the Business Corporations Act, the director or officer is not accountable to the Company for any remuneration or other benefits received by him or her as director, officer or employee of, or from his or her interest in, such other person.

18.

Proceedings of Directors

18.1

Meetings of Directors

The directors may meet together for the conduct of business, adjourn and otherwise regulate their meetings as they think fit, and meetings of the directors held at regular intervals may be held at the place, at the time and on the notice, if any, as the directors may from time to time determine.

18.2

Voting at Meetings

Questions arising at any meeting of directors are to be decided by a majority of votes and, in the case of an equality of votes, the chair of the meeting does not have a second or casting vote.

18.3

Chair of Meetings

The following individual is entitled to preside as chair at a meeting of directors:

(1)

the chair of the board, if any;

(2)

in the absence of the chair of the board, the president, if any, if the president is a director; or

(3)

any other director chosen by the directors if:

(a)

neither the chair of the board nor the president, if a director, is present at the meeting within 15 minutes after the time set for holding the meeting;

(b)

neither the chair of the board nor the president, if a director, is willing to chair the meeting; or

(c)

the chair of the board and the president, if a director, have advised the secretary, if any, or any other director, that they will not be present at the meeting.

18.4

Meetings by Telephone or Other Communications Medium

A director may participate in a meeting of the directors or of any committee of the directors in person or by telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other. A director may participate in a meeting of the directors or of any committee of the directors by a communications medium other than telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other and if all directors who wish to participate in the meeting agree to such participation. A director who participates in a meeting in a manner contemplated by this Article 18.4 is deemed for all purposes of the Business Corporations Act and these Articles to be present at the meeting and to h ave agreed to participate in that manner.

18.5

Calling of Meetings

A director may, and the secretary or an assistant secretary of the Company, if any, on the request of a director must, call a meeting of the directors at any time.

18.6

Notice of Meetings

Other than for meetings held at regular intervals as determined by the directors pursuant to Article 18.1, reasonable notice of each meeting of the directors, specifying the place, day and time of that meeting must be given to each of the directors and the alternate directors by any method set out in Article 24.1 or orally or by telephone.

18.7

When Notice Not Required

It is not necessary to give notice of a meeting of the directors to a director or an alternate director if:

(1)

the meeting is to be held immediately following a meeting of shareholders at which that director was elected or appointed, or is the meeting of the directors at which that director is appointed; or

(2)

the director or alternate director, as the case may be, has waived notice of the meeting.

18.8

Meeting Valid Despite Failure to Give Notice

The accidental omission to give notice of any meeting of directors to, or the non-receipt of any notice by, any director or alternate director, does not invalidate any proceedings at that meeting.

18.9

Waiver of Notice of Meetings

Any director or alternate director may send to the Company a document signed by him or her waiving notice of any past, present or future meeting or meetings of the directors and may at any time withdraw that waiver with respect to meetings held after that withdrawal. After sending a waiver with respect to all future meetings and until that waiver is withdrawn, no notice of any meeting of the directors need be given to that director and, unless the director otherwise requires by notice in writing to the Company, to his or her alternate director, and all meetings of the directors so held are deemed not to be improperly called or constituted by reason of notice not having been given to such director or alternate director.

18.10

Quorum

The quorum necessary for the transaction of the business of the directors may be set by the directors and, if not so set, is deemed to be set at two directors or, if the number of directors is set at one, is deemed to be set at one director, and that director may constitute a meeting.

18.11

Validity of Acts Where Appointment Defective

Subject to the Business Corporations Act, an act of a director or officer is not invalid merely because of an irregularity in the election or appointment or a defect in the qualification of that director or officer.

18.12

Consent Resolutions in Writing

A resolution of the directors or of any committee of the directors consented to in writing by all of the directors entitled to vote on it, whether by signed document, fax, email or any other method of transmitting legibly recorded messages, is as valid and effective as if it had been passed at a meeting of the directors or of the committee of the directors duly called and held. Such resolution may be in two or more counterparts which together are deemed to constitute one resolution in writing. A resolution passed in that manner is effective on the date stated in the resolution or on the latest date stated on any counterpart. A resolution of the directors or of any committee of the directors passed in accordance with this Article 18.12 is deemed to be a proceeding at a meeting of directors or of the committee of the directors and to be as valid and effectiv e as if it had been passed at a meeting of the directors or of the committee of the directors that satisfies all the requirements of the Business Corporations Act and all the requirements of these Articles relating to meetings of the directors or of a committee of the directors.

19.

Executive and Other Committees

19.1

Appointment and Powers of Executive Committee

The directors may, by resolution, appoint an executive committee consisting of the director or directors that they consider appropriate, and this committee has, during the intervals between meetings of the board of directors, all of the directors’ powers, except:

(1)

the power to fill vacancies in the board of directors;

(2)

the power to remove a director;

(3)

the power to change the membership of, or fill vacancies in, any committee of the directors; and

(4)

such other powers, if any, as may be set out in the resolution or any subsequent directors’ resolution.

19.2

Appointment and Powers of Other Committees

The directors may, by resolution:

(1)

appoint one or more committees (other than the executive committee) consisting of the director or directors that they consider appropriate;

(2)

delegate to a committee appointed under paragraph (1) any of the directors’ powers, except:

(a)

the power to fill vacancies in the board of directors;

(b)

the power to remove a director;

(c)

the power to change the membership of, or fill vacancies in, any committee of the directors; and

(d)

the power to appoint or remove officers appointed by the directors; and

(3)

make any delegation referred to in paragraph (2) subject to the conditions set out in the resolution or any subsequent directors’ resolution.

19.3

Obligations of Committees

Any committee appointed under Articles 19.1 or 19.2, in the exercise of the powers delegated to it, must:

(1)

conform to any rules that may from time to time be imposed on it by the directors; and

(2)

report every act or thing done in exercise of those powers at such times as the directors may require.

19.4

Powers of Board

The directors may, at any time, with respect to a committee appointed under Articles 19.1 or 19.2:

(1)

revoke or alter the authority given to the committee, or override a decision made by the committee, except as to acts done before such revocation, alteration or overriding;

(2)

terminate the appointment of, or change the membership of, the committee; and

(3)

fill vacancies in the committee.

19.5

Committee Meetings

Subject to Article 19.3(1) and unless the directors otherwise provide in the resolution appointing the committee or in any subsequent resolution, with respect to a committee appointed under Articles 19.1 or 19.2:

(1)

the committee may meet and adjourn as it thinks proper;

(2)

the committee may elect a chair of its meetings but, if no chair of a meeting is elected, or if at a meeting the chair of the meeting is not present within 15 minutes after the time set for holding the meeting, the directors present who are members of the committee may choose one of their number to chair the meeting;

(3)

a majority of the members of the committee constitutes a quorum of the committee; and

(4)

questions arising at any meeting of the committee are determined by a majority of votes of the members present, and in case of an equality of votes, the chair of the meeting does not have a second or casting vote.

20.

Officers

20.1

Directors May Appoint Officers

The directors may, from time to time, appoint such officers, if any, as the directors determine and the directors may, at any time, terminate any such appointment.

20.2

Functions, Duties and Powers of Officers

The directors may, for each officer:

(1)

determine the functions and duties of the officer;

(2)

entrust to and confer on the officer any of the powers exercisable by the directors on such terms and conditions and with such restrictions as the directors think fit; and

(3)

revoke, withdraw, alter or vary all or any of the functions, duties and powers of the officer.

20.3

Qualifications

No officer may be appointed unless that officer is qualified in accordance with the Business Corporations Act. One person may hold more than one position as an officer of the Company. Any person appointed as the chair of the board or as a managing director must be a director. Any other officer need not be a director.

20.4

Remuneration and Terms of Appointment

All appointments of officers are to be made on the terms and conditions and at the remuneration (whether by way of salary, fee, commission, participation in profits or otherwise) that the directors thinks fit and are subject to termination at the pleasure of the directors, and an officer may in addition to such remuneration be entitled to receive, after he or she ceases to hold such office or leaves the employment of the Company, a pension or gratuity.

21.

Indemnification

21.1

Definitions

In this Article 21:

(1)

“eligible penalty” means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;

(2)

“eligible proceeding” means a legal proceeding or investigative action, whether current, threatened, pending or completed, in which a director, former director or alternate director of the Company (an “eligible party”) or any of the heirs and legal personal representatives of the eligible party, by reason of the eligible party being or having been a director or alternate director of the Company:

(a)

is or may be joined as a party; or

(b)

is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding;

(3)

“expenses” has the meaning set out in the Business Corporations Act.

21.2

Mandatory Indemnification of Directors and Former Directors

Subject to the Business Corporations Act, the Company must indemnify a director, former director or alternate director of the Company and his or her heirs and legal personal representatives against all eligible penalties to which such person is or may be liable, and the Company must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding. Each director and alternate director is deemed to have contracted with the Company on the terms of the indemnity contained in this Article 21.2.

21.3

Indemnification of Other Persons

Subject to any restrictions in the Business Corporations Act, the Company may indemnify any person.

21.4

Non-Compliance with Business Corporations Act

The failure of a director, alternate director or officer of the Company to comply with the Business Corporations Act or these Articles does not invalidate any indemnity to which he or she is entitled under this Part.

21.5

Company May Purchase Insurance

The Company may purchase and maintain insurance for the benefit of any person (or his or her heirs or legal personal representatives) who:

(1)

is or was a director, alternate director, officer, employee or agent of the Company;

(2)

is or was a director, alternate director, officer, employee or agent of a corporation at a time when the corporation is or was an affiliate of the Company;

(3)

at the request of the Company, is or was a director, alternate director, officer, employee or agent of a corporation or of a partnership, trust, joint venture or other unincorporated entity;

(4)

at the request of the Company, holds or held a position equivalent to that of a director, alternate director or officer of a partnership, trust, joint venture or other unincorporated entity;

against any liability incurred by him or her as such director, alternate director, officer, employee or agent or person who holds or held such equivalent position.

22.

Dividends

22.1

Payment of Dividends Subject to Special Rights

The provisions of this Article 22 are subject to the rights, if any, of shareholders holding shares with special rights as to dividends.

22.2

Declaration of Dividends

Subject to the Business Corporations Act, the directors may from time to time declare and authorize payment of such dividends as they may deem advisable.

22.3

No Notice Required

The directors need not give notice to any shareholder of any declaration under Article 22.2.

22.4

Record Date

The directors may set a date as the record date for the purpose of determining shareholders entitled to receive payment of a dividend. The record date must not precede the date on which the dividend is to be paid by more than two months. If no record date is set, the record date is 5 p.m. on the date on which the directors pass the resolution declaring the dividend.

22.5

Manner of Paying Dividend

A resolution declaring a dividend may direct payment of the dividend wholly or partly by the distribution of specific assets or of fully paid shares or of bonds, debentures or other securities of the Company, or in any one or more of those ways.

22.6

Settlement of Difficulties

If any difficulty arises in regard to a distribution under Article 22.5, the directors may settle the difficulty as they deem advisable, and, in particular, may:

(1)

set the value for distribution of specific assets;

(2)

determine that cash payments in substitution for all or any part of the specific assets to which any shareholders are entitled may be made to any shareholders on the basis of the value so fixed in order to adjust the rights of all parties; and

(3)

vest any such specific assets in trustees for the persons entitled to the dividend.

22.7

When Dividend Payable

Any dividend may be made payable on such date as is fixed by the directors.

22.8

Dividends to be Paid in Accordance with Number of Shares

All dividends on shares of any class or series of shares must be declared and paid according to the number of such shares held.

22.9

Receipt by Joint Shareholders

If several persons are joint shareholders of any share, any one of them may give an effective receipt for any dividend, bonus or other money payable in respect of the share.

22.10

Dividend Bears No Interest

No dividend bears interest against the Company.

22.11

Fractional Dividends

If a dividend to which a shareholder is entitled includes a fraction of the smallest monetary unit of the currency of the dividend, that fraction may be disregarded in making payment of the dividend and that payment represents full payment of the dividend.

22.12

Payment of Dividends

Any dividend or other distribution payable in cash in respect of shares may be paid by cheque, made payable to the order of the person to whom it is sent, and mailed to the address of the shareholder, or in the case of joint shareholders, to the address of the joint shareholder who is first named on the central securities register, or to the person and to the address the shareholder or joint shareholders may direct in writing. The mailing of such cheque will, to the extent of the sum represented by the cheque (plus the amount of the tax required by law to be deducted), discharge all liability for the dividend unless such cheque is not paid on presentation or the amount of tax so deducted is not paid to the appropriate taxing authority.

22.13

Capitalization of Surplus

Notwithstanding anything contained in these Articles, the directors may from time to time capitalize any surplus of the Company and may from time to time issue, as fully paid, shares or any bonds, debentures or other securities of the Company as a dividend representing the surplus or any part of the surplus.

23.

Documents, Records and Reports

23.1

Recording of Financial Affairs

The directors must cause adequate accounting records to be kept to record properly the financial affairs and condition of the Company and to comply with the Business Corporations Act.

23.2

Inspection of Accounting Records

Unless the directors determine otherwise, or unless otherwise determined by ordinary resolution, no shareholder of the Company is entitled to inspect or obtain a copy of any accounting records of the Company.

24.

Notices

24.1

Method of Giving Notice

Unless the Business Corporations Act or these Articles provides otherwise, a notice, statement, report or other record required or permitted by the Business Corporations Act or these Articles to be sent by or to a person may be sent by any one of the following methods:

(1)

mail addressed to the person at the applicable address for that person as follows:

(a)

for a record mailed to a shareholder, the shareholder’s registered address;

(b)

for a record mailed to a director or officer, the prescribed address for mailing shown for the director or officer in the records kept by the Company or the mailing address provided by the recipient for the sending of that record or records of that class;

(c)

in any other case, the mailing address of the intended recipient;

(2)

delivery at the applicable address for that person as follows, addressed to the person:

(a)

for a record delivered to a shareholder, the shareholder’s registered address;

(b)

for a record delivered to a director or officer, the prescribed address for delivery shown for the director or officer in the records kept by the Company or the delivery address provided by the recipient for the sending of that record or records of that class;

(c)

in any other case, the delivery address of the intended recipient;

(3)

sending the record by fax to the fax number provided by the intended recipient for the sending of that record or records of that class;

(4)

sending the record by email to the email address provided by the intended recipient for the sending of that record or records of that class;

(5)

physical delivery to the intended recipient.

24.2

Deemed Receipt of Mailing

A record that is mailed to a person by ordinary mail to the applicable address for that person referred to in Article 24.1 is deemed to be received by the person to whom it was mailed on the day, Saturdays, Sundays and holidays excepted, following the date of mailing.

24.3

Certificate of Sending

A certificate signed by the secretary, if any, or other officer of the Company or of any other corporation acting in that behalf for the Company stating that a notice, statement, report or other record was addressed as required by Article 24.1, prepaid and mailed or otherwise sent as permitted by Article 24.1 is conclusive evidence of that fact.

24.4

Notice to Joint Shareholders

A notice, statement, report or other record may be provided by the Company to the joint shareholders of a share by providing the notice to the joint shareholder first named in the central securities register in respect of the share.

24.5

Notice to Trustees

A notice, statement, report or other record may be provided by the Company to the persons entitled to a share in consequence of the death, bankruptcy or incapacity of a shareholder by:

(1)

mailing the record, addressed to them:

(a)

by name, by the title of the legal personal representative of the deceased or incapacitated shareholder, by the title of trustee of the bankrupt shareholder or by any similar description; and

(b)

at the address, if any, supplied to the Company for that purpose by the persons claiming to be so entitled; or

(2)

if an address referred to in paragraph (1)(b) has not been supplied to the Company, by giving the notice in a manner in which it might have been given if the death, bankruptcy or incapacity had not occurred.

25.

Seal

25.1

Who May Attest Seal

Except as provided in Articles 25.2 and 25.3, the Company’s seal, if any, must not be impressed on any record except when that impression is attested by the signatures of:

(1)

any two directors;

(2)

any officer, together with any director;

(3)

if the Company only has one director, that director; or

(4)

any one or more directors or officers or persons as may be determined by the directors.

25.2

Sealing Copies

For the purpose of certifying under seal a certificate of incumbency of the directors or officers of the Company or a true copy of any resolution or other document, despite Article 25.1, the impression of the seal may be attested by the signature of any director or officer.

25.3

Mechanical Reproduction of Seal

The directors may authorize the seal to be impressed by third parties on share certificates or bonds, debentures or other securities of the Company as they may determine appropriate from time to time. To enable the seal to be impressed on any share certificates or bonds, debentures or other securities of the Company, whether in definitive or interim form, on which facsimiles of any of the signatures of the directors or officers of the Company are, in accordance with the Business Corporations Act or these Articles, printed or otherwise mechanically reproduced, there may be delivered to the person employed to engrave, lithograph or print such definitive or interim share certificates or bonds, debentures or other securities one or more unmounted dies reproducing the seal and the chair of the board or any senior officer together with the secretary, trea surer, secretary-treasurer, an assistant secretary, an assistant treasurer or an assistant secretary-treasurer may in writing authorize such person to cause the seal to be impressed on such definitive or interim share certificates or bonds, debentures or other securities by the use of such dies. Share certificates or bonds, debentures or other securities to which the seal has been so impressed are for all purposes deemed to be under and to bear the seal impressed on them.

26.

Prohibitions

26.1

Definitions

In this Article 26:

(1)

“designated security” means:

(a)

a voting security of the Company;

(b)

a security of the Company that is not a debt security and that carries a residual right to participate in the earnings of the Company or, on the liquidation or winding up of the Company, in its assets; or

(c)

a security of the Company convertible, directly or indirectly, into a security described in paragraph (a) or (b);

(2)

“security” has the meaning assigned in the Securities Act (British Columbia);

(3)

“voting security” means a security of the Company that:

(a)

is not a debt security, and

(b)

carries a voting right either under all circumstances or under some circumstances that have occurred and are continuing.

26.2

Application

Article 26.3 does not apply to the Company if and for so long as it is a public company or a pre-existing reporting company which has the Statutory Reporting Company Provisions as part of its Articles or to which the Statutory Reporting Company Provisions apply.

26.3

Consent Required for Transfer of Shares or Designated Securities

No share or designated security may be sold, transferred or otherwise disposed of without the consent of the directors and the directors are not required to give any reason for refusing to consent to any such sale, transfer or other disposition.

EX-99.2

 Stream Communications Network & Media Inc.

 (formerly Stream Communications Network, Inc.)

Consolidated Financial Statements

For the year ended December 31, 2004

Auditors' Report

To the Shareholders of

Stream Communications Network, Inc.

We have audited the consolidated balance sheet of Stream Communications Network, Inc. as at December 31, 2004 and 2003 and the consolidated statements of operations and deficit, and cash flows for the years then ended.  These financial statements are the responsibility of the company's management.  Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the company as at December 31, 2004 and 2003 and the results of its operations and its cash flows for the years then ended in accordance with Canadian generally accepted accounting principles.  

“MacKay LLP”

Vancouver,  Canada.

Chartered Accountants

April 25, 2005, except for notes

19 and 20 dated June 24, 2005

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

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

“MacKay LLP”

Vancouver, Canada

Chartered Accountants

April 25, 2005, except for notes

19 and 20 dated June 24, 2005

Stream Communications Network & Media Inc.
Consolidated Balance Sheets
(in Canadian dollars)
				December 31, 2004	December 31, 2003
ASSETS
	Current Assets
		Cash and cash equivalents		$           640,308	$           207,358
		Accounts receivable - net (note 4)		267,020	154,792
		Inventory		6,781	8,315
		Prepaid expenses and advances		56,552	83,902
				970,661	454,367
	Deposits			-	155,017
	Property, plant and equipment (note 5)			10,243,982	7,232,779
	Intangibles - (note 6)			2,916,444	2,361,995
				$      14,131,087	$      10,204,158
LIABILITIES
	Current Liabilities
		Trade accounts payable and accrued liabilities		$        2,062,001	$        3,032,652
		Accounts payable pertaining to financing costs		1,002,709	1,079,815
		Due to related party (note 10)		-	337,867
		Loan payable (note 8)		650,000	-
		Current portion of long-term debt (note 9)		101,530	64,512
				3,816,240	4,514,846
	Long-term Liabilities
		Due to related party (note 10)		4,236,302	-
		Long-term debt (note 9)		814,707	67,997
				8 ,867,249	4,582,843
	Non-controlling interest			710,445	687,225
				9,577,694	5,270,068
SHAREHOLDERS' EQUITY
	Capital stock
	Authorized
	150,000,000 common shares of no par value
	Issued and fully paid (note 12)			36,005,421	33,209,455
	Contributed surplus			2,167,551	96,041
	Warrants (note 12)			2,025,447	2,025,447
	Cumulative translation account (note 11)			944,701	(371,841)
	Deficit			(36,589,727)	(30,025,012)
				4,553,393	4,934,090
				$      14,131,087	$      10,204,158
	Nature of operations and going concern (note 1)
	Commitments (note 16)
	Contingency (note 17)
	Subsequent events (note 19)
		"Stan Lis"	"Casey Forward"
		President and Chief Executive Officer	Chief Financial Officer

Stream Communications Network & Media Inc.
Consolidated Statements of Operations and Deficit
For the year ended December 31
(in Canadian dollars)
			For the year ended December 31, 2004	For the year ended December 31, 2003	For the year ended December 31 2002
Revenues			$        4,415,461	$        3,700,160	$        3,736,716
Expenses
	Administration and services		917,989	1,045,244	2,238,929
	Occupancy costs		342,202	328,348	303,208
	Professional fees		305,967	357,636	28,413
	Programming		899,438	887,157	757,375
	Sales and marketing		345,709	180,145	214,847
	Stock-based compensation (note 12)		2,071,510	-
	Travel and automotive		217,483	260,677	301,741
	Wages		1,613,005	1,501,308	1,713,906
			6,713,303	4,560,515	5,817,419
Loss before undernoted items			(2,297,842)	(860,355)	(2,080,703)
Amortization of property, plant and equipment			719,171	730,616	906,972
Amortization of intangibles			678,933	243,023	284,064
			1,398,104	973,639	1,191,036
Loss before other items			(3,695,946)	(1,833,994)	(3,271,739)
Other items
	Content development		1,481,904	-	-
	Financing expenses		1,817,353	275,428	438,137
	Foreign exchange		(415,411)	-	-
	Impairment of intangibles and goodwill		-	1,960,000	-
	Interest income		(18,446)	(94,829)	(28,107)
	Write off of deferred charges		-	2,400,713	-
			2,865,400	4,541,312	410,030
Loss before non-controlling interest			(6,561,346)	(6,375,306)	(3,681,769)
Non-controlling interest			(3,369)	120,686	55,444
Loss from continuing operations			(6,564,715)	(6,254,620)	(3,626,325)
Loss from discontinued operations (note 7)			-	-	(2,362,877)
Net loss for the year			(6,564,715)	(6,254,620)	(5,989,202)
Deficit, beginning of year			(30,025,012)	(23,770,392)	(17,781,190)
Deficit, end of year			$   (36,589,727)	$   (30,025,012)	$   (23,770,392)
Loss per share, basic and diluted
	Continuing operations		$              (0.22)	$              (0.21)	$              (0.13)
	Discontinued operations		-	-	(0.08)
	Loss per share		$              (0.22)	$              (0.21)	$              (0.21)
Weighted average number of shares
		Basic and diluted	30,027,489	29,333,427	28,023,911

Stream Communications Network & Media Inc.
Consolidated Statements of Cash Flows
For the year ended December 31
(in Canadian dollars)
			For the year ended December 31, 2004	For the year ended December 31, 2003	For the year ended December 31 2002
Operating Activities
	Net loss for the year		$    (6,564,715)	$     (6,254,620)	$     (3,626,325)
	Items not involving cash
		Amortization	1,398,104	973,639	1,191,036
		Unrealized foreign exchange	(267,616)	-	-
		Stock-based compensation	2,071,510	-	-
		Impairment of intangibles and goodwill	-	1,960,000	-
		Write off of deferred charges	-	2,400,713	-
		Issuance of shares for business development and debt	2,795,966	-	-
		Non-controlling interest	20,405	(57,892)	(55,444)
	Change in non-cash working capital		(546,346)	(978,160)	(2,490,733)
		Accounts receivable	(26,913)	35,055	20,321
		Inventory	2,914	3,742	13,873
		Prepaid expenses and advances	31,407	(19,150)	68,960
		Accounts payable and accrued liabilities	(1,652,246)	(170,100)	1,073,748
	Net cash used by continuing operating activities		(2,191,184)	(1,128,613)	(1,313,831)
	Net cash used by discontinued operating activities		-	-	(173,848)
	Net cash used by operating activities		(2,191,184)	(1,128,613)	(1,487,679)
Financing Activities
	Loans from related parties		4,166,051	337,867	-
	Issuance of shares for cash		-	1,264,553	3,772,917
	Loans payable		650,000	-	-
	Long-term debt		752,709	(3,217)	(91,828)
	Net cash provided from continuing financing activities		5,568,760	1,599,203	3,681,089
	Net cash provided from discontinued financing activities		-	-	-
	Net cash provided by financing activities		5,568,760	1,599,203	3,681,089
Investing Activities
	Purchase of property, plant and equipment		(2,226,805)	(192,714)	(312,756)
	Acquisition of subsidiaries, net of cash acquired		(1,000,050)	-	(3,698,554)
	Deposits		-	-	3,487,543
	Deferred charges		-	(381,452)	(1,742,632)
	Net cash used in continuing investing activities		(3,226,855)	(574,166)	(2,266,399)
	Net cash used in discontinued investing activities		-	-	-
	Net cash used in investing activities		(3,226,855)	(574,166)	(2,266,399)
Foreign exchange effect on cash (note 11)			282,229	(83,300)	251,950
Change in cash and cash equivalents			432,950	(186,876)	178,961
Cash and cash equivalents at beginning of year			207,358	394,234	215,273
Cash and cash equivalents at end of year			$          640,308	$           207,358	$           394,234
	Supplemental cash flow information (note 18)

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)

1.	NATURE OF OPERATIONS & GOING CONCERN
	Stream Communications Network & Media Inc. (“Stream” or the “Company”) mainly provides cable television services and high-speed internet access.
	The Company was incorporated on March 28, 1979  by registration of its Memorandum and Articles under the Company Act of British Columbia, Canada.  On October 19, 2001 the Company changed its name from Trooper Technologies Inc. to Stream Communications Network, Inc. and on August 9, 2004 to Stream Communications Network & Media Inc.
	These financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.  The continuing operations of the Company are dependent upon its ability to continue to raise adequate financing and to commence profitable operations in the future.
	The Company is actively pursuing additional funding to continue its current projects (note 19). Management continues to develop the Company’s operating capabilities in order to improve cash flow from operations.
	Although there is no assurance that the Company will be successful in these actions, management is confident that it will be able to continue as a going concern. Accordingly, these financial statements do not reflect adjustments to the carrying value of assets and liabilities, the reported revenues and expenses and balance sheet classifications used that would be necessary if the going concern assumption were not appropriate. Such adjustments could be material.
2.	SIGNIFICANT ACCOUNTING POLICIES
	Basis of presentation
	These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles. A summary of the significant accounting policies are as follows:
	Consolidation
	These consolidated financial statements include the accounts of the Company and the following subsidiaries. All intercompany transactions and balances have been eliminated.
			Country of Incorporation	Percentage ownership December 31, 2004	Percentage ownership December 31, 2003
		EES Waste solutions Limited	Cyprus	100.00%	100.00%
		International Eco-Waste Systems S.A. ("Eco-Waste")	Poland	100.00%	100.00%
		Stream Communications Sp. z o.o. ("Stream")	Poland	100.00%	100.00%
		Gimsat Sp. z o.o. ("Gimsat")	Poland	100.00%	100.00%
		Polvoice.com Sp. z o.o. ("PolVoice")	Poland	100.00%	95.50%
		Bielsat.com Sp. z o.o. ("Bielsat")	Poland	51.00%	51.00%
		ASK Stream ("ASK", note 3)	Poland	60.00%	0.00%
		Vega Sp. z o.o. ("Vega")	Poland	98.00%	0.00%
	Use of estimates
	The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and expenses for the periods reported. Actual results could differ from those estimates.
	Cash and cash equivalents
	Cash and cash equivalents consist of cash and highly liquid investments with maturities of less than three months.
	Property, plant and equipment
	Property, plant and equipment are stated at cost less accumulated amortization. Amortization is provided for using the declining-balance method at the following rates per annum:
		Automobiles		20% - 30%
		Buildings, offices		3%
		Computer software		20% - 100%
		Cable television network equipment		5% - 45%
		Furniture, fixtures and equipment		20% - 30%
	Plant construction-in-progress consists of assets not yet in use and accordingly no amortization is recorded.

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)

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

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)

3.	ACQUISITIONS
	The Company has completed the acquisition of 60% of ASK. The acquisition was accounted for by the purchase method.  The effective date of the acquisition was May 5, 2004,  after which the operations of ASK are included in these consolidated financial statements. ASK has cable TV networks in Sosnowiec, Poland.
	At the time of acquisition the fair value of the assets and liabilities of ASK were:
		Cash and cash equivalents		$         122,027
		Accounts receivable		36,543
		Property, plant and equipment		113,740
		Intangible assets (subscriber base)		92,622
		Accounts payable and accrued liabilities		(94,856)
		Minority interest		(67,768)
		Purchase price		$          202,308
		Consideration paid in cash		$          202,308
	The Company has completed the acquisition of 98% of Vega. The acquisition was accounted for by the purchase method.  The effective date of the acquisition was October 2, 2004,  after which the operations of Vega are included in these consolidated financial statements. Vega has cable TV networks in Sosnowiec, Poland.
	At the time of acquisition the fair value of the assets and liabilities of Vega were:
		Cash and cash equivalents		$              3,273
		Accounts receivable		25,505
		Property, plant and equipment		51,165
		Intangible assets (subscriber base)		913,377
		Accounts payable and accrued liabilities		(52,735)
		Current portion of long term debt		(6,748)
		Long term debt		(9,033)
		Minority interest		(1,762)
		Purchase price		$          923,042
		Consideration paid in cash		$          923,042
4.	ACCOUNTS RECEIVABLE
			December 31, 2004	December 31, 2003
		Accounts receivable	$          464,012	$          310,176
		Allowance for doubtful accounts	(196,992)	(155,384)
		Accounts receivable - net	$         267,020	$          154,792

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)

5.	PROPERTY, PLANT AND EQUIPMENT
		December 31, 2004		Cost	Accumulated amortization	Net book value
		Automobiles		$          444,227	$          188,622	$          255,605
		Buildings, offices		298,630	96,835	201,795
		Cable television network equipment		13,454,046	3,711,930	9,742,116
		Furniture and fixtures		412,360	377,992	34,368
		Computer software		82,288	74,116	8,172
		Plant construction-in-progress		1,926	-	1,926
				$     14,693,477	$       4,449,495	$     10,243,982
		December 31, 2003		Cost	Accumulated amortization	Net book value
		Automobiles		$          294,435	$          124,898	$          169,537
		Buildings, offices		209,983	62,034	147,949
		Cable television network equipment		9,354,130	2,646,339	6,707,791
		Furniture and fixtures		350,298	278,466	71,832
		Computer software		72,291	57,417	14,874
		Plant construction-in-progress		120,796	-	120,796
				$      10,401,933	$       3,169,154	$       7,232,779
6.	INTANGIBLE ASSETS
		December 31, 2004	Cost	Accumulated amortization	Impairment	Net book value
		Cable TV licences	$          148,781	$            78,774	$                  -	$            70,007
		Subscriber base	6,436,897	1,470,666	2,119,794	2,846,437
			$       6,585,678	$       1,549,440	$       2,119,794	$       2,916,444
		December 31, 2003	Cost	Accumulated amortization	Impairment	Net book value
		Cable TV licences	$            95,625	$            49,520	$                  -	$            46,105
		Subscriber base	4,670,366	536,341	1,818,135	2,315,890
			$       4,765,991	$          585,861	$       1,818,135	$       2,361,995
7.	DISCONTINUED OPERATIONS
	During 2001, the company commenced planned operations in providing cable TV and related cable services. The previous business of meat waste rendering was interrupted when  the European Commission imposed a ban on meat and bone meal products due to the risk of Bovine Spongiform Encephalopathy ("BSE") spread by these products. The Company changed direction in regards to the meat rendering business to avoid liability and uncertainty from the fallout from BSE and applied to change its hazardous waste licence to an incinerator licence. The Company was intending to utilize this licence to start operations in the hazardous waste business, but the company decided to discont inue this business, as it did not fit with its cable service business.
	As at December 31, 2004, the company has not sold Eco-Waste to an arm's length buyer, as originally intended. The net assets were written off during the 2002 fiscal year and the Company disposed of any remaining assets.
	As at December 31, 2002 the net assets related to Eco-Waste were written down to their net realizable value of nil, consequently there are no assets or liabilities included in the consolidated balance sheet as at December 31, 2004 and December 31, 2003.
	In view of the Company’s main business and objectives directed towards cable TV, it was decided to discontinue the operations of PolVoice. In this manner, the Company is focused on one business objective. The operations of PolVoice were discontinued and written off in 2001.

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)

7.	DISCONTINUED OPERATIONS continued
	The statements of operations for the discontinued business operations are:
	For the year ended December 31, 2004				PolVoice	Eco-Waste	Total
	Sales				$                  -	$                  -	$                  -
	Expenses				-	-	-
	Write-down of net assets to net realizable value				-	-	-
	Foreign exchange loss				-	-	-
	Loss from discontinued operations				$                  -	$                  -	$                  -
	For the year ended December 31, 2003				PolVoice	Eco-Waste	Total
	Sales				$                  -	$                  -	$                  -
	Expenses				-	-	-
	Write-down of net assets to net realizable value				-	-	-
	Foreign exchange loss				-	-	-
	Loss from discontinued operations				$                  -	$                 -	$                  -
	For the year ended December 31 2002				PolVoice	Eco-Waste	Total
	Sales				$                  -	$                  -	$                  -
	Expenses				-	-	-
	Write-down of net assets to net realizable value				-	(2,362,877)	(2,362,877)
	Foreign exchange gain				-	-	-
	Loss from discontinued operations				$                     -	$    (2,362,877)	$    (2,362,877)
8.	LOAN PAYABLE
	Loan from Quest Capital Corp. in the amount of $650,000 repayable on or before June 30, 2005, interest bearing at 12% per annum, compounded monthly, payable monthly on the last day of each month. In consideration of the loan, the Company granted a security interest in favour of the lender over all of the Company's present and after-acquired personal property preceded by bank loans and due to related party amount. The lender received a non-refundable bonus payment of 175,000 free-trading common shares of the Company. The loan was jointly and personally guaranteed by three directors/officers ("Guarantors") of the Company. In addition, one of the Guarantors pledged and gran ted the lender 3,000,000 free trading shares in the capital of the Company. The Company has issued replacement shares to that Guarantor - see note 12. When the loan is repaid 3,000,000 shares will be returned to treasury.
9.	LONG-TERM DEBT
						December 31, 2004	December 31, 2003
		Loan balances, current portion				$         101,530	$            64,512
		Loan balances, long term portion				814,707	67,997
		Total				$          916,237	$          132,509
	Bank loans are secured by the fixed assets of the Company repayable monthly at a rate of $5,376 per month. Interest is charged at the prime rate in Poland plus ½% per annum.
	Principal repayments due in the next five years are:
			2005	$          101,530
			2006	$            86,827
			2007	$            69,744
			2008	$            61,129
			2009	$            45,847
10.	DUE TO RELATED PARTY
	The amount due to related party, a former director, bears interest at 5%, compounded annually. The lender agreed in writing that the loan will not be repaid before December 31, 2005.  The total amount due (including accrued interest) is $3,516,054 USD (equivalent to $4,236,302 CAD) of which $2,000,000 USD  was secured by various cable TV networks, with  the remaining debt being unsecured. The Company accrued $113,333 interest in USD (equivalent to $136,544 CAD) at December 31, 2004.

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)

11.	CUMULATIVE TRANSLATION ACCOUNT
	The operations of the Company are situated in the country of Poland along with most of its assets. The foreign exchange rates for the Canadian dollar and the Polish zloty are as follows:
			Rate at the end of the year		Average rate for the year
		2004		2.4898		2.8049
		2003		2.9029		2.7850
	The following table shows the effect of the change in exchange rates and the resulting change in the cumulative translation account for the year ended December 31, 2004, and the foreign exchange effect on cash and cash equivalents:
			December 31, 2003 balance (Polish zloty)	December 31, 2003 balance ($CDN) at 2003 exchange rate	December 31, 2003 balance ($CDN) at 2004 exchange rate	Exchange loss (gain) on translation into 2004
		Rate: Polish zloty to Canadian dollars		2.9029	2.4898
		Accounts receivable	zl         407,082	$         140,233	$          163,500	$         (23,267)
		Inventory	24,138	8,315	9,695	(1,380)
		Prepaid expenses and advances	70,982	24,452	28,509	(4,057)
		Deposits	449,999	155,017	180,737	(25,720)
		Property, plant and equipment	20,954,915	7,218,614	8,416,305	(1,197,691)
		Intangibles	6,444,815	2,220,130	2,588,487	(368,357)
		Accounts payable and accrued liabilities	(7,875,886)	(2,713,110)	(3,163,261)	450,151
		Current portion of long-term debt	(187,272)	(64,512)	(75,216)	10,704
		Long-term debt	(197,388)	(67,997)	(79,279)	11,282
		Non-controlling interest	(1,994,945)	(687,225)	(801,247)	114,022
		Total exchange gain on translation				$    (1,034,313)
		Deduct: Cumulative translation account, beginning of year				371,841
		Cumulative translation account, end of year				944,701
		Foreign exchange effect				$          282,229
12.	CAPITAL STOCK
	(a) Authorized
		150,000,000 common shares of no par value
	(b) Issued
				Number of Shares	Price	Share Capital
		Balance - December 31, 2002		29,003,149	-	$     31,229,685
		Warrants exercised		702,526	$               1.80	1,264,542
		Fair value of warrants expired		-	-	228,323
		Fair value of warrants exercised		-	-	486,905
		Balance - December 31, 2003		29,705,675		33,209,455
		Shares issued for business development		500,000	0.98	487,557
		Shares issued for loan security		3,000,000	-	-
		Financial expenses		1,275,000	0.49	629,809
		Issued for services		78,125	0.78	60,855
		Issued for services		275,000	0.49	135,841
		TV programming and content development		3,000,000	0.49	1,481,904
		Balance - December 31, 2004		37,833,800		$     36,005,421
		3,000,000 shares were issued to a director and guarantor to replace shares pledged  to Quest Capital Corp. - note 8.

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)

12.	CAPITAL STOCK continued
	(c) Options
	In the Annual General Meeting held on June 30, 2004,  the shareholders approved the amendment to the stock option plan whereby the directors  are  authorized  to  issue  stock  options from time to time to employees,  officers, consultants and directors of the Company up to 5,941,135 common shares of the Company at the time of such issue,  at a minimum price allowed under the applicable securities laws.
	Common share purchase options are issued to directors, officers, employees and non-employees of the company with exercise prices which approximate market values at the time the option is granted.
	Summary of directors' and employees' stock options, warrants and convertible securities outstanding:
					Shares	Weighted average  exercise  price $
		Balance of options at December 31, 2003			4,370,000	$                1.88
		Granted			2,490,000	0.60	USD
		Cancelled			(4,370,000)	1.88
		Balance of options at December 31, 2004			2,490,000	$                0.60	USD
	The following table summarizes information about fixed stock options outstanding at December 31, 2004:
			Options Outstanding			Options Exercisable
		Range of exercise prices (USD$)	Number outstanding at December 31, 2004	Weighted average remaining contractual life (years)	Weighted average    exercise        price (USD$)	Number exercisable at December 31,      2004	Weighted average exercise  price (USD$)
		$                        0.60	2,490,000	4.8	$                0.60	2,490,000	$                0.60
	Stock-based compensation expense
	Pursuant to the granting the options in the current period, stock-based compensation expenses has been determined using a Black-Scholes option pricing model assuming no dividends were paid, a weighted average volatility of 56.6% over an expected life of five years and a weighted average annual risk free rate of 3.93%.
	Based on the above assumptions the average fair value for each option is $0.83193 ; accordingly $2,071,510 of stock-based compensation has been recorded in the statement of operations.
	(d) Warrants
		The changes in warrants were as follows:		Number of common shares permitted to be purchased
			Number of warrants		Weighted average price per share	Expiry date	Fair value of Warrants
		Outstanding December 31, 2003	3,126,579	2,976,579	$                1.84	28-Dec-05	$       2,025,447
		Expired	-	-	-		-
		Exercised	-	-	-		-
		Total Balance December 31, 2004	3,126,579	2,976,579	$                1.84		$      2,025,447
		Outstanding December 31, 2004:
			300,000	150,000	$              1.80	28-Dec-05	$          103,962
			2,701,579	2,701,579	1.80	28-Dec-05	1,872,405
			125,000	125,000	2.25 USD	28-Dec-05	49,080
		Total Balance December 31, 2004	3,126,579	2,976,579			$       2,025,447
		The expiry date of the warrants has been extended to December 28, 2005.

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)

13.	SEGMENTED INFORMATION
	The Company operates primarily in one segment, being cable TV services and in two geographic locations, being Canada and Poland.
	Geographic information
		Revenues are attributed to countries based on location of customer.		For the year ended December 31, 2004	For the year ended December 31, 2003	For the year ended December 31 2002
		Revenues
			Canada	$                  -	$                  -	$                  -
			Poland	4,415,461	3,700,160	3,736,716
				$       4,415,461	$       3,700,160	$        3,736,716
		Interest expense
			Canada	$         148,777	$            11,631	$              7,449
			Poland	176,914	127,132	71,113
				$          325,691	$          138,763	$            78,562
		Amortization of property, plant and equipment
			Canada	$              4,015	$              4,983	$              7,526
			Poland	715,156	725,633	899,446
				$          719,171	$          730,616	$          906,972
		Amortization of intangibles
			Canada	$                  -	$                  -	$                  -
			Poland	678,933	243,023	284,064
				$          678,933	$          243,023	$          284,064
		Total expenditures for property, plant and equipment
			Canada	$              2,295	$                 430	$                  -
			Poland	2,576,228	145,508	-
				$       2,578,523	$          145,938	$                  -
		Total expenditures for intangibles
			Canada	$                  -	$                 -	$                  -
			Poland	1,028,928	28,022	-
				$       1,028,928	$            28,022	$                   -
		Property, plant, equipment and intangibles			December 31, 2004	December 31, 2003
			Canada		$            12,446	$            14,165
			Poland		13,147,980	9,580,609
					$     13,160,426	$       9,594,774

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)

14.	INCOME TAXES
	The Company has tax losses in Canadian dollars available for offset against future taxable income in various jurisdictions for the following approximate amounts:
			Canada		$     13,326,000           2,515,000
			Poland
	The income tax losses in Poland can be carried forward and deducted from taxable income for the next five years, but not exceeding 50% of the loss in any of these years. The non-capital losses in Canada begin to expire from 2006 to 2014.  The potential tax benefits of the losses in Canada and Poland have not been recognized in the financial statements and have been offset by a valuation allowance.
	The following is a reconciliation of income taxes:
						For the year ended December 31, 2004	For the year ended December 31, 2003
	Statutory rates in Canada					35.62%	37.62%
		Recovery (income taxes) at Canadian statutory rates				$       2,338,351	$       1,916,229
		Difference in tax rates in other jurisdictions				(525,609)	(155,211)
		Difference due to decrease in statutory rates				-	(139,210)
		Non-deductible expenses for tax purposes				(753,431)	21,495
						$       1,059,312	$       1,643,303
	Tax effect of tax losses not recognized					(1,059,312)	(1,643,303)
	Current and future tax expense (recovery)					$                  -	$                  -
	Future income taxes
	Future income tax assets
		Tax losses				$       4,746,721	$       4,286,910
		Property, plant and equipment				(28,716)	28,818
		Intangible assets				(752,980)	-
		Share issuance costs				243,940	483,754
	Future income tax assets					$       4,208,965	$       4,799,482
	Valuation allowance					(4,208,965)	(4,799,482)
	Net future income tax assets					$                  -	$                 -
15.	FINANCIAL INSTRUMENTS
	(a) Fair Value
	Financial instruments consist of cash and cash equivalents, accounts receivable, deposits, accounts payable and accrued liabilities, the fair value of which are considered to approximate their carrying value due to their short-term maturities or ability of prompt liquidation.
	(b) Credit Risk
	The Company is exposed to credit risk only with respect to uncertainties as the timing and amount of collectibility of accounts receivable.  The Company mitigates credit risk through standard credit and reference checks.
	(c) Currency Risk
	The Company is exposed to financial risk arising from fluctuations in foreign exchange rates and the degree of volatility of these rates.  The Company does not use derivative instruments to reduce its exposure to foreign currency risk.
	The Company had the following financial assets and liabilities in foreign currencies:
				December 31, 2004		December 31, 2003
				Polish zlotys	$USD	Polish zlotys	$USD
		Exchange rates to the Canadian dollar		2.4898	0.8300	2.9029	0.7724
		Cash		871,011	-	555,311	1,029
		Accounts receivable		630,975	-	407,082	-
		Accounts payable		3,781,290	507,313	8,063,201	368,943
		Due to related parties		-	3,516,187	-	-
		Long term debt		2,028,457	-	197,388	-

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)

16.	COMMITMENTS
	As at December 31, 2004, the company is committed under leases for cable networks, office space and automobiles in the following amounts for the next five years:
			2005	$          208,145
			2006	$          205,145
			2007	$          179,410
			2008	$          173,139
			2009	$          170,256
17.	CONTINGENCY
	The company has received invoices from  a creditor for amounts due for work performed in regards to an IPO on the Warsaw exchange in 2003.  The amount claimed is US$3,145,885 of which $NIL has been accrued at December 31, 2004 (2003 - $NIL). The Company is of the opinion that these amounts are due if the IPO on the Warsaw Exchange is completed.
18.	SUPPLEMENTAL CASH FLOW INFORMATION
	The following non-cash transactions were recorded during the year ended December 31:
					2004	2003
	Financing
		TV programming and content development			$       1,481,904	$                 -
		Shares for services			196,696	-
		Business development			487,557
		Financial expenses			629,809	-
					$       2,795,966	$                  -
19.	SUBSEQUENT EVENTS
	Subsequent to year-end:
	The Company issued 850,000 common shares to settle debts owed to the employees and directors.
	The Company has announced a private placement of up to 1,500,000 units ("Unit") at a price of $0.75 USD per unit. Each Unit will be comprised of one common share and one half non-transferable share purchase warrant, with each two warrants entitling the holder to purchase an additional common share of the Company at a purchase price of $1.00 USD per common share for a period of two years.  The pricing of the private placement was changed to $0.80 USD per unit with the warrants exercisable at a purchase price of $0.80 USD per common share.
	The Company has acquired an Internet network in Southern Poland with 2,100 subscribers. The network is located in close proximity to the Company's existing operations.
	The Company has announced an intention  to purchase an additional 1,400 cable subscribers in close proximity to the Company's existing network in Southern Poland from the issuance of 260,000 shares from treasury.

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)

20.	SUMMARY OF MATERIAL DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES IN CANADA AND THE UNITED STATES
	The consolidated financial statements of the company have been prepared in accordance with accounting principles generally accepted in Canada (Canadian "GAAP") which conform in all material respects with accounting principles generally accepted in the United States ("U.S. GAAP") except as set out below:
	Consolidated Balance sheets
			December 31, 2004		December 31, 2003
			Canadian GAAP	U.S.     GAAP	Canadian   GAAP	U.S.        GAAP
	Deficit		$  (36,589,727)	$  (36,589,727)	$  (30,025,012)	$  (30,025,012)
	Total assets		14,131,087	14,131,087	10,204,158	10,204,158
	Consolidated statements of operation			For the year ended December 31, 2004	For the year ended December 31, 2003	For the year ended December 31 2002
	Loss under Canadian GAAP			$    (6,564,715)	$    (6,254,620)	$    (5,989,202)
	Foreign exchange income (loss) (note 20 (a))			1,316,542	(1,809,655)	574,612
	Comprehensive income under US GAAP			$    (5,248,173)	$    (8,064,275)	$    (5,414,590)
	Basic/diluted loss per share, U.S. GAAP			$             (0.17)	$             (0.27)	$             (0.19)
	Consolidated statements of cash flow
			2004		2003
			Canadian  GAAP	U.S.  GAAP	Canadian GAAP	U.S  GAAP
	Cash flows from
		Operating activities	$    (2,191,184)	$    (2,191,184)	$    (1,128,613)	$    (1,128,613)
		Financing activities	5,568,760	5,568,760	1,599,203	1,599,203
		Investing activities	(3,226,855)	(3,226,855)	(574,166)	(574,166)
	Increase (decrease) in cash and cash equivalents		150,721	150,721	(103,576)	(103,576)
	Foreign exchange effect on cash		282,229	282,229	(83,300)	(83,300)
	Cash and cash equivalents - beginning of period		207,358	207,358	394,234	394,234
	Cash and cash equivalents - end of period		$          640,308	$          640,308	$          207,358	$         207,358
	(a) Comprehensive income
	Under SFAS 130, the Company is required to record certain gains and losses as a component of Stockholders' Equity, with the current changes in the component balances comprising the balance sheet figure disclosed in a separate statement or in a financial statement note.  The only item in the Company's financial statements impacting comprehensive income is the unrealized gains and losses from foreign exchange.
	(b) Stock based compensation
	Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”) encourages, but does not require, companies to record compensation cost for stock-based employee compensation plans at fair value.  The company has chosen to account for stock-based compensation using Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”).  Accordingly, compensation cost for stock options is measured as the excess, if any, of the quoted market price of the company's stock at the date of the grant over the amount an employee is required to pay for the stock. There wer e no stock options granted in 2003 or 2002.
	In December 2002, FASB issued SFAS No. 148, “Accounting for Stock–Based Compensation – Transition and Disclosure”.  SFAS 148 amends SFAS No. 123, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation.  In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results.  SFAS 148 is effective for fiscal years beginning after December 15, 2002.  the interim disclosure provisions are effective for financial reports containing financial statements for interim periods beginning after December 15, 2002.  The company adopted SFAS No. 148, as required, on January 1, 2003 with no material impact on its financial statements.

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)

20.	SUMMARY OF MATERIAL DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES IN CANADA AND THE UNITED STATES con't
	(c) Goodwill and other intangibles
	In July 2001, the Financial Accounting Standards Board Issued SFAS No. 142 "Goodwill and Other Intangible Assets".  Under SFAS No. 142, goodwill and indefinite life intangible assets are no longer amortized.  Separate intangible assets that are not deemed to have an indefinite life  will continue to be amortized over their useful lives.  SFAS No. 142 also establishes a new method of testing goodwill and other intangible assets for impairment on an annual basis or on an interim basis if an event occurs or circumstances change that would reduce the fair value of that goodwill or other intangible asset below its carrying value.  The non-amortization provision of SFAS No. 142 applying to goodwill and other tangible assets acquired has been adopted at January 1, 2002.
	(d) New accounting pronouncements
	In March 2004, the Emerging Issues Task Force (“EITF”) reached a consensus on Issue No. 03-01, “The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments” (“EITF 03-1”). EITF 03-1 provides guidance on other-than-temporary impairment models for marketable debt and equity securities accounted for under SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities” (“SFAS 115”), and non-marketable equity securities accounted for under the cost method. The EITF developed a basic three-step model to evaluate whether an investment is other-than-temporarily impaired. On September 30, 2004, the FASB issued FSP 03-1-1, “Effective Date of Paragraphs 10-20 of EITF Issue 03-1, ‘The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments’,” delaying the effective date for the recognition and measurement guidance of EITF 03-1, as contained in paragraphs 10-20, until certain implementation issues are addressed and a final FSP providing implementation guidance is issued. The disclosure requirements of the consensus remain in effect. The Company does not expect the adoption of this consensus or FSP to have a material impact on its consolidated financial statements.
	In September 2004, the EITF reached a consensus on EITF Issue 04-1 (“EITF 04-1”), “Accounting for Pre-existing Relationships between the Parties to a Business Combination.” EITF 04-1 requires that termination settlements of pre-existing contractual relationships between two parties to a business combination be individually evaluated and accounted for separately from the business combination. The provisions of EITF 04-1 apply to business combinations consummated and goodwill impairment tests performed after December 31, 2004. The Company does not expect the adoption of EITF No. 04-1 to have a material impact on its financial position or results of operations.
	In 2003, the Financial Accounting Standards Board (FASB) issued Interpretation No. 46, Consolidation of Variable Interest Entities (“FIN 46”). FIN 46 provides guidance on the identification of entities for which control is achieved through means other than through voting rights (“variable interest entities”) and how to determine when and which business enterprise (the “primary beneficiary”) should consolidate the variable interest entity. This new model for consolidation applies to an entity in which either (i) the equity investors (if any) do not have a controlling financial interest; or (ii) the equity investment at risk is insufficient to finance the entity& #146;s activities without receiving additional subordinated financial support from other parties. In addition, FIN 46 requires that the primary beneficiary, as well as all other enterprises with a significant variable interest in a variable interest entity, makes additional disclosures. FIN 46 and its revision FIN 46-R are effective for the year ended December 31, 2004. As of December 31, 2004, these interpretations did not have an impact on the Company’s financial statements.
	In December 2004, the FASB issued SFAS No. 123R, “Share-Based Payment” which sets accounting requirements for “share-based” compensation to employees, including employee-stock-purchase-plans (ESPPs) and provides guidance on accounting for awards to non-employees. This Statement will require companies to recognize in the income statement the grant-date fair value of stock options and other equity-based compensation issued to employees, but expresses no preference for a type of valuation model. For public entities, this Statement is effective for the first interim period beginning after June 15, 2005. The Company does not expect FASB No. 123R to have a significant impact o n its financial position, results of operations or cash flows.
	In March 2004, the Emerging Issues Task Force (“EITF”) reached a consensus on Issue 03-6 (“EITF 03-6”), “Participating Securities and the Two-Class Method under FASB Statement No. 128, Earnings per Share.” The consensus addresses how to determine whether a security should be considered a “participating security” for purposes of computing earnings per share and how earnings should be allocated to a participating security when using the two-class method for computing basic earnings per share. The provisions of EITF 03-6 are effective for reporting periods beginning after March 31, 2004. The adoption of this consensus is not expected to have a material i mpact on the Company’s results of operations, financial position and cash flows.
	The Emerging Issues Task Force issued EITF Abstract 03-13 (EITF 03-13) to provide guidance on applying SFAS 144, "Determining Whether to Report Discontinued Operations." SFAS 144 discusses when an entity should disclose a 'component' as discontinued operations. Under SFAS 144, a component should be disclosed as discontinued operations when continuing cash flows are eliminated and when there is no significant continuing involvement with the component. EITF 03-13 provides additional guidance on factors to consider in evaluating what constitutes continuing cash flows and continuing significant influence. This Statement is effective for fiscal periods beginning after December 15, 2004 . The Company does not expect there to be any material impact on the consolidated financial statements upon adoption of the guidance.

Stream Communications Network & Media Inc.

Notes to Consolidated Financial statements

December 31, 2004

(in Canadian dollars)

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

EX-99.3

CERTIFICATION

PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

            Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officers of Stream Communications Network & Media Inc. (the "Company"), hereby certifies, to such officers' knowledge, that:

 1.

The Annual Report on Form 20-F for the year ended December 31, 2004 (the "Report") of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

2.

Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: June 28, 2005                        

“Stan Lis”

Chief Executive Officer

Date: June 28, 2005

“Casey Forward”

Chief Financial Officer

EX-99.4

Certification Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
CERTIFICATIONS

        I, Stan Lis, certify that:

1.

I have reviewed this annual report on Form 20-F, of Stream Communications Network & Media Inc.

2.

Based on my knowledge, this 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 report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4.

The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5.

The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

Date: June 24, 2005

“Stan Lis”

Chief Executive Officer

EX-99.4

Certification Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
CERTIFICATIONS

        I, Casey Forward, certify that:

1.

I have reviewed this annual report on Form 20-F, of Stream Communications Network & Media Inc.

2.

Based on my knowledge, this 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 report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4.

The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5.

The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

Date: June 24, 2005

“Casey Forward”

Chief Financial Officer

EX-99.5

Board of Directors

Stream Communications Network & Media Inc.

Commerce Place

PO Box 20

#1020 -400 Burrard Street

Vancouver BC V6C 3A6

Dear Sirs:

We consent to the incorporation in the Registration Statement on Form 20F of our report dated April 25, 2005 except for notes 19 and 20 dated June 24, 2005 relating to the consolidated balance sheets of Stream Communications Network & Media Inc., and the related statements of operations, changes in shareholders’ deficit and cash flows for the years ended December 31, 2004 and 2003.

“MacKay LLP”

Chartered Accountants

Vancouver, Canada

June 30, 2005