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					           TEN NETWORK HOLDINGS LIMITED
                      ABN 14 081 327 068

        ANNUAL     REVIEW       2OO3




what do you want to be?
                                                                               “I WANT TO MAKE
                                                                                TEN VIEWERS FEEL
                                                                                LIKE THEY ARE
                                                                                IN THE DRIVER’S
                                                                                SEAT OF THE BEST
                                                                                TOURING CARS IN




                                                                      bold
                                                                                THE WORLD.”

                                                                                Mark Skaife – V8 Superstar

     “I WANT VIEWERS
      TO KNOW WHAT
      IT’S LIKE TO
      BE PART OF THE
      GREATEST GAME
      IN THE WORLD.
      AND AS PART OF
      TEN'S AFL TEAM,
      I GET TO DO IT
      ALL OVER AGAIN.”

       Stephen Silvagni – AFL Commentator




The Directors’ Report, Concise         The annual general meeting of Ten
Financial Report and Auditor’s         Holdings will be held on Wednesday
Statement contained within this        3 December 2003 in Ballroom 1,
document represent a Concise           Level 3 Hotel Tower, Star City
Report. The Concise Financial Report   Casino, Pyrmont, New South Wales,
within this document has been          commencing at 10.00am.
derived from the Full Financial        Shareholders of Ten Holdings are
Report of Ten Network Holdings         also entitled to attend the annual
Limited (Ten Holdings) for the         general meeting of The Ten Group
financial year ended 31 August 2003    Pty Limited (TEN), which will be held
and cannot be expected to provide      at the conclusion of the annual
as full an understanding of the        general meeting of Ten Holdings.
financial performance, financial
position and investing activities of
the economic entity as the Full
Financial Report. The Full Financial
Report is posted on the Company’s
corporate website
www.tencorporate.com.au
and copies are available through the
office of the Company Secretary on
(02) 9650 1260.



1 The TEN Team       8 Financial Highlights         9 Executive Chairman’s Report   12 Television Operations   17 Eye Corp   2O Community
               “I WANT TEN TO HAVE THE
                PROGRAMMES THAT CLEARLY
                DEFINE US AS A NETWORK.
                EVENT TELEVISION
                INCLUDING BIG BROTHER
                AND AUSTRALIAN IDOL HAS
                ENTRENCHED TEN AS THE
                CLEAR CHOICE OF VIEWERS
                IN THE CORE 16-39
                DEMOGRAPHIC. OUR ABILITY
                TO IDENTIFY NEW
                PROGRAMMING OPPORTUNITIES
                WILL ENSURE TEN’S
                CONTINUED SUCCESS.”

                 David Mott – General Manager, Network Programming




22 Board of Directors   23 Corporate Governance   25 Concise Financial Report   39 Shareholder Information   IBC Directory

                                                     1 /TEN   ANNUAL REVIEW 2003
“I WANT TO KEEP TEN’S IMAGE
 SURPRISING, FUN AND DELIGHTFULLY
 HUMAN! WE’RE CONSTANTLY ON THE
 LOOKOUT FOR NEW WAYS TO ENGAGE OUR
 VIEWERS TO GIVE OUR NETWORK THAT
 UNIQUE KIND OF BUZZ.”
 Jane Eakin – Network Creative Services Manager

                                                       fun
                                                  2 /TEN   ANNUAL REVIEW 2003
                “I WANT TO BUILD ON TEN’S
                 RECORD REVENUE SHARE BY
                 ENSURING OUR SALES AND
                 MARKETING TEAM PROVIDES THE
                 MOST FOCUSED, RESPONSIVE,




   focus
                 ENGAGING AND CREATIVE
                 SOLUTIONS FOR OUR CLIENTS.”

                 Grant Blackley – General Manager, Network Sales




“I WANT TO GROW
 AN EXTRA FEW INCHES.”
 Rove McManus




                3 /TEN   ANNUAL REVIEW 2003
                “I WANT TO
                 MAINTAIN TEN’S
                 HIGH LEVEL OF
                 EFFICIENCY BY
                 IMPLEMENTING
                 COST EFFECTIVE
                 SOLUTIONS AND




edgy
                 DEVELOPING
                 STREAMLINED
                 PROCESS FLOWS.”

                  Chris Chand – TEN’s Young Achiever of the Year




“I WANT TO MAINTAIN AND BUILD ON TEN'S
 REPUTATION FOR PROVIDING BALANCED,
 RELEVANT, CURRENT AND COMPREHENSIVE
 COVERAGE OF NEWS AND PUBLIC AFFAIRS.”

 Sandra Sully – News Presenter




 4 /TEN   ANNUAL REVIEW 2003
“I WANT TO ENSURE TEN CONTINUES TO
 DELIVER THE BEST PROFIT MARGINS IN
 THE SECTOR WHILE MAINTAINING THE
 CREATIVE FOCUS THAT HAS DRIVEN OUR
 RATINGS TO RECORD HIGHS.”
 John Kelly – Chief Financial Officer



                                           best
                                        5 /TEN   ANNUAL REVIEW 2003
“what do you want to be?”
THIS IS TEN’S QUESTION TO ITS
TELEVISION AUDIENCE AS IT PROMOTES
THE PROGRAMMES AND PERSONALITIES THAT
WE BELIEVE REFLECT THE INTERESTS AND
CHARACTER OF OUR VIEWERS.TEN IS IN NO
DOUBT ABOUT WHAT IT WANTS TO BE: STRONG,
SUCCESSFUL, FOCUSED, UNIQUE AND EVEN
A LITTLE PLAYFUL.
Given the stunning growth in our television ratings since the start of 2001, and our record financial performance this
year, TEN is achieving just what it wants to be.
On screen we are delivering the best Australian and international programmes, whether it be drama, light entertainment,
reality, news or sport.
Viewers are voting with their remotes. TEN is the number one network in its core 16-39 year old demographic for
the third year running. TEN’s ratings across all the key demographics in 2003 are among the highest ever recorded
by the Network.
Away from the camera TEN’s sales team secured not only record revenue but a record share of television advertising,
while on the operational front the company has maintained its tight control on costs.
The overall result…. TEN retains the best profit margins in the sector with the benefits flowing directly to shareholders.




                                                                                          QUEER EYE FOR THE
                                                                                          STRAIGHT GUY
                                                                                         “A fresh, lively and
                                                                                          highly entertaining
                                                                                          makeover show with a
                                                                                          difference.”
                                                                                           THE AGE




Top to bottom, left to right: Coupling, Jessica, Navy NCIS, The
Handler, OceanStar, AFL, CrashBurn, The Panel, Law and Order, The
Secret Life of Us, Australian Idol, Queer Eye for the Straight Guy,
Formula One, Big Brother 3, Afer The Deluge, Bathurst 1OOO, Charmed,
Rove McManus and Jana Pittman, The Guardian.




                                                       6 /TEN   ANNUAL REVIEW 2003
                   AFL
                  “You couldn’t ask for more
                   in terms of both calling
                   and expert commentary.”
                   HERALD SUN




                         “The LAW & ORDER
                                           franchise
                          has been one of
                                           the most
                          enduring on tele
                                           vision
                          and good quality
                                            writing
                          is the key.”
                          SUNDAY HERALD SUN




 ROVE [live]
“Whether he is presenting
 the ARIAs, cracking jokes
 or getting the dirt from a
 Hollywood celebrity,
 Australian television’s
 safest pair of hands knows
 every page of the chat
 show manual backwards.”
TV WEEK




              7 /TEN   ANNUAL REVIEW 2003
FINANCIAL HIGHLIGHTS
                                                                         FINANCIAL
                                                                         • Group revenue – $733m (up 1O%)
                                                                         • Ten Holdings Earnings Before Interest Tax Depreciation & Amortisation
                                                                           (EBITDA) - $214m (up 23%)
                                                                         • TV Revenue – $661m (up 12%)
                                                                         • Record TV revenue share – 29.5% (1H 2OO3)
                                            700                          • TV EBITDA – $211m (up 21%)
                       Television Revenue
                                      $M
                                                                66O.7
                                                                         • TV EBITDA margin – 31.8%     (best in industry)
                                                                         • Net Profit After Tax – $89m ($55m normalized – up 31%)
                                                                         • Special dividend – 5.5 cents per share fully franked
                                                                         • Costs (ex AFL finals, Formula One, Australian Idol & selling costs) –
                                                                           up only 1.7%
                                            350
                                                                         • Eye Corp EBITDA – $5m (up from $2m in 2OO2)


                                                                         OPERATIONAL
                                                                         • Number 1 Network* in 16-39 demographic for third year running
                                                                         • Record ratings 25-54 demographic maintained
                                              0
                                                                         • 14 of top 2O programmes in 2OO3 (16-39 demographic)
                                                  2OO1

                                                         2OO2

                                                                 2OO3




                                                                         • 18 regular programmes won timeslot (16-39) – all returning in 2OO3
                                            Ten
                                                                         • Number 1 Australian sporting programme – AFL Grand Final
                                                                         • Number 1 light entertainment show (16-39) – Rove Live
                                                                         • Number 1 reality programme (16-39) – Big Brother
                       EBITDA Margin
                                  %




                                             40
                                                                         • Number 1 Australian drama (16-39) – The Secret Life Of Us
                                                  31.8                   • Introduction of High Definition (HD) broadcasting
                                                                         • Implementation of new sales traffic system brings efficiencies
                                                                           and savings
                                                                         *
                                                                         All ratings data supplied by OzTAM (Survey weeks 7-4O excluding Easter)
                                             20



                                                                         FINANCIAL CALENDAR
                                                                         Beginning of new financial year                               1 September 2OO3
                                                                         Release of preliminary financial results
                                                                         to the Australian Stock Exchange                                8 October 2OO3
                                              0
                                                                         Annual General Meeting                                         3 December 2OO3
                                                   TEN

                                                         NINE

                                                                 SEVEN




                                                                         Record date for payment of interim
                                                                         and special dividends                                         31 December 2OO3
                                                                         Payment of interim and special dividends
                                                                         to members of Ten Holdings                                      8 January 2OO4
                       EBIT Margin
                                %




                                             40
                                                                         Close of first half of financial year                         29 February 2OO4
                                                                         Release of half yearly results                                       April 2OO4
                                                  29.8
                                                                         Record date for payment of second dividend                      Late June 2OO4
                                                                         Payment of second dividend to members of Ten Holdings          Early July 2OO4

                                             20
                                                                         End of financial year                                           31 August 2OO4




                                              0
                                                   TEN

                                                         NINE

                                                                 SEVEN




                                                                               8 /TEN   ANNUAL REVIEW 2003
                                                                                                I am pleased to report that 2003
EXECUTIVE CHAIRMAN’S REPORT
                                                                                                represents TEN’s strongest ever year in
                                                                                                both revenue and earnings terms.
                                                                                                The Company has lifted its share of total
                                                                                                metropolitan television advertising to record
                                                                                                highs due to TEN’s ability to sustain winning
                                                                                                ratings in our core demographic and the
                                                                                                efforts of our sales force to maximise the
                                                                                                revenue return on that performance.
                                                                                                We have also benefited from good growth in
                                                                                                the television advertising market, particularly
                                                                                                in the latter part of the 2003 financial year.
                                                                                                TEN’s success is the culmination of the
                                                                                                Company defining just what it wants to be in
                                                                                                the market place, and how it intends to
                                                                                                achieve that goal.
                                                                                                In the early 1990s TEN established itself as a
                                                                                                low cost network targeting younger viewers.
                                                                                                However by 2000 the strategy and direction
                                                                                                needed rejuvenating if TEN was to not only
                                                                                                maintain but build on its performance and
                                                                                                reputation as a major player in the media
                                                                                                sector.
                                                                                                TEN re-shaped its programming by reducing
                                                                                                the reliance on expensive and increasingly
                                                                                                unproductive international supply agreements
                                                                                                and focusing on domestic content.
                                                                                                At the same time TEN was deepening its
                                                                                                relationship with advertisers and buyers by
                                                                                                developing the most innovative, creative and
                                                                                                effective marketing campaigns. The ability and
                                                                                                commitment to integrate and involve our
                                                                                                clients in Australia’s most talked about
                                                                                                television programmes have firmly
                                                                                                established our sales team as the best in
                                                                                                the business.
                                                                                                In 2003 these programming and sales
                                                                                                initiatives have combined to deliver TEN
                                                                                                unprecedented success.
                                                                                                With our stronger television ratings in the

“TEN’S SUCCESS IS THE                                                                           back half of 2003 we maintained the record
                                                                                                highs of 2002. Most importantly we continue
                                                                                                to dominate our core 16-39 year old
 CULMINATION OF THE COMPANY                                                                     demographic, while becoming increasingly
                                                                                                relevant in other key demographics.

 DEFINING JUST WHAT IT                                                                          The Network’s ratings performance has been
                                                                                                the major driver in TEN achieving its highest
                                                                                                share of metropolitan television advertising
 WANTS TO BE IN THE MARKET                                                                      revenue in many years.
                                                                                                In the twelve months to the end of June
 PLACE, AND HOW IT INTENDS                                                                      2003 TEN secured a 29.2% share, up from
                                                                                                27 .1% in 2002 and well ahead of the average




                                      strong
                                                                                                24.9% share achieved over the previous
 TO ACHIEVE THAT GOAL.”                                                                         five years.
                                                                                                Our revenue position was also boosted
                                                                                                by substantial growth in total television
                              Nick Falloon – Executive Chairman                                 advertising spend, particularly in the second
                                                                                                half of the financial year. Industry figures
                                                                                                indicate revenue grew by 7    .3% for the
                                                                                                six months, the best result since 1998,
                                                                                                excluding the 2000 Olympic year.
                                                                                                Importantly in this positive revenue
                                                                                                environment TEN has been able to maintain
                                                                                                its tight cost control, ensuring the continued
                                                                                                delivery of industry-best margins.




                                                                  9 /TEN   ANNUAL REVIEW 2003
                                                  As a consequence the earnings outcome is           We received an outstanding response to the
EXECUTIVE CHAIRMAN’S REPORT
                                                  just as outstanding, with TEN’s highest ever       TEN story and with the initial offering
                                                  Group EBITDA (earnings before interest, tax,       significantly oversubscribed we increased the
                                                  depreciation and amortisation) of $214.4m,         placement by US$25 million to US$125m at
                                                  with our television division making a record       even more competitive pricing than originally
                                                  contribution of $210.5m.                           anticipated.
                                                  There was also an encouraging improvement          Despite your Company’s stellar performance
                                                  in Eye Corp’s results with the out-of-home         in 2003, there have been continuing
                                                  advertising business delivering EBITDA of          frustrations over industry and legislative
                                                  $5m, up from $2m in 2002.                          matters. Primary among these was the
                                                  The rewards for this performance have              Senate’s rejection of the Government’s
                                                  already flowed through to shareholders with        proposed reforms to cross media and foreign
                                                  two fully franked dividend payments of             ownership laws. I will discuss some of these
                                                  6.5 cents per share (cps) and 5cps in the          issues in more detail shortly.
                                                  2003 financial year, returning TEN to its          These do not detract, however, from TEN’s
                              “TEN REMAINS THE    position as one of the media sector’s high         leading position in the Australian media
                               TV INDUSTRY        yield stocks.                                      sector and the positive outlook for your
                                                  Under the new system introduced this year          Company and the free-to-air television
                               LEADER IN TERMS
                                                  dividend payments were brought forward to          industry generally.
                               OF MARGIN AND IN
                                                  early January and July in line with traditional    The fact is that the media landscape has
                               CONVERTING         timetables adopted by other major public           been transformed in the past decade. There
                               INCREMENTAL        listed companies.                                  is a large array of new mediums competing
                               REVENUE GROWTH     Due to TEN’s August balance date, and to           with a vastly increased number of players in
                               INTO CASH FLOW     accommodate these earlier payments, the            traditional mediums for the advertiser dollar.
                               AND, AT A          dividends for 2003, totalling 11.5 cps fully       Through this fragmentation or media “clutter”   ,
                               CORPORATE LEVEL,   franked, were based on ten months’ profits.        network television is the only medium that
                                                  On a pro forma 12 month basis the annual           delivers “critical mass” for advertisers. So for
                               INTO DIVIDENDS.”
                                                  dividend would have been in excess of 13 cps.      companies looking to launch or reinforce a
                              CITIGROUP           Going forward the first dividend will be based     brand or service free-to-air television is and
                              OCTOBER 2003                                                           will remain at the top of their advertising
                                                  on profits from 1 July to 31 December, and
                                                  the second dividend from 1 January to              schedules.
                                                  30 June.                                           There is plenty of evidence that more and
                                                  With the first dividend in 2004 TEN will also      more advertisers have been adopting just that
                                                  be paying a fully franked special dividend of      strategy through 2003 and into the 2004
                                                  5.5 cps.                                           financial year.
                                                  This is a consequence of a non-recurring gain      Revenue is continuing to surge and was up
                                                  generated by the implementation of a new           over 20% in both September and October
                                                  tax consolidation regime by the Australian Tax     2003, and bookings for the period to
                                                  Office (ATO).                                      Christmas were also significantly ahead
                                                                                                     of last year.
                                                  A total of $44m is distributable and your
                                                  Board felt it was appropriate to pass on the       This outcome is particularly encouraging
                                                  benefits to shareholders, particularly given       given the first quarter is traditionally the
                                                  the tax effectiveness of the special dividend      biggest of the year in revenue terms.
                                                  payment.                                           With booming demand and a great ratings
                                                  There was another non-recurring item relating      story TEN is in its best ever position going
                                                  to our programme supply agreement with             into the annual renegotiations with
                                                  Columbia. With this contract concluding at         advertising buyers for the 2004 year.
                                                  the end of 2003 the Board decided it was
                                                  time to re-assess the value of the studio’s        FINANCIAL RESULTS
                                                  features product in TEN’s library. As a result a   Group revenue for 2003 was $733.1m,
                                                  non-recurring charge of $20m was incurred          an increase of 10% over the previous year.
                                                  as a provision against Columbia features           While there was solid growth in television
                                                  inventory.                                         advertising in the 2003 financial year of 6%,
                                                  We consider this a prudent and conservative        TEN clearly outperformed its competitors
                                                  measure.                                           with revenue rising 12% to $660.7m.
                                                  In 2003 there was clear evidence of                Eye Corp secured $72m in revenue, down
                                                  support for TEN’s strategic direction with the     9.7%, the decline attributable to reduced
                                                  securing of a private debt placement in the        inventory and difficult market conditions
                                                  United States.                                     in Asia.
                                                                                                     Group EBITDA was up significantly to
                                                                                                     $214.4m, 23% higher than 2002.
                                                                                                     The television division’s earnings contribution
                                                                                                     was outstanding with EBITDA of $210.5m, an
                                                                                                     increase of 21%.
                                                                                                     Eye Corp’s EBITDA was $5m, up from $2m
                                                                                                     last year.




                                                         1O /TEN   ANNUAL REVIEW 2003
TEN’s renowned control over costs was             These programmes, along with our proven            The Government, like those in other
maintained.                                       performers, will form the base of our              countries, should regulate a “must-carry”
In television, costs increased by just 1.7%       schedule for next year.                            regime for FTA digital services on the newly-
excluding the incremental impact of a full        Add to them an exciting slate of domestic          approved monopoly pay TV platform.
season of AFL coverage, the acquisition of        productions, including drama, light                This is particularly important for regional
Formula One motor racing, Australian Idol         entertainment and reality, some of America’s       viewers who will suffer because local
and selling costs associated with increased       hottest new shows and premiere Australian          television services will be profoundly
revenue.                                          and Hollywood movies, and TEN has what it          compromised.
As a result, TEN again leads the sector with      takes to attract even bigger ratings in 2004.      It is also essential to promote the take up of
a TV EBITDA margin of 31.8%.                                                                         digital services in the most viable manner.
                                                  EYE CORP
Eye Corp was also stringent on costs                                                                 Shareholders can be assured that your Board
achieving a reduction of 14%.                     Our out-of-home advertising business               will continue to lead the debate on these and
                                                  showed pleasing improvement in its                 other industry matters.
TEN’s operating cash flow continues to            performance in 2003.
be strong.
                                                  Revenue of $72m was below last year,               THE WAY AHEAD
The US placement of US$125m ten-year              however EBITDA increased to $5m from
unsecured notes provides your Company                                                                TEN’s television business has made an
                                                  $2m last year.                                     exceptional start to the 2004 financial year.
with long-term security, certainty and
diversification in our debt commitments.          The reduced revenue was a reflection of less       We are achieving record revenue off the back
                                                  inventory, mostly in the large format area,        of record ratings, and the domestic
TELEVISION                                        and a challenging Asian market impacted by         advertising market is looking very strong.
                                                  issues such as the SARS virus.
TEN was conscious that 2003 would bring                                                              TEN believes that with the return of all our
unprecedented challenges from our                 Chief Executive Gerry Thorley and his              top programmes along with new shows,
commercial rivals, and certain programming        management team continue to scrutinise             including Under Construction and an
initiatives were needed to again reach our        each concession for potential restructuring,       Australian version of Queer Eye For The
primary goal, victory in the 16-39 demographic.   and when deals are due for renewal only            Straight Guy, we have the schedule to
                                                  financially realistic offers are made. This has    ensure our highest ever revenue share is
We looked to achieve more ratings
                                                  meant that some inventory has gone to              maintained.
consistency across the year rather than
                                                  competitors prepared to pay prices based on
softening in the second half as the Network                                                          Eye Corp made encouraging headway over
                                                  historically unachievable revenue.
had done previously.                                                                                 the past twelve months but we are
                                                  The advertising market in the out-of-home          conscious that there is still much to do.
This was accomplished very effectively.
                                                  sector recorded some growth over the past
After a very competitive start against the                                                           We are facing intense competition again in
                                                  twelve months but competition remains
cricket World Cup and rival networks bringing                                                        2004, including the Athens Olympics.
                                                  intense with the introduction of new
out key programmes earlier than usual, TEN        products, particularly in the small format area.   However, the revenue and ratings outlook has
steadily re-established itself back on top                                                           never looked better, and with costs firmly
                                                  There is still much hard work ahead before
in 16-39. In fact, at the time of publication,                                                       under control TEN is looking at an even
                                                  some of Eye Corp’s lost value begins to
TEN trailed last year’s record ratings by only                                                       stronger financial performance in the
                                                  be restored.
2% and was closing the gap.                                                                          year ahead.
Core to this success was the depth of our         INDUSTRY MATTERS                                   Looking further into the future, we continue
schedule and the popularity of our key            In addition to our disappointment over the         to examine potential growth opportunities in
programming franchises, including some of         rejection of the Government’s proposed             the media and hope the Senate will have the
the Network’s new acquisitions.                   changes to cross media and foreign                 foresight to finally free our sector from the
Big Brother produced a different viewing          ownership laws, several other industry issues      outdated and unnecessary constraints of the
pattern in 2003 but again proved the guiding      of vital importance to your Company remain.        cross media and foreign ownership laws.
force in the demographic.                         The Government is reviewing its anti-              The Company could not achieve its continued
Traditional favourites such as Rove [live],       siphoning list, which ensures Australians do       standard of excellence but for the diligence,
The Panel, The Secret Life Of Us,                 not have to pay to watch their favourite           enthusiasm and skills of the management
Neighbours, Everybody Loves Raymond,              sports.                                            and staff, and I offer them my appreciation for
Becker, The Simpsons, Charmed, Law &                                                                 their ongoing efforts and loyalty.
                                                  We believe the current arrangements benefit
Order: SVU and Criminal Intent and the            the consumer and TEN is determined to              My fellow directors also played a key role in
First At Five News were back as winners           ensure free-to-air coverage of the most            our success over the past twelve months and
this year.                                        popular sports is retained.                        I commend them for their contribution and
The AFL ratings were well up for the home                                                            support.
                                                  Contrary to pay television claims, the rules
and away series while the finals, surely the      are not preventing them from showing a             And of course to you, our shareholders, I
most exciting ever with all interstate teams      diversity of sport.                                would like to thank you for your commitment
involved, set new high marks. The 2003 AFL                                                           to TEN as we progress through one of the
Grand Final was this year’s most watched          What pay-TV wants is exclusive, live rights to     most significant stages in this Company’s
sporting event.                                   major sporting events to drive subscriptions.      history.
Fresh to the Network were two large-scale         Anti-siphoning prevents that happening in
projects now critical elements of the TEN         Australia and while there may be room for
brand.                                            flexibility in the coverage of some sports, the
                                                  underlying protections of the legislation must
Formula One motor racing is in its rightful       be retained.
place at TEN, the home of motor sport.
                                                  I predicted this time last year that the merger
Australian Idol was borne from the hugely         of the Foxtel and Optus pay television
successful Pop Idol concept in the Britain,                                                          Nick Falloon
                                                  operations would create many problems. It
and also achieved extraordinary ratings in the    seems they are already coming to the fore          EXECUTIVE CHAIRMAN
United States. It is a perfect fit with our       in terms of disadvantaging the free-to-air
target demographic and was climbing               broadcasters not affiliated with Foxtel.
strongly as the finale approached.




                                                        11 /TEN   ANNUAL REVIEW 2003
TELEVISION OPERATIONS




                                                                                                 OVERVIEW
“OUR IDEAS CULTURE CREATES                                                                       It is fair to say that Network Ten has the
                                                                                                 clearest identity of any of Australia’s
 AN OPENNESS TO DOING                                                                            commercial television networks. We are
                                                                                                 absolutely focused on what we want to be:

 THINGS DIFFERENTLY THAT                                                                         • Number one with viewers under 40
                                                                                                 • Increasingly competitive in the 25-54
                                                                                                   demographic
 MANIFESTS ITSELF IN EVERY                                                                       • A very important player for the
                                                                                                   independent production community
 PART OF OUR BUSINESS.”

                               flexible
                        John McAlpine – Chief Executive Officer
                                                                                                 • Winning a larger share of total television
                                                                                                   revenue
                                                                                                 • Fully exploiting new technology
                                                                                                 • An employer of choice
                                                                                                 Our ideas culture creates an openness to
                                                                                                 doing things differently that manifests itself in
                                                                                                 every part of our business.
                                                                                                 It has enabled TEN – amid the most
                                                                                                 competitive year I can recall – to continue to
                                                                                                 grow revenue and market share, and maintain
                                                                                                 the ratings gains achieved since 2001.
                                                                                                 The strategy we unveiled in 2000, to increase
                                                                                                 our Australian prime time content, continues
                                                                                                 to deliver, and was recognised at this year’s
                                                                                                 Logies, where TEN won eight awards,
                                                                                                 including three in the industry-judged “most
                                                                                                 outstanding” categories.




                                                                  12 /TEN   ANNUAL REVIEW 2003
We are less reliant on imported product than       We also want to be the first port of call for       Underscoring the extent to which viewers
ever before, and the Hollywood agreements          Australian creatives.                               want to be involved, eviction voting this year
we have negotiated in the past 18 months           Outsourcing virtually all of our local              was up 38% on 2002. Big Brother will return
provide far greater flexibility and value to TEN   production, we work closely with Australia’s        to TEN in 2004.
than traditional studio output deals.              leading independent producers to bring their        No television format anywhere is bigger than
Through careful inventory management, and          projects – from drama, to light entertainment,      Idol, which has already been enjoyed by
acquiring key new shows, our 2003 schedule         to factual, to children’s – alive on television.    more than 68 million viewers in ten countries.
was our strongest and most consistent in           The results of this collaborative approach are      As with Big Brother, TEN is driving
many years – performing throughout the             seen across our schedule.                           consumer interaction with Australian Idol on
40-weeks of official ratings.                      Take, for example, Rove [live]. Now in its          multiple levels. As of week 40, the audience
And, despite aggressive counter-scheduling         fourth season on TEN, Rove consistently wins        continues to build, averaging a 46.6% share in
by our rivals – now fully cognisant of the         its timeslot in 16-39, and frequently in total      16-39 for the Sunday night live performances,
challenge we present – we retain the lead in       people as well. Demonstrating how far Rove          and 37 .8% for Monday result programmes.
our core 16-39 demographic, and are making         McManus has come in just a few years, he            Website traffic and audience voting are
inroads in 25-54.                                  won the Gold Logie at this year’s awards.           climbing with each successive week.
With several major capital projects behind us,     We’re proud of the role TEN has played in           TEN has also acquired Queer Eye for the
our focus increasingly is on developing TEN’s      Rove’s flourishing career.                          Straight Guy, with rights to both the hit US
performance culture, and creating a climate        The Panel continues to perform strongly             series and the format for adaptation in
of opportunity for employees.                      after six years, testament to the crew at           Australia.
Our programming and sales achievements,            Working Dog. Rove and The Panel endure in           A new format for next year is Under
prudent cost controls, aggressive deployment       a crowded marketplace where similar formats         Construction, which sees14 couples live and
of new technology and staff development            have launched and failed on other networks          work together to design, build, and furnish a
initiatives position TEN well for continued        this year.                                          dream home, but only one couple will get to
growth.                                            Roving Enterprises’ new sketch comedy,              keep it.
                                                   skitHOUSE, was an immediate hit in 2003,            Our Australian drama slate is busier than
PROGRAMMING                                        and we commissioned a second series.                ever. The multi-award winning The Secret
We want to be the number one network with          Rounding out a busy year, Roving Enterprises        Life of Us (Southern Star) returns for a fourth
viewers under 40, and increasingly                 also produced After the Game, a light-              series in 2004, having won its timeslot every
competitive in 25-54.                              hearted look at the week’s footy news, and          week this year in 16-39 against the toughest
For the third consecutive year, we are doing       the annual ARIA Awards telecast for TEN.            competition.
just that, with a host of “must-watch”             Good Morning Australia, undisputed leader           CrashBurn, the 13-part drama from Sea
programmes for viewers aged 16-39,                 of Australian daytime TV, broadcast its 2700th      Change creators, CoxKnight Productions,
including Rove [live], The Secret Life of Us,      episode in September.                               debuted in August to critical acclaim.
The Simpsons, the Law & Order trilogy,             In the reality genre, we have brought two           Neighbours goes from strength to strength,
Becker, Everybody Loves Raymond and                great franchises to Australia - Big Brother         continuing to win nightly in 16-39.
The Panel.                                         (Southern Star Endemol) and Australian Idol
AFL and motorsport, with our Australian and        (Grundy Television) - with more to come.
international dramas, are broadening TEN’s         Big Brother delivered nearly 50% shares of
appeal to the 25-54 audience, while not            the under-40 audience again this year.
sacrificing our dominance of under 40s. In
fact, TEN is now the number one network            The Big Brother Final Eviction was among
with viewers aged 16-42.                           the top shows of the year in both 16-39 and
                                                   total people.




                                                                                                      “WE VIEW TEN AS
                                                                                                       A CORE HOLDING
                                                                                                       AS IT REPRESENTS
                                                                                                       A QUALITY MEDIA
                                                                                                       FRANCHISE.”
                                                                                                      JP MORGAN
                                                                                                      JULY 2003




                                   Left to right: Becker,
                                                          Blackjack, Cheez TV




                                                        13 /TEN    ANNUAL REVIEW 2003
                                                                                                                              This year TEN brought audiences the mini-          In 2003, our children’s programming team
TELEVISION OPERATIONS
                                                                                                                              series, After the Deluge (CoxKnight, with          scheduled approximately 900 hours of
                                                                                                                              Apollo Films) and the telemovie, Temptation        television, including: In the Box; Cheez TV;
                                                                                                                              (Chapman Pictures). A series based on              TEN’s youth-oriented AFL show, Totally
                                                                                                                              Temptation, with the working title, The            Footy; and the award-winning Totally Wild,
                                                                                                                              Cooks, is planned for 2004.                        which now airs in High Definition. Totally
                                                                                                                              TEN also enjoyed success with the telemovie        Wild‘s focus on nature and science, and
                                                                                                                              Black Jack, starring Colin Friels (Jigsaw          TEN’s commitment to children’s
                                                                                                                              Entertainment). Another three Black Jack           programming, made the show a natural for
                                                                                                                              installments will air in 2004.                     the new technology.
                                                                                                                              Other dramas in the pipeline include the           Our children’s drama remains world class.
                                                                                                                              telemovies: Small Claims, starring Rebecca         Pirate Islands built to a cumulative reach of
                                                                                                                              Gibney and Claudia Karvan (RB Films);              1.7 million viewers across its final week.
                                                                                                                              Go Big, with Tom Long and Justine Clarke           For 2004 is the high-end drama, Wicked
                                                                                                                              (RB Films); and Second Chance (BBHTV)              Science, which combines high-energy live
                                                                                                                              starring Vince Poletto, Jodie Dry and              action and character generated images
                                                                                                                              Ben Mendelsohn.                                    (3-D animation), and follows the school
                                                                                                                              A mini-series of Bryce Courtenay’s Jessica,        science curriculum.
                                                                                                                              produced by Anthony Buckley (Heroes’               Also for next year is a modern-day
                                                                                                                              Mountain) will air in 2004.                        Huckleberry Finn adventure/comedy, Fergus
                                                                                                                              We continue to identify demographically            McPhail, while the comedy/spy spoof
                                                                                                                              suitable Australian feature films at an early      SCOOTER:Secret Agent is planned for 2005.
                                                                                                                              stage, securing their Australian free-to-air       Turning to international programming, some
                                                                                                                              television rights. Crackerjack, starring Mick      exciting new shows enhanced our prime time
                                                                                                                              Molloy, Jane Scott’s Love’s Brother, and Nick      schedule.
                                                                                                                              Giannopoulos’ The Wannabes will premiere           UK celebrity chef, Jamie Oliver, has cooked
                                                                                                                              on TEN over the next two years.                    up a storm on TEN. Jamie’s Kitchen
                                                                                                                                                                                 launched on the night of the Big Brother
                                                                                                                                                                                 Final Eviction to a strong timeslot win, and
                                                                                                                                                                                 continued that form throughout the series.
                                                                                                                                                                                 Encouraged by Jamie’s Kitchen, TEN took
                                                                                                                                                                                 the bold step of scheduling Oliver’s Twist
                                  Commercial Audience Share 16-39
                                                               %




                                                                    40         2OOO                   2OO1                  2OO2                   2OO3
                                                                                                                                                                                 and The Naked Chef weeknights at 7pm.
                                                                                                                                                                                 Traditionally the preserve of news or sitcoms,
                                                                                                                                                                                 Oliver’s Twist dominated that timeslot in
                                                                    30
                                                                                                                                                                                 16-39, underscoring the demand of under-40
                                                                                                                                                                                 audiences for an alternative.
                                                                                                                                                                                 Following the hugely popular The Osbournes,
                                                                    20                                                                                                           we brought to TEN another MTV reality
                                                                                                                                                                                 series, Punk’d, where top Hollywood stars
                                                                                                                                                                                 fall prey to a super-prankster.
                                                                    10




                                                                     0
                                                                         TEN




                                                                                                TEN




                                                                                                                      TEN




                                                                                                                                             TEN
                                                                                NINE




                                                                                                       NINE




                                                                                                                             NINE




                                                                                                                                                    NINE
                                                                                       SEVEN




                                                                                                              SEVEN




                                                                                                                                    SEVEN




                                                                                                                                                           SEVEN




                                                                                               “...the qualtiy of LAW &
                                                                                                ORDER: CRIMINAL INTENT
                                                                                                continues to shine. It is
                                                                                                one of the sharpest, most
                                                                                                elaborately plotted and
                                                                                                unpredictable detective
                                                                                                series on television.”
                                                                                                THE AGE


                                                                                                                                                   Law and Order: SVU
                                                                                                                     Raymond, Bathurst 1000, Monk,
                                                                                      n, Neighbours, Everybody Loves
                                                      Criminal Intent, Jamie’s Kitche
                        Left to right: Law and Order:




                                                                                                                                            14 /TEN         ANNUAL REVIEW 2003
Law & Order: Criminal Intent – the latest in      TEN continues to lead in local news. TEN           SALES ACHIEVEMENTS
the Dick Wolf Law & Order franchise – has         News First at Five provides the Network’s          We want a greater share of total television
become the most-watched regular programme         face in each of our capital city markets, and a    revenue, reflecting TEN’s ability to deliver
on TEN and one of the top-rating dramas on        strong lead-in to prime time. The one-hour         targeted audiences in mass numbers.
Australian TV. With Law & Order: SVU, and         format allows for longer stories and more
                                                                                                     Our sales team remain the best in the
the original Law & Order, these slick, cleverly   in-depth coverage of local news, key to its
                                                                                                     business, with a keen understanding of how
scripted shows appeal not only to our core        enduring success. With the Early News and
                                                                                                     television can connect advertisers with their
demographic but frequently win their              TEN’s Late News, TEN provides nearly
                                                                                                     target markets, and a reputation for delivering
timeslots in 25-54 and total people as well.      40 hours of news each week.
                                                                                                     the most creative and effective strategies
In our continued efforts to provide an            Entering its 11th year, Meet The Press             to clients.
alternative to viewers, after the AFL season      remains the favoured weekend interview
                                                                                                     TEN is taking the lead in how Australian
we introduced “Super Crime Saturday” on           programme for senior politicians and public
                                                                                                     television is bought and sold – moving away
TEN, launching the new series Dragnet and         sector leaders.
                                                                                                     from the traditional view of television airtime
Monk, followed by the long-running police         Sports Tonight celebrated its 10th                 being a commodity.
drama, NYPD Blue.                                 anniversary this year, and is Australia’s only
                                                                                                     By getting involved with advertisers and their
The Simpsons and Charmed continue to              nightly sports news programme on free-to-air
                                                                                                     agencies at the earliest stage, and aligning
attract the lion’s share of under-40 viewers,     television.
                                                                                                     marketers’ brands with our content, TEN can
while perennial favourites, Everybody Loves       TEN’s second year as an AFL broadcaster            offer clients much more value than simply
Raymond and Becker, often take out the            saw Saturday night audiences build                 buying a demographic through a certain
broader demographics, too.                        throughout the season, up 13.5% on 2002            number of spots.
Looking ahead, our programme supply               levels which were, in turn, significantly higher
                                                                                                     High viewer engagement with shows as
agreement with Columbia (Sony Television)         than 2001, before TEN acquired the AFL
                                                                                                     diverse as Big Brother, Australian Idol,
expires at the end of this year, although we      rights.
                                                                                                     and The Secret Life of Us allows us to
have run of series rights to the Columbia         The 2003 AFL finals saw both thrilling             create comprehensive marketing solutions
programmes still in production, including         competition and unprecedented ratings, with        for clients.
The Guardian.                                     every non-Victorian team contesting for the
                                                                                                     With content as the bridge, TEN can also
The extension of our output agreement with        first time. This was both a milestone in AFL
                                                                                                     work across a variety of media to deliver the
Universal Studios (which brings the Law &         history and a boon for efforts to grow the
                                                                                                     most effective solutions for clients.
Order franchise, Dragnet, and feature films),     game’s following in the eastern states.
and our exclusive agreement with Paramount                                                           A good example is Australian Financial
                                                  The introduction of Formula One this year
International Television (Becker, Charmed)                                                           Review Market Wrap. Launched in June,
                                                  cemented TEN’s position as the home of
secure our long-term supply of international                                                         the nightly two-minute financial news and
                                                  motorsport. TEN broadcasts every major
series.                                                                                              advertising segment draws on the AFR’s
                                                  motorsport category in the world, including
                                                                                                     respected “Market Wrap” section, and
TEN got the best of the new Hollywood             V8 Supercars, the World Rally
                                                                                                     provides a vehicle for client Hutchison’s “3”
product for 2004 (US 2003 fall season),           Championship, Australian Rally
                                                                                                     brand to reach its target market.
including dramas, Navy NCIS and The               Championship, CART World
Handler, and the comedy It’s All Relative.        Championship, and Moto GP.
                                                  Dedicated entirely to the world of motorsport,
                                                  the weekend magazine programme, RPM,
                                                  marked its 200th episode this year.




                                   “With its slick cast and
                                    perfectly timed one-
                                    liners, it’s not hard to
                                    see why everybody still
                                    loves Raymond.”
                                     THE DAILY TELEGRAPH




                                                                                   “MONK makes an extremely
                                                                                    promising debut, kicking
                                                                                    off TEN’s new Saturday-
                                                                                    night crime-time line-up
                                                                                    in style.”
                                                                                     THE AGE




                                                         15 /TEN   ANNUAL REVIEW 2003
                                            The results that stem from TEN’s                  created in widescreen digital, and we are
TELEVISION OPERATIONS
                                            collaborative approach to working with            encouraging clients and production houses
                                            advertisers and their agencies are getting        to produce commercials in that format.
                                            noticed, leading our competitors to imitate
                                            our tactics.                                      CHALLENGES AHEAD
                                                                                              In the most competitive television
                                            OPERATIONS                                        environment in memory, TEN has risen to
                                            We want to fully exploit new technology to        the challenge.
                                            ensure TEN is as operationally efficient and      For the third consecutive year we are winning
                                            nimble as possible.                               the 16-39 demographic, and continuing to
                                            Towards that aim, we concluded several            deepen our appeal in broader demographics.
                                            major capital expenditure programmes              With a number of new Australian and
                                            this year.                                        international programmes planned for 2004,
                                            We completed centralisation of the play-out       we expect TEN will be every bit as
                        “WE EXPECT TEN'S    of all programmes, promotions and                 competitive going forward.
                         VIGILANT TRACK     commercials from TEN’s headquarters in            Our ratings successes have helped our sales
                                            Sydney. Doing so alleviated the need to           team secure both record television revenue
                         ON COSTS TO
                                            replace the old analogue structure with digital   and market share, and the outlook for future
                         CONTINUE. IT'S     equipment in each of our five capital city        growth remains positive.
                         SUCCESSFUL         stations, generating multi-million dollar
                                                                                              With several long-term capital projects,
                         LOW-COST,          savings.
                                                                                              including our digital upgrade, largely
                         DIFFERENTIATED     Our world-first airtime management system         complete, TEN has the technological flexibility
                         PROGRAMMING        is progressively operational, streamlining and    to keep pace with changes.
                         OFFER AND A        automating the many administrative
                                                                                              We have done all this while preserving the
                                            processes that underpin our sales activities,
                         PROVEN                                                               best margins in our industry.
                                            thereby freeing our sales team to direct their
                         TELEVISION         efforts more fully to client service.             Attracting and retaining the best people is
                         MANAGEMENT TEAM                                                      and will continue to be a major focus for TEN.
                                            With our High Definition facilities fully
                         PROVIDE EXTRA                                                        We’re proud of our efforts to create a culture
                                            on-line, TEN’s upgrade to digital is all but
                                                                                              that encourages and rewards performance,
                         COMFORT.”          complete. Most of our weekly Australian
                                                                                              recognizes individual aspirations, and makes
                                            drama, The Panel, Good Morning Australia,
                        CREDIT SUISSE                                                         TEN an employer of choice.
                                            Totally Wild and an increasing number of
                        OCTOBER 2003
                                            international programmes, including Becker        With our programming, sales, operations and
                                            and Everybody Loves Raymond, are                  staff development initiatives working in
                                            created in High Definition. TEN is meeting the    concert, TEN is ideally positioned to capitalize
                                            Government’s annual transmission quota of         on any new opportunities.
                                            1040 hours of native High Definition
                                            programming.
                                            We continue to invest heavily in new
                                            newsgathering technology to give our
                        “WE LIKE TEN A      journalists and crews the ability to get
                         LOT.”              material to air as quickly as possible –
                                            particularly from remote locations. Our new
                        DEUTSCHE BANK
                        OCTOBER 2003        “store and forward” gear has already proved       John McAlpine
                                            invaluable in our coverage of the Iraq War and    CHIEF EXECUTIVE OFFICER
                                            the Bali bombing trials.                          TELEVISION
                                            With the industry, TEN continues to promote
                                            digital television to encourage consumer take
                                            up. All of TEN’s Australian programming is




                                           “THE SIMPSONS is one of
                                            those rare mass-culture
                                            phenomena with a
                                            seemingly inexhaustible
                                            appeal.”
                                            THE AUSTRALIAN




                        sons, AFL
Left to Right: The Simp




                                                   16 /TEN   ANNUAL REVIEW 2003
EYE CORP




                                                                                       Eye Corp wants to be known for providing
           “THE FINANCIAL PERFORMANCE                                                  the most creative, innovative and effective
                                                                                       marketing strategies in the out-of-home
            HAS IMPROVED, AND JUST                                                     advertising sector.
                                                                                       The past twelve months have been a period

            AS IMPORTANTLY WE ARE                                                      when we have worked hard to build Eye
                                                                                       Corp’s reputation. Through the diligent efforts
                                                                                       of the management team and staff I am
            INCREASINGLY COMING INTO                                                   pleased to report the Company has made
                                                                                       considerable progress in 2003.

            CONSIDERATION BY MAJOR                                                     The financial performance has improved, and
                                                                                       just as importantly we are increasingly
                                                                                       coming into consideration by major advertisers
            ADVERTISERS AS THEY PLAN                                                   as they plan their media campaigns.




                visible
                                                                                       We are also encouraged from an industry

            THEIR MEDIA CAMPAIGNS.”                                                    viewpoint that there has been revenue
                                                                                       growth across the out-of-home sector,
                                                                                       particularly in the first half of the 2003
                                                                                       calendar year. However, this should be seen
            Gerry Thorley – Chief Executive Officer, Eye Corp
                                                                                       in the context of the expansion of new
                                                                                       out-of-home advertising product, particularly
                                                                                       in the small format categories.
                                                                                       Nevertheless, there are certainly positive
                                                                                       signs, particularly in the television sector,
                                                                                       of a return by larger companies to “brand”
                                                                                       advertising. For mediums such as
                                                                                       out-of-home, whose key strength is brand
                                                                                       building, this is good news.




                                                        17 /TEN   ANNUAL REVIEW 2003
                                 In regard to our individual business units, the
EYE CORP
                                                                                   From an industry viewpoint, we are
                                 shopping centre division Eye Shop recorded        maintaining the focus on research and
                                 good growth in 2003. With our dominance of        accountability.
                                 the major malls and the further roll out of       There is still a need to finalise an acceptable
                                 inventory, we expect further improvements in      audience measurement “currency”       .
                                 this category in 2004.
                                                                                   The ROAM reach and frequency system is
                                 Eye Drive had the toughest challenges, with       the best approach available today, and
                                 large format being the most competitive of        participating operators hold the majority of
                                 the domestic out-of-home mediums, and we          large format sites.
                                 remain resolute in our efforts to restructure
                                                                                   It gives media buyers accurate site profiles,
                                 and move away from unviable concession
                                                                                   demographic market segmentation, and
                                 arrangements.
                                                                                   reach and frequency estimates by campaign
                                 Our Fly division, with its signage in and         or site.
                                 around Australia’s major airports, had a
                                                                                   Already it’s been strongly endorsed by the
                                 pleasing level of activity considering the
                                                                                   Media Federation of Australia, while key
                                 difficult travel environment. This was despite
                                                                                   clients such as Pepsi say ROAM has been
                                 the SARS virus, which impacted air
                                                                                   critical in allowing it to select sites where
                                 passenger movements around the world
                                                                                   they can target specific demographics.
                                 and the Asian region, in particular, for a
                                 number of months.                                 The relationship with our parent company,
                                                                                   Network Ten, is of great importance to
                                 SARS and a difficult economic environment
                                                                                   the future development of Eye Corp. This
                                 meant that there was a smaller contribution
                                                                                   relationship continues to evolve, and we are
                                 from our Asian operations in 2003. However,
                                                                                   increasingly undertaking joint sales projects,
                                 there have been signs of more buoyant
                                                                                   including an upcoming summer campaign.
                                 advertising conditions in recent months.
                                 There has also been a development in regard       FINANCIAL RESULTS AND
                                 to our Malaysian operations. Navis
                                                                                   OPERATIONS
                                 Investment Partners, a Kuala Lumpur based
                                 fund manager, has taken a majority stake in       I am pleased to report that there was a
                                 Big Tree Outdoor, Malaysia’s largest out-of-      promising improvement in Eye Corp’s
                                 home operator, in which Eye Corp has a            financial results in 2003.
                                 30% shareholding.                                 While revenue of $72.0m was below 2002,
                                 We have held extensive discussions with           Earnings Before Interest, Tax, Depreciation
                                 Navis and are impressed by their enthusiasm       and Amortisation (EBITDA) increased to
                                 for the business and their desire for a           $5m from $2m.
                                 long-term involvement.                            The revenue reduction was a reflection of
                                 Adval, Eye Corp’s point-of-sale services          Eye Corp’s decision not to pursue an
                                 operation, boosted its earnings performance       unprofitable renewal of a large format
                                 despite a tougher revenue climate. This is a      concession in Victoria and difficulties in Asia,
                                 reward for the work done on improving the         including the SARS virus and the closure of
                                 unit’s business processes.                        the Vietnam operation early in 2003.
                                                                                   In terms of both large and small format
                                                                                   inventory we continue to scrutinise each
                                                                                   concession for potential restructuring, and
                                                                                   when deals are due for renewal only
                                                                                   financially realistic offers are made. This has
                                                                                   meant that some inventory has gone to
                                                                                   competitors prepared to pay prices based on
                                                                                   historically unachievable revenue.




           Left to right: Eye Fly
                                  large format signage, Aust
                                                             ralia’s longest billboar
                                                                                      d on the Glebe Island Silo
                                                                                                                 s, Westfield Parent Room




                                        18 /TEN   ANNUAL REVIEW 2003
      As a consequence of our efforts on the            Production and installation were complex        Growing recognition of these attributes will
      expenses front, both in concession                tasks but highlighted Eye Corp’s ability to     be critical as out-of-home fights to increase
      arrangements and general operations,              meet such complicated and demanding             its share of the advertising market from
      Eye Corp was able to reduce its total costs       requirements.                                   around 3% to the 8-10% achieved in many
      in 2003 by 14%. This tight level of control       Other clever ideas included living displays     European countries.
      will continue in 2004.                            such as the Sapphire Gin fish tank at           There is clearly room for expansion in certain
      This does not mean Eye Corp is inactive on        Sydney International Airport, and interactive   industry categories which are more
      the concession front. We investigate any          car displays.                                   prominent users of out-of-home
      opportunities that may complement our             Eye Corp is also moving to standardise          internationally.
      current inventory base.                           signage allowing for greater flexibility with   We remain alert to opportunities across
      For example, in 2003 we extended our              campaigns. The ability to stage shorter,        Australia, New Zealand and south-east Asia.
      dominance of signage in and around                sharper campaigns has been a key driver for     I would conclude by saying that Eye Corp
      Australia’s airports by securing internal         growth in out-of-home internationally, and a    continues to be a “work in progress”.
      advertising rights to the T2 terminal, the        similar trend is expected here.
                                                                                                        There is still much to be done to counter the
      Sydney base for Virgin Blue, and a number
                                                                                                        existing challenges, and those we will face in
      of regional operators. Several other common       OUTLOOK
                                                                                                        coming years.
      user terminals have also been secured in          Eye Corp has entered the 2004 financial year
      the other major capitals.                         in a positive frame of mind.                    But I am confident we have the strategy,
                                                                                                        products and team to build on the 2003
      Within our concession arrangements Eye            The advertising market is showing signs         performance, and a more promising future
      Corp is also looking to develop new product       of strength not evident since the 2000          is ahead.
      to broaden out-of-home’s appeal and               Olympic year.
      effectiveness.
                                                        With our innovative marketing solutions, and
      Eye Shop, with three thousand “eyelites”          thorough campaigns such as “Summer is all
                                           ,
      across more than 60 Westfield, AMP Gandel         about being Out-of-home” in 2002/3 and the
      and selected independent shopping centres,                                     ”
                                                        upcoming “Eye Love Summer, we are
      is “drilling down” even further. Shop now         driving the out-of-home message.
      offers signage in parent rooms at Westfield
                                                        The fact is that with growing demands on
      and Gandel centres, providing a very specific,                                                    Gerry Thorley
                                                        consumers’ lives they are increasingly “time    CHIEF EXECUTIVE OFFICER
      very targeted product for our advertisers.
                                                            ”
                                                        poor, meaning that fewer and fewer              EYE CORP
      Eye Fly is, of course, another of our divisions   mediums are mass reach.
      with similar capabilities to Shop in terms
                                                        Out-of-home has broad reach, which is
      of targeting, albeit of a different market.
                                                        especially relevant considering the greater
      It captures the attention of travellers,
                                                        mobility of consumers. It uses “dead time,  ”
      particularly those in the AB demographic.
                                                        and unlike other mediums, out-of-home
      Fly is drilling down with product like            cannot be ignored or avoided.
      electronic screens in business lounges and
                                                        Out-of-home also has the unique ability to
      opportunities in valet parking and on aero
                                                        target activities and lifestyles, such as
      bridges.
                                                        commuting, recreational travel, shopping,
      On the creative side, Eye Corp is responsible     sport and other leisure pursuits.
      for some of the best “out-of-home” concepts
      anywhere in the world.
      The campaign for the movie, The Matrix –
      Reloaded, was a highlight in 2003 featuring a
      giant billboard, believed to be the longest in
      Australia, stretching nearly 200 metres across
      the top of Sydney’s Glebe Island Silos.




advertising,   Eye Fly internals, Eye
                                      Drive large format, Eye
                                                              Shop “eyelite”




                                                               19 /TEN   ANNUAL REVIEW 2003
            COMMUNITY SERVICE
COMMUNITY
                                                               Show, The Rocks Market by Moonlight (all
            As a leading Australian media company              NSW) and the Glendi Greek Festival (SA),
            Network Ten knows what it wants to be in           Valley Fiesta (Qld), Moonlight Cinemas (Vic),
            a business sense, but TEN also wants to            Fremantle Festival (WA) and Neighbourhood
            be actively involved in a wide range of            Watch (WA).
            community activities.
             Throughout 2003, Network Ten provided             CHARITIES
            significant support to charities, the arts, the    TEN assisted many charities through
            environment and sport. We are proud to help        community service announcements,
            people wanting to improve the lives of their       sponsorship and talent involvement, including
            fellow Australians.                                the Kids Help Line, the Matthew Talbot
                                                               Hostel, the Australian Red Cross Blood
            TEN’s role is varied but generally involves
                                                               Service, Sparc Disability Foundation, Planet
            sponsorship, community service
                                                               Ark, Cystic Fibrosis NSW, Austin Breast
            announcements, signage, printed materials,
                                                               Cancer Foundation, Royal Society for the
            broadcast interviews, and the voluntary
                                                               Blind and Premier’s Drug Prevention Council.
            participation of TEN personalities in
            community events.
                                                               YOUTH ISSUES
            COMMUNITY ACTIVITIES                               With a core audience of 16-39 year olds, TEN
                                                               understands the impact of television on the
            Royal Shows                                        lives and welfare of young people, and with
            Each year Royal Shows bring a flavour of           this in mind it is appropriate that much of our
            country life to the cities, and in 2003 TEN        community focus is on issues and events
            was sponsor and exhibitor for the Sydney,          most relevant to that audience.
            Brisbane, Adelaide and Perth shows. In
            Sydney, a purpose built studio was                 Bush to Beach
            constructed, broadcasting the 11.30am and          Three hundred and fifty country children from
            5pm news, daily for 14 days. The public had        drought affected areas travelled to Brisbane
            chance to have their photos taken with their       and the Gold Coast for a five day ‘Bush to
            favourite TEN personalities, and in doing so,      Beach’ holiday. The tour included a day at
            raised $11,000 for the Malcolm Sargent             Coolangatta, a visit to Movie World and
            Cancer Fund for Children.                          Sea World, a training clinic with AFL premiers
                                                               the Brisbane Lions and a gala dinner with
            Sydney Dreaming                                    country musician, Troy Cassar-Daly. Network
            TEN was media sponsor for Sydney Dreaming          Ten supported the project with a community
            – the inaugural event celebrating traditional      service announcement in addition to filming
            indigenous culture and ceremony. Over              and scheduling a half hour documentary.
            10,000 Sydneysiders experienced the first          Mission Australia’s Winter Sleepout,
            event of its kind, which incorporated              organised to help the homeless, was once
            traditional Aboriginal dance, music and            again a feature of TEN’s youth contributions.
            storytelling. Performers came from remote
            communities as far away as Thursday Island         Other youth health, welfare organisations and
            and performed for those Australians wanting        events given help included Rostrum Voice of
            to learn more about indigenous culture.            Youth (Qld), Kids Day Out (Qld), MS Read-a-
                                                               thon (Qld), Carclew Youth Arts Centre – Off
            Many other community events were                   the Couch (SA) Scouts – Activ8 Premier’s
            supported by TEN throughout 2003, including        Youth Team Challenge (SA) Adelaide Central
            the Chinese New Year Festival, Darling             Mission – Rap It Up Video Clip Competition,
            Harbour Jazz Festival, Consumer Electronics        SIDS and Kids Maranello Ball (Vic), National
                                                               Youth Week (NSW), Kids Helpline Radiothon
                                                               (NSW), Stewart House Preventorium (NSW),
                                                               Ybblue (WA), and Wesley Hospital Choice
                                                               Program (Qld).




                                                                                                         Race, Consumer
                                                                                        Year Dragon Boat
                                                                        al, Chinese New
                                         Left to rig ht: Panyiri Festiv




                   2O /TEN   ANNUAL REVIEW 2003
      THE ARTS                                            TEN is also a proud supporter of the Nike
      Encouraging the performing and visual arts          Women’s Classic Fun Run (NSW & Vic), The
      is a vital component of Network Ten’s               Adelaide Football Club, Swim SA Volleyball SA
      community involvement. Each year we focus           Clipsal 500 Adelaide, Walk to Cure Diabetes
      on a number of events and activities,               (SA), State Round Motocross (WA), Telstra
      encouraging people to experience local art          Rally Australia (WA), Avon Descent (WA) and
      and culture and to help Australians develop         Brisbane Lions’ Open Day.
      their artistic talent.
                                                          ENVIRONMENT
      Rock Eisteddfod Challenge
                                                          TEN shares the concerns of young
      TEN has once again enjoyed working with             Australians about the environment. The
      the Rock Eisteddfod in 2003. Each year it           Network has retained its involvement in vital
      provides young performers with great                conservation and research work at the
      opportunities to develop their talent and also      Adelaide and Perth Zoos, as well as the
      sends an important anti-drugs message. Over         Australian Dolphin Research Foundation and
      40,000 students from hundreds of schools            Adelaide’s Earth Sanctuaries Foundation and
      throughout Australia take to the stage.             Dolphin Rescue Foundation.
      Other arts organisations and festivals              TEN is also involved with Planet Ark (NSW),
      supported by TEN include Melbourne’s Fringe         Scienceworks (Vic), Sci-tech (WA) and
      Festival, Melbourne Symphony Orchestra,             Araluen Botanical Park (WA).
      St Kilda Film Festival, Australian Centre of
      Contemporary Art (Vic). In NSW, Art of the
      Rocks, the NSW Department of Education’s
      Art Express and the Sydney Film Festival.
      In Brisbane, the Shortcut Film Festival, the
      International Film Festival and the
      Queensland Art Gallery. In Adelaide, the
      inaugural Adelaide International Film Festival,
      the Fuse Music Festival and Carclew Youth
      Arts Centre. In Perth, the Awesome Arts
      Festival and the WA Fringe Festival.

      SPORT
      Network Ten continues to present world-class
      Australian and international sporting events
      and is the leading broadcaster of motorsport
      and AFL. TEN takes its commitment to sport
      into the community by supporting numerous
      activities.
      City to Surf
      TEN was again the official broadcaster and
      sponsor of Australia’s largest community
      fitness event, the 2003 City to Surf, where
      more than 60,000 runners took to the streets
      of Sydney.
      Tour d’Kids
      Network Ten was a major sponsor of the
      annual Tour d’Kids bike ride, spanning 1100
      kilometres from Melbourne to Sydney over
      seven days. The event, in which 28 men took
      part, raised over $350,000 for the Starlight
      Foundation and the Starlight Express room at
      the Randwick Children’s Hospital.




                                                                                         Week
                                                                         ors Recognition
                                                      National Blood Don
                                     “Bush To Beach”,
                Ent ertainment Show,
Electronics and




                                                                 21 /TEN   ANNUAL REVIEW 2003
                     TEN NETWORK HOLDINGS DIRECTORS
BOARD OF DIRECTORS

                     Nicholas G Falloon
                     BMS
                     Appointed Executive Chairman of Ten Network Holdings Limited and The Ten Group Pty Limited in February
                     2002. Previously served as Chief Executive Officer of Publishing and Broadcasting Limited from 1998 – 2001.
                     Prior to that Mr Falloon held other senior executive positions within the PBL organisation. He has also been a
                     director of a number of companies including Foxtel, Fox Sports and ecorp.

                     Jack J Cowin
                     BA
                     Director of Ten Network Holdings Limited and The Ten Group Pty Limited since April 1998. Previously a Director
                                                                                      .
                     of The Ten Group Pty Limited from December 1992 to January 1997 Founder and Chairman of Competitive
                     Foods Australia Limited and is on the Board of CIBC World Markets (Australia) Ltd.

                     Laurence S Freedman AM
                     ASA, ASIA, MAUSIMM
                     Director of Ten Network Holdings Limited since February 1998 and of The Ten Group Pty Limited since
                     March 1994. Founder of The EquitiLink Group. Director of a number of investment companies listed on the
                     American, Canadian and Australian stock exchanges. Chairman of The Freedman Foundation.

                     Paul V Gleeson
                     BEc, ACA
                     Director of Ten Network Holdings Limited since February 1998 and of The Ten Group Pty Limited since
                     April 1998. Previously a Director of The Ten Group Pty Limited from December 1992 to March 1994. Director
                     of Telecasters North Queensland Pty Limited since 1990 and is a member of the Institute of Chartered
                     Accountants in Australia.

                     Paul P A Harris
                     MA, ASIA
                     Director of Ten Network Holdings Limited since February 1998 and of The Ten Group Pty Limited since
                     December 1992. Director of a number of companies including Gresham CEA Management Limited and
                     Gresham Technology Management Ltd, Wilson HTM Limited, the Centenary Institute for Cancer Research
                     and a Director of the Bundanon Trust.

                     Irene Y L Lee
                     BA, Barrister-at-Law
                     Director of Ten Network Holdings Limited and of The Ten Group Pty Limited since October 2000. Director of
                     Mariner Financial Limited, Beyond International Limited, Record Investments Limited, Record Realty, BioTech
                     Capital Limited and QBE Insurance Group Limited. She is also a Trustee of the Art Gallery of New South Wales
                     and a member of the Takeovers Panel. Formerly Chief Executive Officer of SEALCORP Holdings Limited and
                     held senior positions at Commonwealth Bank of Australia and Citibank in Sydney, London and New York.

                     Geoffrey H Levy
                     BComm, LLB, ASIA
                     Director of Ten Network Holdings Limited and The Ten Group Pty Limited since April 1998. Previously a Director
                     of The Ten Group Pty Limited from February 1995 to December 1996. He is Chief Executive Officer of Investec
                     Bank (Australia) Limited and its wholly owned subsidiary Investec Wentworth Pty Limited. He is also a non-
                     executive Director of a number of companies including STW Communications Group Limited, Mirvac Group
                     Limited and the Multiple Sclerosis Society of NSW. He has also been appointed by the Federal Government as
                     the Chairman of Film Finance Corporation Australia Limited and was formerly a partner of the law firm, Freehills.
                     He has over twenty years experience in the corporate advisory environment.

                     Robert Magid
                     BSc, BA(Maths), MA(Econ)
                     Director of Ten Network Holdings Limited and The Ten Group Pty Limited since April 1998. Chairman and
                     Managing Director of TMG Developments Pty Ltd. Director of Pier One Developments Pty Limited.

                     Brian Sherman
                     B Comm, CTA, SIA(Aff)
                     Brian Sherman is a Director of Ten Network Holdings Limited and The Ten Group Pty Limited. He is President
                     of the Australian Museum Trust, Chairman of Sonic Communications Pty Limited and Pulse International Pty
                     Limited, a Director of The Sherman Galleries and substantial shareholder of Ocean Pictures Pty Limited. He is
                     also a Director of a number of investment companies listed on the American, Canadian and Australian stock
                     exchanges and is a member of IIBAB which advises NSW Government on policies for IT companies in NSW.
                     Brian is the former Chairman and Joint Managing Director of The EquitiLink Group (1981 – 2000), was previously
                     a Director of the Sydney Organising Committee for the Olympic Games (SOCOG) and Chairman of SOCOG’s
                     Finance Committee.

                     John B Studdy AM
                     BEc, FCA
                     Director of Ten Network Holdings Limited since June 1998 and of The Ten Group Pty Limited from May 1993 to
                     February 2002. He was awarded the Centenary Medal in 2003 for services to the media and communications.
                     Director of Angus & Coote (Holdings) Limited, and IWPE Nominees Pty. Limited. He is Chairman of the
                     compliance committee of Westfield Management Limited and Westfield America Management Limited.
                     Mr Studdy is also an Honorary Vice President of the International Federation of MS Societies, Emeritus President
                     of the MS Society of New South Wales and Chairman of the Pain Management Research Institute.

                     Peter D Viner
                     Director of Ten Network Holdings Limited since April 1998 and of The Ten Group Pty Limited since July 1997.
                                                                                                     .
                     Served as Chief Executive Officer of The Ten Group Pty Limited from 1993 to 1997 Currently Executive
                     Vice-President of CanWest Global Communications Corp.



                             22 /TEN        ANNUAL REVIEW 2003
                       INTRODUCTION                                       The Constitution of Ten Group also stipulates
CORPORATE GOVERNANCE
                       The Boards of Directors of Ten Holdings and        that any Board committee shall have five
                       Ten Group are committed to responsible             members and shall be comprised of:
                       corporate governance practices in accordance       • the Chairman or his nominee;
                       with community and shareholder
                                                                          • one person nominated by each of
                       expectations.
                                                                            CanWest and Brian Sherman and
                       The principal operations of Ten Holdings are         Laurence Freedman (jointly);
                       limited to the holding of a significant interest
                                                                          • two persons appointed by the Board.
                       in Ten Group, which is the major operating
                       entity within the Ten Holdings group of            The Board is not allowed to nominate any
                       companies. Accordingly the corporate               person for election as a Director except for a
                       governance practices have been structured          casual vacancy. Any vacancies on the Board
                       having regard to these operations.                 (except vacancies where one or more
                                                                          persons has a right to appoint the
                       The corporate governance practices adopted
                                                                          replacement under the Constitution) are
                       by Ten Holdings and Ten Group are as follows:
                                                                          elected by members of Ten Group at a
                                                                          general meeting (and thus the members of
                       THE BOARD                                          Ten Holdings under the see-through voting
                       Size and composition of the Board                  provisions).
                       of Ten Holdings                                    Nominations to fill a casual vacancy are
                       Details of the current Directors of Ten            reviewed by the Executive Committee of the
                       Holdings are set out on page 22.                   Board, with recommendations submitted to
                       The Constitution of Ten Holdings provides          the Board of Directors for approval.
                       that generally one third of those Directors        A person is only eligible to be so appointed
                       (other than a Managing Director, Alternate         as Director where both the nomination of the
                       Directors and any Director who has been            person by a member and a consent to
                       appointed to fill a casual vacancy or as           nomination signed by the person are received
                       addition to the Board since the last annual        by Ten Group at least 28 business days
                       general meeting) are required to retire and        before the relevant general meeting.
                       seek re-election each year and no Director         Members of Ten Holdings may nominate a
                       can hold office for more than three years          person to be a Director of Ten Group by
                       without seeking re-election.                       delivering a form of nomination, together
                       The Directors may appoint persons to fill          with the consent of the person nominated, to
                       casual vacancies or additions to the Board.        Ten Holdings at least 30 business days before
                       Any person filling a casual vacancy or             the relevant general meeting of Ten Group.
                       appointed as an additional Director holds          Each of the Directors of Ten Holdings (other
                       office until the next annual general meeting,      than John Studdy) is also a Director of the
                       where they must retire but are eligible for        Ten Group. Additionally, the following persons
                       re-election.                                       are also directors of Ten Group:
                       A person is only eligible for appointment as a
                       Director at an annual general meeting where        Leonard J Asper
                       a nomination of the person by a member and         Director of Ten Group since December 1998.
                       a consent signed by the person is received at      Appointed Deputy Chairman of Ten Group
                       least 30 business days before the relevant         in March 2000. Appointed as President and
                       general meeting.                                   Chief Executive of CanWest Global
                                                                          Communications Corp in August 1999.
                       Size and composition of the Board                  Director of a number of media and
                       of Ten Group                                       entertainment companies associated with the
                       The Constitution of Ten Group and the              CanWest Group.
                       associated Director Appointment Deeds
                       (entered into between Ten Group and various        John H McAlpine
                       parties at the time of the listing of Ten          Director of Ten Group since April 1998. Chief
                       Holdings in 1998) provide that the Board of        Executive Officer – Television since July 1997.
                       Ten Group shall at all times be comprised of       Previously General Manager Network Sales
                       13 Directors of whom:                              for Ten Group and a senior executive of the
                                                                          Ten Network since 1970. Deputy Chairman of
                       • Nick Falloon, being a person appointed
                                                                          Commercial Television Australia Limited.
                         under the Constitution, is a Director and
                         the Chairman and Chief Executive Officer         Thomas C Strike
                       • CanWest is entitled to appoint three             Director of Ten Group since July 2000.
                         persons as Directors (currently being            Director of a number of media and
                         Leonard Asper, Tom Strike and Peter Viner)       entertainment companies associated with
                       • Brian Sherman and Laurence Freedman              the CanWest Group. Chief Operating Officer
                         jointly may appoint two Directors                (Corporate) of CanWest Global
                         (currently Brian Sherman and                     Communications Corp.
                         Laurence Freedman)
                       • The remaining seven Directors are elected
                         by members of Ten Holdings.




                              23 /TEN   ANNUAL REVIEW 2003
                       BOARD COMMITTEES                                (b)Remuneration Committee
CORPORATE GOVERNANCE
                                                                                                                           COMPLIANCE WITH AUSTRALIAN
                       The Boards of Ten Holdings and Ten Group        The Remuneration Committee is comprised             STOCK EXCHANGE LISTING RULES
                       have each established an Audit Committee.       of five members, being:                             Ten Holdings, as a listed company, is required
                       The members of the Audit Committee of           Nick G Falloon (Chairman)                           to comply with the Listing Rules of the
                       Ten Holdings are:                                                                                   Australian Stock Exchange.
                                                                       Jack J Cowin
                       Paul V Gleeson (Chairman)                                                                           Ten Group has also undertaken to the
                                                                       Laurence S Freedman
                       Geoff H Levy                                                                                        Australian Stock Exchange that it will comply
                                                                       Irene Y L Lee                                       with certain Listing Rules, including to ensure
                       Barry J Sechos
                                                                       Thomas C Strike                                     that information is provided to Ten Holdings in
                       Irene Y Lee                                                                                         respect of any continuous disclosure
                                                                       The role of the Remuneration Committee
                       The members of the Audit Committee of           is to:                                              requirements.
                       Ten Group include each of the members                                                               The Board of Ten Group has established a
                                                                       • review remuneration policy for Ten Group;
                       of the Audit Committee of Ten Holdings,                                                             policy to ensure that any relevant information
                       together with Tom Strike.                       • approve the remuneration of the Chief
                                                                                                                           requiring disclosure is referred to the
                                                                         Executive Officer and the executives
                       The responsibilities of the Audit Committees                                                        Company Secretary of, for review in
                                                                         reporting to the Chief Executive Officer;
                       include:                                                                                            conjunction with the Chairman of, Ten Group.
                                                                       • review proposals for incentive plans prior
                       • reporting to the respective Boards on their                                                       Copies of presentations given by Ten
                                                                         to submission to the Board of Directors
                         activities;                                                                                       Holdings to the financial community
                                                                         for approval; and
                       • reviewing the effectiveness of                                                                    associated with the release of major financial
                                                                       • review human resources planning with              results are also provided to the Australian
                         management systems in areas of greatest
                                                                         particular emphasis on succession                 Stock Exchange, with copies also being
                         financial risk;
                                                                         planning for senior group executive               displayed on the corporate website.
                       • recommending to the respective Boards           positions.
                         on the appointment of the external auditor
                                                                                                                           DEALINGS IN SECURITIES BY
                         (which is subject to each Company’s           DIRECTORS’ SHAREHOLDINGS
                         Constitution) and on the auditor’s                                                                DIRECTORS AND OFFICERS
                                                                       Details of Ten Network shares held by               A policy exists in relation to dealings in the
                         remuneration;
                                                                       Directors are set out on page 27.                   securities of Ten Holdings by Directors and
                       • reviewing and assessing the auditor’s
                         report and the actions proposed by                                                                employees within the Group. This policy
                                                                       INDEPENDENT PROFESSIONAL                            provides that such persons should be aware
                         management in response;
                                                                       ADVICE                                              of the insider trading provisions contained in
                       • to be satisfied that the scope of the audit   Each of the Boards of Ten Holdings and Ten          the Corporations Act when considering any
                         is adequate especially in relation to areas   Group retains advisers as considered                dealings in shares of Ten Holdings. Directors
                         where the Audit Committee believes            necessary and has resolved that the Board           are required to contact the Chairman of Ten
                         special attention is necessary;               Committees may retain advisers as                   Holdings when they wish to trade shares so
                       • reviewing the accounting, policies and        necessary.                                          as to inform him. Executives have been
                         practices of each Company; and,                                                                   recommended to contact the Company
                       • reviewing the half yearly and annual          RISK MANAGEMENT                                     Secretary in the event they have any queries
                         financial statements.                         Each Company is committed to the                    or concerns that any insider trading
                                                                       identification and quantification of risk           restrictions may apply.
                       The partner from PricewaterhouseCoopers
                       responsible for the audit of the financial      throughout its business units and controlled
                                                                       entities.                                           COMPANY WEBSITE
                       statements of each of Ten Holdings and
                       Ten Group is required to attend the annual      The above Audit Committees are responsible          Further information in relation to each of
                       general meetings of the respective              for reviewing the effectiveness of                  Ten Holdings and Ten Group is available on
                       companies to answer any questions that          management systems in areas of greatest             the corporate website at
                       shareholders may wish to raise in relation      financial risk and to report to the respective      www.tencorporate.com.au.
                       to the financial statements of the              Boards if they become aware of any matters
                       respective companies.                           that might have a significant impact on the
                       The Board of Ten Group, as the principal        financial condition or affairs of Ten Holdings,
                       operating subsidiary, has established the       Ten Group or any of their subsidiaries.
                       following additional Committees:
                                                                       GROUP POLICIES
                       (a) Executive Committee                         Ten Group has developed policies in relation
                       The Executive Committee has five members,       to equal employment opportunity and
                       each of whom must be a Ten Group director.      affirmative action, occupational health and
                       The members are:                                safety, privacy, internet usage, sexual
                                                                       harassment, corporate law and trade
                       Nick G Falloon (Chairman)
                                                                       practices.
                       Jack J Cowin
                                                                       Regular training sessions, which employees
                       Laurence S Freedman                             of Ten Group are required to attend, are held
                       Thomas C Strike                                 to promote an understanding of compliance
                       Peter D Viner                                   and also to update in relation to continuing
                                                                       regulatory developments affecting the
                       The Executive Committee meets between
                                                                       operations of Ten Group.
                       the scheduled Board meetings of Ten Group.
                       The Board has delegated extensive powers to     Executives of Ten Group also enter into a
                       the Executive Committee to facilitate the       written contract that sets out the terms of
                       expeditious handling of matters that would      their employment. The contracts include
                       otherwise be required to be dealt with by the   provisions that deal with compliance with the
                       Board.                                          above-mentioned policies of Ten Group,
                                                                       together with restricting employees engaging
                                                                       in business activities that are in competition
                                                                       with Ten Group and ensuring appropriate
                                                                       confidentiality is maintained in relation to, the
                                                                       Group’s business affairs.



                                                                              24 /TEN    ANNUAL REVIEW 2003
                               TEN NETWORK HOLDINGS LIMITED
                                                 ABN 14 081 327 068

            CONCISE            FINANCIAL                   REPORT




                                 CONTENTS
                                 Directors’ Report                    26
                                 Statement of Financial Performance   31
                                 Statement of Financial Position      32
                                 Statement of Cash Flows              33
                                 Notes to the Financial Statements    34
                                 Directors’ Declaration/Independent
                                 Auditors’ Report                     38
                                 Shareholder Information              39




25 /TEN   ANNUAL REVIEW 2003
                    TEN NETWORK HOLDINGS LIMITED AND CONTROLLED ENTITIES CONCISE FINANCIAL REPORT AS AT 31 AUGUST 2003
DIRECTORS’ REPORT
                                                                                                                         The Directors of Ten Network Holdings Limited present their report on the consolidated entity, consisting of Ten Network Holdings Limited
                                                                                                                         (“the Company”) and its controlled entities, for the year ended 31 August 2003.

                                                                                                                         DIRECTORS
                                                                                                                         The Directors that have been in office during the year and since year end are:
                                                                                                                         Mr NG Falloon, Chairman
                                                                                                                         Mr JJ Cowin (Alternate Mr JB Studdy)
                                                                                                                         Mr LS Freedman (Alternate Mr BG Sechos)
                                                                                                                         Mr PV Gleeson (Alternate Mr NG Falloon A)
                                                                                                                         Mr PPA Harris
                                                                                                                         Ms IYL Lee
                                                                                                                         Mr GH Levy
                                                                                                                         Mr R Magid
                                                                                                                         Mr BM Sherman (Alternate Mr BG Sechos)
                                                                                                                         Mr JB Studdy (Alternates Mr JJ Cowin and Mr AJ Peschar)
                                                                                                                         Mr PD Viner (Alternates Mr LJ Asper and Mr TC Strike)
                                                                                                                         A
                                                                                                                          : Mr NG Falloon was appointed alternate Director for Mr PV Gleeson on 20 December 2002.

                                                                                                                         PRINCIPAL ACTIVITIES
                                                                                                                         The principal activity of Ten Network Holdings Limited is the investment in The Ten Group Pty Limited and controlled entities, whose principal
                                                                                                                         activities are the operation of commercial television licences TEN-10 (Sydney), ATV-10 (Melbourne), TVQ-10 (Brisbane), ADS-10 (Adelaide) and
                                                                                                                         NEW-10 (Perth), and out-of-home advertising.

                                                                                                                         RESULT
                                                                                                                         The consolidated net profit/(loss) after income tax for the year ended 31 August comprises:
                                                                                                                                                                                                                                                        2003            2002
                                                                                                                                                                                                                                                       $’000           $’000

                                                                                                                         Earnings before interest, taxes and non-recurring items                                                                   193,321          145,932
                                                                                                                         Non-recurring items                                                                                                       (20,000)        (198,436)
                                                                                                                         Earnings before interest and taxes                                                                                        173,321          (52,504)
                                                                                                                         Subordinated debenture interest                                                                                            (87,791)          (6,825)
                                                                                                                         Net interest expense – other                                                                                              (26,637)         (29,490)
                                                                                                                         Profit/(Loss) from ordinary activities before income tax                                                                   58,893           (88,819)
                                                                                                                         Income tax revenue/(expense)
                                                                                                                            Normal                                                                                                                 (23,503)         (34,353)
                                                                                                                            Non-recurring                                                                                                           68,041           (36,158)
                                                                                                                         Net profit/(loss) from ordinary activities after income tax                                                               103,431         (159,330)
                                                                                                                         Net (profit)/loss attributable to outside equity interests                                                                (14,393)           50,698
                                                                                                                         Net profit/(loss) attributable to members of the Company                                                                   89,038         (108,632)

                                                                                                                         DIVIDENDS
                                                                                                                         Since the end of the previous financial year a fully franked ordinary dividend of 6.5 cents per share ($25,103,916) was paid on 28 February 2003
                                                                                                                         and a fully franked ordinary dividend of 5.0 cents per share ($19,351,955) was paid on 4 July 2003 in respect of the results for the period to 30
                                                                                                                         June 2003. Dividends in respect to the six months to 31 December 2003 will be paid during January 2004. No dividend was paid in respect of
                                                                                                                         the year ended 31 August 2002.

                                                                                                                         REVIEW OF OPERATIONS
                                                                                                                         The Directors were satisfied with the results of the consolidated entity for the year.

                                                                                                                         SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
                                                                                                                         Significant changes in the state of affairs of the consolidated entity during the financial year were as follows:
                                                                                                                         (a) Tax matters
                                                                                                                         The Company and controlled entities early adopted AASB 1020 Income Taxes on 1 September 2002. This resulted in the recognition of
                                                                                                                         consolidated deferred tax liabilities relating to the difference between accounting and taxation values of television licences and plant and
                                                                                                                         equipment of $270,192,000 with the offset to opening retained earnings.
                                                                                                                         On 1 July 2003 The Ten Group Pty Limited and its 100% Australian controlled entities entered the tax consolidations regime. The uplift in the tax
                                                                                                                         value of television licences and plant and equipment resulted in a consolidated $62,041,000 decrease in deferred tax liabilities, with the offset
                                                                                                                         being a non-recurring tax credit to current year earnings.
                                                                                                                         (b) Non-recurring program write down
                                                                                                                         A controlled entity provided a non-recurring $20,000,000 and resulting $6,000,000 tax credit for the write down of features inventory to
                                                                                                                         realisable value.
                                                                                                                         Except for the matters noted above or otherwise disclosed in the financial report, there were no other significant changes in the state of affairs
                                                                                                                         of the consolidated entity during the year.




                                                                                                                                                                             26 /TEN    ANNUAL REVIEW 2003
                    TEN NETWORK HOLDINGS LIMITED AND CONTROLLED ENTITIES CONCISE FINANCIAL REPORT AS AT 31 AUGUST 2003
DIRECTORS’ REPORT
                                                                                                                         EVENTS SUBSEQUENT TO BALANCE DATE
                                                                                                                         On 8 October 2003 the Directors declared a special dividend of 5.5 cents per share to be paid on 8 January 2004. The special dividend is a
                                                                                                                         result of the additional distributable earnings from the implementation of the tax consolidations regime on 1 July 2003.
                                                                                                                         Other than the matters discussed above, no other matters or circumstances have arisen since balance date that have significantly affected or
                                                                                                                         may significantly affect:
                                                                                                                         • the operations in financial years subsequent to 31 August 2003 of the consolidated entity and the entities it controls from time to time; or
                                                                                                                         • the results of those operations; or
                                                                                                                         • the state of affairs in financial years subsequent to 31 August 2003 of the consolidated entity.

                                                                                                                         LIKELY DEVELOPMENTS
                                                                                                                         Information as to likely developments in the operations of the consolidated entity and the expected results of those operations in subsequent
                                                                                                                         financial years has not been included in this report because, in the opinion of the Directors, it would prejudice the interests of the consolidated
                                                                                                                         entity.

                                                                                                                         INFORMATION ON DIRECTORS
                                                                                                                                                                                                                                                            Particulars of Directors’ Interests in
                                                                                                                                                                                                                                                           Shares and Options of The Company
                                                                                                                         Director                                Responsibility                                    Appointed/Resigned                     Ordinary Shares                 Options

                                                                                                                         NG Falloon      BMS                     Executive Chairman of                             Continuing                                            –          7,500,000
                                                                                                                                                                 Board of Directors
                                                                                                                         JJ Cowin BA                             Non-Executive Director                            Continuing                               1,000,000                           –
                                                                                                                         LS Freedman AM, ASA, ASIA, MAusIMM      Non-Executive Director                            Continuing                              39,800,972                           –
                                                                                                                         PV Gleeson BEcon, ACA                   Non-Executive Director                            Continuing                              15,048,608                           –
                                                                                                                                                                 Chairman of Audit Committee                       Continuing
                                                                                                                         PPA Harris MA, ASIA                     Non-Executive Director                            Continuing                                    15,428                         –
                                                                                                                         IYL Lee BA, Barrister at Law            Non-Executive Director                            Continuing                                    10,000                         –
                                                                                                                                                                 Member of Audit Committee                         Appointed 3 December 2002
                                                                                                                         GH Levy      BComm, LLB, ASIA           Non-Executive Director                            Continuing                                    33,000                         –
                                                                                                                                                                 Member of Audit Committee                         Continuing
                                                                                                                         R Magid BSc, BA(Maths), MA(Econ)        Non-Executive Director                            Continuing                                 150,000                           –
                                                                                                                         BM Sherman BComm, CTA, SIA (Aff)        Non-Executive Director                            Continuing                              39,800,972                           –
                                                                                                                         JB Studdy AM, BEc, FCA                  Non-Executive Director                            Continuing                                  50,000                           –
                                                                                                                         PD Viner                                Non-Executive Director                            Continuing                                       –                           –

                                                                                                                         DIRECTORS’ MEETINGS
                                                                                                                                                                                                                                        No. of meetings                      Number of meetings
                                                                                                                         Director’s Name                                                                                                  of Directors                       of Audit committee
                                                                                                                            Alternate name (if applicable)                        Date appointed   Date resigned                         held/attended                          held/attended

                                                                                                                         NG Falloon                                                  13/02/02      Continuing                           7             7                        1               1
                                                                                                                         JJ Cowin                                                    03/04/98      Continuing                           7             7                        –               –
                                                                                                                         LS Freedman                                                 16/02/98      Continuing                           7             5                        –               –
                                                                                                                           BG Sechos (Alternate)                                     16/02/98      Continuing                                         1
                                                                                                                         PV Gleeson                                                  16/02/98      Continuing                           7             6                        4               4
                                                                                                                           NG Falloon (Alternate)                                    20/12/02      Continuing                                         1
                                                                                                                         PPA Harris                                                  16/02/98      Continuing                           7             5                        –               –
                                                                                                                         IYL Lee                                                     13/10/00      Continuing                           7             6                        3               1
                                                                                                                         GH Levy                                                     03/04/98      Continuing                           7             5                        4               3
                                                                                                                         R Magid                                                     03/04/98      Continuing                           7             6                        –               –
                                                                                                                         BM Sherman                                                  16/02/98      Continuing                           7             5                        –               –
                                                                                                                           BG Sechos (Alternate)                                     16/02/98      Continuing                                         1
                                                                                                                         JB Studdy                                                   04/06/98      Continuing                           7             6                        –                –
                                                                                                                         PD Viner                                                    03/04/98      Continuing                           7             2                        –                –
                                                                                                                           LJ Asper (Alternate)                                      11/08/00      Continuing                                         1
                                                                                                                           TC Strike (Alternate)                                     11/08/00      Continuing                                         4

                                                                                                                         The number of meetings held refers to the period whilst a Director.




                                                                                                                                                                                  27 /TEN    ANNUAL REVIEW 2003
                    TEN NETWORK HOLDINGS LIMITED AND CONTROLLED ENTITIES CONCISE FINANCIAL REPORT AS AT 31 AUGUST 2003
DIRECTORS’ REPORT
                                                                                                                         DIRECTORS’ HOLDINGS OF SHARES
                                                                                                                         The relevant aggregate interests of Directors of the parent entity and their Director-related entities in shares of the ultimate parent entity within
                                                                                                                         the consolidated entity at the year end are set out below:
                                                                                                                                                                                                                                                                     The Company
                                                                                                                                                                                                                                                             2003                  2002

                                                                                                                         Ten Network Holdings Limited
                                                                                                                           Ordinary shares                                                                                                          56,115,354           55,674,550

                                                                                                                         DIRECTORS’ AND OFFICERS’ EMOLUMENTS
                                                                                                                         The Remuneration Committee of The Ten Group Pty Limited, a controlled entity, consisting of four non-executive directors and one executive
                                                                                                                         director, advises the Board on remuneration policies and practices generally, and makes specific recommendations on remuneration packages
                                                                                                                         and other terms of employment for executive Directors, other senior executives and non-executive Directors of the consolidated entity.
                                                                                                                         Remuneration consists of annual fees and superannuation contributions made in accordance with superannuation guarantee legislation for the
                                                                                                                         Directors performing their duties on the Board of the Company and The Ten Group Pty Limited and on various committees. The non-executive
                                                                                                                         Directors do not participate in any option plans.
                                                                                                                         Currently the maximum amount that may be paid by the Company to the Directors (in aggregate) by way of remuneration in relation to the
                                                                                                                         performance of their duties as non-executive Directors of the Company is $600,000.
                                                                                                                         Additionally, under The Ten Group Pty Limited’s Constitution, the maximum amount payable to Directors of that company (which include certain
                                                                                                                         Directors of this Company) is $400,000. Separate arrangements in relation to the remuneration and retirement benefits of the former Chairman
                                                                                                                         of The Ten Group Pty Limited also applied under the terms of the The Ten Group Pty Limited’s Constitution. Directors’ fees have been
                                                                                                                         determined on the basis that it will be attractive to proposed board members and so ensure that the Company’s board is comprised of skilled
                                                                                                                         and well qualified Directors.
                                                                                                                         Executive remuneration and other terms of employment are reviewed annually by the Committee having regard to performance against goals
                                                                                                                         set at the start of the year and relative comparative information. Remuneration packages are set at levels that are intended to attract and retain
                                                                                                                         skilled and qualified executives.
                                                                                                                         Details of the nature and amount of each element of the emoluments of each Director of Ten Network Holdings Limited and each of the
                                                                                                                         5 officers of the consolidated entity receiving the highest emoluments are set out in the following tables. The only officers of Ten Network
                                                                                                                         Holdings Limited are the Directors.
                                                                                                                         The table below discloses all amounts paid by all entities within the consolidated entity for services provided to each of those entities.
                                                                                                                         The amounts paid by the Company by way of remuneration totalled $500,000.

                                                                                                                         EXECUTIVE DIRECTOR OF TEN NETWORK HOLDINGS LIMITED
                                                                                                                                                                                                  Base Salary    Motor Vehicle    Bonus/Incentive   Superannuation    Consolidated Total
                                                                                                                         Name                                                                               $                $                  $                $                    $

                                                                                                                         NG Falloon, Chairman                                                    1,419,333            70,067          750,000             10,600          2,250,000

                                                                                                                         NON-EXECUTIVE DIRECTORS OF TEN NETWORK HOLDINGS LIMITED
                                                                                                                                                                                                                Directors’ Base
                                                                                                                                                                                                                     Fee/Salary   Committee Fees    Superannuation    Consolidated Total
                                                                                                                         Name                                                                                                 $                $                 $                    $

                                                                                                                         JJ Cowin                                                                                     57,872             6,281             5,653              69,806
                                                                                                                         LS Freedman                                                                                  57,872             6,500             5,793              70,165
                                                                                                                         PV Gleeson                                                                                   61,365             4,000             7,313              72,678
                                                                                                                         PPA Harris                                                                                   57,872                 –             5,208              63,080
                                                                                                                         IYL Lee                                                                                      57,872             4,970             5,416              68,258
                                                                                                                         GH Levy                                                                                      57,872             4,000             5,568              67,440
                                                                                                                         R Magid                                                                                      57,872                 –             5,208              63,080
                                                                                                                         BM Sherman                                                                                   57,872                 –             5,208              63,080
                                                                                                                         JB Studdy                                                                                    50,000                 –                 –              50,000
                                                                                                                         PD Viner                                                                                     62,000             4,500                 –              66,500
                                                                                                                         LJ Asper (Alternate)                                                                         12,000                 –                 –              12,000
                                                                                                                         AJ Peschar (Alternate)                                                                            –                 –                 –                   –
                                                                                                                         BG Sechos (Alternate)                                                                             –             4,000               360               4,360
                                                                                                                         TC Strike (Alternate)                                                                        12,000            10,500                 –              22,500




                                                                                                                                                                             28 /TEN   ANNUAL REVIEW 2003
                    TEN NETWORK HOLDINGS LIMITED AND CONTROLLED ENTITIES CONCISE FINANCIAL REPORT AS AT 31 AUGUST 2003
DIRECTORS’ REPORT
                                                                                                                         OTHER EXECUTIVES OF THE CONSOLIDATED ENTITY
                                                                                                                                                                                Base Salary    Motor Vehicle   Bonus/Incentive (iii)   Superannuation    Termination           Total
                                                                                                                         Name                                                             $                $                    $                   $              $              $

                                                                                                                         J McAlpine (i)                                          989,400                  –            350,000               10,600               –     1,350,000
                                                                                                                         Chief Executive Officer – Television
                                                                                                                         P Myers (i)                                             238,201           16,930                        –            6,136       767,897       1,029,164
                                                                                                                         General Manager – Corporate Development
                                                                                                                         G Blackley (i)                                          472,126           13,535              260,000               16,600               –       762,261
                                                                                                                         General Manager – Network Sales
                                                                                                                         G Thorley (ii)                                          450,854           58,747              120,000               10,600               –       640,201
                                                                                                                         Chief Executive Officer – Eye Corp
                                                                                                                         D Mott (i)                                              417,969           44,765              133,000               10,600               –       606,334
                                                                                                                         General Manager – Network Programming

                                                                                                                         (i) These executives are all employees of Network Ten Pty Limited, a controlled entity.
                                                                                                                         (ii) An employee of Eye Corp Pty Limited, a controlled entity.
                                                                                                                         (iii) The bonus/incentive was paid in December 2002 and relates to performance in the 2002 financial year.

                                                                                                                         Options have been granted to executives under the Ten Executive Option Plan.
                                                                                                                         The amounts disclosed for emoluments relating to options detailed below is the assessed fair value at grant date of options granted to
                                                                                                                         executives, allocated equally over the period from grant date to vesting date. Fair values at grant date are independently determined by Mercer
                                                                                                                         Financing and Risk Consulting using the Monte-Carlo option pricing model that takes into account the exercise price, the term of the option, the
                                                                                                                         vesting and performance criteria, the impact of dilution, the non-tradeable nature of the option, the current price and expected price volatility of
                                                                                                                         the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.
                                                                                                                         The emoluments relating to options of Directors and the 5 officers of the consolidated entity receiving the highest emoluments for the year
                                                                                                                         ended 31 August 2003 are:
                                                                                                                         • NG Falloon       $1,003,360
                                                                                                                         • J McAlpine       $47,350
                                                                                                                         • P Myers          $5,197
                                                                                                                         • G Thorley        $19,735
                                                                                                                         • G Blackley       $18,382
                                                                                                                         • D Mott           $14,427

                                                                                                                         The Ten Executive Option Plan has been suspended and no further options will be issued.

                                                                                                                         SHARE OPTIONS GRANTED TO DIRECTORS AND MOST HIGHLY REMUNERATED OFFICERS
                                                                                                                         No options over unissued ordinary shares of Ten Network Holdings Limited were granted during or since the end of the financial year to
                                                                                                                         Directors or any of the 5 most highly remunerated officers of Ten Network Holdings Limited and consolidated entities as part of their
                                                                                                                         remuneration.

                                                                                                                         SHARES UNDER OPTION
                                                                                                                         Unissued ordinary shares of Ten Network Holdings Limited under option at the date of this report are as follows:
                                                                                                                                                                                                                                           Issue Price
                                                                                                                                                                                                                          Number             of Shares                   Expiry Date

                                                                                                                         The Ten Executive Option Plan                                                                       –                $1.92                12 August 2003
                                                                                                                                                                                                                       175,000                $2.11             24 November 2003
                                                                                                                                                                                                                       200,000                $2.09                9 February 2005
                                                                                                                                                                                                                     1,385,000                $2.41                 15 March 2005
                                                                                                                                                                                                                       750,000                $2.25             22 December 2005
                                                                                                                                                                                                                     7,500,000                $1.90             21 December 2011

                                                                                                                         SHARES ISSUED ON THE EXERCISE OF OPTIONS
                                                                                                                         During the year ended 31 August 2003, the following number of shares were issued on the exercise of options granted under the Ten Executive
                                                                                                                         Option Plan.
                                                                                                                                                                                                                                           Issue Price
                                                                                                                                                                                                                          Number             of Shares

                                                                                                                         The Ten Executive Option Plan                                                               3,125,000                $1.92
                                                                                                                                                                                                                     3,700,000                $2.11
                                                                                                                                                                                                                       300,000                $2.09

                                                                                                                         Since year end and up to the date of this report, the following number of shares have been issued on the exercise of options granted under the
                                                                                                                         Ten Executive Option Plan.
                                                                                                                                                                                                                                           Issue Price
                                                                                                                                                                                                                          Number             of Shares

                                                                                                                         The Ten Executive Option Plan                                                                 500,000                $2.11




                                                                                                                                                                            29 /TEN     ANNUAL REVIEW 2003
                    TEN NETWORK HOLDINGS LIMITED AND CONTROLLED ENTITIES CONCISE FINANCIAL REPORT AS AT 31 AUGUST 2003
DIRECTORS’ REPORT
                                                                                                                         CONTRACTS WITH DIRECTORS
                                                                                                                         During the financial year, Competitive Foods Australia Limited entered into agreements in respect of the purchase of television airtime (through
                                                                                                                         an advertising agency) from a controlled entity on normal commercial terms and conditions. Mr JJ Cowin, a Director of the Company, is
                                                                                                                         Chairman of, and has a substantial interest in, Competitive Foods Australia Limited.
                                                                                                                         Also during the financial year, Investec Wentworth Pty Limited provided the consolidated entity with corporate consultancy services on normal
                                                                                                                         commercial terms and conditions. Mr GH Levy, a Director of the Company, is a director of Investec Wentworth Pty Limited.

                                                                                                                         INSURANCE OF OFFICERS
                                                                                                                         During the financial year, a controlled entity arranged for directors and officers liability insurance cover for officers of the Company and related
                                                                                                                         parties. An insurance premium was paid in relation thereto. The officers of the Company covered by this insurance include all Directors and all
                                                                                                                         employees in positions of responsibility.
                                                                                                                         The Directors have not included details of the nature of the liabilities covered or the amount of the premium paid in respect of the directors’
                                                                                                                         and officers’ insurance contracts as such disclosure is prohibited under the terms of the contract.

                                                                                                                         INDEMNIFICATION OF OFFICERS
                                                                                                                         The Company has entered into deeds to indemnify each Director of the Company in accordance with the approval given at the Annual General
                                                                                                                         Meeting of the Company held on 7 December 1999.
                                                                                                                         In broad terms, the deeds of indemnity entrench a Director’s rights to:
                                                                                                                         • access the books and records of the Company which relate to the period the Director acted as a Director of the Company;
                                                                                                                         • be indemnified by the Company to the maximum extent permitted by law; and
                                                                                                                         • require the Company to take out an appropriate directors’ and officers’ insurance policy to protect the Director from liability
                                                                                                                            (to the maximum extent permitted by law).
                                                                                                                         Separately, a deed of indemnity has been provided by The Ten Group Pty Limited to Directors and officers of that company and its
                                                                                                                         controlled entities.
                                                                                                                         Additionally, separate deeds of indemnity cover other executives of controlled entities who have been requested to act as directors
                                                                                                                         on the boards of other companies in which the Group holds an interest.
                                                                                                                         No liability has arisen under these indemnities at the date of this report.

                                                                                                                         ENVIRONMENTAL REGULATIONS
                                                                                                                         The consolidated entity is not subject to significant environmental regulations. Planning permission is required prior to the construction of
                                                                                                                         new outdoor signage. A controlled entity also holds environmental licences for its manufacturing site in Victoria. The licenses require discharge
                                                                                                                         to air and water to be below specified levels. These requirements arise under the Environmental Protection Authorities Regulations.
                                                                                                                         The Directors are not aware of any breaches to environmental regulations and are not aware of any infringement notices being issued.

                                                                                                                         ROUNDING OF AMOUNTS TO NEAREST THOUSAND DOLLARS
                                                                                                                         The Company is of a kind referred to in Class Order 98/0100 and accordingly the financial report has been rounded to the nearest thousand
                                                                                                                         dollars, unless otherwise stated.
                                                                                                                         Signed in Sydney on 8 October 2003 in accordance with a resolution of the Directors.




                                                                                                                         NG Falloon
                                                                                                                         Chairman




                                                                                                                                                                             3O /TEN    ANNUAL REVIEW 2003
                                     TEN NETWORK HOLDINGS LIMITED AND CONTROLLED ENTITIES CONCISE FINANCIAL REPORT AS AT 31 AUGUST 2003   DISCUSSION AND ANALYSIS
STATEMENT OF FINANCIAL PERFORMANCE
                                                                                                                                                                                                                                                                                         Consolidated
                                                                                                                                          OF THE STATEMENT OF                                                                                                                         2003           2002
                                                                                                                                                                                                                                                                       Note          $’000          $’000
                                                                                                                                          FINANCIAL PERFORMANCE
                                                                                                                                          The consolidated entity’s revenue       Revenue from ordinary activities                                                        2     733,070         667 ,129
                                                                                                                                          from ordinary activities for the        Television costs                                                                             (483,376)       (446,110)
                                                                                                                                          year ended 31 August 2003 was           Out-of-home costs                                                                              (75,107)     (272,214)
                                                                                                                                          $733.1m,an increase of 9.9% on the      Corporate costs                                                                                 (1,082)         (1,185)
                                                                                                                                          August 2002 revenue of $667.1m.
                                                                                                                                                                                  Borrowing costs                                                                               (117,042)        (37,355)
                                                                                                                                          Included in total Television costs
                                                                                                                                                                                  Share of net profit of associates and joint ventures accounted
                                                                                                                                          of $483.4m for the year ended           for using the equity method                                                                     2,430             916
                                                                                                                                          31 August 2003 are non-recurring
                                                                                                                                                                                  Profit/(Loss) from ordinary activities before income tax                                       58,893         (88,819)
                                                                                                                                          expense items totalling $20.0m
                                                                                                                                          relating to the write down of           Income tax revenue/(expense)                                                                   44,538         (70,511)
                                                                                                                                          Columbia features.                      Net profit/(loss) from ordinary activities after income tax                                   103,431       (159,330)
                                                                                                                                          Included in tax revenue/(expense) are   Net (profit)/loss attributable to outside equity interests                                    (14,393)         50,698
                                                                                                                                          the following non-recurring items:      Net profit/(loss) attributable to members of the Company                                4      89,038       (108,632)
                                                                                                                                          • $6.0m tax credit from the write       Net exchange difference on translation of financial report
                                                                                                                                            down of the Columbia features,        of foreign controlled entities                                                                     353               78
                                                                                                                                            and                                   Total changes in equity from non-owner related transactions
                                                                                                                                          • $62.0m tax credit from the            attributable to the members of the Company                                                      89,391      (108,554)
                                                                                                                                            implementation of the tax
                                                                                                                                            consolidations regime on              EARNINGS PER SHARE
                                                                                                                                                                                                                                                                                     2003           2002
                                                                                                                                            1 July 2003.                                                                                                                            Cents          Cents
                                                                                                                                          Of the $62.0m tax credit from
                                                                                                                                                                                  Shareholding earnings per share                                                                  23.16         (28.53)
                                                                                                                                          the implementation of the tax
                                                                                                                                          consolidation regime, a total of        Economic earnings per share                                                                      20.30         (13.41)
                                                                                                                                          $44.7m is distributable. A Special      Diluted earnings per share                                                                       17.49         (13.63)
                                                                                                                                          Dividend of 5.5 cents per share
                                                                                                                                          fully franked was declared by           The above statement of financial performance should be read in conjunction with the discussion and analysis of the
                                                                                                                                                                                  statement of financial performance and the accompanying notes.
                                                                                                                                          Directors on 8 October 2003 in
                                                                                                                                          relation to this distributable tax
                                                                                                                                          credit. This dividend is expected
                                                                                                                                          to be paid on 8 January 2004.




                                                                                                                                                                                         31 /TEN     ANNUAL REVIEW 2003
                                  TEN NETWORK HOLDINGS LIMITED AND CONTROLLED ENTITIES CONCISE FINANCIAL REPORT AS AT 31 AUGUST 2003   DISCUSSION AND ANALYSIS
STATEMENT OF FINANCIAL POSITION
                                                                                                                                                                                                                                                                                         Consolidated
                                                                                                                                       OF THE STATEMENT OF                                                                                                                            2003           2002
                                                                                                                                                                                                                                                                       Note          $’000          $’000
                                                                                                                                       FINANCIAL POSITION
                                                                                                                                       AASB 1020 Income Taxes was early
                                                                                                                                                                                 CURRENT ASSETS
                                                                                                                                       adopted on 1 September 2002. The
                                                                                                                                       impact was to recognise deferred tax      Cash                                                                                             21,948         12,885
                                                                                                                                       liabilities on the difference between     Receivables                                                                                     127,808        116,123
                                                                                                                                       the taxation and accounting values        Inventories                                                                                     123,417        127,638
                                                                                                                                       of television licences and plant and      Current tax receivables                                                                               –         63,716
                                                                                                                                       equipment. The adjustments on early       Other                                                                                             4,060         12,063
                                                                                                                                       adopting AASB 1020 Income Taxes
                                                                                                                                                                                 Total Current Assets                                                                            277,233       332,425
                                                                                                                                       were as follows:
                                                                                                                                       • increase in consolidated deferred       NON-CURRENT ASSETS
                                                                                                                                         tax liabilities of $270.2m
                                                                                                                                                                                 Receivables                                                                                      2,682     2,116
                                                                                                                                       • decrease in opening consolidated
                                                                                                                                                                                 Inventories                                                                                      3,005     1,565
                                                                                                                                         retained earnings of $270.2m
                                                                                                                                                                                 Investments accounted for using the equity method                                               10,162     2,888
                                                                                                                                       On 1 July 2003 The Ten Group Pty
                                                                                                                                                                                 Other financial assets                                                                           2,553     2,553
                                                                                                                                       Limited and various controlled entities
                                                                                                                                       entered the tax consolidations            Property, plant and equipment                                                                   88,688    84,264
                                                                                                                                       regime. The adjustments on entering       Intangibles                                                                                  1,156,190 1,159,707
                                                                                                                                       the tax consolidations regime were        Deferred tax assets                                                                                162     8,325
                                                                                                                                       as follows:                               Other                                                                                            1,397       626
                                                                                                                                       • decrease in consolidated deferred       Total Non-Current Assets                                                                     1,264,839 1,262,044
                                                                                                                                         tax liabilities by $62.0m               Total Assets                                                                                 1,542,072 1,594,469
                                                                                                                                       • decrease in consolidated income
                                                                                                                                         tax expense by $62.0m                   CURRENT LIABILITIES
                                                                                                                                       Other significant balance sheet           Payables                                                                                       216,050        160,142
                                                                                                                                       movements are:                            Interest-bearing liabilities                                                                       945         29,247
                                                                                                                                       • The current tax receivable at           Current tax liabilities                                                                         16,110              –
                                                                                                                                         31 August 2002 was received             Provisions                                                                                      23,789         40,737
                                                                                                                                         during 2003.
                                                                                                                                                                                 Total Current Liabilities                                                                      256,894        230,126
                                                                                                                                       • Increase in investments accounted
                                                                                                                                         for using the equity method due         NON-CURRENT LIABILITIES
                                                                                                                                         mainly to the participation in the
                                                                                                                                                                                 Payables                                                                                        38,577         28,442
                                                                                                                                         restructuring of Television & Media
                                                                                                                                         Services Limited which has              Interest-bearing liabilities                                                                   434,457         510,111
                                                                                                                                         increased the ownership interest        Deferred tax liabilities                                                                       224,286         32,042
                                                                                                                                         to 24.3%                                Provisions                                                                                       1,796          1,971
                                                                                                                                       • The increase in current payables is     Total Non-Current Liabilities                                                                  699,116        572,566
                                                                                                                                         due mainly to increased debenture       Total Liabilities                                                                              956,010        802,692
                                                                                                                                         interest payable                        Net Assets                                                                                     586,062        791,777
                                                                                                                                       • Non-current interest bearing
                                                                                                                                         liabilities have decreased as a         EQUITY
                                                                                                                                         result of repayments of bank loans      Contributed equity                                                                              823,563        808,376
                                                                                                                                         during the year, and                    Reserves                                                                                           (416)            (63)
                                                                                                                                       • Contributed equity has increased        Retained earnings                                                                        4     (330,736)      (145,461)
                                                                                                                                         as a result of the exercise of
                                                                                                                                                                                 Total parent entity interest                                                                    492,411        662,852
                                                                                                                                         options during the year.
                                                                                                                                                                                 Outside equity interests in controlled entities                                                  93,651        128,925
                                                                                                                                                                                 Total Equity                                                                                    586,062        791,777

                                                                                                                                                                                 The above statement of financial position should be read in conjunction with the discussion and analysis of the
                                                                                                                                                                                 statement of financial position and the accompanying notes.




                                                                                                                                                                                        32 /TEN     ANNUAL REVIEW 2003
                          TEN NETWORK HOLDINGS LIMITED AND CONTROLLED ENTITIES CONCISE FINANCIAL REPORT AS AT 31 AUGUST 2003   DISCUSSION AND ANALYSIS
STATEMENT OF CASH FLOWS
                                                                                                                                                                                                                                                                             Consolidated
                                                                                                                               OF THE STATEMENT OF                                                                                                                        2003           2002
                                                                                                                                                                                                                                                                         $’000          $’000
                                                                                                                               CASH FLOWS
                                                                                                                               Total cash and its equivalents of
                                                                                                                                                                       CASH AND ITS EQUIVALENTS
                                                                                                                               $21.9m as at 31 August 2003 is
                                                                                                                               $10.9m higher than the prior year.      Cash on hand                                                                                       80             65
                                                                                                                                                                       Cash at bank                                                                                   21,868        12,820
                                                                                                                               Cash flows from operating activities
                                                                                                                               of $197.3m are $175.3m higher than      Bank overdraft                                                                                      –         (1,791)
                                                                                                                               the prior year. Excluding tax           At end of year                                                                                 21,948        11,094
                                                                                                                               receipts/payments, cashflows from       At beginning of year                                                                           11,094        20,868
                                                                                                                               operating activities have increased     Net cash inflow/(outflow) for the year                                                         10,854         (9,774)
                                                                                                                               by $49.8m predominantly due to the
                                                                                                                               increase in television revenues.        Represented by:
                                                                                                                               Cash outflows from investment           CASH FLOWS FROM OPERATING ACTIVITIES
                                                                                                                               activities of $28.6m are $13.7m lower
                                                                                                                                                                       Receipts from customers                                                                      786,458        745,199
                                                                                                                               than the prior year as 2002 included
                                                                                                                               the acquisition of the remaining        Payments to suppliers and employees                                                         (604,800)      (610,997)
                                                                                                                               40% interest in Eye Corp.               Dividends received                                                                              1,915           346
                                                                                                                               Cash outflows from financing            Interest received                                                                               2,491         1,050
                                                                                                                               activities of $157.9m compares to       Bank interest paid                                                                            (26,210)      (25,503)
                                                                                                                               inflows of $10.4m in the prior year.    Income tax received/(paid)
                                                                                                                               Increased net bank loan repayments         Prior year refunds received                                                                 71,188          4,447
                                                                                                                               have been partially offset by lower        Current year payments                                                                      (33,706)       (56,305)
                                                                                                                               dividend and debenture interest
                                                                                                                                                                          Tax settlement                                                                                   –        (36,158)
                                                                                                                               payments.
                                                                                                                                                                       Net cash flow from operating activities                                                       197,336         22,079

                                                                                                                                                                       CASH FLOWS FROM INVESTMENT ACTIVITIES
                                                                                                                                                                       Acquisition of property, plant and equipment                                                  (23,909)       (25,490)
                                                                                                                                                                       Proceeds on disposal of property, plant and equipment                                             591             326
                                                                                                                                                                       Sale of equity investments                                                                          –             142
                                                                                                                                                                       Payment for investments                                                                        (5,567)              –
                                                                                                                                                                       Purchases of controlled entities (net of cash acquired)                                             –        (10,000)
                                                                                                                                                                       Payment for out-of-home investments and site acquisitions                                           –          (6,361)
                                                                                                                                                                       Advances/(repayments) from/(to):
                                                                                                                                                                         Controlled entities                                                                               –              –
                                                                                                                                                                         Associated companies and joint ventures                                                         122             11
                                                                                                                                                                         Directors of controlled entities                                                                350         (1,017)
                                                                                                                                                                         Other                                                                                          (169)           153
                                                                                                                                                                       Net cash flow from investment activities                                                      (28,582)      (42,236)

                                                                                                                                                                       CASH FLOWS FROM FINANCING ACTIVITIES
                                                                                                                                                                       Dividend paid                                                                                (53,123)        (65,443)
                                                                                                                                                                       Debenture interest paid                                                                       (30,018)       (66,221)
                                                                                                                                                                       Debenture interest – withholding tax                                                           (3,002)         (6,622)
                                                                                                                                                                       Amounts received/(paid) re: Tax Dispute                                                        16,972        (16,972)
                                                                                                                                                                       Financing establishment costs paid                                                             (1,467)              –
                                                                                                                                                                       Proceeds from exercise of options                                                              14,434               –
                                                                                                                                                                       Proceeds from borrowings                                                                     380,084        538,000
                                                                                                                                                                       Repayment of borrowings                                                                     (481,780)      (372,359)
                                                                                                                                                                       Net cash flow financing activities                                                          (157,900)         10,383
                                                                                                                                                                       Net cash inflow/(outflow) for the year                                                         10,854          (9,774)

                                                                                                                                                                       The above statement of cash flows should be read in conjunction with the discussion and analysis of the statement of
                                                                                                                                                                       cash flows and the accompanying notes.




                                                                                                                                                                              33 /TEN     ANNUAL REVIEW 2003
                                    TEN NETWORK HOLDINGS LIMITED AND CONTROLLED ENTITIES CONCISE FINANCIAL REPORT AS AT 31 AUGUST 2003
NOTES TO THE FINANCIAL STATEMENTS
                                                                                                                                         1 BASIS OF PREPARATION OF THE CONCISE FINANCIAL REPORT
                                                                                                                                         The Concise Financial Report has been prepared in accordance with the requirements of the Corporations Act, Accounting Standard AASB 1039:
                                                                                                                                         Concise Financial Reports and applicable Urgent Issues Group Consensus Views.
                                                                                                                                         The accounting policies adopted are consistent with those of the previous year except for the change in Income Taxes. A full description of the
                                                                                                                                         accounting policies adopted by the consolidated entity may be found in the consolidated entity’s Full Financial Report.


                                                                                                                                         2 REVENUE FROM ORDINARY ACTIVITIES
                                                                                                                                                                                                                                                                              Consolidated
                                                                                                                                                                                                                                                                      2003                    2002
                                                                                                                                                                                                                                                                     $’000                   $’000

                                                                                                                                         Revenue from Operating Activities
                                                                                                                                         Sales revenue                                                                                                         729,865                665,555
                                                                                                                                         Revenue from Outside the Operating Activities
                                                                                                                                         Dividends
                                                                                                                                            Other                                                                                                                        –                     66
                                                                                                                                         Interest
                                                                                                                                            Other                                                                                                                2,614                   1,040
                                                                                                                                         Gross proceeds on sale of listed investments                                                                                –                     142
                                                                                                                                         Gross proceeds on sale of property, plant and equipment                                                                   591                     326
                                                                                                                                         Total Revenue from Ordinary Activities                                                                                733,070                 667,129


                                                                                                                                         3 PROFIT/(LOSS) FROM ORDINARY ACTIVITIES
                                                                                                                                           BEFORE INCOME TAX
                                                                                                                                         Non-recurring items included in profit/(loss)
                                                                                                                                         from ordinary activities before income tax
                                                                                                                                         Write down of program rights – Columbia features                                                                       (20,000)                      –
                                                                                                                                         Write down of goodwill and other charges                                                                                     –               (178,421)
                                                                                                                                         Write off of capitalised digital costs                                                                                       –                  (3,493)
                                                                                                                                         Write down of listed investments                                                                                             –                 (16,522)
                                                                                                                                                                                                                                                                (20,000)              (198,436)


                                                                                                                                         4 RETAINED EARNINGS
                                                                                                                                         Retained earnings at beginning of year                                                                               (145,461)                (36,829)
                                                                                                                                         Adjustments to opening retained earnings
                                                                                                                                           Adoption of AASB 1020                                                                                              (270,192)                      –
                                                                                                                                           Related outside equity interest                                                                                      40,335                       –
                                                                                                                                         Adjusted retained earnings at the beginning of the financial year                                                    (375,318)                (36,829)
                                                                                                                                         Net profit/(loss) attributable to members of the Company                                                               89,038                (108,632)
                                                                                                                                         Dividends paid                                                                                                        (44,456)                      –
                                                                                                                                         Retained earnings at end of year                                                                                     (330,736)               (145,461)


                                                                                                                                         5 DIVIDENDS
                                                                                                                                         Dividends proposed or paid by the Company are:
                                                                                                                                                                                                 Cents per   Total Amount                         Date of      Tax rate for           Percentage
                                                                                                                                                                                                    share           $’000                        payment    franking credit               franked

                                                                                                                                         2003
                                                                                                                                         Dec – ordinary dividend proposed and paid                    6.5       25,104               28 February 2003               30%                  100%
                                                                                                                                         Jun – ordinary dividend proposed and paid                    5.0       19,352                    4 July 2003               30%                  100%

                                                                                                                                         2002
                                                                                                                                         Final – ordinary dividend proposed                            –             –                              n/a              n/a                   n/a
                                                                                                                                         Final – ordinary dividend paid                            14.35        54,647                  2 January 2002              30%                  100%




                                                                                                                                                                                           34 /TEN     ANNUAL REVIEW 2003
                                    TEN NETWORK HOLDINGS LIMITED AND CONTROLLED ENTITIES CONCISE FINANCIAL REPORT AS AT 31 AUGUST 2003
NOTES TO THE FINANCIAL STATEMENTS
                                                                                                                                         6 SEGMENT INFORMATION
                                                                                                                                         Primary reporting – Business segments
                                                                                                                                                                                                                                                        Eliminations/
                                                                                                                                                                                                                            Television   Out-of-home     Unallocated    Consolidated
                                                                                                                                         2003                                                                                   $’000           $’000          $’000           $’000


                                                                                                                                         REVENUE
                                                                                                                                         Sales to external customers                                                       660,384          69,481                –       729,865
                                                                                                                                         Inter-segment sales                                                                   119             289             (408)            –
                                                                                                                                         Total sales revenue                                                               660,503          69,770             (408)      729,865
                                                                                                                                         Other revenue                                                                       3,033              97               75         3,205
                                                                                                                                         Total revenue                                                                     663,536          69,867             (333)      733,070

                                                                                                                                         SEGMENT RESULT
                                                                                                                                         Result                                                                            210,308            2,808         (1,082)       212,034
                                                                                                                                         Share of associates’ and joint ventures’ profit                                       193            2,237              –           2,430
                                                                                                                                         EBITDA                                                                            210,501            5,045         (1,082)       214,464
                                                                                                                                         Depreciation                                                                      (12,883)          (4,743)             –         (17,626)
                                                                                                                                         Amortisation                                                                            –           (3,517)             –          (3,517)
                                                                                                                                         EBIT                                                                              197,618           (3,215)        (1,082)       193,321
                                                                                                                                         Non-recurring Items                                                               (20,000)               –              –        (20,000)
                                                                                                                                         Borrowing costs                                                                                                                  (117,042)
                                                                                                                                         Interest revenue                                                                                                                    2,614
                                                                                                                                         Profit before tax                                                                                                                 58,893
                                                                                                                                         Income tax revenue/(expense)
                                                                                                                                            Normal                                                                                                                        (23,503)
                                                                                                                                            Non-recurring                                                                                                                  68,041
                                                                                                                                         Net Profit after tax                                                                                                             103,431

                                                                                                                                         Depreciation and amortisation                                                      12,883            8,260                –       21,143
                                                                                                                                         Other non-cash expenses                                                            20,000                –                –       20,000

                                                                                                                                         ASSETS
                                                                                                                                         Segment assets                                                                   1,416,377        112,720             694      1,529,791
                                                                                                                                         Investments in associates and joint ventures                                         7,962          4,319               –         12,281
                                                                                                                                         Consolidated total assets                                                                                                      1,542,072

                                                                                                                                         LIABILITIES
                                                                                                                                         Segment liabilities                                                               929,416          26,419              175       956,010
                                                                                                                                         Acquisitions of non-current assets                                                 27,666           2,206                –        29,872




                                                                                                                                                                                           35 /TEN   ANNUAL REVIEW 2003
                                    TEN NETWORK HOLDINGS LIMITED AND CONTROLLED ENTITIES CONCISE FINANCIAL REPORT AS AT 31 AUGUST 2003
NOTES TO THE FINANCIAL STATEMENTS
                                                                                                                                         6 SEGMENT INFORMATION (CONTINUED)
                                                                                                                                         Primary reporting – Business segments (continued)
                                                                                                                                                                                                                                                         Eliminations/
                                                                                                                                                                                                                  Television   Out-of-home    Ventures    Unallocated    Consolidated
                                                                                                                                         2002                                                                         $’000           $’000     $’000           $’000           $’000


                                                                                                                                         REVENUE
                                                                                                                                         Sales to external customers                                             587,453          78,102           –               –       665,555
                                                                                                                                         Inter-segment sales                                                         171             667           –            (838)            –
                                                                                                                                         Total sales revenue                                                     587,624          78,769           –            (838)      665,555
                                                                                                                                         Other revenue                                                             1,172             143         142             117         1,574
                                                                                                                                         Total revenue                                                           588,796          78,912         142            (721)      667,129

                                                                                                                                         SEGMENT RESULT
                                                                                                                                         Result                                                                   173,590            1,019       142         (1,185)       173,566
                                                                                                                                         Share of associates’ profit                                                     –             916         –              –              916
                                                                                                                                         EBITDA                                                                   173,590            1,935       142         (1,185)       174,482
                                                                                                                                         Deprecation                                                               (10,953)         (5,300)        –              –         (16,253)
                                                                                                                                         Amortisation                                                               (1,543)       (10,754)         –              –         (12,297)
                                                                                                                                         EBIT                                                                     161,094          (14,119)      142         (1,185)       145,932
                                                                                                                                         Non-recurring items                                                       (20,015)     (178,421)          –              –       (198,436)
                                                                                                                                         Borrowing costs                                                                                                                     (37,355)
                                                                                                                                         Interest revenue                                                                                                                      1,040
                                                                                                                                         Loss before tax                                                                                                                    (88,819)
                                                                                                                                         Income tax expense
                                                                                                                                            Normal                                                                                                                         (34,353)
                                                                                                                                            Non-recurring                                                                                                                   (36,158)
                                                                                                                                         Net Loss after tax                                                                                                               (159,330)

                                                                                                                                         Depreciation and amortisation                                             12,496         16,054            –               –       28,550
                                                                                                                                         Other non-cash expenses                                                   16,522        169,540            –               –      186,062

                                                                                                                                         ASSETS
                                                                                                                                         Segment assets                                                         1,451,436        137,366            –           660      1,589,462
                                                                                                                                         Investments in associates                                                  2,119          2,888            –             –          5,007
                                                                                                                                         Consolidated total assets                                                                                                       1,594,469

                                                                                                                                         LIABILITIES
                                                                                                                                         Segment liabilities                                                     733,467          69,040            –            185       802,692
                                                                                                                                         Acquisitions of non-current assets                                       20,509           5,004            –              –        25,513

                                                                                                                                         BUSINESS SEGMENTS
                                                                                                                                         The consolidated entity is organised into the following divisions by service type.
                                                                                                                                         Television
                                                                                                                                         Operation of commercial television licences TEN-10 (Sydney), ATV-10 (Melbourne),
                                                                                                                                         TVQ-10 (Brisbane), ADS-10 (Adelaide) and NEW-10 (Perth).
                                                                                                                                         Out-of-home
                                                                                                                                         Advertising media outside the home environment.
                                                                                                                                         Ventures
                                                                                                                                         Investments in the online industry.
                                                                                                                                         Geographical segments
                                                                                                                                         The consolidated entity operates principally within Australia.
                                                                                                                                         Inter-segment transactions
                                                                                                                                         Segment revenues, expenses and results include transactions between segments.
                                                                                                                                         Such transactions are priced on an “arm’s-length” basis and are eliminated on consolidation.




                                                                                                                                                                                            36 /TEN       ANNUAL REVIEW 2003
                                    TEN NETWORK HOLDINGS LIMITED AND CONTROLLED ENTITIES CONCISE FINANCIAL REPORT AS AT 31 AUGUST 2003
NOTES TO THE FINANCIAL STATEMENTS
                                                                                                                                         7 SUBSEQUENT EVENTS
                                                                                                                                         On 8 October 2003 the directors declared a special dividend of 5.5 cents per share to be paid on 8 January 2004. The special dividend
                                                                                                                                         is a result of the additional distributable earnings from the implementation of the tax consolidations regime on 1 July 2003.
                                                                                                                                         Except for the special dividend noted above, at the date of this report, no matters or circumstances have arisen since balance date
                                                                                                                                         that have significantly affected or may significantly affect:
                                                                                                                                         • the operations in financial years subsequent to 31 August 2003 of the consolidated entity and the entities it controls from time to time; or
                                                                                                                                         • the results of those operations; or
                                                                                                                                         • the state of affairs in financial years subsequent to 31 August 2003 of the consolidated entity.


                                                                                                                                         8 CONTINGENT LIABILITIES
                                                                                                                                         General
                                                                                                                                         As part of its normal operations as a television broadcaster, the consolidated entity has received writs for defamation and various claims for
                                                                                                                                         damages. At balance date, the aggregate of all such claims will not give rise to any material liability.
                                                                                                                                         Details and estimates of other maximum amounts of contingent liabilities are as follows:
                                                                                                                                                                                                                                                                               Consolidated
                                                                                                                                                                                                                                                                        2003                   2002
                                                                                                                                                                                                                                                                       $’000                  $’000

                                                                                                                                         Unsecured guarantees by a controlled entity and consolidated entity
                                                                                                                                         in respect of leases of controlled entities in the group                                                                   34,856               39,053
                                                                                                                                         Secured guarantees by a controlled entity, Eye Corp Pty Limited, in respect
                                                                                                                                         of leases of certain of its controlled entities. The guarantees are secured by a
                                                                                                                                         fixed and floating charge over all assets of the Eye Corp Pty Limited consolidated entity                                   1,910                1,768
                                                                                                                                                                                                                                                                    36,766               40,821

                                                                                                                                         No material losses are anticipated in respect of any of the above contingent liabilities.




                                                                                                                                                                                             37 /TEN    ANNUAL REVIEW 2003
                          TEN NETWORK HOLDINGS LIMITED AND CONTROLLED ENTITIES CONCISE FINANCIAL REPORT AS AT 31 AUGUST 2003




                                                                                                                                                                                                                    TEN NETWORK HOLDINGS LIMITED AND CONTROLLED ENTITIES CONCISE FINANCIAL REPORT AS AT 31 AUGUST 2003
DIRECTORS’ DECLARATIONS




                                                                                                                                                                                     INDEPENDENT AUDITORS’ REPORT
                                                                                                                               In the opinion of the Directors of Ten Network                                                                                                                                               Matters relating to the electronic presentation of the audited
                                                                                                                               Holdings Limited the accompanying Concise                                                                                                                                                    financial report
                                                                                                                               Financial Report of the consolidated entity,                                                                                                                                                 This audit report relates to the concise financial report of Ten Network Holdings
                                                                                                                               comprising Ten Network Holdings Limited                                                                                                                                                      Limited (the Company) for the financial year ended 31 August 2003 included on
                                                                                                                               and its controlled entities, for the year ended                                                                                                                                              the Company’s web site. The Company’s directors are responsible for the
                                                                                                                               31 August 2003, set out on pages 31 to 37:                                                                                                                                                   integrity of the Company’s web site. We have not been engaged to report on
                                                                                                                               (a) has been derived from or is consistent with                                                                                                                                              the integrity of this web site. The audit report refers only to the financial report
                                                                                                                               the Full Financial Report for the financial year;                                                                                                                                            identified below. It does not provide an opinion on any other information which
                                                                                                                               and                                                                                                                                                                                          may have been hyperlinked to/from the financial report. If users of this report
                                                                                                                               (b) complies with Accounting Standard                                                                                                                                                        are concerned with the inherent risks arising from electronic data
                                                                                                                               AASB 1039: Concise Financial Reports.                                                                                                                                                        communications they are advised to refer to the hard copy of the audited
                                                                                                                                                                                                                                                                                                                            financial report to confirm the information included in the audited financial
                                                                                                                               The Concise Financial Report cannot be
                                                                                                                                                                                                                                                                                                                            report presented on this web site.
                                                                                                                               expected to provide as full an understanding
                                                                                                                               of the financial performance, financial position                                                                                                                                             Audit opinion
                                                                                                                               and financing and investing activities of the                                                                                                                                                In our opinion, the concise financial report of Ten Network Holdings Limited for
                                                                                                                               consolidated entity as the Full Financial Report,                                                                                                                                            the year ended 31 August 2003 complies with Australian Accounting Standard
                                                                                                                               which is available on request.                                                                                                                                                               AASB 1039: Concise Financial Reports.
                                                                                                                               SIGNED at Sydney on 8 October 2003 in                                                                                                                                                        This opinion must be read in conjunction with the rest of our audit report.
                                                                                                                               accordance with a resolution of the Directors.                                                                                                                                               Scope
                                                                                                                                                                                                                                                                                                                            The concise financial report and directors’ responsibility
                                                                                                                                                                                                                                                                                                                            The concise financial report comprises the statements of financial position as
                                                                                                                                                                                                                                                                                                                            at 31 August 2003 and the statements of financial performance and cash
                                                                                                                               NG Falloon                                                                                                                                                                                   flows, notes 1 to 8 to the financial statements and the Directors’ Declaration
                                                                                                                                                                                                                                                                                                                            for Ten Network Holdings Limited (the Company) for the year ended 31 August
                                                                                                                               Chairman
                                                                                                                                                                                                                                                                                                                            2003.
                                                                                                                                                                                                                                                                                                                            The directors of the Company are responsible for the preparation and
                                                                                                                                                                                                                                                                                                                            presentation of the financial report in accordance with Australian Accounting
                                                                                                                                                                                                                                                                                                                            Standard AASB 1039: Concise Financial Reports.
                                                                                                                                                                                                                                                                                                                            Audit approach
                                                                                                                                                                                                                                                                                                                            We conducted an independent audit of the concise financial report in order to
                                                                                                                                                                                                                                                                                                                            express an opinion on it to the members of the Company. Our audit was
                                                                                                                                                                                                                                                                                                                            conducted in accordance with Australian Auditing Standards, in order to provide
                                                                                                                                                                                                                                                                                                                            reasonable assurance as to whether the concise financial report is free of
                                                                                                                                                                                                                                                                                                                            material misstatement. The nature of an audit is influenced by factors such as
                                                                                                                                                                                                                                                                                                                            the use of professional judgement, selective testing, the inherent limitations of
                                                                                                                                                                                                                                                                                                                            internal control, and the availability of persuasive rather than conclusive
                                                                                                                                                                                                                                                                                                                            evidence. Therefore, an audit cannot guarantee that all material misstatements
                                                                                                                                                                                                                                                                                                                            have been detected
                                                                                                                                                                                                                                                                                                                            We also performed an independent audit of the full financial report of the
                                                                                                                                                                                                                                                                                                                            Company for the financial year ended 31 August 2003. Our audit report on the
                                                                                                                                                                                                                                                                                                                            full financial report was signed on 8 October 2003, and was not subject to any
                                                                                                                                                                                                                                                                                                                            qualification.
                                                                                                                                                                                                                                                                                                                            In conducting our audit of the concise financial report, we performed
                                                                                                                                                                                                                                                                                                                            procedures to assess whether in all material respects the concise financial
                                                                                                                                                                                                                                                                                                                            report is presented fairly in accordance with Australian Accounting Standard
                                                                                                                                                                                                                                                                                                                            AASB 1039: Concise Financial Reports.
                                                                                                                                                                                                                                                                                                                            We formed our audit opinion on the basis of these procedures, which included:
                                                                                                                                                                                                                                                                                                                            • testing that the information included in the concise financial report is
                                                                                                                                                                                                                                                                                                                               consistent with the information in the full financial report, and
                                                                                                                                                                                                                                                                                                                            • examining, on a test basis, information to provide evidence supporting the
                                                                                                                                                                                                                                                                                                                               amounts, discussion and analysis, and other disclosures in the concise
                                                                                                                                                                                                                                                                                                                               financial report which were not directly derived from the full financial report.
                                                                                                                                                                                                                                                                                                                            When this audit report is included in a document containing the directors’
                                                                                                                                                                                                                                                                                                                            report, our procedures include reading the directors’ report to determine
                                                                                                                                                                                                                                                                                                                            whether it contains any material inconsistencies with the financial report.
                                                                                                                                                                                                                                                                                                                            Independence
                                                                                                                                                                                                                                                                                                                            In conducting our audit, we followed the applicable independence
                                                                                                                                                                                                                                                                                                                            requirements of Australian professional ethical pronouncements and the
                                                                                                                                                                                                                                                                                                                            Corporations Act 2001.




                                                                                                                                                                                                                                                                                                                            PricewaterhouseCoopers




                                                                                                                                                                                                                                                                                                                            SJ Bosiljevac
                                                                                                                                                                                                                                                                                                                            Sydney
                                                                                                                                                                                                                                                                                                                            Partner
                                                                                                                                                                                                                                                                                                                            8 October 2003



                                                                                                                                                                                   38 /TEN                                                                                                                               ANNUAL REVIEW 2003
                          TEN NETWORK HOLDINGS LIMITED AND CONTROLLED ENTITIES CONCISE FINANCIAL REPORT AS AT 31 AUGUST 2003
SHAREHOLDER INFORMATION
                                                                                                                               VOTING RIGHTS
                                                                                                                               On a show of hands, ordinary shareholders present or by proxy at a general meeting of the Company have one (1) vote each. On a poll,
                                                                                                                               shareholders have one (1) vote for each share held.
                                                                                                                               At general meetings of The Ten Group Pty Limited (“TEN”), shareholders of the Company are entitled to attend or be represented by proxy as if
                                                                                                                               they were shareholders of TEN.
                                                                                                                               Shareholders must complete a Notice of Appointment of See Through Representative (if attending in person) or a Notice of Appointment of See
                                                                                                                               Through Proxy (where attending by proxy).
                                                                                                                               Shareholders of the Company will be entitled to one (1) vote on a show of hands and one (1) vote for each share held in the Company, on a poll
                                                                                                                               in respect of most resolutions to be considered at general meetings of TEN.

                                                                                                                               MAXIMUM SHAREHOLDER LIMITATIONS
                                                                                                                               There is no maximum limitation on shareholdings under the Company’s Constitution but the Broadcasting Services Act (“BSA”) limits any one
                                                                                                                               foreign person to a shareholding interest of 15% of a company’s ordinary shares. The BSA also restricts the total level of shareholding interests
                                                                                                                               held by all foreign shareholders to 20% of the ordinary shares of a company.

                                                                                                                               SHARE REGISTRY
                                                                                                                               Registries Limited                     PO Box R67
                                                                                                                               Level 2                                Royal Exchange
                                                                                                                               28 Margaret Street                     SYDNEY NSW 1223
                                                                                                                               SYDNEY NSW 2000                        Tel 02 9279 0677
                                                                                                                                                                      Fax 02 9279 0684

                                                                                                                               SERVICES FOR SHAREHOLDERS
                                                                                                                               For services or any information on your shareholding including direct payment of dividends, please telephone the Share Registry.

                                                                                                                               STOCK EXCHANGE LISTING
                                                                                                                               The Company’s ordinary shares are listed on the Australian Stock Exchange under code TEN.

                                                                                                                               DIVIDEND REINVESTMENT PLAN
                                                                                                                               The Company does not operate a dividend reinvestment plan as at the date of this report.

                                                                                                                               DISTRIBUTION OF HOLDINGS
                                                                                                                               No. of Shares                                                                                                     No. of Shareholders       Total Units


                                                                                                                               1 - 1,000                                                                                                                    3,594        2,599,339
                                                                                                                               1,001 - 5,000                                                                                                               10,473      30,703,879
                                                                                                                               5,001 - 10,000                                                                                                               2,751       22,033,514
                                                                                                                               10,001 - 100,000                                                                                                             1,753       41,472,159
                                                                                                                               100,001                                                                                                                        182      292,537,201
                                                                                                                               Totals                                                                                                                      18,753      389,346,092




                                                                                                                                                                                 39 /TEN    ANNUAL REVIEW 2003
                          TEN NETWORK HOLDINGS LIMITED AND CONTROLLED ENTITIES CONCISE FINANCIAL REPORT AS AT 31 AUGUST 2003
SHAREHOLDER INFORMATION
                                                                                                                               TOP 20 SHAREHOLDERS
                                                                                                                               Holder Name                                                                         as at 15 October 2003                    %

                                                                                                                               RBC Global Services Australia Nominees Pty Limited                                          33,135,885                  8.511
                                                                                                                               J P Morgan Nominees Australia Limited                                                       28,310,586                  7.271
                                                                                                                               Suspirium Pty Limited                                                                       24,396,193                  6.266
                                                                                                                               National Nominees Limited                                                                   13,871,419                  3.563
                                                                                                                               Allard Services Pty Ltd                                                                     12,184,563                  3.129
                                                                                                                               Birketu Pty Ltd                                                                             11,680,000                  3.000
                                                                                                                               Westpac Custodian Nominees Limited                                                          11,583,700                  2.975
                                                                                                                               EIML Australia Pty Limited                                                                  11,082,124                  2.846
                                                                                                                               RBC Global Services Australia Nominees Pty Limited <PIPOOLED A/C>                           10,931,990                  2.808
                                                                                                                               Westpac Financial Services Limited                                                            7,936,427                 2.038
                                                                                                                               Queensland Investment Corporation                                                             7,188,866                 1.846
                                                                                                                               AMP Life Limited                                                                             6,842,341                  1.757
                                                                                                                               ANZ Nominees Limited                                                                         6,089,661                  1.564
                                                                                                                               Win Television NSW Pty Ltd                                                                   5,675,965                  1.458
                                                                                                                               Citicorp Nominees Pty Limited                                                                5,539,375                  1.423
                                                                                                                               Westpac Life Insurance Services Limited                                                       5,067,693                 1.302
                                                                                                                               George Edward Chapman                                                                        4,545,000                  1.167
                                                                                                                               Cogent Nominees Pty Limited                                                                  4,410,294                  1.133
                                                                                                                               Suncorp Custodian Services Pty Limited                                                       4,091,588                  1.051
                                                                                                                               Zurich Investment Management Limited                                                         3,591,091                  0.922
                                                                                                                               Total for Top 20                                                                           218,154,761                 56.030
                                                                                                                               Total Issued Ordinary Fully Paid Shares                                                    389,346,092


                                                                                                                               LOCATION OF SHAREHOLDERS
                                                                                                                               Location of Shareholders                                                                No. of Shareholders       No. of Shares


                                                                                                                               Australia
                                                                                                                               New South Wales                                                                                    5,920       235,048,707
                                                                                                                               A.C.T.                                                                                               383          1,589,178
                                                                                                                               Victoria                                                                                           5,533         67,675,420
                                                                                                                               Queensland                                                                                         3,058        62,353,603
                                                                                                                               South Australia                                                                                    1,535          9,616,578
                                                                                                                               Western Australia                                                                                  1,840          8,729,144
                                                                                                                               Tasmania                                                                                             292          1,351,780
                                                                                                                               Northern Territory                                                                                    23             88,290
                                                                                                                               New Zealand                                                                                           50            398,891
                                                                                                                               Rest of World                                                                                        119          2,494,501
                                                                                                                               Total                                                                                             18,753       389,346,092



                                                                                                                               REGISTER OF SUBSTANTIAL SHAREHOLDERS
                                                                                                                               Name                                                                         Interest    Extent of Holdings Date of Notification

                                                                                                                               Equitilink Australia Pty Limited & ORS                                      11.97%           42,574,047         11 Jun 1998
                                                                                                                               Maple Brown Abbott Limited                                                   9.16%           34,899,039         12 Oct 2001




                                                                                                                                                                            4O /TEN   ANNUAL REVIEW 2003
                                                              NETWORK TEN

                                                              REGISTERED OFFICE
                                                              Network Ten
                                                              1 Saunders Street
                                                              PYRMONT NSW 2009
                                                              Ph (02) 9650 1010
                                                              Fax (02) 9950 1111
                                                              www.tencorporate.com.au

                                                              COMPANY SECRETARY            EYE CORP PTY LTD             EYE CORP ASIA
                                                              Stephen Partington
                                                                                           HEAD OFFICE                  INDONESIA
                                                              NETWORK TEN OFFICES          Sydney                       Eye Corp – Indonesia
                                                              TEN-10 Sydney                Level 5/35 Saunders Street   Graha Iskandarsyah Lt.4
                                                              1 Saunders Street            PYRMONT NSW 2009             Jl. Iskandarsyah Raya
                                                              PYRMONT NSW 2009             Ph (02) 8584 2222            no.66C
                                                              Ph (02) 9650 1010            Fax (02) 9552 3626           KEBAYORAN BAU
                                                              Fax (02) 9650 1111           www.eyecorp.com.au           JAKARTA 12160
                                                                                                                        INDONESIA
                                                              ATV-10 Melbourne             Melbourne
                                                                                                                        Ph +62 21 7279 2019
                                                              Como Centre                  Como Centre 3rd Floor
                                                                                                                        Fax +62 21 7279 2015
                                                              620 Chapel Street            620 Chapel Street
                                                              SOUTH YARRA VIC 3141         SOUTH YARRA VIC 3141         MYANMAR
                                                              Ph (03) 9275 1010            Ph (03) 9824 1200            Eye Corp – Myanmar
                                                              Fax (03) 9275 1011           Fax (03) 9824 1744           50/C, Inya Road
                                                                                                                        KATHAYUT TOWNSHIP
                                                              TVQ-10 Brisbane              Brisbane
                                                                                                                        YANGON, MYANMAR
                                                              Sir Samuel Griffith Drive    The Astor Centre
                                                                                                                        Ph +951 514 123
                                                              MT COOT-THA QLD 4066         Suite 22/Level 5
                                                                                                                        Fax +951 526 133
                                                              Ph (07) 3214 1010            445 Upper Edward Street
                                                              Fax (07) 3369 3786           SPRING HILL QLD 4000         MALAYSIA
                                                                                           Ph (07) 3839 1044            Big Tree Outdoor
                                                              ADS-10 Adelaide
                                                                                           Fax (07) 3939 2772           LOT G.1 Ground Floor
                                                              125 Strangways Terrace
                                                                                                                        Menara Lien Hoe
                                                              NORTH ADELAIDE               Adelaide
                                                                                                                        No.8 Persiaran Tropicana
                                                              SA 5006                      C/- Network Ten
                                                                                                                        47410 Petaling Jaya
                                                              Ph (08) 8239 1010            125 Strangways Terrace
                                                                                                                        SELANGOR DE MALAYSIA
                                                              Fax (08) 8239 1011           NORTH ADELAIDE
                                                                                                                        Ph +60 3 7880 9988
                                                                                           SA 5006
                                                              NEW-10 Perth                                              Fax +60 3 7880 8989
                                                                                           Ph (08) 8267 1066
                                                              Cottonwood Crescent
                                                                                           Fax (08) 8267 1266
                                                              DIANELLA HEIGHTS
                                                              WA 6062                      Perth
                                                              Ph (08) 9345 1010            C/- Network Ten
                                                              Fax (08) 9344 8076           Cottonwood Crescent
                                                                                           DIANELLA HEIGHTS
                                                              Parliament House, Canberra
                                                                                           WA 6059
                                                              Suite 65, Senate Side
                                                                                           Ph (08) 9442 6420
                                                              PARKES ACT 2602
                                                                                           Fax (08) 9345 2183
                                                              Ph (02) 6273 2210
                                                              Fax (02) 6273 1402           Adval Australia
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                                                                                           76–80 Carroll Road
                                                              Los Angeles
                                                                                           SOUTH OAKLEIGH
                                                              3440 Motor Avenue
                                                                                           VIC 3167
                                                              Circular Building
                                                                                           Ph (03) 9543 3999
                                                              CULVER CITY
                                                                                           Fax (03) 9543 5551
                                                              CA 90034 USA
                                                              Ph +1 310 287 3800           Adval Australia – Sydney
                                                              Fax +1 310 287 3808          South Sydney
                                                                                           Corporate Park
                                                                                           Unit 12, Level 1
                                                                                           138–160 Bourke Road
                                                                                           ALEXANDRIA NSW 2015
                                                                                           Ph (02) 8339 1855
                                                                                           Fax (02) 8339 1844

				
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