Chairman's report20112585742

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					Chairman’s report

Dear Shareholder,

In the 2003 Financial Year, TVSN Limited grew to become one of Australia's leading and most
sophisticated direct retailers. During the year we successfully executed the merger with the
Danoz Group of Companies whilst growing the existing businesses. In addition, the rollout of
the retail store model accelerated and operations were launched in New Zealand and Hong
Kong.

Financially TVSN Limited recorded its most significant and pleasing results to date. Revenue
grew to $69.3 million at a time when operating expenses were managed downwards. The
result was an EBITDA loss of ($498k), an improvement of $5.7 million or 92% over the
comparable twelve-month period to June 2002.

Key achievements of the 2003 Financial Year were:

Successful merger with the Danoz Group: The Danoz Group was acquired on 19 June
2002 and was integrated into joint premises at Lane Cove from July 2002. The Company was
successful in capturing the anticipated cost savings of the merger.

Continued growth of the TVSN Channel: The TVSN Channel continued its history of
revenue and earnings growth with a 36% lift in revenue over the comparable period to
$34 million. In August 2002 the TVSN Channel was launched in New Zealand on the SKY
Television platform reaching an additional 350,000 households.

Danoz Directions stores: The rollout of the Danoz Directions stores accelerated with 18 new
stores either opened or contracted. Store trading is exceeding expectations and currently
there are 26 franchised and company-owned stores located throughout Australia.

Growth in Wholesale Division - The wholesale division grew its revenue in the second half
of the year by 44% over the first half. It achieved this result by expanding its customer base
to include some of the largest retailers in Australia.

In December 2002 the Company raised $2.9 million through the issue of new shares at $0.22
per share together with one option (exercisable at $0.22) for every 4 shares issued. This
raising was primarily used to retire aged trade debt.

The successful integration of the businesses and the growth that was achieved in this past
year is a tribute to the dedication and hard work of all staff. The Board would like to take this
opportunity to especially thank employees of the Company for their contributions.

On behalf of the Board of Directors, I would also like to thank you, as a shareholder, for your
continued support of the Company through this year of consolidation and growth. We can all
look forward to an exciting year ahead.

Yours sincerely,




30 September 2003
Sydney


TVSN Limited and controlled entities                                                          1
TVSN Limited
A.C.N. 066 139 991


Annual report 30 June 2003


Contents                                  Page


Corporate directory                          3
Review of operations and activities          4
Directors’ report                            8
Corporate governance statement              23
Financial report                            29
Directors’ declaration                      69
Independent audit report to the members     70
Shareholder information                     72




TVSN Limited and controlled entities         2
Corporate directory

Directors                  Ron Baskin, Chairman
                           John Porter, Non-Executive
                           Eric Melman, Non-Executive
                           Moshe Ozana, Executive Vice-Chairman
                           Rob Hunt, Chief Executive Officer

Secretary                  Eryl Baron

Annual General Meeting The Annual General Meeting of TVSN Limited will be held:
                       Location:       15 Orion Road, Lane Cove
                       Time:           11 am
                       Date:           20 November 2003
                       A formal notice of meeting is enclosed

Principal registered       L5, 15 Orion Road
office in Australia        Lane Cove NSW 2066

Share register             Computershare Registry Services
                           L3, 60 Carrington Street
                           Sydney, NSW 2000

Solicitors                 Morgan Lewis Alter
                           L12, 15 Castlereagh Street
                           Sydney, NSW 2000

Auditor                    PricewaterhouseCoopers
                           201 Sussex Street
                           Sydney, NSW 2000

Bankers                    St George Bank Limited
                           L5, 4 Bligh Street
                           Sydney, NSW 2000

Stock Exchange listings TVSN Limited shares are listed on the Australian Stock Exchange

Website address            www.itvsn.com.au




    TVSN Limited and controlled entities                                                  3
Review of operations and activities
Company overview
Founded in 1995 and listed on the Australian Stock Exchange in 1999, TVSN is Australia's
premier television retailer and is one of Australia’s largest direct retailers. The Company
retails its range of merchandise throughout Australia and New Zealand, with distribution via
subscription television, free-to-air television, retail stores, the internet and catalogues.

In June 2002, TVSN merged with the Danoz group of companies.

The Company operates two primary brands, Danoz Direct and TVSN. Danoz Direct was
established over 11 year ago and the brand is synonymous with television retailing in
Australia. Danoz Direct advertises its products using the infomercial and advertorial format,
buying airtime on the broadcast networks of Australia. Danoz Direct merchandise is not only
exclusive but also innovative by nature and sales are recorded through the call centre or via
the internet.

Supporting and leveraging off the activity of Danoz Direct is a growing chain of retail store
named Danoz Directions. Currently there are 26 of these stores with the majority being
owned and operated by franchisees. This retail model has proven successful in overseas
markets and trading in the Danoz Directions stores is exceeding expectations.

The second major brand operated by the Company is TVSN. The TVSN Channel is a 24-hour
home-shopping channel carried by all the major subscription television operators reaching
nearly 2 million homes across Australia and New Zealand. The TVSN Channel is like a
department store on television and carries a full range of merchandise include product
categories such as jewellery, health & beauty, fashion, electrical, kitchenware, and
collectibles. The Harrods Knightsbridge merchandise range is exclusive to the TVSN Channel
in Australia and New Zealand.

Other businesses operated by the Company include Emjoi Australasia and the Expo Channel.
Emjoi Australasia is a wholesale business that imports and then distributes merchandise to a
number of the major retail chains in Australia. This wholesale business distributes both an
exclusive range of Emjoi product, and also wholesales product that has previously been
marketed by Danoz Direct. In such a case these products benefit from the backing of a large
advertising and marketing campaign. Often the presence of these products in the large retail
chains of Australia reignites interest in the product particularly with consumers who are not
predisposed to buying merchandise from the television in the first instance.

The Expo Channel is a 24-hour subscription television channel that is carried in Australia by
Austar and Optus Television and reaches over 600,000 homes. The EXPO Channel is
compiled by the Company and is presented as a showcase of goods and services. Airtime on
the Expo Channel is purchased by a number of leading direct retailers, including Danoz
Direct.

While the Danoz Direct and TVSN Channel brands usually receive orders for their product via
the telephone, increasingly the internet and catalogues are proving effective sales tools. The
growth in the Company's internet business is particularly encouraging.

TVSN Limited operates its various businesses from joint premises at Lane Cove, Sydney. At
this location is a call centre, a distribution centre, a digital television studio, television
production and post-production, product sourcing, quality assurance, wholesale, retail,
marketing, and the corporate team. The success of any direct retail business lies in the
integration and co-ordination of each of these business units. Furthermore, in the experience
of TVSN Limited it is more cost effective to have the core capabilities operated in-house.



TVSN Limited and controlled entities                                                       4
Review of operations and activities (Continued)

While the TVSN Channel and the Danoz Group enjoy strong organic growth, the Company is
aware that the most effective means of maintaining growth is by fostering the direct retail
industry and enticing more viewers to become buyers of television products. The experience
of comparable markets suggests that the Australian Television retail industry is nascent. This
is also the view of the Electronic Retailers Association, which has suggested that the
Australian television retail industry may double over the next three years.

Company Operations

The TVSN Channel - The subscription television industry in Australia did not experience
material subscriber growth in the year to 30 June 2003, maintaining a level of approximately
1.5 million subscription households.

Net sales in the 2003 Financial Year were $34 million, an increase of 36% over the
corresponding 12 months to June 2002 from the previous year. TVSN generated average net
sales per Full Time Equivalent home ('FTE") of $22 as compared to $17 in the prior
comparable period. Perhaps even more satisfying is that the TVSN Channel is appealing to
an increasing number of viewers with I in 25 homes purchasing from the channel during the
year.

TVSN continues to enjoy customer loyalty with in excess of 85% of daily sales earned from
repeat customers. TVSN generates this level of repeat purchasing by maintaining high levels
of customer service, a rigorous commitment to quality assurance and a rapid order fulfilment
system. The number of customers who qualified for the Select Shopper loyalty program,
based on repeat purchasing, grew by over 45% during the period.


Danoz Direct and Danoz Directions - The Danoz Direct brand has a high level of consumer
recall. This awareness was built over the last eleven years of operation and through an
annual advertising campaign that has exceeded $10 million.

The business of Danoz Direct is product driven and at any one time often ten products are
generating over 85% of revenue. In any one year many hundreds of products are tested and
trialed with only a few progressing to become best sellers.

The roll out of the Danoz Directions stores, a predominantly franchise operation, has been an
exciting and profitable one for the Danoz brand. Currently there are 26 Danoz Directions
stores, 19 of which have opened since July 2002.

A significant factor in the rollout of the Danoz Directions stores is that we believe it has been
achieved without materially cannibalising the revenues of Danoz Direct as recorded through
the call centre or via Danoz.com.au. Indeed, it is possible (though not yet proven) that the
new physical presence of the stores in turn provides reassurance to viewers of Danoz Direct
infomercials when considering a purchase over the phone.

Over half of the Danoz Directions outlets are owned and operated by franchisees. The
Company has been successful in attracting franchisees of a high calibre and we have found
that once franchisees become established they often seek to open a second or third store.

The Company plans to continue the roll out of stores over the next two years at a similar rate
to that achieved in the 2003 Financial Year.

In addition to its Australian operations, Danoz Direct launched in Hong Kong. This variable
cost model was profitable during the year however the results were not material to the overall
performance of TVSN Limited.


TVSN Limited and controlled entities                                                          5
Review of operations and activities (Continued)

Emjoi Australasia - The turnover of Emjoi Australasia at $6.6 million represented an increase
of 14% over the prior year. More importantly, during the 2003 Financial Year Emjoi
Australasia began supplying new clients, some of which own Australia's largest retail outlets.
Driven by these new opportunities, sales rose by 44% in the second half of the year over the
first half.

A second factor assisting the growth of Emjoi Australasia is the rising awareness of television
merchandise and its popularity amongst consumers in retail outlets. The popularity of
television products has been known for some year in overseas markets such as the United
Kingdom.


The EXPO Channel - The Expo Channel passed a number of key milestones.

(i)     In July 2002 it established the capability for 24-hour playout which enhanced the
        ability to tailor advertising packages to clients.

(ii)    Twice during the year the channel rate card was restructured raising the airtime rates
        in each instance.

(iii)   The EXPO Channel was successful in attracting non-traditional content including
        coverage of the Australian Soccer. While the channel is committed to servicing the
        direct response television marketing industry, opportunities to showcase and earn
        revenue      from     other    content    sources      are      always   explored.


Company Strategy

Overall Strategy - The Company is committed to maintaining its position as Australia's
premier television retailer. This will encompass:

(i)     Continuing the organic growth of its television shopping businesses in Australia and
        New Zealand.

(ii)    Growing alternate channels to market including the internet, interactive television,
        catalogue retailing, and others.

(iii)   Growing the traditional retail opportunity by increasing the number of franchise stores
        and expanding wholesale distribution.

(iv)    Maintaining retail brands supported by customer service, a rigorous commitment to
        quality assurance, a rapid fulfilment system, and loyalty programs.



The strategy will be achieved by focussing on the following:

Merchandising – On the TVSN Channel the merchandising strategy continues to focus on
product categories where information is as important as price in the consumer's purchase
decision. An integral part of TVSN's merchandising strategy is to provide customers with a
wide range of desirable product not otherwise available in Australia and New Zealand.




TVSN Limited and controlled entities                                                        6
Review of operations and activities (Continued)


For a product to qualify as suitable for Danoz Direct it should be unique and innovative in
nature, appealing to a broad range of customers, and in demonstrating the product it should
make compelling television. The majority of Danoz Direct merchandise is sourced from
overseas suppliers and is usually shipped direct from the factory to the Company.

Television Production - The Company aims to create a strong retail presence on television,
which complements the calibre of merchandise. The TVSN Channel achieves this by
producing a mix of taped and live television presentations that seek to educate consumers on
the products being offered and assist them in making an informed purchase decision.

The Danoz Direct infomercials are as unique and innovative as the merchandise they sell.
Emphasis is placed on brand integrity and on genuine customer testimonials in marketing the
product.

Customer Service - Maintaining levels of customer service that meet or exceed the
expectations of consumers has been a critical factor in the success of both the TVSN Channel
and Danoz Direct brands. The Company has invested significant resources in the customer
service infrastructure with customer service levels tailored to specific customer groups based
on frequency of purchase and spending patterns. For instance, TVSN's premium customers
are able to participate in the Company's loyalty program that rewards them with a series of
personalised service outputs.

Order Fulfilment - TVSN operates its own warehouses in Sydney and primarily uses
Australia Post for delivery within Australia and Express Logistics for distribution in New
Zealand. The TVSN Channel is committed to delivery within five working days from purchase.
Delivery of merchandise beyond 5 working days tends to result in an unacceptable level of
order cancellations.

Risk Management - The Company is committed to active risk management as outlined in the
Corporate Governance Statement. The responsibility for ensuring that significant risks facing
the Company are identified is the function of the Board of Directors, with the assistance of the
Audit Committee and a dedicated internal compliance and legal team. At the date of the
Directors’ Report there are no significant risk management issues facing TVSN that are not
disclosed elsewhere in this report.




TVSN Limited and controlled entities                                                          7
Directors’ report
The Directors of TVSN Limited submit the following report made in accordance with a
resolution of the Directors in respect of the 12-month period or financial year ended 30 June
2003. The Company received an exemption from ASIC to change its financial year from
December to June, with effect from June 2002. Therefore, the comparative financial period
referred to in this report is the six-month period from 1 January 2002 to 30 June 2002.



1. Directors
The names and details of Directors of the Company in office at the date of this report are:



Ron Baskin • Chairman, Non-Executive Director
Appointed a Director on 4 April 2002. Ron Baskin has a background in operating, owning and
growing retail businesses. Ron began his career working in department store management in
South Africa for ten years. He then opened his own sunglasses retail business and sold his
six-store chain to immigrate to Australia.

Once in Australia, Ron opened and operated 81 Sunglass World stores in Australia, with a
further 20 stores in the United States. At the time of selling to Sunglass Hut, a Nasdaq listed
company, Sunglass World was the largest sunglasses retail group in Australia.

In 1987 Ron joined the six-store King of Knives group, which is now the largest specialist
operator of its kind in Australia with 53 stores in Australia, New Zealand and the United
States. In 1998 Ron was appointed Non-Executive Director of Millers Retail Limited

Ron Baskin is a member of TVSN’s Audit Committee and Remuneration Committee



John C Porter - Non-Executive Director
Appointed a Director on 19 October 2000. John Porter has served as the Chief Executive
Officer of Austar United Communications Limited (“Austar”) since June 1999. John has
served as Chief Operating Officer of the Asia-Pacific operations of Austar’s parent company,
UnitedGlobalCom, from 1995 and as Managing Director of Austar from 1997. Prior to joining
Austar, John spent ten years with Time Warner Cable, a subsidiary of Time AOL Inc., most
recently as Division President, Central Ohio. John has more than 17 years of management
experience in the United States and Australian pay television industries.

John Porter is a member of TVSN’s Audit Committee and Remuneration Committee.




TVSN Limited and controlled entities                                                          8
Directors’ report - Continued


Eric Melman - Non-Executive Director
Appointed a Director on 4 April 2002. Eric Melman has more than twenty years experience in
merchant banking, investment banking and funds management. His roles during this period
include Treasurer of UAL Merchant Bank in South Africa, Treasurer of Schroders Australia
(“Schroders”), Executive Director of Schroders, Managing Director of Investec Australia, Non-
Executive Director of the Hambro-Grantham Group, Non-Executive Director of Prefusure
Limited and Executive Director of BEAM Corp, a boutique investment bank.

As a Director of Schroders Property Management he performed an integral role in funding the
portfolio, internationalising the property fund and negotiating listings on both the Amsterdam
and Australian Stock Exchanges. As Managing Director of Investec he was responsible for
growing the merchant banking operation in Australia within four years, from concept through
to a successful merchant bank.

As a Director of the Hambro-Grantham Group he was involved with the executive
management of this listed private equity and venture capital company. Eric’s experience
includes cross border transactions, capital raisings and acquisitions.

Eric Melman is a member of TVSN’s Audit Committee and Remuneration Committee.




Moshe Ozana
Executive Vice-Chairman
Appointed a Director on 4 April 2002. Moshe Ozana is a highly successful operator in the
television direct selling industry in Australia, with a history dating from 1993. Moshe built the
Danoz operation from a fledgling direct response business into the multifaceted enterprise it is
today. The success of the Danoz Group of Companies surrounds the identification and
presentation of unique and innovative products suited for sale through the medium of
television. Prior to establishing the business of Danoz, Moshe grew and then sold a chain of
traditional retail stores in Australia.




TVSN Limited and controlled entities                                                           9
Directors’ report - Continued



Rob Hunt
Chief Executive Officer


Appointed a Director on 19 October 2000. Rob Hunt joined TVSN as Chief Executive Officer
in January 2001. Prior to joining TVSN Rob served as the General Manager, Business
Development, of Austar United Communications Limited (“Austar”), having joined Austar in
December 1997. He has assisted Austar through various capital raisings and in mapping
broadband strategy, corporate acquisitions, commercial negotiation, and forming alliances
with partners in the new businesses. Rob's background is in Corporate Finance, having spent
seven years with Ernst & Young where he gained his chartered accountancy qualification.




2. Principal activity of the consolidated entity
The consolidated entity comprises TVSN Limited and its controlled entities, hereon referred to
as the consolidated entity. The principal activity of the consolidated entity during the period
was the retail of quality merchandise on pay television in Australia and New Zealand, via its
online retail business and, since the merger with the Danoz Group of Companies (“Danoz”) in
June 2002, through direct response television marketing on free-to air television, and the sale
of products through wholesale distribution and retail outlets.



3. Dividends
No dividend has been paid by the Company nor is any dividend recommended for payment in
respect of the financial year ended 30 June 2003 (2002 – NIL).




4. Review and results of operations
As noted above, the consolidated entity changed its financial year-end from December to
June, effective from June 2002. Therefore, while these financial statements relate to the 12-
month period from July 2002 to June 2003, the comparative period relates to the 6-month
period from January 2002 to June 2002. It should also be noted that the 12-month period to
June 2003 includes the results of the Danoz Group (“Danoz”) for the whole year, whereas the
period to June 2002 included the results of Danoz only from the merger date of 19 June 2002.

improvement in EBITDA of $2.8m or 85%


TVSN Limited and controlled entities                                                       10
Directors’ report - Continued


                                              Comparison of EBITDA
                                                              12 month period to   Variance
            6 month period to
                                                                30 June 2003
            June 2002 $'000
                                                                    $'000           $'000

                      (4,759) Loss from ordinary activities              (5,665)    (906)

                         301 Add back: net interest expense                  417     116

                          24 Add back: income tax expense                      0     (24)

                       1,004 Add back: depreciation                        1,992     988

                          91 Add back: amortisation                        2,758    2,667

                      (3,339) EBITDA                                       (498)    2,841




This improvement in EBITDA a result of the following:

•   Increase in revenue

•   Increase in gross margins: The gross margins of the consolidated entity have increased
    from 43% in the 6-month period to June 2002 to 50% in the 12-month period to June
    2003.

•   Reduction in costs as a percentage of revenue: Operating costs, including Signal
    Distribution & Fulfillment, Direct Selling and Operations and Administration costs, after
    taking out depreciation and amortisation, have been reduced from 68% of revenue in the
    6-month period to June 2002 to 52% of revenue in the 12-month period to June 2003.



The table of results below has been created to allow a comparison which depicts 12 months
of results as if the Danoz group had been part of the group for this period, notwithstanding the
Danoz group became part of the wholly owned group on 19th June 2003. The results of the
12-month period to June 2002 are unaudited in this combined form, because the current
consolidated entity was not in existence in this form during that period, and because of the
change in financial year end.




TVSN Limited and controlled entities                                                          11
Directors’ Report (Continued)



                                            Consolidated Results
      12 month period to                                    12 month period to             Variance
         30 June 02                                            30 June 03             03 vs       02
            $'000                                                 $'000
                                                                                   $'000               %

                  59,968             Sales Revenue                       69,262   9,294               15%

                  31,008              Gross Profit                       34,797   3,789               12%

                       436           Other Revenue                         782     346                79%

                  37,691          Operating Expenses                     36,077   (1,614)             (4%)

                  (6,247)               EBITDA                            (498)   5,749              (92%)

                    2,012            Depreciation                         1,992    (20)               (1%)
                       93        Amortisation of Goodwill                 2,758   2,665           2866%
                       858        Net Borrowing Costs                      417    (441)              (51%)

                  (9,210)                 EBT                           (5,665)   3,545              (38%)



The explanation of revenues, losses, trends and significant features described below should
therefore be read in conjunction with this table of consolidated results.



In the 2003 financial year TVSN Limited successfully executed the merger with the Danoz
Group of Companies while growing its existing businesses. The Company is now the largest
television retailer in Australia and this scale is assisting in improving profitability while opening
new business opportunities.



Achievements in the 2003 financial year include:

(a) Successful merger with the Danoz Group: The Danoz Group was acquired on 19 June
    2002 and the business was integrated into joint premises at Lane Cove from July 2002.
    The company was successful in capturing the anticipated cost savings of the merger and
    believe     that       the     Danoz        business     is    now       positioned        for         growth.



(b) Continued growth of the TVSN Channel: the TVSN Channel continued its annual
    revenue and earnings growth. Revenue rose by 36% to $34 million in the 12-month
    period to June 2003, compared with the corresponding 12-month period to June 2002.
    During the year the TVSN Channel was launched in New Zealand on the SKY Television
    platform. The TVSN Channel and its merchandise now appeal to more viewers than ever
    before.



TVSN Limited and controlled entities                                                                           12
Directors’ report - Continued


(c) Rollout of the Danoz Directions stores: The rollout of the Danoz Directions stores
    accelerated with 18 new stores contracted. This retail model has proven successful in
    overseas markets and store trading is exceeding expectations. Currently there are a total
    of 25 franchised and company-owned stores with further growth planned for 2004.



(d) Growth of Wholesale Division - The wholesale division grew its revenue in the second
    half of the year by 44% over the first half.



(e) Growth of Other Businesses – The Expo Channel has now been carried by Austar and
    Optus since December 2001, and contributed revenue of $1.65m in the 12-month period
    to June 2003. Danoz Direct Hong Kong was launched on English speaking PayTV in
    Hong Kong in November 2002, and contributed revenue of $0.5 revenue. Both
    businesses made a positive contribution to EBITDA during the period.



5. Significant changes in the state of affairs

Acquisition of the Danoz Group

The acquisition of the Danoz Group in June 2002 introduced a variety of new operations and
revenue streams into the consolidated entity. From July 2002 the various operations of the
new consolidated entity were integrated at the Lane Cove premises of TVSN.



Listing on ASX

On 27 March 2002, TVSN requested a suspension of trading in its shares, pending the
satisfaction of ASX (Australian Stock Exchange) Listing Rules requirements and the
completion of the merger with the Danoz Group. On 10 July 2002 having satisfied the ASX
Listing Rules, TVSN applied for re-instatement to official quotation. Approval was granted,
and the shares of TVSN were re-listed on Friday 12 July 2002.


Capital raising December 2002

A capital raising in December 2002 raised $2.9m, from a combination of external subscribers
and related parties, for use in the on-going operations of the business. (Note 21A)




TVSN Limited and controlled entities                                                     13
Directors’ report - Continued

Summary of movement in shares during the period



Details                                            Date          No. of Shares

Share Capital
Opening Balance                                01-Jul-02           120,373,874

Issue of shares to external investors
following December 2002 Capital Raising        31-Dec-02             8,567,458

Issue of shares to related parties following
December 2002 Capital Raising                  30-Jun-03             4,727,274
Closing Balance                                30-Jun-03           133,668,606




6. Earnings / (loss) per share
The basic loss per share for the financial year ended 30 June 2003 was (4.55) cents per
share. (6-month period ended 30 June 2002: (35.2) cents)

The diluted loss per share for the financial year ended 30 June 2003 was (4.50) cents per
share. (6-month period ended 30 June 2002: (35.1) cents)



7. Events subsequent to balance sheet date

On 28 August 2003 judgement was handed down in the Federal Court of Brisbane in a case
brought by the ACCC against Danoz Direct Pty Limited (“Danoz Direct”), its sole director, and
certain of its officers. The case related to a product named the Abtronic that was promoted by
Danoz Direct in 2001 on the Free to Air Networks of Australia. Danoz Direct is a wholly owned
subsidiary of TVSN Limited.

The judge in this case has ruled:

(a) The ACCC prosecution against the former sole director of Danoz Direct, Mr Moshe
    Ozana, failed and the ACCC must pay his costs

(b) The judge followed a previous decision stating that the Federal Court has no power to
    order refunds under the Trade Practices Act.

(c) Danoz Direct did not have reasonable grounds to make the representations that were
    made about the effectiveness of the product.

Following this ruling Danoz Direct will undertake corrective advertising over a period of two
weeks. TVSN Limited received indemnities in relation to this matter from the owner of the



TVSN Limited and controlled entities                                                        14
Directors’ report (Continued)


Danoz Group prior to the merger in June 2002, therefore the judgement in this matter is not
expected to have a material impact on the financial performance of the consolidated entity.


8. Likely developments
The Directors have excluded from this report any information on likely developments in the
operations of the Company and expected results of those operations in future financial years,
as the Directors believe that it would be likely to result in unreasonable prejudice to
the consolidated entity.


9. Environmental regulation and performance
The operations of the consolidated entity are not subject to any particular or significant
environment regulation under a law of the Commonwealth or State.



10. Directors’ meetings
The number of Directors’ meetings held in the period each Director held office during the 12-
month period and the number of meetings attended by each Director are:


Meeting Attendance              Board meeting         Audit Committee Meeting       Remuneration committee
                              held      attended        held        attended          held        attended
Ron Baskin                     12           11           10             9              2              2
Rob Hunt                       12           12           n/a           n/a            n/a            n/a
Eric Melman                    12           12           10             10             2              2
Moshe Ozana                    12           10           n/a           n/a            n/a            n/a
John Porter                    12           9            10             7              2              2


11. Shares and options issued to Directors
Directors’ interests in shares and options of the Company as at the date of this
report are:

                                                   Shares Indirect        Shares          Options
                                                                           Direct           Direct
 Ron Baskin (a) (e) (h) (i)                             5,189,655      4,349,566         1,211,364
 Rob Hunt (f) (j)                                                -        12,000         2,450,000
 Eric Melman (b) (h)                                    1,050,315               -           75,000
 Moshe Ozana (c) (g) (k)                               59,688,746         10,000         2,125,000
 John Porter (d) (h)                                             -              -           75,000
                                                       65,928,716      4,371,566         5,936,364




TVSN Limited and controlled entities                                                            15
Directors’ report - Continued


Indirect interest in shares
(a) Ron Baskin has an indirect interest in 644,200 shares held by R & R Super Pty Ltd, and
    4,545,455 shares held by Rosedale Road Pty Limited.

(b) Eric Melman has an indirect interest in 1,050,415 shares held by Meltrust Pty Ltd.

(c) Moshe Ozana has an indirect interest in 6,300,000 shares held by Ricketty Street Pty Ltd
    and 53,388,746 shares held by Ozlink Pty Ltd.

(d) John Porter is a Director of Austar United Communications Limited, which ultimately holds
    26,736,854, or 20%, of the shares of TVSN Limited.



Direct interest in shares
(e) Ron Baskin has a direct interest in 4,349,566 shares.

(f) Rob Hunt has a direct interest in 12,000 shares.

(g) Moshe Ozana has a direct interest in 10,000 shares.



Options
(h) By the approval of shareholders in March 2002, Ron Baskin, Eric Melman and John
    Porter were each awarded 75,000 options for nil consideration, with an exercise price of
    26.6cents. The options vested immediately.


(i) As part of the Capital Raising of December 2002, a company controlled by Ron Baskin
    subscribed for 4,545,455 shares. This entitled him to 1,136,364 options issued for no
    consideration with an exercise price of 22cents, vesting immediately and expiring in June
    2004.


(j) Rob Hunt holds

        - 150,000 options granted in 2000 for no consideration, with an exercise price of $2
        per consolidated share.

        - 1,250,000 options granted in 2001 for no consideration, with an exercise price of 9
        cents per share.

        - 1,050,000 options share issued under the Senior Executive Share Option Plan in
        June 2002 for no consideration with an exercise price of 26.6 cents per share. The
        performance hurdles attached to these options have not been met and the options
        lapsed on 30 June 2003.


TVSN Limited and controlled entities                                                     16
Directors’ report (Continued)


(k) Moshe Ozana holds

         - 1,125,000 options share issued under the Senior Executive Share Option Plan in
        June 2002 with an exercise price of 26.6 cents per share. The performance hurdles
        attached to these options have not been met and the options lapsed on 30 June
        2003.

        - 1,000,000 options granted in November 2002, with an exercise price of 30 cents per
        share, in consideration for the provision of a loan of $1.5m made to TVSN Limited in
        June 2002. Two thirds of the options vested when shareholder approval for the grant
        was obtained on 28 November 2002. The balance of the options will vest on 31
        December 2003 if the loan is still outstanding at that date.


12. Employee option and share plans
Under the Senior Executive Share Option Plan adopted by TVSN Limited in June 2002, a
total of 7.5 million options were issued to Executive directors and key executives. The options
were subject to certain performance hurdles relating to revenue and profitability for the
financial year 2002 / 2003, and to the share price in June 2003. These performance hurdles
were not met, and subsequently the options have not vested

As well as the 7.5m options above, a further 308,731 options are outstanding under various
employee option plans from previous years. Further details in respect of the various
Employee Option and Share Plans are included in Note 33 to the Financial Statements.


13. Directors’ benefits and contracts
In June 2002, Moshe Ozana made available a loan of $1.5 million to TVSN Limited on
commercial terms. These funds were placed on deposit as security for the provision by St
George Bank of a Commercial Bill and trade finance facility. The loan was originally repayable
in June 2004, but Mr Ozana and TVSN have agreed to extend the final repayment date of the
loan to December 2004.

In consideration for the provision of this loan, the Directors of TVSN issued 1 million options
to Moshe Ozana, exercisable at 30 cents per share. Two thirds of the options vested when
shareholder approval for the grant was obtained on 28 November 2002. The balance of the
options will vest on 31 December 2003 if the loan is still outstanding at that date.




TVSN Limited and controlled entities                                                       17
Directors’ report (Continued)


In June 2002, TVSN Limited leased the Ricketty Street premises owned by Ricketty Street
Pty Ltd, a company of which Moshe Ozana is sole Director and shareholder, on commercial
terms for the period from 1 July 2002 to 31 December 2002. The lease was subsequently
extended on a month by month basis, and will now expire on 30 October 2003.


No other Director of the Company has, since the end of the previous financial year, received
or become entitled to receive a benefit (other than a benefit included in the total amount of
emoluments received or due and receivable by Directors shown in the financial statements)
by reason of a contract made by the Company, a controlled entity or a related body corporate
with the Director or with a firm of which the Director is a member, or with an entity in which the
Director has a substantial financial interest.



14. Directors’ and executives’ emoluments

The Remuneration Committee, consisting of three non-executive directors, advises the board
on remuneration policies and practices generally, and makes specific recommendations on
remuneration packages and other terms of employment for executive directors, and other
senior executives, so as to ensure remuneration packages and fees properly reflect the
person’s duties and responsibilities and that remuneration is competitive in attracting,
retaining and motivating people.       Executive remuneration packages and other terms of
employment are reviewed annually by the committee having regard to performance goals set
at the start of the year, relevant comparative information and independent expert advice.

Under the Company’s Constitution, the Directors are entitled to be paid fees in aggregate as
determined by the Company in general meeting. Shareholder approval was obtained at the
General Meeting of 27 March 2002, to set Directors’ Fees at $105,000 per annum, exclusive
of superannuation. These fees are divided equally between the Non-Executive Directors of
the Company, being Ron Baskin, Eric Melman and John Porter.

Directors are also entitled to be reimbursed for reasonable travelling, accommodation and
other expenses incurred by them in the performance of their duties as Directors of TVSN.

Details of the nature and amount of each element of the emoluments of each Director of
TVSN Limited and each of the five executives of the Company and the consolidated entity
receiving the highest emoluments during the period are set out below.            These amounts
exclude premiums paid for by the Company insuring against liability incurred as Directors of
the Company.




TVSN Limited and controlled entities                                                          18
Directors’ report – Continued


Non-executive directors of TVSN Limited


                                                                Directors    Motor     Value of
Name                         Appointed   Salaries     Super        Fee      Vehicle    options      Total
                                            $           $           $          $           $                $


Ron Baskin, Chairman          4-Apr-02          -       3,150     35,000           -           -     38,150


Eric Melman                   4-Apr-02          -       3,150     35,000           -           -     38,150


John Porter                  27-Oct-00          -       3,150     35,000           -           -     38,150




Executive directors of TVSN Limited


                                                                Directors    Motor     Value of
Name                         Appointed   Salaries     Super        Fee      Vehicle    options      Total
                                            $           $           $          $           $         $

Rob Hunt, Chief Executive
Officer                      27-Oct-00   250,000       22,500           -          -     36,552     309,052
Moshe Ozana, Executive
Vice Chairman                 4-Apr-02   384,735       34,626           -    30,639      38,185     488,185




The amounts disclosed above and on the next page for remuneration relating to options are
the assessed fair value of options at the date they were granted to executive directors in
previous financial years, amortised over the vesting period of the options. Fair values have
been determined using an appropriate 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 options were subject to certain performance hurdles which were not met. The options
therefore lapsed on 30 June 2003.

Valuation of the 1 million options granted to Moshe Ozana (see 11k above) have not been
included above, as these options were granted in return for the grant of an interest-bearing
loan, not as remuneration.

Further information on the options, including the numbers of options granted to directors and
other executives is set out in the Notes 21 and 33.


TVSN Limited and controlled entities                                                           19
Directors’ report – Continued


Other Executives – TVSN Limited

                                                                               Motor           Value of
Name                     Position                   Salary        Super       Vehicle          options         Total

                                                             $            $            $              $           $


Trevor Goodman           Chief Operating Officer    175,552       15,800       13,648            32,245     237,245


Eryl Baron               Chief Financial Officer    158,472       14,262           -             20,365     193,099
                         General Manager,
Bettina Clark            Merchandise, TVSN          138,888       12,500           -             20,365     171,753
                         General Manager, Danoz
Peter Samek              Direct                     138,888       12,500           -             20,365     171,753
                         General Manager, Network
Nick Pigot               Production                 117,737       10,596           -             10,183     138,516




Other executives – consolidated entity

                                                                                Motor           Value of
Name                      Position                  Salary        Super        Vehicle          options         Total
                                                              $           $                $            $          $


Trevor Goodman            Chief Operating Officer   175,552        15,800       13,648            32,245     237,245
                          General Manager, Emjoi
Yoram Jovani              Australasia               153,270        13,794       24,936            24,936     216,936


Eryl Baron                Chief Financial Officer   158,472        14,262              -          20,365     193,099
                          General Manager,
Bettina Clark             Merchandise, TVSN         138,888        12,500              -          20,365     171,753
                          General Manager, Danoz
Peter Samek               Direct                     138,888       12,500              -          20,365     171,753




This remuneration relates to the 12-month period from 1 July 2002 to 30 June 2003.




TVSN Limited and controlled entities                                                                 20
Directors’ report (Continued)


Value of options: the executive options valued above were issued under the Senior
Executives Share Option Plan approved by shareholders at the General Meeting of 27 March
2002. These options were subject to achievement of certain performance hurdles during the
financial year 2002/2003, relating to revenue, earnings and share price. These performance
hurdles were not met during the year, and therefore lapsed on 30 June 2003. See also Note
25 to the financial statements.



15. Indemnification and insurance of Directors and Executive Officers
Under the Constitution, each Director, alternate Director or Executive Officer (and any person
who has previously served in any such capacity) is indemnified against any liability to third
parties (unless the liability arises out of conduct involving a lack of good faith) and against any
liability incurred in successfully defending legal and administrative proceedings and
applications for such proceedings.



TVSN may insure a Director, alternate Director or Executive Officer and a related company of
the Director, alternate Director or Executive Officer against any liability which does not arise
out of conduct constituting wilful breach of duty or a contravention of the Corporations Act
2001.



The Company may also insure a Director, alternate Director or Executive Officer against any
liability for costs and expenses incurred in defending proceedings, whether civil or criminal.



16. Auditors
PricewaterhouseCoopers continues in office in accordance with section 327 of the
Corporations Act 2001.




TVSN Limited and controlled entities                                                             21
Directors’ report – Continued

For and on behalf of the Board




30 September 2003




__________________________

Rob Hunt

Chief Executive Officer

30 September 2003




TVSN Limited and controlled entities   22
Corporate governance statement

TVSN Limited (the company) and the board are committed to achieving and demonstrating
the highest standards of corporate governance. An extensive review of the company’s
corporate governance framework was completed in April and May 2003 in light of the best
practice recommendations released by the Australian Stock Exchange Corporate Governance
Council in March 2003. The company’s framework was largely consistent with the
recommendations and exceeded them in some areas. Any changes made as a result of this
review have been highlighted in this statement.


The Board of Directors
The board of directors’ primary objective is to increase shareholder value within an
appropriate   framework    that   protects   the   rights   and   interests   for   shareholders
and ensures the Company and its subsidiaries, referred to in this document as the Group, are
properly managed. The function of the Board of Directors includes responsibility for:

•   Approval of corporate strategies, policies and the annual budget;

•   Monitoring financial performance including approval of the annual financial statements
    and liaison with the Group’s auditors;

•   Monitoring managerial performance; and

•   Ensuring the significant risks facing the Group have been identified and appropriate and
    adequate control, monitoring and reporting mechanisms are in place.

Day-to-day management of the Group’s affairs and implementation of corporate strategy and
policy initiatives are delegated by the Board to the CEO and senior executives.

The Directors are committed to the principles underpinning best practice in corporate
governance, applied in a manner that is best suited to the Company and its subsidiaries and
to best addressing the Directors’ accountability to shareholders and other stakeholders. This
is supported by an overriding organisation-wide commitment to the highest standards of
legislative compliance and financial and ethical behaviour.



Board composition
The Board operates in accordance with the following principles:

•   The Board should comprise at least three directors, the majority of whom are non-
    executive directors . At the date of signing the Directors’ Report the Board comprised
    three non-executive and two executive directors.




TVSN Limited and controlled entities                                                         23
Corporate governance statement (continued)


•   Non-Executive Directors are regarded as independent, this being defined by the
    Company as independent of the executive management and of business or other
    relationships which could otherwise detract from a Director’s ability to act impartially in the
    Company’s best interest.

•   The Chairman should be a non-executive director elected by the full Board. The role of
    Chairman is separate from the role of Chief Executive Officer.

•   The Board should comprise directors with an appropriate broad range of qualifications
    and expertise.

•   The Chairman and a non-executive director of TVSN will regularly review the
    performance of the Board to ensure that the Board continues to have a mix of skills and
    experience necessary for the conduct of the activities of TVSN. Detailed information on
    members of the board is set out in the Directors’ Report.



Directors’ Independence
Under the ASX Corporate Governance Council’s best practice recommendations, Ron Baskin
does not constitute an independent director because he is a substantial shareholder of the
company as defined in section 9 of the Corporations Act 2001.

The board has specifically addressed this issue, and believes that except for the substantial
shareholding in the shares of TVSN, Ron Baskin meets all other criteria that satisfy the test
of independence. The board also believes that Ron Baskin’s depth of experience and
knowledge of the retail industry are indispensable assets to TVSN.



Corporate Reporting
The CEO and CFO have made the following certifications to the board:

•   that the company’s financial reports are complete and present a true and fair view, in all
    material respects, of the financial condition and operational results of the company and
    group

•   that the above statement is founded on a sound system of internal control and risk
    management which implements the policies adopted by the board and that the company’s
    risk management and internal control is operating efficiently and effectively in all material
    respects.

The company adopted this reporting structure for the year ended 30 June 2003



TVSN Limited and controlled entities                                                           24
Corporate governance statement (continued)


Board Commitment
The Board has adopted the approach that it should meet regularly during the year. Meetings
follow set guidelines that allow all Directors to be made aware of, and have available, the
necessary information to participate in and deal with the agenda items. The Board keeps its
own process under review.

The board held eleven board meetings during the year.


Board committees
While the Board retains overall responsibility, it has established an Audit Committee and
Remuneration Committee to assist it in carrying out its responsibilities. Minutes of committee
meetings      are    tabled    at      the   immediately     subsequent      board     meeting.




Audit committee


TVSN’s Audit Committee consists of the following Non-Executive Directors:

Eric Melman (Chairman)
Ron Baskin
John Porter

The Committee met nine times during the year. It is considered appropriate that management
are invited to attend all meeting. TVSN’s external auditors are invited where appropriate. The
Audit Committee is intended to be the focal point of communication between the Board, TVSN
management and the external auditors. The main responsibilities of the Audit Committee are
to:


•     Review and report to the Board on the annual budget;

•     Review and report to the Board on the annual and half-yearly financial statements;

•     Provide assurance to the Board that it is receiving adequate up-to-date and reliable
      information;

•     Assist the Board in reviewing the effectiveness of the organisation’s internal control
      environment;

•     Assist the Board in reviewing risk management and internal controls;




TVSN Limited and controlled entities                                                           25
Corporate governance statement (continued)

•     Recommend to the Board the appointment, removal and remuneration of the external
      auditors, and reviewing the terms of their engagement, the scope and quality of the
      audit and the auditor’s independence;

•     Review any significant disagreements between the auditors and management,
      irrespective of whether they have been resolved; and

•     Review the level of non-audit services provided by the external auditors and ensure it
      does not adversely impact on auditor independence.


The Committee has authority, within the scope of its responsibilities, to seek any information it
requires from any employee or external party and obtain external legal or other independent
professional advice. The Committee reports to the full Board after each committee meeting
and relevant papers and minutes are provided to all Directors.


External auditors
In fulfilling its responsibilities the Audit Committee receives regular reports from management
and the external auditors. The external auditors have a clear line of direct communication at
any time to either the Chairman of the Audit Committee or the Chairman of the Board. It is the
policy of the external auditors to provide an annual declaration of their independence to the
Audit Committee. An analysis of fees paid to the external auditors, including a break-down of
fees for non-audit services, is provided in note 23 to the financial statements.


PricewaterhouseCoopers were appointed as the external auditors in 1997. It is
PricewaterhouseCoopers policy to rotate audit engagement partners on listed companies at
least every seven years, and in accordance with that policy a new audit engagement partner
was introduced for the year ended 30 June 2003.


Remuneration Committee
TVSN’s Remuneration Committee consists of the following Non-Executive Directors:

John Porter (Chairman)
Ron Baskin
Eric Melman


The Remuneration Committee 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.
The committee met twice during the year.

TVSN Limited and controlled entities                                                         26
Corporate governance statement (continued)

Executive remuneration and other terms of employment are reviewed annually by the
Committee, having regard to performance, relevant comparative information and independent
expert advice.

Remuneration is set at levels that are intended to attract and retain first-class executives
capable of managing the consolidated entity’s operations and achieving the Company’s
strategic objectives. Remuneration and other terms of employment for the CEO and certain
other senior executives are formalised in service agreements. Executives and staff are also
provided with longer-term incentive through the issue of options to subscribe for ordinary
shares in the Company.


Remuneration of Directors
At the General Meeting held on 27 March 2002, shareholders approved a resolution to
increase the total amount of Directors’ fees payable by the Company from nil to $105,000 per
annum. This amount excludes superannuation and is divided equally among the non-
executive Directors. Payment of such fees took effect from 19 June 2002.

The level of Non-Executive Directors’ fees will be reviewed regularly by the Board following
the review by the Chairman and the Chief Executive Officer and will take into consideration
additional time required for involvement in various committees.

The performance of Non-Executive Directors will be reviewed by the Chairman on an ongoing
basis. The performance of Executive Directors will be reviewed by Non-Executive members of
the Board. The performance of senior executives will be reviewed by the Board on an
ongoing basis.




Appointment of Directors
When the need for a new Director is identified, having regard to the present and future needs
of the Company, a short list of candidates with the appropriate skills and experience is
prepared. Where necessary, advice is sought from independent consultants. The Board then
appoints the most suitable candidate who must then stand for election at the next Annual
General Meeting of the Company.




TVSN Limited and controlled entities                                                      27
Corporate governance statement (continued)


The Company’s Constitution specifies that each member of the Board retires by the earlier of
rotation at three-yearly intervals or on the basis that one-third of their number, excluding new
appointees and the CEO, must stand for election at the next Annual General Meeting.


Independent professional advice
Directors have the right, in connection with their duties and responsibilities as Directors, to
seek independent professional advice at the Company’s expense. Prior written approval of
the Chairman is required, but this will not be unreasonably withheld.


Code of Conduct
The Company has developed a Code of Conduct (“the Code”) which is outlined in the
Induction Handbook. The Code is fully endorsed by the Board and applies to all Directors and
employees of the organisation. The Code is regularly reviewed and updated as necessary to
ensure it reflects the highest standards of behaviour and professionalism.

In summary, the Code requires that at all times all Company personnel act with the utmost
integrity and objectivity in their dealings with each other, competitors, customers, suppliers,
the Company and the community, and in compliance with the letter and the spirit of both the
law and Company policies.

The purchase and sale of Company securities by directors, executives and staff who are
designated as being in possession of commercially sensitive information is not permitted
during the four-week period prior to the release of the half-yearly and annual financial results
and   the   quarterly   cashflow   report   to   the   market.   This   policy   took   effect   on
22 July 2002.

The directors are satisfied that the Group has complied with the policies on ethical standards,
including trading in securities.


Continuous disclosure
The Company Secretary has been nominated as the person responsible for communications
with the Australian Stock Exchange (ASX). This role includes responsibility for ensuring
compliance with the continuous disclosure requirements in the ASX Listing Rules and
overseeing and coordinating information disclosure to the ASX, analysts, brokers,
shareholders, the media and the public.

All information disclosed to the ASX is posted on the company’s web site as soon as it is
disclosed to the ASX.


TVSN Limited and controlled entities                                                             28
Statements of financial performance
For the financial year ended 30 June 2003
                                                             Consolidated                         Parent Entity
                                                      Financial year    6 months        Financial year     6 months
                                                         to 30 June    to 30 June          to 30 June    To 30 June
                                                               2003          2002                2003           2002
                                             Notes                 $            $                    $             $

Revenue from operating activities                3        69,262,268     13,782,981         33,952,834     12,674,691
Cost of sales                                    4      (34,465,016)     (7,889,943)      (20,368,291)     (7,751,255)
Gross Profit                                              34,797,252       5,893,038        13,584,543       4,923,436

Other revenue from ordinary activities         3             988,161        256,148           276,124         213,031
Other expenses from ordinary activities:
 Signal Distribution & Fulfilment costs        4        (18,959,830)     (3,619,853)       (7,052,106)     (3,398,804)
 Direct Selling and Operational costs                   (12,968,718)     (4,405,866)       (7,979,836)     (4,005,594)
 Borrowing costs expenses                      4           (623,233)       (352,821)         (447,239)       (349,536)
 Administrative costs                                    (8,899,113)     (2,420,823)       (4,145,263)     (2,096,113)
 Other costs                                                       -        (84,793)                 -        (84,792)
Loss from ordinary activities before income tax
expense                                                  (5,665,481)     (4,734,978)       (5,763,777)     (4,798,372)

Income tax expense                               5                  -       (24,008)                  -              -

Loss from ordinary activities after income tax
expense                                                  (5,665,481)     (4,758,978)       (5,763,777)     (4,798,372)

Total changes in equity other than those resulting
from transactions with owners as owners                  (5,665,481)     (4,758,978)       (5,763,777)     (4,798,372)




                                                         Cents           Cents
Basic earnings per share                         36      (4.55c)         (35.2c)
Diluted earnings per share                       36      (4.50c)         (35.1c)

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




 TVSN Limited and controlled entities                                                              29
  Statements of financial position
  As at 30 June 2003
                                                        Consolidated                             Parent Entity
                                                    2003             2002                    2003              2002
                                  Notes                $                $                       $                 $

  Current assets
  Cash assets                      6           2,037,490          2,844,251               401,812            2,456,279
  Receivables                      7           4,939,078          1,835,296             5,474,228              514,855
  Inventories                      8           8,300,216          5,144,008             3,130,092            2,231,423
  Restricted Cash                  9           3,086,400          3,050,000             3,086,400            3,050,000
  Other                            10            619,168            474,351               182,722              225,191
  Total current assets                        18,982,352         13,347,906            12,275,254            8,477,748

  Non-current assets
  Receivables                      11            111,011             66,505                 9,450                9,450
  Other financial assets           12              9,383              9,383            19,785,167           19,785,167
  Plant & equipment                13          5,123,115          6,266,450             4,464,392            5,584,086
  Intangible assets                14         18,939,951         21,697,598                     -                    -
  Other                            15                  -              9,414                     -                9,414
  Total non-current assets                    24,183,460         28,049,350            24,259,009           25,388,117
  Total assets                                43,165,812         41,397,256            36,534,263           33,865,865

  Current liabilities
  Payables                         16         17,922,199         13,616,151            13,449,994            7,952,614
  Interest bearing liabilities     17          3,019,320          1,774,985             1,568,149              648,331
  Provisions                       18            787,501          1,124,177               467,645              690,550
  Total current liabilities                   21,729,020         16,515,313            15,485,788            9,291,495

  Non-current liabilities
  Interest bearing liabilities     19          3,920,855          4,616,545             3,699,920            4,372,835
  Provisions                       20            228,703            235,643               145,747              157,910
  Total non-current liabilities                4,149,558          4,852,188             3,845,667            4,530,745
  Total liabilities                           25,878,578         21,367,501            19,331,455           13,822,240

  Net assets / (liabilities)                  17,287,234         20,029,755            17,202,808           20,043,625

  Equity
  Contributed equity               21        281,876,817        278,953,857           281,876,817           278,953,857
  Accumulated losses               22      (264,589,583)      (258,924,102)         (264,674,009)         (258,910,232)
  Total equity / (deficit)                    17,287,234         20,029,755            17,202,808           20,043,625


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




TVSN Limited and controlled entities                                                              30
Statements of cash flows
For the financial year ended 30 June 2003
                                                                      Consolidated                  Parent Entity
                                                               Financial     6 months         Financial     6 months
                                                                     year                          year
                                                              to 30 June    to 30 June       to 30 June To 30 June
                                                                    2003          2002             2003          2002
                                                     Notes              $            $                $             $

Cash flows from operating activities
Receipts from customers (inclusive of goods and               73,200,252     15,155,746      36,622,850     13,989,162
services tax)
Payments to suppliers and employees (inclusive of            (75,397,375)   (17,718,393)    (40,531,275) (15,366,932)
 Goods and services tax)
                                                              (2,197,123)    (2,562,647)     (3,908,425)    (1,377,770)
Interest received                                                 217,621         66,368         164,880         62,006
Interest and other costs of finance paid                        (485,282)      (164,468)       (438,672)      (163,381)
Others                                                                  -        411,937               -        411,937
Net cash flows from operating activities              29      (2,464,784)    (2,248,810)     (4,182,217)    (1,067,208)

Cash flows from investing activities
Cash paid for purchase of plant and equipment                  (883,643)      (122,412)         (738,967)    (112,412)
Proceeds on disposal of fixed assets                                   -        110,877                 -      110,877
Cash from acquisition of controlled entity, net of
cash paid                                             28               -      1,298,657                 -    (196,484)
Net cash flows from investing activities                       (883,643)      1,287,122         (738,967)    (198,019)

Cash flows from financing activities
Principal repayments under finance leases                       (663,014)      (301,875)       (638,223)      (300,343)
Proceeds from issue of shares                                   2,924,842      4,129,109       2,924,842      4,129,109
Costs related to issue of shares                                (406,521)        (68,820)      (174,346)        (68,820)
Loan advanced by related parties                                1,000,000      2,900,000       1,000,000      2,900,000
Loans repaid to related parties                               (1,000,000)      (750,000)     (1,000,000)      (750,000)
Transfer of restricted cash                                             -    (2,895,000)               -    (2,895,000)
Drawdown Commercial Bill                                          500,000               -        500,000               -
Net cash flows from financing activities                        2,355,307      3,013,414       2,612,273      3,014,946

Net increase / (decrease) in cash held                         (993,120)      2,051,726      (2,308,911)     1,749,719
Cash at beginning of financial period                          2,760,257        708,531        2,456,278       706,559
Cash at end of financial period                        6       1,767,137      2,760,257          147,367     2,456,278

Financing arrangements                                26


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




   TVSN Limited and controlled entities                                                              31
Notes to the financial statements – 30 June 2003

1. Summary of significant accounting policies

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

It is prepared in accordance with the historical cost convention, except for certain assets
which, as noted, are at valuation. Unless otherwise stated, the accounting policies adopted
are consistent with those of the previous year.

The general purpose financial report is prepared on a going concern basis as the directors
consider that the company has sufficient cash resources to enable it to continue as a going
concern. The directors regularly monitor the company’s cash position and on an on-going
basis consider a number of strategic and operational plans / initiatives to ensure that
adequate funding continues to be available for the company to meet its business objectives.

TVSN Limited was granted approval to change its financial year from December to June,
effective June 2002. This report refers to the 12-month financial period from 1 July 2002 to 30
June 2003. Comparative numbers relate to the six-month period from 1 January 2002 to 30
June 2002.

a) Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all entities
controlled by TVSN Limited (“the Company”) as at 30 June 2003 and the results of all
controlled entities for the year then ended. TVSN Limited and its controlled entities together
are referred to in this financial report as the consolidated entity. The effects of all transactions
between entities in the consolidated entity are eliminated in full.

Where control of an entity was obtained during a financial period, its results are included in
the consolidated statement of financial performance from the date on which control
commenced.


b) Acquisition of assets
The purchase method of accounting is used for all acquisitions regardless of whether equity
instruments or other assets are acquired. Cost is measured as the fair value of the assets
given up, shares issued or liabilities undertaken at the date of acquisition plus incidental costs
directly attributable to the acquisition. Where equity instruments are issued in an acquisition,
the value of the instruments is their market price as at acquisition date, unless the price at
which they could be placed in the market is a better indicator of fair value. Transaction costs
arising on the issue of equity instruments are recognised directly in equity.




TVSN Limited and controlled entities                                                            32
1. Summary of significant accounting policies (continued)


Where settlement of any part of cash consideration is deferred, the amounts payable in the
future are discounted to their present value as at the date of the acquisition. The discount rate
used is the incremental borrowing rate being the rate at which a similar borrowing could be
obtained from an independent financier under comparable terms and conditions.

A liability for restructuring costs is recognised as at the date of acquisition of an entity or part
thereof when there is a demonstrable commitment to a restructuring of the acquired entity and
a reliable estimate of the amount of the liability can be made.

Goodwill is brought to account on the basis described in Note 1(l).


c) Revenue recognition

Sales revenue represents revenue earned from the dispatch of the consolidated entity’s
products and the provision of services net of sales returns, discounts and allowances. Other
revenue includes interest income on cash deposits and other amounts received and
receivable.


d) Non-current assets

The consolidated entity carries its non-current assets at cost less accumulated depreciation or
amortisation. Non-current assets are not stated at amounts in excess of their recoverable
amounts. Except where stated, recoverable amounts are not determined using discounted
cash flows.

The Directors are of the view that the carrying values of non-current assets do not exceed the
amounts that the Company would reasonably spend to acquire these assets as at the end
of the financial year and are not stated at amounts in excess of their recoverable amounts.


e) Income tax

Tax effect accounting procedures have been adopted whereby the income tax expense in the
statements of financial performance is matched with the accounting profit after allowing for
permanent differences. The future tax benefit relating to tax losses is not carried forward as
an asset unless the benefit is virtually certain of realisation.



f)   Foreign currency

Transactions denominated in a foreign currency are converted at the exchange rate at the
date of the transaction. Foreign currency receivables and payables at balance date are



TVSN Limited and controlled entities                                                            33
1. Summary of significant accounting policies (continued)


translated at exchange rates at balance date. Exchange gains and losses are brought to
account in determining the profit or loss for the year.


g) Inventories

Finished goods are stated at the lower of cost and net realisable value. Costs are assigned
on a weighted average cost basis and are determined using the Company’s standard costing
system.


h) Depreciation of plant and equipment

Depreciation    of   plant   and   equipment     is    calculated   on   a   straight-line    basis,
over their estimated useful life to the consolidated entity. Estimates of remaining useful lives
are made on a regular basis for all assets, with annual reassessment for major items.
The estimated useful lives are generally as follows:

Plant and equipment      5-10 years

Computer equipment       3 years



i)   Maintenance and repairs

Plant of the consolidated entity is required to be overhauled from time to time.             This is
managed as part of an ongoing cyclical maintenance program. The costs of this maintenance
are charged as expenses as incurred, except where they relate to the replacement of a
component of an asset, in which case the costs are capitalised and depreciated in
accordance with Note 1(h).

j)   Leasehold improvements

The cost of improvements to or on leasehold properties is amortised from the date of
purchase, over the unexpired portion of the lease or the estimated useful life of the
improvement to the consolidated entity, whichever is the shorter. These assets are generally
amortised over seven to ten years.

k) Leased assets

A distinction is made between finance leases which effectively transfer from the lessor to the
lessee substantially all the risks and benefits incident to ownership of leased assets, and
operating leases under which the lessor effectively retains substantially all such risks and
benefits.


TVSN Limited and controlled entities                                                             34
1. Summary of significant accounting policies (continued)

The leased assets held at the reporting date are being amortised over periods ranging from
three to five years.


Where plant and equipment is acquired by means of finance leases, the present value of the
minimum lease payments is recognised as an asset at the beginning of the lease term and
amortised on a straight-line basis over the expected useful life of the leased asset. A
corresponding liability is also established and each lease payment is allocated between the
liability and finance charge.


Other operating lease payments are charged to the statements of financial performance in the
periods in which they are incurred, as this represents the pattern of benefits derived from
leased assets.



l)   Intangible assets

Goodwill
Where an entity is acquired, the identifiable net assets acquired are measured at fair value.
The excess of the fair value of the cost of acquisition over the fair value of the identifiable
assets acquired, including any provision for restructuring, is brought to account as goodwill
and is amortised on a straight-line basis over the period during which the benefits are
expected to arise. The goodwill on the acquisition of Danoz is being amortised over five
years.

Brand
The identifiable intangible asset of the company comprises the name “Danoz”. No
amortisation is provided against this asset as the life of the asset is of such duration, and the
residual value is such that the amortisation charge, if any, would not be material. The carrying
value of $8 million is in accordance with a valuation by Directors. At each reporting date,
assessment of the carrying value will be made by the Directors.


m) Receivables

Trade accounts receivable fall into two categories. Part Payment debtors are generally settled
within 90 days. Other trade receivables are generally settled within 30 days. All receivables
are carried at amounts due. A provision is raised for any doubtful debts based on a review of
all outstanding amounts at balance date. Bad debts are written off in the period in which they
are identified.



TVSN Limited and controlled entities                                                         35
1. Summary of significant accounting policies (continued)


n) Trade and other creditors

These amounts represent liabilities for goods and services provided to the consolidated entity
prior to the end of the financial period and which are unpaid. The amounts are unsecured and
are usually paid within 30 to 60 days of recognition, depending on the terms.




o) Employee benefits

(1)       Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and
accumulating sick leave expected to be settled within 12 months of the reporting date are
recognised in other creditors and provision for employee benefits in respect of employees’
services up to the reporting date, and are measured as the amounts expected to be paid
when the liabilities are settled.



(2)     Long Service Leave
The liability for long service leave expected to be settled within 12 months of the reporting
date is recognised in the provision for employee benefits and is measured in accordance with
(1) above. The liability for long service leave expected to be settled more than 12 months
from the reporting date is recognised in the provision for employee benefits and measured as
the present value of expected future payments to be made in respect of services provided by
employees      up    to   the       reporting   date.   Consideration   is   given   to   expected
future wage and salary levels, experience of employee departures and periods
of service. Expected future payments are discounted using market yields at the reporting date
on national government bonds with terms to maturity that match, as closely as possible, the
estimated future cash outflows.

(3)     Superannuation
Contributions to defined contribution and other employee superannuation plans are charged
as an expense as the contributions are paid or become payable.

(4)       Termination Benefits
Liabilities for termination benefits, not in connection with the acquisition of an entity or
operation, are recognised when a detailed plan for the terminations has been developed and
a valid expectation has been raised in those employees affected that the terminations will be
carried out. The liabilities for termination benefits are recognised when other creditors unless
the amount or timing of the payments in uncertain, in which case they are recognised as
provisions.



TVSN Limited and controlled entities                                                           36
1. Summary of significant accounting policies (continued)

Liabilities for termination benefits expected to be settled within 12 months are measured at
the amounts expected to be paid when they are settled. Amounts expected to be settled more
than 12 months from the reporting date are measured as the estimated cash outflows,
discounted using market yields at the reporting date on national government bonds with terms
to maturity that match, as closely as possible, the estimated future payments, where the effect
of discounting is material.



(5)     Equity-based compensation benefits
Details of employee option and share schemes are set out in Note 33. No accounting entries
are made in relation to the various plans until options are exercised, at which time the
amounts receivable from employees are recognised in the statement of financial position as
share capital. The amounts disclosed for remuneration of directors and executives in notes 24
and 25 exclude the assessed fair values of options at the date they were granted.



(6)       Employee benefit on-costs

Employee benefit on-costs, including payroll tax, are recognised and included in employee
benefit liabilities and costs when the employee benefits to which they relate are recognised as
liabilities.



p) Interest bearing liabilities

Interest bearing liabilities represent lease liabilities, re-financed Letters of Credit and a loan
from a Director and shareholder. Interest is accrued over the period it becomes due and is
recorded as part of other creditors.

q) Net fair values of financial assets and liabilities

Net fair values of monetary financial assets and liabilities not traded in an organised financial
market are determined on a cost basis of carrying amounts of trade debtors, trade accounts
payable and accruals, which approximates net market value.

r)    Cash flows

For the purpose of the statements of cash flows, cash includes cash on hand, deposits held at
call with banks and net of bank overdrafts, and excludes restricted cash.




TVSN Limited and controlled entities                                                          37
1 - Summary of significant accounting policies (continued)

s) Earnings per share

Basic earnings per share
Basic earnings per share is determined by dividing the operating loss after income tax
attributable by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares issued during the year.



Diluted earnings per share
Diluted earnings per share adjusts the figures in the determination of basic earnings per share
to take into account the after income tax effect of interest and other financing costs
associated with dilutive potential ordinary shares and the weighted average number of shares
assumed to have been issued for no consideration in relation to dilutive potential ordinary
shares.

t)   Comparative figures

Where     necessary,     comparative     figures    have    been    adjusted     to      conform
with changes in presentation in the current year.




TVSN Limited and controlled entities                                                         38
         Notes to the financial statements – 30 June 2003
         2. Segment information – Business Segments
                                       Home          Direct           Sale of        Wholesale       Other         Inter-segment Consolidated
                                      Shopping     Response         Franchises                                       elimination
 Financial year to 30 June 2003                    Marketing
                                                   and Retail
                                         $             $                $               $             $                  $             $

Sales to external customers           33,952,834    22,108,948        2,399,658        6,584,573     4,216,256                 -    69,262,268
Inter-segment sales                            -             -                -                -       646,432         (646,432)             -
Total sales revenue                   33,952,834    22,108,946        2,399,658        6,584,573     4,862,688         (646,432)    69,262,268
Other Revenue                            109,928       470,483                -          217,750               -         (15,584)      782,577
Total segment revenue                 34,062,762    22,579,429        2,399,658        6,802,323     4,862,688         (662,016)    70,044,845

Segment result                         (999,698)     1,600,622        1,090,633        1,100,622       629,317           102,051     3,523,547
Unallocated expenses                                                                                                                (5,568,461)
Unallocated depreciation, interest                                                                                                    (862,919)
Amortisation of Goodwill                                                                                                            (2,757,648)
Loss from ordinary activities
                                                                                                                                    (5,665,481)
before income tax expense
Income tax expense                                                                                                                            -
Net loss from ordinary activities
                                                                                                                                    (5,665,481)
after income tax expense

Segment assets                        13,662,697    13,189,898                   -     7,315,400     5,075,916           835,500    40,079,412
Unallocated assets                                                                                                                   3,086,400
Total assets                                                                                                                        43,165,812

Segment liabilities                   17,831,455    12,875,151                   -     5,870,356     5,906,067       (18,104,451)   24,378,578
Unallocated liabilities                                                                                                              1,500,000
Total liabilities                                                                                                                   25,878,578



Acquisitions of property, plant and
equipment, intangibles and other
                                          85,190                -                                      144,188           619,148       907,194
non-current segment assets                                                       -          58,668

Depreciation and amortisation
expense                                1,413,401                -                -          51,061        82,240       3,202,918     4,749,620




                   TVSN Limited and controlled entities                                                                      39
Notes to the financial statements – 30 June 2003

 2. Segment information – Business Segments - continued
                                           Home         Direct Response    Other        Inter-segment Consolidated
                                          Shopping       Marketing and                    elimination
       6 months to 30 June 2002
                                                             Retail
                                             $                  $           $                $                 $

Sales to external customers               12,674,691            541,712     566,578                  -     13,782,981
Inter-segment sales                                -            171,644     125,509          (297,153)              -
Total sales revenue                       12,674,691            713,356     692,087          (297,153)     13,782,981
Other Revenue                                176,184             28,169           -                  -        204,353
Total segment revenue                     12,850,875            741,525     692,087          (297,153)     13,987,334

Segment result                            (4,183,594)           181,980     (18,596)          (10,682)     (4,030,892)
Unallocated revenue less unallocated
                                                                                                                (90,663)
expenses
Unallocated depreciation, interest                                                                             (613,415)
Loss from ordinary activities before
                                                                                                           (4,734,970)
income tax expense
Income tax expense                                                                                              (24,008)
Net loss from ordinary activities after
                                                                                                           (4,758,978)
income tax expense

Segment assets                             8,919,327          29,821,387   2,146,428       (4,651,263)     36,235,879
Unallocated assets                                                                                          5,161,377
Total assets                                                                                               41,397,256

Segment liabilities                       12,322,240           7,596,673   4,493,521       (4,544,933)     19,867,501
Unallocated liabilities                                                                                     1,500,000
Total liabilities                                                                                          21,367,501



Acquisitions of property, plant and
equipment, intangibles and other non-
                                             250,200             10,000             -                 -         260,200
current segment assets

Depreciation and amortisation expense        993,704               8,308        1,992            90,663        1,094,667




           TVSN Limited and controlled entities                                                           40
Notes to the financial statements – 30 June 2003


2. Segment information (continued)


1. Corresponding period in 2002
The results for the 6 month period to June 2002 include the results of the Danoz group only
form the merger date of 19 June 2002.


2. Secondary reporting - geographical segments

The majority of TVSN's sales and operations fall within Australia.


Notes to and forming part of the segment information:

(a) Accounting policies
Segment information is prepared in conformity with the accounting policies of the entity and
the revised segment reporting accounting standard, AASB 1005 Segment Reporting.
Segment revenues, expenses, assets and liabilities are those that are directly attributable to a
segment. Segment assets include all assets used by a segment and consist primarily of
operating cash, receivables, inventories, and property, plant and equipment, net of related
provisions. All of these assets are directly attributable to individual segments.
Segment liabilities consist primarily of trade and other creditors and employee entitlements.


(b) Inter-segment transfers
Segment revenues, expenses and results include transfers between segments. Such
transfers are priced on an "arm's-length" basis and are eliminated on consolidation.


(c) Business segments



Business segments

Home shopping is the sale of products to viewers of the TVSN Channel, carried on all major
subscription television operators.

Direct Response Marketing and Retail is the sale of product under the Danoz brand to
viewers of infomercial and advertorial format advertising on Australia’s broadcast networks.

Sale of Franchises is the sale of the right for third parties to operate Danoz Directions stores
throughout Australia.

Other includes the sale of air-time on the Expo Channel carried on the Austar and Optus
networks, sales by company owned retail stores, and direct response marketing and retail in
Hong Kong,




TVSN Limited and controlled entities                                                        41
Notes to the financial statements – 30 June 2003

                                                         Consolidated              Parent Entity
                                                 Financial     6 months     Financial 6 months
                                                       year                      year
                                                to 30 June    to 30 June   to 30 June to 30 June
                                                      2003          2002         2003        2002
                                                          $            $            $            $




3. Revenue
Revenue from operating activities

Revenue from sale of goods                      61,076,286   12,708,746    31,833,864 12,022,818

Postage & Handling recovery                      4,777,343      651,873     2,118,970     651,873

Franchise sales                                  2,399,658             -            -            -

Advertising                                      1,008,981      422,362             -            -

                                                69,262,268   13,782,981    33,952,834 12,674,691



Revenue from outside the operating activities

Interest                                          205,584        51,795      166,196       36,847

Net foreign exchange gains                        707,723              -       73,405            -

Sale of fixed assets                                     -      110,877             -     110,877

Other                                              74,854        93,476        36,523      65,307

                                                  988,161       256,148      276,124      213,031



Revenue from ordinary activities                70,250,429   14,039,129    34,228,958 12,887,722




TVSN Limited and controlled entities                                                       42
Notes to the financial statements – 30 June 2003

                                                             Consolidated             Parent Entity
                                                     Financial     6 months     Financial 6 months
                                                           year                      year
                                                    to 30 June    to 30 June   to 30 June to 30 June
                                                          2003          2002         2003       2002
                                                              $            $            $           $


4. Loss from ordinary
activities


Net gains and expenses
Loss from ordinary activities before income tax expenses
Includes the following specific net gains and expenses:

Net Gains
Net gain on disposal of plant and equipment                  -       28,380               -     28,380

Expenses
Cost of sales of goods                           (34,465,016)    (7,889,943)   (20,368,291) (7,751,255)

Signal Distribution & Fulfilment costs
 Signal Distribution Costs                       (11,480,837)    (1,202,509)    (2,587,682) (1,056,764)
 Fulfilment                                       (7,478,993)    (2,417,344)    (4,464,424) (2,342,040)

                                                 (18,959,830)    (3,619,853)    (7,052,106) (3,398,804)

Depreciation and Amortisation
 Amortisation - Goodwill
                                                   (2,757,648)     (90,663)               -             -

  Amortisation - Leasehold improvement              (264,329)     (131,039)       (264,250)   (131,039)
  Amortisation - Plant & equipment under
lease                                               (741,551)     (339,197)       (697,723)   (336,760)
  Depreciation - Plant & equipment                  (986,092)     (533,768)       (853,453)   (525,905)

                                                   (1,991,972)   (1,004,004)    (1,815,426)   (993,704)


                                                   (4,749,620)   (1,094,667)    (1,815,426)   (993,704)

Net loss on disposal of plant and equipment           (26,212)             -              -             -

Provision for stock obsolescence                    (388,476)        22,461       (124,575)      22,461
Bad and doubtful debts - trade debtors              (517,037)     (122,545)       (183,716)    (92,545)
Employee entitlements                                (30,681)      (26,716)        (23,649)    (26,716)

                                                    (936,194)     (126,800)       (331,940)    (96,800)
Borrowing costs
Interest charges on related party loans                      -    (207,209)               -   (207,209)
(Note 30)
Interest charges on Director loan (Note 30)         (139,800)       (4,213)       (139,800)     (4,213)
Other Interest and finance charges                  (483,433)     (141,399)       (307,439)   (138,114)
                                                    (623,233)     (352,821)       (447,239)   (349,536)

Rental Expenses relating to operating
leases                                              3,362,940     1,277,313       2,128,057   1,203,314



TVSN Limited and controlled entities                                                          43
Notes to the financial statements – 30 June 2003
                                                                   Consolidated                   Parent Entity
                                                                Financial 6 months             Financial 6 months
                                                                      year                          year
                                                               to 30 June to 30 June          to 30 June to 30 June
                                                                     2003       2002                2003        2002
                                                                         $         $                   $           $


5. Income tax

(a) The income tax expense for the financial period differs from the amount calculated on the profit.

The differences are reconciled as follows:

Losses from ordinary activities before income expenses         (5,665,481) (4,734,970)       (5,763,777) (4,798,372)

Prima facie tax calculated at 30%                              (1,699,644) (1,420,491)       (1,729,133) (1,439,512)

Tax effect of permanent differences:

- Non deductible amortisation of goodwill                         827,294               -                 -           -

- Non deductible legal expenses                                           -        3,245                  -      3,245

- Entertainment                                                        803           506                803        506

- Other                                                                 76         1,405                76       1,405


Prima facie income tax adjusted for:

Permanent differences arising during the year                    (871,471) (1,415,335)       (1,728,254) (1,434,356)

Over provision in previous year                                   (24,008)              -                 -           -

Future income tax benefits arising during                         895,479     1,439,343        1,728,254      1,434,356
the year not brought to account
Income tax expense                                                        -      24,008                   -           -


(b) Potential future income tax benefits in
respect of tax losses not brought to account:                  30,082,945 29,144,647          30,917,413 29,123,615



TVSN Limited and its wholly owned Australian subsidiaries have decided to implement the tax consolidation
legislation as of 1 July 2002. The Australian Tax Office has not yet been notified of this decision. The entities also
intend to enter into a tax sharing agreement, but details of this agreement are yet to be finalised. As a consequence,
TVSN Limited, as the head entity in the tax consolidated group, will recognise current and deferred tax amounts
relating to transactions, events and balances of the wholly owned Australian controlled entities in this group in future
financial statements as if those transactions, events and balances were its own, in addition to the current and
deferred tax balances arising in relation go its own transactions, events and balances. Amounts receivable or
payable under the tax sharing agreement will be recognised separately by TVSN Limited as tax-related amounts
receivable or payable. The impact on the income tax expense and results of TVSN Limited is unlikely to be material
because of the tax sharing agreement. This is not expected to have a material impact on the consolidated assets
and liabilities and results.




TVSN Limited and controlled entities                                                                     44
Notes to the financial statements – 30 June 2003
                                                                       Consolidated                   Parent Entity
                                                                      2003       2002               2003        2002
                                                                         $          $                  $            $


6. Current assets – Cash assets
Cash at bank and on hand                                         1,987,047        2,791,652      401,812        2,453,680
Deposits at call                                                    50,443           52,599            -            2,599
                                                                 2,037,490        2,844,251      401,812        2,456,279

The above figures are reconciled to cash at the end of the
financial period as shown in the statement of cash flows
as follows:
Balances as above                                                2,037,490        2,844,251       401,812       2,456,279
Less: Bank Overdraft (Note 17)                                   (270,353)          (83,994)    (254,445)               -
                                                                 1,767,137        2,760,257       147,367       2,456,279
Deposits at call
The deposits bear floating interest rates of 1.75%.




7. Current assets – Receivables
Trade debtors                                                    4,607,818        2,341,741     1,432,635         653,396
Less: provision for doubtful debts                                (574,925)        (591,015)    (209,728)       (198,441)
                                                                 4,032,893        1,750,726     1,222,907         454,955
Other debtors                                                       876,702           84,570      116,649          31,383
Amounts due from related entities (Note 30)                          29,483                -            -               -
Amounts due from other entities within the group (Note
30)                                                                      -                -     4,134,672         28,517
                                                                 4,939,078        1,835,296     5,474,228        514,855


8. Current assets – Inventories

Finished goods

- at cost                                                        5,831,678        4,155,004     2,612,458       2,131,537
- at net realisable value                                          527,301          122,238       363,182          26,838
Goods in transit at cost                                         1,941,237          866,766       154,452          73,048
                                                                 8,300,216        5,144,008     3,130,092       2,231,423


9. Current assets – Restricted cash

Restricted cash                                                    3,086,400        3,050,000    3,086,400 3,050,000


Amount held by ANZ Bank as security for merchant         3.95%                -       155,000               -    155,000
facilities
Amount held by St George Bank as security for the        4.57%       500,000        1,500,000      500,000 1,500,000
Commercial Bill facility
Amount held by St George Bank as security for the        4.58%     1,860,400          750,000    1,860,400       750,000
Trade Finance Multi-Option facility
Amount held by St George Bank as security for the        4.57%       726,000          645,000      726,000       645,000
Bank Guarantee facility
                                                                   3,086,400        3,050,000    3,086,400 3,050,000
   See Note 26 for details of bank facilities secured.

TVSN Limited and controlled entities                                                                   45
Notes to the financial statements – 30 June 2003
                                                              Consolidated                   Parent Entity
                                                           2003        2002                2003         2002
                                                              $            $                  $            $


10. Current assets – Other

Prepayments                                             588,424         324,381         167,051          179,116

Other                                                    30,744         149,970          15,671           46,075

                                                        619,168         474,351         182,722          225,191




11. Non-current assets – Receivables

Deposits                                              111,011          66,505           9,450            9,450




12. Non-current assets – Other financial assets

Investments traded on organised markets

Shares in other corporations – at cost                   9,383           9,383                  -                -

Other (non-traded) investments

Shares in controlled entities - at cost (Note 28)               -               -   19,785,167      19,785,167

                                                         9,383           9,383      19,785,167      19,785,167




13. Non-current assets – Plant and equipment

Plant and equipment (at cost)                        6,715,785       6,106,201       5,916,292       5,415,561

Less: accumulated depreciation                      (4,971,333)     (4,205,330)     (4,572,696)     (3,914,243)

                                                     1,744,452       1,900,871       1,343,596       1,501,318

Leasehold improvements (at cost)                     1,515,926       1,515,926       1,512,626       1,512,626
Less: accumulated depreciation                       (947,931)       (683,601)       (947,715)       (683,465)

                                                       567,995         832,325         564,911         829,161

Plant and equipment under finance leases             5,040,059       5,043,467       4,705,397       4,708,535
Less: accumulated amortisation                      (2,229,391)     (1,510,213)     (2,149,512)     (1,454,928)

                                                     2,810,668       3,533,254       2,555,885       3,253,607

                                                     5,123,115       6,266,450       4,464,392       5,584,086



TVSN Limited and controlled entities                                                                46
Notes to the financial statements – 30 June 2003

Reconciliations
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning and end of the
current financial period are set out below.

                                                      Plant and   Leasehold            Leased            Total
Consolidated entity                                  equipment improvements          plant and
                                                                                    equipment
                                                               $             $               $                 $

Carrying amount at 1 July 2002                        1,900,871       832,335        3,533,254     6,266,450

Additions                                               850,536              -          56,658       907,194

Disposals - at written down value                       (20,863)             -         (37,693)      (58,556)

Depreciation / amortisation expense (Note 4)          (986,092)     (264,330)        (741,551)    (1,991,973)

Carrying amount at 30 June 2003                       1,744,452       567,995        2,810,668     5,123,115



Parent entity


Carrying amount at 1 July 2002                        1,501,318       829,161        3,253,607     5,584,086

Additions                                               695,731              -                -      695,731

Disposals - at written down value                              -             -                -                -

Depreciation / amortisation expense (Note 4)          (853,453)     (264,250)        (697,722)    (1,815,425)

Carrying amount at 30 June 2003                       1,343,596       564,911        2,555,885     4,464,392


                                                         Consolidated                    Parent Entity
                                                           2003       2002                2003         2002
                                                              $          $                   $            $


14. Non-current assets – Intangible assets

Goodwill                                             13,788,261    13,788,261                 -                -

Less: accumulated amortisation                       (2,848,310)     (90,663)                 -                -

                                                     10,939,951    13,697,598                 -                -

Brand                                                 8,000,000     8,000,000                 -                -

Total                                                18,939,951    21,697,598                 -                -


Refer Note 1(l) for accounting policy.




TVSN Limited and controlled entities                                                                47
Notes to the financial statements – 30 June 2003
                                                             Consolidated                    Parent Entity
                                                            2003           2002            2003          2002
                                                               $              $               $             $


15. Non-current assets – Other

Prepayments                                                     -          9,414               -         9,414




16. Current liabilities – Payables

Trade creditors                                     12,186,343       7,969,010       3,776,208     3,876,105

Sundry creditors and accruals                         4,117,803      4,254,941       1,879,342     2,150,221

Amount due to entities within the group (Note
30)                                                           -              -       6,216,926       639,447
Amount due to related parties (Note 30)               1,618,053      1,392,200       1,577,518     1,286,841

                                                     17,922,199     13,616,151      13,449,994     7,952,614



Standard terms for trade accounts payable is settlement within 45 days.

The Directors consider the carrying amounts of trade and other accounts payable to approximate their net fair
values.

17. Current liabilities – Interest bearing liabilities

Bank Overdraft                                          270,353           83,994       254,445                  -

Lease liabilities (Note 27)                             752,929       690,991          683,023       648,331

Commercial Bill – secured (Note 9)                      500,000                -       500,000                  -

Re-financed Letters of Credit – secured (Note
9)                                                    1,496,038      1,000,000         130,681             -
                                                      3,019,320      1,774,985       1,568,149       648,331




18. Current liabilities – Provisions
Employee benefits (note 33)                             698,792       661,170          453,312       417,501

Taxation                                                 74,376       189,958                  -                -

Provision for restructuring (Note 28)                    14,333       273,049           14,333       273,049


                                                        787,501      1,124,177         467,645       690,550




TVSN Limited and controlled entities                                                                48
Notes to the financial statements – 30 June 2003



18. Current liabilities – Provisions (Continued)


                                                                                                   2003
                                                                             Restructuring provisions –
                                                                                           acquisitions
                                                                                                      $
Consolidated and parent

Carrying amount at start of year                                                               273,049

Payments / other sacrifices of economic                                                       (258,716)
benefit
Carrying amount at end of year                                                                  14,333



Restructuring provisions – acquisitions includes provisions for employee termination benefits
relating to restructurings occurring as a consequence of acquisitions as they are aggregated with
the provisions for the other restructuring costs relating to the acquisition for disclosure purposes.


                                                        Consolidated                  Parent Entity
                                                       2003        2002              2003         2002
                                                          $           $                 $            $



19. Non-current liabilities – Interest bearing liabilities

Finance lease liability (Note 27)                  2,420,855     3,116,545       2,199,920    2,872,835

Director loan (Note 30)                            1,500,000     1,500,000       1,500,000    1,500,000

                                                   3,920,855     4,616,545       3,699,920    4,372,835


20. Non-current liabilities – Provisions

Employee benefits (note 33)                         228,703       235,643           145,747     157,910


21. Contributed equity
(a) Paid up Share Capital:

133,668,606 (30 June 2002 – 120,373,874)

Ordinary shares each fully paid            (A) 261,876,817     258,953,857      261,876,817   258,953,857

Converting Notes                           (C)    20,000,000    20,000,000       20,000,000    20,000,000

                                                 281,876,817   278,953,857      281,876,817   278,953,857




TVSN Limited and controlled entities                                                          49
Notes to the financial statements – 30 June 2003

21. Contributed equity (continued)
(A) Movements in ordinary Share Capital of the Company during the period were as
follows:

Details                                         Date          Notes         No. of Shares      Amount
                                                                                                      $
Opening Balance                                 01 Jul 02                    120,373,874    258,953,857
Issue of shares to external investors          31 Dec 02        (a)            8,567,458      1,884,841
following December 2002 Capital Raising
Issue of shares to related parties following   30 Jun 03        (a)             4,727,274     1,040,000
December 2002 Capital Raising
Costs relating to share issues                                                         -         (1,881)
Balance at 30 June 2003                                                      133,668,606    261,876,817


(a) Following a Capital Raising in December 2002, 13,294,732 shares were issued at a price
    of 22 cents each. 8,567,458 shares were issued to external subscribers in December 02
    and January 03. A further 4,727,274 shares were issued to related parties after
    shareholder approval was obtained at a General Meeting of the company on 20 June
    2003. Of this total, 4,545,455 were issued to Chairman Ron Baskin, with the balance
    issued to members of his family.

(B) Movement in options of the Company during the period are as follows:

Details                                                Date      Notes               No. of      Exercise
                                                                                    Options         Price

Opening Balance                                     01 Jul 02                     9,493,787       Various


Issued to external consultant                      25 Nov 02          (a)            75,000         0.266
Issued to Executive Vice Chairman                  05 Dec 02          (b)         1,000,000         0.300
Issue to external investors                        31 Dec 02          (c)         2,141,866         0.220
Issue to related parties                           30 Jun 03          (c)         1,181,820         0.220

Closing Balance at 30 June 2003                                                  13,892,473       Various


(a) With the approval of the Board, 75,000 options over ordinary shares were issued, for no
    consideration, to an external consultant to the company. The options vest immediately,
    and are exercisable at 26.6c per share, with an expiry date of 22nd July 2012.

(b) In June 2002, Executive Vice Chairman Moshe Ozana provided a loan of $1.5m to TVSN
    Limited to help secure bank facilities from St George. In consideration for this loan, the
    company agreed to issue 1,000,000 options over ordinary shares to Mr Ozana for no
    consideration, exercisable at 30c per share, with an expiry date of 14 June 2007. Two
    thirds of the options vested when shareholder approval for the grant was received on 28
    November 2002. The balance of 333,333 vest on 31 December 2003 if any balance of the
    $1.5m loan remains outstanding at that time. The loan was originally due for repayment in
    June 2004, but the loan has been extended until December 2004.


TVSN Limited and controlled entities                                                                 50
Notes to the financial statements – 30 June 2003

21. Contributed equity (continued)

(c) Following a Capital Raising in December 2002, 13,294,732 shares were issued at a price
    of 22 cents each. For every 4 shares purchased, the investor received, for nil
    consideration, 1 option over ordinary shares. The options, which vest immediately on
    issue, are exercisable at 22c each with an expiry date of 30th June 2004. 2,141,866
    options were issued to external subscribers in December 2002. A further 1,181,820
    options were issued to related parties after shareholder approval was obtained at a
    General Meeting of the company on 20 June 2003. Of this total, 1,136,364 were issued to
    Chairman Ron Baskin, with the balance issued to members of his family


(C) Converting Notes

The $20 million Convertible Note was issued to Austar United Holdco 1 Pty Ltd ("AUH") in
2000. On 27 March 2002, pursuant to a Variation of Rights Agreement approved by
shareholders, AUH agreed to vary the terms of the Convertible Note, such that AUH's right to
redeem the Note was waived. As a result, the Note is now classified as equity as it will
mandatorily convert to equity on 19 October 2005.



                                                           Consolidated                Parent Entity
                                                          2003        2002            2003         2002
                                                             $           $               $            $


22. Accumulated Losses



Accumulated losses at the beginning of the       (258,924,102) (254,165,124)   (258,910,232) (254,111,859)
financial year
Net loss attributable to members of TVSN           (5,665,481)   (4,758,978)     (5,763,777)   (4,798,373)
Limited
Accumulated losses at the end of the financial   (264,589,583) (258,924,102)   (264,674,009) (258,910,232)
year.




TVSN Limited and controlled entities                                                           51
Notes to the financial statements – 30 June 2003

                                                          Consolidated                  Parent Entity
                                                         2003        2002              2003         2002
                                                            $           $                 $            $

23. Remuneration of auditors
During the period, the auditor of the parent entity and its related practices earned
the following:

PricewaterhouseCoopers - Australian firm
Audit or review of financial reports of the entity or   130,000    105,000       130,000       105,000
any entity in the economic entity
Other audit-related work                                      -     13,530             -        13,530
Other assurance services                                      -      5,850             -         5,850
Total audit and other assurance services                130,000    124,380       130,000       124,380
Taxation                                                  5,660     27,350         5,660        27,350
                                                        135,660    151,730       135,660       151,730


It is TVSN's policy to employ PricewaterhouseCoopers on assignments additional to its
statutory audit duties where PricewaterhouseCoopers' expertise and experience with TVSN is
important; these assignments are principally tax advice and due diligence reporting on
acquisitions, or where PricewaterhouseCoopers is awarded assignments on a competitive
basis. It is TVSN's policy to seek competitive tenders for all major consulting projects.




TVSN Limited and controlled entities                                                           52
Notes to the financial statements – 30 June 2003

24. Directors’ remuneration
                                                          Directors of entities Directors of parent
                                                          in the consolidated          entity
                                                                  entity
                                                           Financial 6 months       Financial   6 months
                                                                year                     year
                                                          to 30 June to 30 June         to 30      to 30
                                                                                        June        June
                                                               2003       2002          2003        2002
                                                                  $          $             $          $
Income paid or payable or otherwise made available to
Directors by entities in the consolidated entity and
related parties in connection with the management of            (a)
affairs of the parent entity or its controlled entities      1,028,950 128,274       808,843     122,365


(a) This includes the remuneration of Yoram Jovani, a director of Emjoi Australasia Pty Ltd.


During previous financial periods:
•   Options were granted to executive directors under the Senior Executive Share Option
    Plan, and the Management Incentive Plan
•   Options were granted to non-executive directors
No options were granted or exercised under the above plans during the financial year.


Options were granted to executive director Moshe Ozana during the year in return for the
provision of an interest-bearing loan to the company in June 2002.
See note 21 (B) for details of option grants.


The number of parent entity Directors whose total income for the financial period from the
parent entity or related parties was within the specified bands is as follows:

                                                                                   Financial 6 months
                                                                                         year
                                                                                  to 30 June to 30 June
                                                                                        2003       2002
$0     - $ 9,999                                                                          -          8
$10,000 - $ 19,999                                                                        -          1
$30,000 - $ 39,999                                                                        3          -
$100,000 - $109,999                                                                       -          1
$270,000 - $279,999                                                                       1          -
$450,000 - $459,999                                                                       1          -



Note: in the 6-month period to June 2002, Non-Executive Directors were paid a salary
effective 19 June 2002. The salary of Executive Director Moshe Ozana is only included from
the merger date of 19 June 2002.

TVSN Limited and controlled entities                                                                53
Notes to the financial statements – 30 June 2003


25. Executives’ remuneration

                                                      Executive officers of       Executive officers
                                                     the consolidated entity      of the parent entity
                                                      Financial 6 months          Financial    6 months
                                                            year                       year
                                                     to 30 June to 30 June       to 30 June   to 30 June

                                                             2003      2002            2003         2002

                                                                $           $             $              $
Remuneration received, or due and receivable
from, entities in the consolidated entity and
related parties by Australian-based Executive
Officers (including Directors) whose remuneration
was at least $100,000 on an annualised basis:

Executive officers of the parent entity               1,647,072     444,271       1,647,072      444,271
Executive officers of other entities in the
consolidated entity                                     313,111           -               -            -
                                                      1,960,183     444,271       1,647,072      444,271




No options were granted or exercised under the Senior Executive Share Option Plan during
the financial year to June 2003.


The number of Australian-based Executive Officers (including Directors) whose remuneration
from entities in the consolidated entity and related parties was within the specified bands is
as follows:

                                                   Executive officers            Executive officers
                                              of the consolidated entity         of the parent entity
                                                  Financial     6 months         Financial      6 months
                                                       year                            year
                                                to 30 June    to 30 June        to 30 June    to 30 June
                                                      2003           2002             2003           2002

$50,000 - $ 59,999                                       -             1                 -               1
$60,000 - $ 69,999                                       -             1                 -               1
$70,000 - $ 79,999                                       -             3                 -               3
$100,000 - $109,999                                      -             1                 -               1
$110,000 - $119,999                                      1             -                 1               -
$120,000 - $129,999                                      2             -                 1               -
$150,000 - $159,999                                      2             -                 2               -
$170,000 - $179,999                                      1             -                 1               -
$190,000 - $199,999                                      1             -                 -               -
$200,000 - $209,999                                      1             -                 1               -
$270,000 - $279,999                                      1             -                 1               -
$450,000 - $459,999                                      1             -                 1               -



TVSN Limited and controlled entities                                                                     54
Notes to the financial statements – 30 June 2003

26. Financing arrangements

All banking facilities are held with St George Bank. The facilities have an expiry date of 30
June 205, and are subject to annual review and to certain Financial Performance Loan
Covenants. The facilities obtained by the consolidated entity are as follows:

                                                                                 Parent entity
                                                                               2003        2002
                                                                                $            $

Multi-Option Trade Finance Facility
This is a Letter of Credit facility, to assist with the purchase
and funding of inventory.
Total facility                                                                5,750,000     4,750,000
Used at balance date                                                          4,904,407     1,949,000
Unused at balance date                                                          845,593     2,801,000

The facility includes $1,500,000 (2002: $1,000,000) of refinance facility, 100% of which was
drawn down at balance date. Drawdown and acceptance fees apply, and interest on the
refinance facility is based on the Bank Bill Rate. $1, 860,400 (2002: $750,000) of TVSN funds is
held in a restricted cash account, as security against the facility (Note 9).


Bank Guarantee / Performance Bond Facility

Total facility                                                                  795,000      645,000
Used at balance date                                                            726,000      645,000
Unused at balance date                                                           69,000            -

Line fees and guarantee fees apply. $726,000 (2002: $645,000) of TVSN funds is held in a
restricted cash account, as security against the facility (Note 9).


Commercial Bill Facility
The purpose of the facility is to provide additional working capital funds to the entity.

Total facility                                                                  500,000     1,500,000
Used at balance date                                                            500,000             -
Unused at balance date                                                                -     1,500,000

$500,000 (2002: $1,500,000) of TVSN funds is held in a restricted cash account, as
security against the facility (Note 9).

Other
Total facility                                                                   55,000             -
Used at balance date                                                             55,000             -
Unused at balance date                                                                -             -

Total facilities                                                              7,100,000     6,895,000
Used at balance date                                                          6,185,407     2,594,000
Unused at balance date                                                          914,593     4,301,000




TVSN Limited and controlled entities                                                           55
Notes to the financial statements – 30 June 2003

                                                    Consolidated             Parent Entity
                                                  2003         2002       2003         2002
                                                    $            $          $             $



27. Commitments


(a) Operating lease expenditure contracted for
at the reporting date but not recognised as
liabilities, payable:

Not later than one year                           1,177,940   1,404,848     936,152     847,302
Later than one year but not later than 5 years    1,996,164   3,025,121   1,703,734   2,373,698
More than five years                                      -           -           -           -
                                                  3,174,104   4,429,969   2,639,886   3,221,000

(b) Other operating expenditure commitments for
satellite transmission services and carriage
contracted for at the reporting date but which
have not been provided for in the financial
statements:
Within one year                                   2,145,373   2,108,517   2,145,373   2,108,517
Later than one year but not later than 5 years    3,301,370   5,304,839   3,301,370   5,304,839

                                                  5,446,743   7,413,356   5,446,743   7,413,356



(c) Finance lease expenditure contracted for
at the reporting date :


Not later than one year                             911,451     960,322     876,878     890,954
Later than one year but not later than 5 years    2,769,558   3,631,148   2,455,572   3,322,245
                                                  3,681,009   4,591,470   3,332,450   4,213,199
Deduct future finance charges on finance
leases                                            (507,225)   (783,934)   (449,507)   (692,033)
Net finance lease liability                       3,173,784   3,807,536   2,882,943   3,521,166

Reconciled to:
Current liability (note 17)                         752,929     690,991     683,023     648,331
Non-current liability (note 19)                   2,420,855   3,116,545   2,199,920   2,872,835
                                                  3,173,784   3,807,536   2,882,943   3,521,166




TVSN Limited and controlled entities                                                  56
Notes to the financial statements – 30 June 2003

28. Investments in controlled entities
                                                                              Place        2003     2002
Name of entity                                                      Notes     of Inc.        %         %
TVSN Limited                                                                      ACT
TVSN Interactive Pty Limited                                          (a)        NSW          100      100
The Expo Channel Pty Limited                                        (a),(b)      NSW          100      100
Danoz Holdings Pty Limited                                            (c)        NSW          100      100

(a) Controlled entity not audited as it is a small proprietary company.
(b) Controlled entity was incorporated on 3 September 2001.
(c Controlled entity was acquired on 19 June 2002. Danoz Holdings Pty Limited owns 100% of the shares of
    the following subsidiaries:
    - Danoz Direct Pty Limited
    - Emjoi Australasia Pty Limited
    - Danoz Directions Pty Limited
    - Danoz Direct Retail Pty Limited
    - Danoz Directions Ashfield Pty Limited
    - Danoz Directions Campbelltown Pty Limited
    - Danoz Directions Warringah Pty Limited
    - Shop From Home International Pty Limited


Danoz Direct Pty Limited owns 100% of the shares of Danoz Direct Hong Kong Pty Limited.


Fair value of identifiable net assets of controlled entity                                                 $
Cash assets                                                                                     1,495,141
Trade Debtors                                                                                   1,813,082
Inventory                                                                                       2,431,676
Plant and equipment                                                                               682,664
Other assets                                                                                      315,597
Trade Creditors                                                                               (7,201,258)
Interest bearing liabilities                                                                  (1,374,050)
Provisions                                                                                      (165,950)
Provision for restructuring (Note 18)                                                           (273,049)
                                                                                              (2,276,147)
Goodwill on consolidation                                                                      13,788,261
Brand name                                                                                      8,000,000
Total consideration                                                                            19,512,114
Consideration comprises:
Cash paid                                                                                         196,484
Accrued costs                                                                                     114,028
Shares issued                                                                                  19,201,602
                                                                                               19,512,114




TVSN Limited and controlled entities                                                              57
Notes to the financial statements – 30 June 2003

28. Investments in controlled entities (continued)
                                                          Consolidated                      Parent Entity
                                                        Financial   6 months            Financial     6 months
                                                              year                           year
                                                       to 30 June to 30 June           to 30 June    to 30 June
                                                        2003         2002                2003          2002
                                                          $            $                   $              $


Outflow of cash to acquire controlled entity, net of cash acquired:

Cash Paid                                                           -      196,484               -         196,484
Less: Balances acquired
Cash                                                                -    1,507,128               -               -
Bank overdraft                                                      -      (11,987)              -               -
                                                                    -    1,495,141               -               -
(Inflow) / Outflow of cash                                          -   (1,298,657)              -         196,484




29. Cash flow information

Reconciliation of net cash flows from operating activities to operating loss after income tax:

Operating loss after income tax                       (5,665,481)       (4,758,978)    (5,763,777)     (4,798,372)
Depreciation and amortisation                           4,749,620         1,094,667      1,815,426         993,704
Write off of bad debts                                    517,037                  -       183,716               -
(Profit)/Loss on disposal/write off of fixed assets        26,212           (28,380)             -        (28,380)
Capitalised interest on Convertible Note                        -           181,941              -         181,941

Change in assets and liabilities
(Increase) / Decrease in Receivables                  (3,087,693)           31,582     (4,970,660)         116,035
(Increase) / Decrease in Inventory                    (3,544,685)          300,215     (1,023,245)         780,474
(Increase) / Decrease in Other assets                   (189,322)          745,987           42,469        745,987
Increase / (Decrease) in payables                       4,700,757        (239,700)       5,633,060         571,554
Increase / (Decrease) in Provisions                        28,771          423,856         (99,206)        369,849


Net cash flows from operating activities              (2,464,784)       (2,248,810)    (4,182,217)     (1,067,208)




TVSN Limited and controlled entities                                                                  58
Notes to the financial statements – 30 June 2003

30. Related party information

TVSN Limited is the parent entity.


Directors
The following Directors held office during the financial period:
                                                                   Appointed         Resigned
Ron Baskin                                                         04-Apr-02                n/a
Rob Hunt                                                           19-Oct-00                n/a
Eric Melman                                                        04-Apr-02                n/a
Moshe Ozana                                                        04-Apr-02                n/a
John Porter                                                        19-Oct-00                n/a

Remuneration
Information on remuneration and retirement benefits of Directors is disclosed in Note 24.


Loans to Directors and director-related entities
No loans were made to Directors of entities in the consolidated entity or their director-related
entities during the financial period.


Transactions with Directors and director-related entities concerning shares or
share options
Aggregate number of shares and share options of TVSN Limited acquired or disposed of
by Directors of the Company and consolidated entity or their director-related entities from
the Company:


                                                                        Parent entity
                                                                      2003          2002
                                                                     Number      Number
Acquisition
Ordinary Shares                                                        5,024,305     84,174,916

Options granted under Senior Executive Share Option Plan                       -      3,125,000
Options granted to Non-Executive Directors                                     -        225,000
Further options granted to the Chief Executive Officer                         -      1,250,000
Options granted to the Executive Vice Chairman                         1,000,000              -
Options issued to the Chairman pursuant to the December
2002 Capital Raising                                                   1,136,364                  -

Disposals
Disposal of ordinary shares                                                      -                -
Exercise of options                                                              -                -
Details of all options granted are including in Note 21.




TVSN Limited and controlled entities                                                        59
Notes to the financial statements – 30 June 2003

30. Related party information (continued)

Aggregate number of shares and share options held directly, indirectly or beneficially
by Directors of the Company or the consolidated entity or their director-related entities at
balance date:
                                                                      Parent entity
                                                                   2003           2002
                                                                Number          Number
Ordinary shares                                         (a)      99,933,733 94,909,428
Options over ordinary shares                            (a)        6,886,364     4,750,000
The aggregate number of shares held by director-related
entities at balance date were:                                   92,610,570 87,808,515


a) Details of shares and options include those relating to Mr Yoram Jovani, a Director of a
   controlled entity, Emjoi Australasia Pty Ltd.


Loans from directors

b) In June 2002, Executive Vice Chairman Moshe Ozana advanced a loan of $1.5m to the
   parent entity. The funds are held as restricted cash as security against Commercial Bill
   and other trade facilities provided by St George Bank to a value of $1.5m. The interest
   rate for the financial year was 9.32%. The loan was originally due for repayment in June
   2004, but Mr Ozana and TVSN Limited have agreed to extend the loan to December
   2004. Mr Ozana was granted a second charge over the company’s assets. Mr Ozana was
   granted 1,000,000 options in return for advancing the loan. See note 22 for details of the
   options.


c) Chairman Ron Baskin subscribed for shares valued at $1m during the December 2002
   capital raising. Shareholder approval for the issue of shares to Mr Baskin was obtained at
   a General Meeting on 20th June 2003. During the period from 31 December 2002 to 20
   June 2003, Mr Baskin advanced an interest-free loan of $1m to the company, which was
   repaid with the proceeds of the shares issued



d) During the year, the company paid personal expenses to a low value on behalf of Mr
   Moshe Ozana. These amounts were mainly repaid during the year, except for an amount
   of $6,633 which was repaid after the financial year end.


Other transactions with Directors and director-related entities



    Austar Entertainment Pty Ltd ("AUE")
e) A contract is in place between TVSN and Austar Entertainment Pty Ltd ("AUE"), whereby
   the TVSN Channel is distributed in Australia via AUE's television programming
   distribution system.




TVSN Limited and controlled entities                                                      60
Notes to the financial statements – 30 June 2003

30. Related party information (continued)


     Under an agreement executed pursuant to shareholder approval in March 2002, the
     balance due to AUE under this contract at 30 June 2002 was not repayable until June
     2003. The repayment date has now been extended to December 2003.
     A contract is in place between The Expo Channel Pty Ltd and AUE, whereby the Expo
     Channel is distributed in Australia via AUE's television programming distribution system.
     The Expo Channel Pty Ltd is a wholly owned subsidiary of TVSN Limited.


     AUE is a controlled subsidiary of Austar United Communications Limited, as is Austar
     United Holdco 1 Pty Ltd ("AUH"), which at balance date owns 20% of the shares of
     TVSN. Until the completion of the acquisition by TVSN of the Danoz Group of
     Companies, and related transactions, AUH was the controlling shareholder of TVSN. A
     Director of AUH, Mr John Porter, is a Non-Executive Director of TVSN.


     Ricketty Street Pty Ltd
f)   In June 2002, a property lease was executed between Ricketty Street Pty Ltd and TVSN
     Limited over 32 Ricketty Street, Mascot, being the former operating premises of the
     Danoz Group. At balance date, the property continues to be used for warehousing by the
     merged businesses. The lease is at a commercial rent, and expires on 30 October 2003.
     Moshe Ozana, the Executive Vice-Chairman of TVSN Limited, is the sole Director and
     shareholder of Ricketty Street Pty Ltd. Ricketty Street Pty Ltd owns 4.7% of the shares of
     TVSN Limited.


     1900 Win.Com Pty Limited

g) In November 2002, Danoz Directions Pty Limited, a company of which TVSN is the
   ultimate 100% holding company, sold a franchise for a Danoz Directions retail store to
   1900 Win.Com Pty Limited. The transaction was at arms’ length. Under the terms of the
   franchise agreement, this store purchases inventory from companies within the TVSN
   group, and pays royalties to companies within the group. Transactions with this company
   are carried out at the same commercial terms as third party franchisees.

     Moshe Ozana, the Executive Vice-Chairman of TVSN Limited, is the sole Director and
     shareholder of 1900 Win.Com Pty Ltd.




TVSN Limited and controlled entities                                                       61
Notes to the financial statements – 30 June 2003

30. Related party information (continued)


Transactions with directors and director-related entities during the year

                                                                Consolidated               Parent Entity

                                                          Financial 6 months        Financial         6 months
                                                                year                     year
                                                         to 30 June to 30 June     to 30 June     to 30 June
                                                               2003       2002           2003           2002
                                                                   $         $              $              $

Interest incurred on AUH Convertible Note                         -     181,941             -          181,941
Interest incurred on AUH loan                                     -      17,572             -           17,572
Purchase of carriage and distribution services     (e)      652,925     195,457       481,609          195,457
from AUE
Costs incurred under Rob Hunt Secondment                           -     98,657              -          98,657
Agreement
Interest payable to Mr Moshe Ozana                 (b)      139,800       4,213       139,800            4,213
Rent charged on Ricketty Street premises           (f)      408,003      12,000             -                -
Sale of inventory to 1900 Win.Com Pty Ltd          (g)      320,776           -             -                -
Royalties charged to 1900 Win.Com Pty Ltd          (g)       21,914           -             -                -
Interest incurred on loan from Danoz Direct Pty                   -       7,696             -            7,696
Ltd
Director loan – advanced by Mr Ron Baskin          (c)     1,000,000           -     1,000,000                -
Director loan – repaid to Mr Ron Baskin            (c)   (1,000,000)           -   (1,000,000)                -
Loans repaid to related party                                      -   (750,000)             -        (750,000)

With the exception of costs under the Rob Hunt Secondment Agreement, these amounts exclude remuneration of
executives and Directors, set out in Notes 24 and 25.


Aggregate amounts receivable from and payable to Directors and to director-related
entities at balance date
                                                                Consolidated               Parent Entity

                                                               2003        2002          2003             2002
                                                                  $           $             $                $

Amounts owed by Mr Moshe Ozana             (d)                6,633            -             -                -
Amounts by entities controlled by Mr Moshe (g)               22,850            -             -                -
Ozana
Total amounts owed by related parties      (Note 7)          29,483            -             -                -

Amounts owed to members of the Austar        (e)
group.                                                    1,592,053    1,331,064    1,577,518         1,282,628
Amount owed to Mr Moshe Ozana                (b)                  -        4,213            -             4,213
Amounts owed to entities controlled by Mr
Moshe Ozana                                  (f)             26,000       56,923            -                 -
Total amounts payable to related parties     (Note 16)    1,618,053    1,392,200    1,577,518         1,286,841

Director loan – advanced by Mr Moshe Ozana (b)            1,500,000    1,500,000    1,500,000         1,500,000


TVSN Limited and controlled entities                                                             62
Notes to the financial statements – 30 June 2003

30. Related party information (continued)


Wholly owned group
The wholly owned group consists of TVSN Limited and its wholly controlled entities as
set out in Note 28.
Transactions between TVSN Limited and other entities within the wholly owned group
consist of:
(a)   the transfer of inventory between entities at cost
(b)   the sale of airtime on the EXPO Channel to Danoz Direct Pty Ltd at an agreed price
(c)   amounts advanced by TVSN Limited
(d)   amounts repaid to TVSN Limited.

Amounts payable to and receivable from other entities within the wholly owned group at
balance date are as follows:

                                                                              Parent Entity
                                                                               2003         2002
                                                                                  $            $
Amounts owed to TVSN Limited by entities within the wholly owned group
(Note 7)                                                                   4,134,672     28,517
Amounts owed by TVSN Limited to entities within the wholly owned group
(Note 16)                                                                  6,216,926    639,447


31. Contingent liabilities
                                                     Consolidated             Parent Entity
                                                    2003      2002          2003       2002
                                                      $         $             $           $
Secured guarantee by the entity in respect
of indemnities granted. Secured by amounts
held in restricted cash balances (Note 9).                  -   155,000            -    155,000



32. Subsequent events
Refer to commentary included on page 14 of the Directors’ Report.



33. Employee benefits
                                                     Consolidated              Parent Entity
                                                    2003      2002            2003       2002
                                                      $         $               $           $
Employee benefit liabilities
Provision for employee entitlements
- Current (Note 18)                                  698,792    661,170       453,312    417,501

- Non-current (Note 20)                              228,703    235,643       145,747    157,910
Aggregate employee entitlement liabilities           927,495    896,813       599,059    575,411

Employee numbers
Average number of employees during the financial         305         194          135         135
period
TVSN Limited and controlled entities                                                          63
Notes to the financial statements – 30 June 2003
33. Employee benefits (Continued)




The following assumptions were adopted in measuring present values.


                                                       Consolidated        Parent Entity

Long Service leave                                    2003              2003

Weighted average rates of increase in annual
employee benefits to settlement of the liabilities           3%                3%

Weighted average discount rates                          5.37%            5.37%
Weighted average terms to settlement of the          6.18 years       6.18 years
liabilities


Superannuation
The consolidated entity contributes to a various employee sponsored defined contribution
superannuation plans, mainly the BT Employee Superannuation Fund and the ING
Superannuation Fund, which all employees are entitled to join. Contributions to the Funds
are made pursuant to the Superannuation Guarantee arrangements. The total contribution for
the financial period was $867,213 (January-June 2002 – $254,101).



TVSN Limited Employee Option Plan - Options issued during the financial year


No options were issued or exercised during the financial year ending 30 June 2003 under any
employee option plan.
In the 6-month period to 30 June 2002 7,500,000 options (see c below) were issued to
executives including executive directors, and 165,000 shares were issued to staff.


TVSN Limited Employee Option Plan - Options on issue at 30 June 2003


a) In 1999, TVSN established a Management Incentive Plan. The options granted under this
   plan were originally exercisable at a pre-consolidation price of 40c with a pre-
   consolidation price of $1.50. Following the 10 for 1 consolidation of shares in June 2002,
   the exercise price of these options is $4.00, with a strike price of $15.00. These options
   have not vested, as the market price of the shares has not exceeded the exercise price
   since their issue.




TVSN Limited and controlled entities                                                       64
Notes to the financial statements – 30 June 2003


33. Employee benefits (Continued)


b) In April 2001, the TVSN Option Plan was introduced. The exercise price of options
   granted under this plan was based on the average share price over the month prior to the
   issue of the options. 1,035,000 options were granted to staff under this Plan in May 2001.
   They were originally exercisable at a pre-consolidation price of 24c. Following the 10 for 1
   consolidation of shares in June 2002, the exercise price of these options is $2.40.
   In June 2001, shareholder approval was obtained to grant options under the TVSN
   Option Plan to CEO Rob Hunt. The options were issued in June 2001 with a pre-
   consolidation exercise price of 20c. The post-consolidation exercise price is $2.00
    These options have not vested, as the market price of the shares has not exceeded the
   exercise price since their issue.

c) At the General Meeting of 27 March 2002, the shareholders approved the adoption of the
   Senior Executive Share Option Plan. Under this plan, 7.5 million options were issued to
   named senior executives, including the executive directors of TVSN Limited, for no
   consideration. The options are exercisable at 26.6cents per share. The options are
   subject to performance hurdles relating to the results of the financial year ended 30 June
   2003 and to the share price during June 2003. None of the performance hurdles were
   met, therefore the options have not vested.


Options on issue at 30 June 2003             Executives     Directors Exercise   Strike
                                                                         price    price     Vested

TVSN Management Incentive Plan         (a)       55,231             -    $4.00   $15.00         No
TVSN Option Plan                       (b)      103,500             -    $2.40      N/a         No
TVSN Option Plan                       (b)            -       150,000    $2.00      N/a         No
Senior Executive Share Option Plan     (c)    5,325,000     2,175,000   $0.266      N/a         No
Total options outstanding under
employee option plans                         5,483,731     2,325,000


d) At the General Meeting of 27 March 2002, shareholders approved the issue of 1,250,000
   options over consolidated shares to CEO Rob Hunt, for no consideration, at an exercise
   price of 9cents per share. These options vested immediately and are exercisable until the
   later of three months after the termination of the employment of Rob Hunt and 19 June
   2012. These options were not issued under an employee option plan.



34. Amounts receivable and payable denominated in foreign currencies
                                                            Consolidated          Parent Entity
                                                          2003      2002         2003      2002
                                                             $          $           $           $
Amounts payable
Current, not effectively hedged:
Hong Kong Dollars                                      1,700      120,035       1,700     120,035
New Zealand Dollars                                   76,155          959      76,155         959
Pounds Sterling                                      102,202       15,568     102,202      15,568
EURO Currency                                         57,450       13,835      57,450      13,835
United States Dollars                              5,549,017    1,513,120   1,427,916     393,809


TVSN Limited and controlled entities                                                         65
Notes to the financial statements – 30 June 2003


35. Additional financial instruments disclosures
Interest rate risk
The consolidated entity's exposure to interest rate risk, repricing maturities and the effective
interest rates on financial instruments at balance date are:

                                                             Fixed interest
                                                              maturing in:
                                                Floating      1 year    1 year to         Non
                                                Interest     or less     5 years      interest
                                                    rate                              bearing         Total
                                     Notes             $          $            $             $           $
30 June 2003


Financial Assets
Cash assets                               6    2,029,590           -            -        7,900    2,037,490
Trade Receivables                         7            -           -            -    4,032,893    4,032,893
Restricted Cash                           9            -   3,086,400            -            -    3,086,400
Deposits                                 11       66,505           -            -       44,506      111,011
Other financial non-current assets       12        9,383           -            -            -        9,383
Total financial assets                         2,105,478   3,086,400            -    4,085,299    9,277,177

Weighted average interest rate                    2.40%       4.59%             -            -



Liabilities
Bank Overdraft                            17    270,353           -            -             -      270,353
Trade and other creditors                 16          -           -            -    17,922,199   17,922,199
Finance lease liabilities            17, 19           -     752,929    2,420,855             -    3,173,784
Refinanced Letters of Credit             17    1,496,038           -           -             -    1,496,038
Director Loan                            19            -           -   1,500,000             -    1,500,000
Commercial Bill                          17            -     500,000           -             -      500,000
Total financial liabilities                    1,766,391   1,252,929   3,920,855    17,922,199   24,862,374

Weighted average interest rate                    7.17%       7.40%       8.30%              -

Net financial liabilities                       339,087    1,833,471 (3,920,855) (13,836,900) (15,585,197)




TVSN Limited and controlled entities                                                             66
Notes to the financial statements – 30 June 2003


35. Additional financial instruments disclosures (continued)

                                                               Fixed interest
                                                                maturing in:
                                                 Floating       1 year    1 year to            Non
                                                 Interest      or less     5 years         interest
                                                     rate                                  bearing         Total
                                      Notes             $           $              $              $           $
30 June 2002

Financial Assets
Cash assets                                6    2,840,751            -             -         3,500     2,844,251
Trade Receivables                          7            -            -             -     1,750,726     1,750,726
Restricted Cash                            9            -    3,050,000             -             -     3,050,000
Deposits                                  11       66,505            -             -             -        66,505
Other financial non-current assets        12        9,383            -             -             -         9,383
Total financial assets                          2,916,639    3,050,000             -     1,754,226     7,720,865

Weighted average interest rate                     2.40%        5.03%



Liabilities
Bank Overdraft                             17     83,994             -           -               -        83,994
Trade and other creditors                  16          -             -           -      13,616,151    13,616,151
Finance lease liabilities             17, 19           -       690,991   3,116,545               -     3,807,536
Refinanced Letters of Credit               17          -     1,000,000           -               -     1,000,000
Director Loan                              19          -             -   1,500,000               -     1,500,000
Total financial liabilities                       83,994     1,690,991   4,616,545      13,616,151    20,007,681

Weighted average interest rate                        5%        7.47%       8.18%

Net financial liabilities                       2,832,645    1,359,009 (4,616,545) (11,861,925) (12,286,816)




Reconciliation of Net Financial Liabilities to Net assets:

                                                                                          Consolidated
                                                                                        2003         2002
                                                                                          $            $

Net financial liabilities as above:                                                    (15,585,197) (12,286,816)
Other debtors                                                                  7            906,185        84,570
Inventories                                                                    8          8,300,216     5,144,008
Other current assets                                                          10            619,168       474,351
Plant and equipment                                                           13          5,123,115     6,266,450
Intangible assets                                                             14        18,939,951    21,697,598
Other non-current assets                                                      15                  -         9,414
Provisions                                                                18, 20        (1,016,204)   (1,359,820)
Net assets per balance sheet                                                            17,287,234    20,029,755




TVSN Limited and controlled entities                                                                  67
Notes to the financial statements – 30 June 2003


36. Earnings per share
                                                                                   Consolidated
                                                                             Financial      6 months
                                                                                   year
                                                                            to 30 June     to 30 June
                                                                                  2003           2002
                                                                                 Cents          Cents

(a) Basic earnings per share                                                    (4.55)         (35.2)
(b) Diluted earnings per share                                                  (4.50)         (35.1)

Weighted average number of ordinary share and potential ordinary
shares used as the denominator in calculating basic earnings per share     124,611,145    13,528,092

Weighted average number of ordinary share and potential ordinary
shares used as the denominator in calculating diluted earnings per share   125,580,258    13,562,082



The amount used in the numerator for both the Basic and Diluted EPS calculation is the same
as the net loss for the period.

Information concerning the classification of securities

(a) Options
Options granted during the period are considered to be potential ordinary shares.


The following options have been included in the determination of diluted earnings per share
for the year:
•   1,250,000 options granted to CEO Rob Hunt in June 2002
•   3,323,686 options issued to subscribers to the December 2002 Capital Raising


Other options on issue have not been included in the determination of diluted earnings per
share, because they are anti-dilutive.
Details relating to the options are set out in Note 21.


(b) Converting Notes
The $20 million Converting Note will mandatorily convert to shares on 19 October 2005.
However, these potential shares have not been included in the determination of diluted
earnings per share as they are anti-dilutive shares.
Details relating to the Converting Note are set out in Note 21.




TVSN Limited and controlled entities                                                             68
TVSN Limited


Directors’ Declaration


The Directors declare that the financial statements and notes set out on pages 29 to 68:

(a) comply with Accounting Standards, the Corporations Regulations 2001 and other
    mandatory professional reporting requirements; and

(b) give a true and fair view of the Company’s and consolidated entity’s financial position
    as at 30 June 2003 and of their performance, as represented by the results of their
    operations and their cash flows, for the financial year ended on that date.


In the Directors’ opinion:
(a) the financial statements and notes are in accordance with the Corporations Act 2001;

(b) there are reasonable grounds to believe that the Company and the consolidated entity will
    be able to pay their debts as and when they become due
    and payable.

This declaration is made in accordance with a resolution of the Directors. For and on behalf
of the Board.




    Sydney
    30 September 2003




TVSN Limited and controlled entities                                                          69
                                                                                       PricewaterhouseCoopers
                                                                                       ABN 52 780 433 757

                                                                                       Darling Park Tower 2
                                                                                       201 Sussex Street
                                                                                       GPO BOX 2650
                                                                                       SYDNEY NSW 1171
                                                                                       DX 77 Sydney
                                                                                       Australia
                                                                                       www.pwc.com/au
                                                                                       Telephone +61 2 8266 0000
                                                                                       Facsimile +61 2 8266 9999

Independent audit report to the members of
TVSN Limited

Audit opinion
In our opinion, the financial report of TVSN Limited:
•     gives a true and fair view, as required by the Corporations Act 2001 in Australia, of the
      financial position of TVSN Limited and the TVSN Limited Group (defined below) as
      at 30 June 2003, and of their performance for the year ended on that date, and
•     is presented in accordance with the Corporations Act 2001, Accounting Standards and
      other mandatory financial reporting requirements in Australia, and the Corporations
      Regulations 2001.

This opinion must be read in conjunction with the rest of our audit report.

Scope

The financial report and directors’ responsibility
The financial report comprises the statement of financial position, statement of financial
performance, statement of cash flows, accompanying notes to the financial statements, and
the directors’ declaration for both TVSN Limited (the company) and the TVSN Limited
Group (the consolidated entity), for the year ended 30 June 2003. The consolidated entity
comprises both the company and the entities it controlled during that year.

The directors of the company are responsible for the preparation and true and fair presentation
of the financial report in accordance with the Corporations Act 2001. This includes
responsibility for the maintenance of adequate accounting records and internal controls that
are designed to prevent and detect fraud and error, and for the accounting policies and
accounting estimates inherent in the financial report.

Audit approach
We conducted an independent audit in order to express an opinion 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 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.




TVSN Limited and controlled entities                                                             70
We performed procedures to assess whether in all material respects the financial report
presents fairly, in accordance with the Corporations Act 2001, Accounting Standards and
other mandatory financial reporting requirements in Australia, a view which is consistent with
our understanding of the company’s and the consolidated entity’s financial position, and of
their performance as represented by the results of their operations and cash flows.

We formed our audit opinion on the basis of these procedures, which included:

•     examining, on a test basis, information to provide evidence supporting the amounts and
      disclosures in the financial report, and
•     assessing the appropriateness of the accounting policies and disclosures used and the
      reasonableness of significant accounting estimates made by the directors.


When this audit report is included in an Annual Report, our procedures include reading the
other information in the Annual Report to determine whether it contains any material
inconsistencies with the financial report.

While we considered the effectiveness of management’s internal controls over financial
reporting when determining the nature and extent of our procedures, our audit was not
designed to provide assurance on internal controls.

Our audit did not involve an analysis of the prudence of business decisions made by directors
or management.

Independence
In conducting our audit, we followed applicable independence requirements of Australian
professional ethical pronouncements and the Corporations Act 2001.




PricewaterhouseCoopers




J W Bennett                                                                               Sydney
Partner                                                                         30 September 2003




TVSN Limited and controlled entities                                                          71
Shareholder information

The shareholder information set out below was applicable as at 19 September 2003.


A. Distribution of equity securities
Analysis of equity security holders by size of holding:

                                                            Number of     Ordinary Shares
                                                          shareholders               Held
1 - 1000                                                          607               235,617
1,001 - 5,000                                                      93               253,466
5,001 - 10,000                                                    216              1,732,832
10,001 - 100,000                                                  131              4,990,737
More than 100,000                                                  58         126,455,954
Total                                                            1,105        133,668,606



There were 905 holders of less than a marketable parcel of ordinary shares, based on a
share price of 26 cents.

B. Equity security holders
The names of the 20 largest holders of quoted equity securities are listed below:

                                                                 Ordinary Shares
                                                              Number held     Percentage of
                                                                              issued shares

Ozlink Pty Ltd                                                  53,388,746              39.9%
Austar United Holdco 1 Pty Ltd                                  26,736,854              20.0%
Ricketty Street Pty Ltd                                           6,300,000              4.7%
Rosedale Road Pty Ltd                                             4,545,455              3.4%
Mr Ron Baskin & Mrs Ruth Baskin                                   4,349,566              3.3%
Robert Co Pty Ltd                                                 3,636,364              2.7%
Jane Jovani                                                       2,961,597              2.2%
Yoram Jovani                                                      2,548,238              1.9%
Snowglaze Investments Pty Ltd                                     2,127,200              1.6%
Miss Heather Baskin                                               1,465,457              1.1%
Mr Darryl Baskin & Mrs Joanne Baskin                              1,419,037              1.1%
Mr Bradley Baskin                                                 1,327,842              1.0%
Miss Taryn Baskin                                                 1,327,842              1.0%
TLJ Investments Pty Ltd                                           1,201,663              0.9%
Chicago Limited                                                   1,021,240              0.8%
Meltrust Pty Ltd                                                  1,021,240              0.8%
Financialmac Pty Ltd <Superannuation Fund A/c>                     909,091               0.7%
Abe Meyerson and Riva Meyerson                                     797,279               0.6%
R & R Super Pty Ltd                                                644,200               0.5%
Westpac Custodian Nominees                                         527,000               0.4%
                                                               118,255,911              88.5%



TVSN Limited and controlled entities                                                            72
Shareholder information (continued)

Unquoted equity securities                            Number on issue       Number of Holders

Number of options on issue                                   13,892,473                    72


Persons holding > 20% of the options

No individual holds > 20% of the options.



C. Substantial holders

Substantial holders in the Company are set out                 Number held          Percentage
below:
 Ozlink Pty Ltd                                                  53,388,746             39.9%
 Austar United Holdco 1 Pty Ltd                                  26,736,854             20.0%



Through his direct and indirect shareholdings, Chairman Mr Ron Baskin holds 9,539,221
shares or 7.1% of the shares of TVSN Limited.



D. Voting rights
The voting rights attaching to each class of equity securities are set out below:

(a) Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have
one vote and upon a poll each share shall have one vote.

(b) Options
No voting rights




TVSN Limited and controlled entities                                                      73

				
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