TVA Group Records Net Income of $12.8 Million for the Quarter Ended June 30, 2008

TVA Group Inc. (TSX:TVA.B) announces that the Company reported net income of
$12.8 million, or $0.49 per share, for the second quarter of 2008, compared with
net income of $16.6 million, or $0.61 per share, for the corresponding quarter
of 2007.




Operating highlights for the second quarter:

- Drop of $1.5 million in the Television sector's operating income against
  the same quarter of 2007, resulting essentially from the negative impact
  of an accrual of $5.7 million related to disputed regulatory fees.

  - On a comparative basis, normalized operating income(1) for the
    Television sector posted growth of 18.0% over the operating income for
    the same quarter of 2007, generated mainly by TVA Network.

- Jump of 53.2% in the Publishing sector's operating income against the
  corresponding quarter last year, increasing from $2.2 million in 2007 to
  $3.3 million in 2008.

- The Distribution sector's operating income remained relatively stable at
  $605,000 against $753,000 for the corresponding period of 2007.

- Redemption and cancellation of 3,000,642 Class B shares at $17.00 per
  share.



As a result, the Company's consolidated operating income was $21.7 million,
compared with operating income of $22.0 million for the same quarter of 2007.


Since the beginning of the fiscal year, the Company has generated net income of
$18.5 million, or $0.70 per share, compared with $17.5 million, or $0.65 per
share, for the corresponding period of 2007.


"Considering the slowdown in the Canadian advertising market, we are satisfied
with the contribution made by our three business segments in the second quarter
of fiscal 2008. Excluding the adjustment for the disputed regulatory fees, TVA
Group's normalized operating income(1) saw growth of 21% over the second quarter
of 2007. With a market share of 27 and 24 of the market's 30 best-watched
programs, TVA Network achieved advertising revenue growth of 1.7% in an
extension of the unusual economic environment in Quebec's French-language
television market. In addition, advertising and subscription revenues from
specialty channels each grew 13% compared with the same period of 2007," said
Pierre Dion, President and Chief Executive Officer of TVA Group Inc.




(1) Normalized operating income consists of the operating income for the
    period adjusted to take into account the disputed regulatory fees for
    the current period only. Management is using this measure to obtain
    comparable data in order to evaluate the Company's performance.



"In the Publishing sector, despite a 3.2% decrease in our advertising revenues,
the stringent management of our operating expenses allowed the sector to achieve
an exceptional profit margin of 16.0%, compared with 10.4% for the same quarter
of 2007. Lastly, in the Distribution sector, the drop in operating income is
essentially due to the higher volume of sales made last year on foreign
markets," concluded Mr. Dion.


Cash flows from operating activities were $21.0 million for the second quarter,
against $17.7 million for the corresponding year-ago period. This increase is
mainly due to the change in non-cash working capital items, including the
favourable change in accounts receivable and from the accounts payable and
accrued liabilities.


TVA Group's Board of Directors today declared a dividend of $0.05 per share,
payable on September 2, 2008 to Class A and B shareholders of record as at
August 18, 2008. This dividend is designated to be an eligible dividend, as
provided under subsection 89(14) of the Income Tax Act and its provincial
counterpart.


TVA Group Inc., a subsidiary of Quebecor Media Inc., is an integrated
communications company involved in television, the production and distribution
of audiovisual products, and in magazine publishing. TVA Group is one of the
largest private sector producers and the largest private sector broadcaster of
French-language entertainment, information and public affairs programming, and
magazine publishing in North America. TVA also operates SUN TV, a conventional
station in Toronto. The Company's Class B shares are listed on the Toronto Stock
Exchange under the ticker symbol TVA.B.


The unaudited consolidated financial statements with notes and Management's
Discussion and Analysis can be consulted on TVA's Web site at: www.tva.canoe.ca.


Definition of operating income

In its analysis of operating results, the Company defines operating income or
operating loss as earnings (loss) before amortization, financial expenses,
restructuring costs of operations, impairment of intangible assets, gain on
acquisition and disposal of business, (recovery) income taxes, non-controlling
interest and equity in income of companies subject to significant influence.
Operating income or operating loss, as defined above, is not a measure of
results that is consistent with Canadian Generally Accepted Accounting
Principles ("GAAP"). Neither is it intended to be regarded as an alternative to
other financial performance measures or to the statement of cash flows as a
measure of liquidity. This measure is not intended to represent funds available
for debt service, dividend payment, reinvestment or other discretionary uses,
and should not be considered in isolation or as a substitute for other
performance measures prepared in accordance with Canadian GAAP. Operating income
is used by the Company because management believes it is a meaningful
measurement of performance.


This measure is commonly used by senior management and the Board of Directors to
evaluate the consolidated results of the Company and its sector's results.
Measurements such as operating income are also commonly used by the investment
community to analyze and compare the performance of companies in the industries
in which we are engaged. The Company's definition of operating income may not be
identical to similarly titled measures reported by other companies.


Forward-looking Information Disclaimer

The statements in this news release that are not historical facts may be
forward-looking statements and are subject to important known and unknown risks,
uncertainties and assumptions which could cause the Company's actual results for
future periods to differ materially from those set forth in the forward-looking
statements. Forward-looking statements generally can be identified by the use of
the conditional, the use of forward-looking terminology such as "propose,"
"will," "expect," "may," "anticipate," "intend," "estimate," "plan," "foresee,"
"believe" or the negative of these terms or variations of them or similar
terminology. Certain factors that may cause actual results to differ from
current expectations include seasonality, operational risks (including pricing
actions by competitors), capital investment risks, environmental risks, credit
risk, government regulation risks, governmental assistance risks and general
changes in the economic environment. Investors and others are cautioned that the
foregoing list of factors that may affect future results is not exhaustive and
that undue reliance should not be placed on any forward-looking statements. For
more information on the risks, uncertainties and assumptions that could cause
the Company's actual results to differ from current expectations, please refer
to the Company's public filings available at www.sedar.com and www.tva.canoe.ca
including, in particular, the "Risks and Uncertainties" section of the Company's
Management's Discussion and Analysis for the year ended December 31, 2007.


The forward-looking statements in this news release reflect the Company's
expectations as of August 1st, 2008, and are subject to change after this date.
The Company expressly disclaims any obligation or intention to update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise, unless required by the applicable securities laws.




TVA GROUP INC.
Consolidated statements of income and comprehensive income
(unaudited)
(in thousands of dollars, except per share amounts)

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                             Three-month periods         Six-month periods
                                   ended June 30             ended June 30
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                               2008         2007         2008         2007
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Operating revenues         $111,054     $106,467     $217,514     $199,793
Operating, selling and
 administrative expenses
 (note 14)                   89,356       84,428      184,424      175,030
Amortization of fixed
 assets, intangible
 assets and start-up
 costs                        3,461        3,292        6,776        6,480
Financial expenses
 (note 3)                       261        1,136          978        2,173
Restructuring costs of
 operations (note 4)            184          232          184        1,212
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Income before income
 taxes, non-controlling
 interest and equity in
 income of companies
 subject to significant
 influence                  $17,792      $17,379      $25,152      $14,898
Income taxes (recovery)
 (note 5)                     5,694        1,861        8,065         (358)
Non-controlling interest       (459)        (678)        (995)      (1,456)
Equity in income of
 companies subject to
 significant influence         (261)        (372)        (433)        (792)

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NET INCOME AND
 COMPREHENSIVE INCOME       $12,818      $16,568      $18,515      $17,504

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EARNINGS PER SHARE BASIC
 AND DILUTED (note 9 c)       $0.49        $0.61        $0.70        $0.65

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See accompanying notes to consolidated financial statements



Consolidated statements of retained earnings
(unaudited)
(in thousands of dollars)

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                                                         Six-month periods
                                                             ended June 30
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                                                         2008         2007
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Balance, at beginning of period                       $95,610      $62,631
Net income                                             18,515       17,504
Dividends paid                                         (2,702)      (2,702)
Share redemption - excess of purchase price
 over net carrying value (note 9b)                    (36,193)           -
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Balance, at end of period                             $75,230      $77,433
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See accompanying notes to consolidated financial statements



TVA GROUP INC.
Consolidated balance sheets
(in thousands of dollars)

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                                                      June 30,     Dec. 31,
                                                         2008         2007
                                                   (unaudited)    (audited)
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ASSETS
Current assets
  Cash                                                 $2,218       $3,225
  Accounts receivable                                  93,228      107,854
  Current income tax assets                             1,878          946
  Investments in televisual products and films         37,968       45,906
  Inventories and prepaid expenses                      5,969        5,969
  Future income tax assets                              3,573        4,629
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                                                      144,834      168,529

Investments in televisual products and films           33,611       27,253
Investments (note 7)                                   31,918       31,571
Fixed assets                                           80,946       77,275
Future income tax assets                                    -        2,319
Other assets                                            9,385        9,102
Licences and others intangible assets                  69,724       69,732
Goodwill                                               71,981       71,981
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                                                      442,399     $457,762
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
  Bank overdraft                                       $2,547       $2,435
  Accounts payable and accrued liabilities             75,494       85,812
  Current income tax liabilities                        3,096       11,037
  Broadcast and distribution rights payable            20,561       23,054
  Deferred revenue                                      8,175        6,613
  Deferred credit                                         413          471
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                                                      110,286      129,422

Broadcast rights payable                                3,567        3,965
Long-term debt                                         99,422       56,333
Future income tax liabilities (note 5)                 37,545       39,334
Others long term liabilities (note 7)                     136          731
Non-controlling interest and redeemable
 preferred shares (note 8)                             12,463       13,458
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                                                      263,419      243,243

Shareholders' equity
  Capital stock (note 9)                               99,930      115,137
  Contributed surplus                                   3,820        3,772
  Retained earnings                                    75,230       95,610
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                                                      178,980      214,519
Contingency (note 14)
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                                                     $442,399     $457,762
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See accompanying notes to consolidated financial statements



TVA GROUP INC.
Consolidated statements of cash flows
(unaudited)
(in thousands of dollars)

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                             Three-month periods         Six-month periods
                                   ended June 30             ended June 30
--------------------------------------------------------------------------
                               2008         2007         2008         2007
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CASH FLOWS FROM OPERATING
 ACTIVITIES
  Net income                $12,818      $16,568      $18,515      $17,504
  Non-cash items
   Amortization               3,482        3,315        6,820        6,524
   Equity in income of
    companies subject to
    significant influence      (261)        (372)        (433)        (792)
   Non-controlling interest    (459)        (678)        (995)      (1,456)
   Tax benefits relating to
    tax deductions (note 5)       -       (3,670)           -       (3,670)
   Future income taxes          660           35        1,508       (1,303)
   Others                      (128)         (31)        (189)        (675)
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  Cash flows provided by
   current operations        16,112       15,167       25,226       16,132
  Net change in non-cash
   items                      4,876        2,542       (7,073)      15,369
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Cash flows from operating
 activities                  20,988       17,709       18,153       31,501
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CASH FLOWS FROM INVESTING
 ACTIVITIES
   Additions to fixed
    assets                   (4,899)      (2,784)      (7,370)      (6,282)
   Business acquisition
   (note 6)                       -            -            -       (2,625)
   Deferred charges               -            -         (400)           -
   Changes in investments
   (note 7)                       -            -         (489)           -
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Cash flows from investing
 activities                  (4,899)      (2,784)      (8,259)      (8,907)
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CASH FLOWS FROM FINANCING
 ACTIVITIES
   Bank overdraft            (3,247)      (1,930)         112        4,000
   Increase (decrease) in
    long-term debt           39,925      (11,787)      43,089      (25,065)
   Class B Share redemption
   (note 9 b)               (51,400)           -      (51,400)           -
   Issuance of shares of a
    subsidiary (note 8)           -        1,300            -        1,300
   Dividends paid            (1,351)      (1,351)      (2,702)      (2,702)
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Cash flows from financing
 activities                 (16,073)     (13,768)     (10,901)     (22,467)
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Net change in cash               16        1,157       (1,007)         127
Cash, at beginning of
 period                       2,202        1,926        3,225        2,956
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Cash, at end of period       $2,218       $3,083        2,218       $3,083
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SUPPLEMENTAL INFORMATION
   Interests paid net of
    interests income
    received                   $133       $1,535       $1,007       $2,205
   Income taxes paid
   (received)                 4,079          183       15,438       (2,349)
   Additions to fixed assets
    financed by accounts
    payable and accrued
    liabilities at end of
    period                                             $4,260        $1,116
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See accompanying notes to consolidated financial statements



TVA GROUP INC.

Notes to consolidated financial statements

Three-month and six-month periods ended June 30, 2008 and 2007 (unaudited)

(Amounts presented in the tables are expressed in thousands of dollars, except
per-share and per-option amounts)


1. FINANCIAL STATEMENT PRESENTATION

These consolidated financial statements have been prepared in conformity with
Canadian Generally Accepted Accounting Principles ("GAAP"). With the exception
of the accounting policies presented in Note 2 for the current quarter, the same
accounting policies described in the consolidated financial statements included
in the latest annual report of TVA Group Inc. ("the Company") have been used.
However, these consolidated financial statements do not include all disclosures
required under Canadian GAAP for an annual report and accordingly should be read
in conjunction with the Company's latest annual consolidated financial
statements and the notes thereto.


Some of the Company's businesses experience significant seasonality effects due
to, among other things, seasonal advertising patterns and their influence on
people's viewing, reading and listening habits. Because the Company depends on
the sale of advertising for a significant portion of its revenue, operating
results are also sensitive to prevailing economic conditions, including changes
in local, regional and national economic conditions, particularly as they may
affect advertising expenditures. Accordingly, the results of operations for
interim periods should not necessarily be considered indicative of full-year
results due to the seasonality of certain operations.


2. CHANGES IN ACCOUNTING POLICIES

On January 1st, 2008, the Company adopted the Canadian Institute of Chartered
Accountants (CICA) Handbook Section 3031, Inventories which requires that
additional details be provided regarding the determination and recognition of
inventories and the information to be presented. The adoption of this new
section does not have any significant effect on its consolidated financial
statements.


On January 1st, 2008, the Company also adopted Sections 3862, Financial
Instruments - Disclosures, 3863, Financial Instruments - Presentation and
Section 1535, Capital Disclosures. The disclosures required by the new standards
are presented in note 13.


3. FINANCIAL EXPENSES



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                             Three-month periods         Six-month periods
                                   ended June 30             ended June 30
--------------------------------------------------------------------------
                               2008         2007         2008         2007
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Interest on long-term debt     $779       $1,145       $1,518       $2,321
Dividends on redeemable
 preferred shares               263          930          530        1,860
Interest revenue on
 convertible bonds issued
 by an affiliated company      (255)        (900)        (513)      (1,800)
Interest revenue               (572)         (67)        (624)        (271)
Amortization of deferred
 financing charges               22           22           44           44
Foreign exchange loss            24            6           23           19
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                               $261       $1,136         $978       $2,173
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4. RESTRUCTURING COSTS OF OPERATIONS

During the second quarter of 2008, the Company recorded a provision for
restructuring costs of $184,000 following the elimination of position in the
Television sector.


During the corresponding quarter of 2007, the Company recorded a provision for
restructuring costs in the amount of $232,000 following the elimination of
positions in the Publishing sector.


During the first six months of 2007, the Company recorded a provision for
restructuring costs in the amount of $1,212,000. A provision of $451,000 was
recorded following the elimination of positions in the Publishing sector and a
provision of $761,000 was recorded for new litigation relating to the production
activities of its former subsidiary, TVA Acquisition Inc.


5. INCOME TAXES (RECOVERY)

During the second quarter of 2007, following the federal government's adoption
of Bill C-33,which provides for the modification of the deduction multiple for
tax deductions, the Company recognized into income tax benefits an amount of
$3,670,000 that had been recorded as an income tax liabilities pending the
official enactment of the Bill by taxation authorities. Moreover, following the
reductions in federal income taxe rates for 2011 and subsequents years and in
light of the evolution of tax auditing, jurisprudence and tax legislation, the
Company reduced, during the second quarter of 2007, its future income tax
liabilities by $569,000. For the six-months period of 2007, these reductions in
recorded future income tax liabilities represent $2,057,000.


6. BUSINESS ACQUISITION

On January 8, 2007, the Company made the final payment of the purchase price for
the conventional television station in Toronto, SUN TV, including a working
capital adjustment of $2,625,000.


7. INVESTMENT

During the first quarter of 2008, the Company made an additional capital
investment of $490,000 in the pay-per-view service, Canal Indigo S.E.N.C. in
which it already has a participating interest  of 20%. The interests of each of
the partners remained unchanged. Moreover, on February 15, 2008, the Company
concluded an agreement to acquire the totality of the remaining interests in
Canal Indigo S.E.N.C. for total consideration of $105,000. On July 18, 2008, the
CRTC approved this transaction and this one will be finalized during the next
months.


8. NON-CONTROLLING INTEREST

On June 6, 2007, a subsidiary of the Company, Sun TV Company, in which the
Company has a 75% interest and that operates the SUN TV television station,
obtained from its non-controlling shareholder an investment in its capital stock
of $1,300,000. The respective pourcentage interests in Sun TV Company remain
unchanged.


9. CAPITAL STOCK

a) Number of shares outstanding



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                                              June 30, 2008  Dec. 31, 2007
--------------------------------------------------------------------------

Class A common shares                             4,320,000      4,320,000
Class B shares                                   19,704,206     22,704,848
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                                                 24,024,206     27,024,848
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b) Shares redemption

Substantial issuer bid

On March 31, 2008, the Company filed a substantial issuer bid to redeem for
cancellation up to 2,000,000 of its participating Class B non-voting shares, or
about 8.8% of the total number of its issued and outstanding shares, for a fixed
price of $17.00 per share. The offer was to expire on May 14, 2008; however, the
Company filed a notice to amend and extend its initial offer in order to bring
the number of shares redeemable under the offer to a maximum of 3,000,000 Class
B shares and the offer was thereby extended until June 2, 2008. A total of
9,189,542 Class B shares were deposited as at the expiration of the offer.


Taking into account the proration factor, adjustments for odd lot purchases and
to avoid the creation of new irregular lots, the Company took up 3,000,642 Class
B shares, for a total consideration of $51,010,914, plus $389,000 in transaction
fees, paid through the credit agreement. The Class B shares redeemed for
cancellation under this issuer bid represented 13.2% of the 22,704,848 Class B
shares issued and outstanding before the redemption.


c) Earnings per share

The following table provides the calculation of basic and diluted earnings per
share:




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                             Three-month periods         Six-month periods
                                   ended June 30             ended June 30
--------------------------------------------------------------------------
                               2008         2007         2008         2007
--------------------------------------------------------------------------

Net income                  $12,818      $16,568      $18,515      $17,504
Weighted average number
 of shares outstanding   26,101,574   27,024,848   26,563,211   27,024,848
Effect of dilutive stock
 options                     45,534       17,675       24,350        7,540
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Weighted average number
 of diluted shares
 outstanding             26,147,108   27,042,523   26,587,561   27,032,388
Basic and diluted
 earnings per share           $0.49        $0.61        $0.70        $0.65
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10. STOCK-BASED COMPENSATION AND OTHER STOCK-BASED PAYMENTS


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                             Three-month periods         Six-month periods
                             ended June 30, 2008       ended June 30, 2008
--------------------------------------------------------------------------
                       Conventional     Quebecor   Conventional   Quebecor
                            Class B    Media Inc.       Class B  Media Inc.
                              stock        stock          stock      stock
                            options      options        options    options
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Balance at beginning        983 693      259 755        983 693    328 159
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Exercised                         -       (1 077)             -    (69 481)
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Balance as at June 30,
 2008                       983 693      258 678        983 693    258 678
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During the first quarter of 2008, the Company increased the number of Class B
shares that could be issued under the Class B stock option plan for managers
from 1,400,000 to 2,200,000.


Of the options outstanding as at June 30, 2008, 133,761 conventional Class B
stock options at an average exercise price of $19.54 and 1,446 Quebecor Media
Inc. stock options at an average exercise price of $30.47 can be exercised.


11. GUARANTEES

The maximum exposure in respect of the guaranteed portion of the residual values
of certain assets under operating leases to the benefit of the lessor is
approximately $981,000. As at June 30, 2008, the Company did not record any
liability related to these guarantees.


12. PENSION PLANS AND OTHER RETIREMENT BENEFITS

The Company maintains defined benefit and defined contribution pension plans for
its employees. In addition, under an old plan, the Company maintains for certain
retired employees other retirement benefits, such as health, life and dental
insurance plans. Total costs for these benefits are as follows:




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                             Three-month periods         Six-month periods
                                   ended June 30             ended June 30
--------------------------------------------------------------------------
                               2008         2007           2008       2007
--------------------------------------------------------------------------

Pension plans
  Defined benefit plans        $718         $896         $1,400     $1,887
  Defined contribution
   plans                        675          448          1,247      1,059

Other retirement benefits       $47          $47            $94        $93
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13. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

The Company's risk management policy is established to identify and analyze the
risks faced by the Company, to set appropriate risk limits and controls, and to
monitor risks and adherence to limits. Risk management policy is reviewed, when
necessary, to reflect changes in market conditions and the Company's activities.


From its use of financial instruments, the Company is exposed to credit risk,
liquidity risk, market risks relating to foreign exchange fluctuations and to
interest rate fluctuations.


i) Fair value of financial instruments

The carrying amount of accounts receivable from external and related parties
(classified as receivables) and accounts payable and accrued charges to external
or related parties (classified as other liabilities) approximates their fair
value since these items will be realized or paid within one year. As at June 30,
2008, the fair value of the long-term debt was equivalent to the book value
because it bears interest at variable rates.


ii) Credit risk management

The Company is exposed to credit losses resulting from defaults by third
parties. In the normal course of business, the Company regularly evaluates the
financial position of its clients and reviews the credit history of each new
client. As at June 30, 2008, no clients had balances representing a significant
portion of the Company's consolidated trade receivables. The Company establishes
an allowance for doubtful accounts in response to the specific credit risk of
its clients. The Company's accounts receivable balance is divided among various
clients, primarily advertising agencies. The Company does not believe that it is
exposed to an unusual or significant level of customer credit risk. As at June
30, 2008, 7,9% of the accounts receivable had been unpaid for more than 120 days
after the date of invoicing. Moreover, the allowance for doubtful accounts
amounted to $4,197,000 as of June 30, 2008 ($3,578,000 as of December 31, 2007).


iii) Liquidity risk management

Liquidity risk is the risk that the Company will not be able to meet its
financial obligations as they fall due or to meet them at excessive cost. The
Company ensures that it has sufficient cash flows from continuing operations and
available sources of financing to meet planned cash requirements for capital
investments, working capital, interest payments, debt repayments, pension plan
contributions, dividends and shares redemption.


The Company has at its disposal a maximum amount of $160,000,000 under a credit
agreement consisting of a revolving-term bank loan bearing interest at floating
rates based on the banker's acceptance rate or Canadian bank prime rate, plus a
variable margin based on the ratio of total debt to operating income (or
earnings before interests, taxes and amortizations). The credit agreement
matures on June 15, 2010 and is repayable in full on that date.


vi) Market risk

Market risk is the risk that changes in market prices due to foreign exchange
rates and interest rates will affect the Company's income or the value of its
financial instruments. The objective of market risk management is to mitigate
and control exposures within acceptable parameters.


Foreign currency risk

The Company is exposed to  limited foreign currency risk on sales and expenses
that are denominated in a foreign currency other than Canadian dollars due to
the insubstantial volume of such transactions undertaken. The majority of these
transactions are denominated in U.S. dollars, mainly for the acquisition of
certain distribution rights, for capital expenditures and for certain foreign
denominated sales. The Company has determined in view of its limited
transactions denominated in a foreign currency, its limited exposure to foreign
currency risk does not necessitate the  use of hedging.  Accordingly, the
Company's sensitivity to the variation of foreign currency rates is not
significant.


An increase or a decrease of 1% in the exchange rate of a Canadian dollar into a
U.S. dollar would have an impact on earnings before taxes or capital
expenditures less than $100,000 on a yearly basis.


Interest rate risk

The Company is exposed to interest rate risk on its long-term debt because its
financing bears interest at variable rates.


An increase (decrease) of 100 basis points in Canadian banker's acceptances rate
at the reporting date would have increased (decreased) interest expenses by
$994,000 on an annual basis using debt level prevailing as of June 30, 2008.


Considering the low exposure to markets risk, the company does not use
derivative financial instruments. However, the Company regularly reviews its
situation to ensure that its exposure to these risks has not changed.


Capital management

The Company's primary objectives in managing capital are:

- to safeguard the entity's ability to continue as a going concern, so that it
can continue to provide returns for shareholders.


- to maintain an optimal capital base in order to support the capital
requirements of is various activities sectors, including growth opportunities
and to maintain investor and creditor confidence.


The Company manages its capital structure in accordance with the characteristics
of the assets of its underlying sectors and according to its planned
requirements. The Company has the ability to manage its capital structure by
issuing new debts or by repaying existing debt with cash generated internally,
by controlling the amounts it returns to shareholders under the dividends or
shares redemption or by issuing capital stock and by making adjustment to its
capital expenditures program. Since the last financial year, the Company has not
changed its strategy regarding the management of its capital structure.


The capital structure of the Company is composed of shareholder equity, bank
overdraft, long-term debt, non-controlling interest, redeemable preferred shares
at the option of the holder, less cash.


Except for the maintenance of certain financial ratios required in the credit
agreement, the Company is not subject to any others externally imposed capital
requirements As at June 30, 2008, the Company was in compliance with the
conditions of its credit agreement.


14. CONTINGENCY

In 2003 and 2004, a number of companies, including TVA Group Inc., brought a
suit against the Crown before the Federal Court, alleging that the Part II
licence fees that broadcasters are required to pay annually constitute, in fact
and in law, a tax, not authorized by the Broadcasting Act. On December 14, 2006,
the Federal Court ruled that these fees did indeed constitute an illegal tax,
that the Canadian Radio-television and Telecommunications Commission ("CRTC")
was to cease collection of such fees, and concluded that the plaintiff companies
were not entitled to a reimbursement of the amounts already paid. The plaintiffs
and the defendant both filed an appeal before the Federal Court of Appeal. On
October 1, 2007, the CRTC issued a document stating that it would comply with
the decision that was rendered and that it would not collect, in 2007 or in any
subsequent years, the Part II licence fees payable on November 30 of each year
unless a Superior Court overturned the Federal Court decision. In the third
quarter of 2007, in light of these facts and the Federal Court decision, the
Company reversed its liability of $3,238,000 relating to the Part II licence
fees for the period from September 1st, 2006 to September 30, 2007 and ceased to
record these fees for subsequent periods.


On April 29, 2008, the Federal Court of Appeal handed down its decision and, on
the basis of its position that the Part II licence fees are a valid regulatory
charge rather than a tax, overturned the December 14, 2006 decision of the
Federal Court. The plaintiff companies disputed the decision and filed an
application for leave to appeal to the Supreme Court of Canada. The CRTC
publicly stated that it would not attempt to collect the Part II licence fees
before the earliest of the following: a) the Supreme Court of Canada denies
leave to appeal, or b) the Supreme Court of Canada upholds the Federal Court of
Appeal ruling, or c) the matter is settled between the parties. The Company's
management believes in the soundness of its application for leave to appeal to
the Supreme Court. However, given the Federal Court of Appeal decision that
confirms the right of the CRTC to collect the Part II licence fees to which the
Company is subject, the Company recorded in the second quarter of 2008 a total
liability of $5,710,000 relating to the Part II licence fees for the period from
September 1st, 2006 to June 30, 2008.


15. SEGMENTED INFORMATION

The following table includes information on operating income, as well as
information on assets:




--------------------------------------------------------------------------
--------------------------------------------------------------------------
                             Three-month periods         Six-month periods
                                   ended June 30             ended June 30
--------------------------------------------------------------------------
                               2008         2007           2008       2007
--------------------------------------------------------------------------
Operating revenues
Television                  $86,664      $81,835       $169,944   $155,103
Publishing                   20,640       20,759         39,901     38,595
Distribution                  4,359        5,169          9,408      8,974
Intersegment items             (609)      (1,296)        (1,739)    (2,879)
--------------------------------------------------------------------------
                            111,054      106,467        217,514    199,793
Operating, selling and
 administrative expenses
Television                   68,939       62,653        142,644    132,091
Publishing                   17,336       18,603         34,926     35,329
Distribution                  3,754        4,416          8,786     10,428
Intersegment items             (673)      (1,244)        (1,932)    (2,818)
--------------------------------------------------------------------------
                             89,356       84,428        184,424    175,030
Income before amortization,
 financial expenses,
 restructuring costs of
 operations, income taxes,
 non-controlling interest
 and equity in income of
 companies subject to
 significant influence
Television                   17,725       19,182         27,300     23,012
Publishing                    3,304        2,156          4,975      3,266
Distribution                    605          753            622     (1,454)
Intersegment items               64          (52)           193        (61)
--------------------------------------------------------------------------
                            $21,698      $22,039        $33,090    $24,763
--------------------------------------------------------------------------
--------------------------------------------------------------------------


The intersegment items mentioned above represent the elimination of normal
course business transactions made between the Company's business segments
regarding revenues, expenses and unrealized profit.


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                                          June 30, 2008  December 31, 2007
--------------------------------------------------------------------------

Total assets
Television                                     $331,638           $342,500
Publishing                                       83,455             84,237
Distribution                                     16,044             19,763
Unallocated items                                11,262             11,262
--------------------------------------------------------------------------
                                               $442,399           $457,762
--------------------------------------------------------------------------
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