TVA Group Records a Decrease of 8.2% of its Operating Income for the Quarter Ended September 30, 2008

TVA Group Inc. (TSX:TVA.B) announces that the Company reported consolidated
operating income of $10.8 million for the third quarter 2008, compared with
consolidated operating income of $11.8 million for the same quarter of 2007.


Highlights of the third quarter:

- Increase of 14.5% in the Television sector's operating income over the same
quarter of 2007 which had benefited of a positive impact of an accrual of
$3,238,000 related to disputed regulatory fees;


- Decrease of 17.7% in the Publishing sector's operating income against the
corresponding quarter last year, down from $2,969,000 in 2007 to $2,444,000 in
2008;


- The Distribution sector sustained an operating loss of $517,000 for the
quarter, compared with operating income of $1,247,000 for the same quarter of
2007;


- Reduction in future tax liabilities of $6,977,000 in light of the evolution in
tax auditing, jurisprudence and tax legislation.


As a result, the Company reported net income of $11.9 million, or $0.49 per
share, compared with net income of $5.3 million, or $0.20 per share for the
corresponding quarter of 2007.


Since the beginning of the fiscal year, the Company has generated net income of
$30.4 million, or $1.18 per share, compared with $22.8 million, or $0.84 per
share, for the corresponding period of 2007.


"Given the slowdown in the advertising market in Canada, we are satisfied with
our results, in spite of the 8.2% decrease in operating income related, in part,
to the adjustments over the last two years for disputed regulatory fees. In
television, our specialty channels have seen an increase of 20.9% in their
operating revenues, and the TVA Network continues to enjoy solid ratings at the
beginning of the fall season with a 29 market shares, and 25 of its shows among
the 30 most watched", said Pierre Dion, President and Chief Executive Officer of
the TVA Group.


"The slowdown in the advertising market was felt more in the Publishing sector
with a 9.8% lag in operating revenues compared to the same quarter of 2007. In
spite of economic conditions, tight management of our operating expenses
provided the sector profit margins of 12.7% for the quarter. Finally, in the
Distribution sector, the drop in operating income is explained mainly by
advertising investments made over the quarter for films that will be released
during the fourth quarter of 2008, combined with decrease in operating revenues
for the sector," said Mr. Dion.


Cash flows from operating activities were $11.9 million for the third quarter,
against $7.5 million for the corresponding year-ago period. This increase is
essentially due to the change in non-cash working capital items, mainly accounts
receivable.


TVA Group's Board of Directors today declared a dividend of $0.05 per share,
payable on December 2, 2008 to Class A and B shareholders of record as at
November 17, 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 Group 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 October 31st, 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)

--------------------------------------------------------------------------
--------------------------------------------------------------------------
                                Three-month periods     Nine-month periods
                                 ended September 30     ended September 30
--------------------------------------------------------------------------
                                   2008        2007        2008       2007
--------------------------------------------------------------------------

Operating revenues              $92,249     $91,620    $309,763   $291,413
Operating, selling and
 administrative expenses
 (note 14)                       81,400      79,796     265,824    254,826
Amortization of fixed
 assets, intangible
 assets and deferred
 start-up costs                   3,512       3,157      10,288      9,637
Financial expenses (note 3)       1,035       1,241       2,013      3,414
Restructuring costs of
 operations (note 4)                  -         527         184      1,739
--------------------------------------------------------------------------
Income before income taxes,
 non-controlling interest and
 equity in income of
 companies subject to
 significant influence           $6,302      $6,899     $31,454    $21,797
Income taxes (recovery)
 (note 5)                        (5,222)      2,350       2,843      1,992
Non-controlling interest           (374)       (721)     (1,369)    (2,177)
Equity in loss (income) of
 companies subject to
 significant influence               40          (4)       (393)      (796)
 
--------------------------------------------------------------------------

NET INCOME AND
 COMPREHENSIVE INCOME           $11,858       $5,274    $30,373    $22,778
--------------------------------------------------------------------------
--------------------------------------------------------------------------

EARNINGS PER SHARE BASIC
 AND DILUTED (note 9 c)           $0.49        $0.20      $1.18      $0.84
--------------------------------------------------------------------------
--------------------------------------------------------------------------

See accompanying notes to consolidated financial statements



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

-------------------------------------------------------------------------
-------------------------------------------------------------------------
                                                       Nine-month periods
                                                       ended September 30
-------------------------------------------------------------------------
                                                          2008       2007
-------------------------------------------------------------------------
Balance, at beginning of period                        $95,610    $62,631
Net income                                              30,373     22,778
Dividends paid                                          (3,904)    (4,054)
Share redemption - excess of purchase price over net
 carrying value (note 9b)                              (36,208)         -
-------------------------------------------------------------------------
Balance, at end of period                              $85,871    $81,355
-------------------------------------------------------------------------
-------------------------------------------------------------------------

See accompanying notes to consolidated financial statements



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

--------------------------------------------------------------------------
--------------------------------------------------------------------------
                                              Sept. 30, 2008 Dec. 31, 2007
--------------------------------------------------------------------------
ASSETS
Current assets
 Cash                                                 $1,584        $3,225
 Accounts receivable                                  84,207       107,854
 Current income tax assets                             1,956           946
 Investments in televisual products and films         56,203        45,906
 Inventories and prepaid expenses                      6,320         5,969
 Future income tax assets                              3,312         4,629
--------------------------------------------------------------------------
                                                     153,582       168,529

Investments in televisual products and films          37,363        27,253
Investments (note 7)                                  31,878        31,571
Fixed assets                                          82,386        77,275
Future income tax assets                                   -         2,319
Other assets                                           9,606         9,102
Licences and others intangible assets                 69,719        69,732
Goodwill                                              71,981        71,981
--------------------------------------------------------------------------
                                                    $456,515      $457,762
--------------------------------------------------------------------------
--------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
 Bank overdraft                                         $212        $2,435
 Accounts payable and accrued liabilities             83,866        85,812
 Current income tax liabilities                        1,039        11,037
 Broadcast and distribution rights payable            28,070        23,054
 Deferred revenue                                      7,273         6,613
 Deferred credit                                         396           471
--------------------------------------------------------------------------
                                                     120,856       129,422

Broadcast rights payable                               4,420         3,965
Long-term debt                                        98,500        56,333
Future income tax liabilities (note 5)                30,903        39,334
Others long term liabilities (note 7)                    126           731
Non-controlling interest and redeemable
 preferred shares (note 8)                            12,089        13,458
--------------------------------------------------------------------------
                                                     266,894       243,243

Shareholders' equity
 Capital stock (note 9)                               99,930       115,137
 Contributed surplus                                   3,820         3,772
 Retained earnings                                    85,871        95,610
--------------------------------------------------------------------------
                                                     189,621       214,519

Contingency (note 14)
--------------------------------------------------------------------------
                                                    $456,515      $457,762
--------------------------------------------------------------------------
--------------------------------------------------------------------------

See accompanying notes to consolidated financial statements



TVA GROUP INC.
Consolidated statements of cash flows
(unaudited)
(in thousands of dollars)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
                                Three-month periods     Nine-month periods
                                 ended September 30     ended September 30
--------------------------------------------------------------------------
                                   2008        2007       2008        2007
--------------------------------------------------------------------------

CASH FLOWS FROM OPERATING
 ACTIVITIES
 Net income                     $11,858      $5,274    $30,373     $22,778
 Non-cash items
  Amortization                    3,534       3,179     10,354       9,703
  Equity in income of
   companies subject to
   significant influence             40          (4)      (393)       (796)
  Non-controlling interest         (374)       (721)    (1,369)     (2,177)
  Tax benefits relating to tax
   deductions (note 5)                -           -          -      (3,670)
  Future income taxes            (6,408)        (29)    (4,900)     (1,332)
  Others                           (381)        208       (570)       (467)
--------------------------------------------------------------------------
 Cash flows provided by
  current operations              8,269       7,907     33,495      24,039
 Net change in non-cash items     3,657        (361)    (3,416)     15,008
--------------------------------------------------------------------------
Cash flows from operating
 activities                      11,926       7,546     30,079      39,047
---------------------------------------------------------------------------

CASH FLOWS FROM INVESTING
 ACTIVITIES
  Additions to fixed assets      (7,981)     (3,453)   (15,351)     (9,735)
  Business acquisition
  (notes 6 and 7)                  (105)       (274)      (105)     (2,899)
  Deferred charges                    -           -       (400)          -
  Changes in investments
  (note 7)                            -         226       (489)        226
--------------------------------------------------------------------------
Cash flows from investing
 activities                      (8,086)     (3,501)   (16,345)    (12,408)
--------------------------------------------------------------------------

CASH FLOWS FROM FINANCING
 ACTIVITIES
  Bank overdraft                 (2,335)     (1,985)    (2,223)      2,015
  (Decrease) increase in
   long-term debt                  (922)       (951)    42,167     (26,016)
  Class B share redemption
   (note 9 b)                       (15)          -    (51,415)          -
  Issuance of shares of a
   subsidiary (note 8)                -         750          -       2,050
  Dividends paid                 (1,202)     (1,352)    (3,904)     (4,054)
--------------------------------------------------------------------------
Cash flows from financing
 activities                      (4,474)     (3,538)   (15,375)    (26,005)
--------------------------------------------------------------------------

Net change in cash                 (634)        507     (1,641)        634
Cash, at beginning of period      2,218       3,083      3,225       2,956
--------------------------------------------------------------------------
Cash, at end of period           $1,584      $3,590     $1,584      $3,590
--------------------------------------------------------------------------
--------------------------------------------------------------------------

SUPPLEMENTAL INFORMATION
 Interests paid net of
  interests income received        $698        $926     $1,705      $3,131
 Income taxes paid (received)     3,313        (806)    18,751      (3,155)
 Additions to fixed assets
  financed by accounts payable
  and accrued liabilities at
  end of period                                           $983      $1,521
--------------------------------------------------------------------------
--------------------------------------------------------------------------

See accompanying notes to consolidated financial statements



TVA GROUP INC.

Notes to consolidated financial statements

Three-month and nine-month periods ended September 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

Current changes to 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 did 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 of these consolidated financial statements.


Future changes to accounting policies

In January 2008, the CICA issued Section 3064 Goodwill and Intangible Assets, to
replace Section 3062 Goodwill and Other Intangible Assets, Section 3450 Research
and Development Costs, and Emerging Issues Committee (EIC) 27 Revenues and
Expenditures during the Pre-operating Period, and to modify the Accounting
Guideline (AcG) -11 Entreprises in the Development Stage. The new section
establishes standards for the recognition of intangible assets in the sense of
the definition of assets based on principles for recognizing costs as assets and
clarifying the application of the concept of matching revenues and expenses for
intangible assets acquired or developed internally. The new standard will take
effect for interim and annual financial statements for fiscal years that begin
October 1, 2008 or later. The Company is evaluating the impact of the
application of this standard. In February 2008, the Accounting Standards Board
of Canada confirmed that Canadian GAAP, as used by companies with a public
obligation to report, will be fully converged to International Financial
Reporting Standards ("IFRS") published by the International Accounting Standards
Board ("IASB"). The Company will present its interim and annual financial
statements for 2011 in accordance with the IFRS. The Company is evaluating the
impact of this alignment with the IFRS.




3. FINANCIAL EXPENSES

--------------------------------------------------------------------------
--------------------------------------------------------------------------
                                   Three-month periods  Nine-month periods
                              ended September 30    ended September 30
--------------------------------------------------------------------------
                                     2008       2007      2008        2007
--------------------------------------------------------------------------
 Interests on long-term debt         $959     $1,043    $2,477      $3,364
 Dividends on redeemable
  preferred shares                    267        940       797       2,800
 Interest revenues on convertible
  bonds issued by
  an affiliated company              (258)      (910)     (771)     (2,710)
 Interest revenues                    (25)       (58)     (649)       (329)
 Amortization of deferred
  financing charges                    22         22        66          66
 Foreign exchange loss                 70        204        93         223
--------------------------------------------------------------------------

                                   $1,035     $1,241    $2,013      $3,414
--------------------------------------------------------------------------
--------------------------------------------------------------------------



4. RESTRUCTURING COSTS OF OPERATIONS

During the third quarter of 2007, the Company recorded a provision for
restructuring costs of $527,000 following the elimination of positions in its
Television sector.


During the first nine months of 2008, the Company recorded a provision of
restructuring costs in the amount of $184,000 following the elimination of one
position in its Television sector versus a provision for restructuring costs of
$1,739,000 for the corresponding period of 2007 including $978,000 related to
the elimination of positions in the Television and Publishing sectors, and
$761,000 linked to new litigation relating to the production activities of its
former subsidiary, TVA Acquisition Inc.



5. INCOME TAXES (RECOVERY)

In light of the evolution of tax auditing, jurisprudence and tax legislation,
the Company reduced its future tax liabilities during the third quarter of 2008
by $6,977,000.


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 tax rates for 2011 and subsequent years, and in
light of the evolution of tax auditing, jurisprudence and tax legislation, the
Company also reduced its future tax liabilities by $2,057,000 during the first
semester of 2007.



6. BUSINESS ACQUISITION

On July 30, 2007, the Company acquired all of the issued and outstanding shares
in Animal Hebdo Inc., the company that publishes Animal magazine, for a total
consideration of $274,000. 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 invested an additional $490,000 in
the pay-per-view television service Canal Indigo S.E.N.C., in which it held a
20% interest. Furthermore, on February 15, 2008, the Company signed an agreement
to purchase all of the shares of Canal Indigo S.E.N.C. for a total amount of
$105,000. This transaction was finalized on August 31st, 2008, and the results
are included in the Company's consolidated results since September 1st, 2008.



8. NON-CONTROLLING INTEREST

On September 7, 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 $750,000, bringing the cumulative investments for 2007 to $2,050,000. The
respective percentage interests in SUN TV Company remained unchanged.


9. CAPITAL STOCK



a) Number of shares outstanding

-----------------------------------------------------------------
-----------------------------------------------------------------
                                 September 30, 2008 Dec. 31, 2007
-----------------------------------------------------------------
Class A common shares                     4,320,000     4,320,000
Class B shares                           19,704,206    22,704,848
-----------------------------------------------------------------
                                         24,024,206    27,024,848
-----------------------------------------------------------------
-----------------------------------------------------------------



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 fixed
price of $17.00 per share. On May 14, 2008; the Company filed a notice to amend
and extend its initial offer 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 $404,000 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:




--------------------------------------------------------------------------
--------------------------------------------------------------------------
                             Three-month periods        Nine-month periods
                              ended September 30        ended September 30
--------------------------------------------------------------------------
                               2008         2007         2008         2007
--------------------------------------------------------------------------

Net income                  $11,858       $5,274      $30,373      $22,778
Weighted average
 number of shares
 outstanding             24,024,206   27,024,848   25,716,876   27,024,848
Effect of dilutive
 stock options                    -        6,483        3,467        6,773
--------------------------------------------------------------------------
Weighted average
 number of diluted
 shares outstanding      24,024,206   27,031,331   25,720,343   27,031,621
Basic and diluted
 earnings per share           $0.49        $0.20        $1.18        $0.84
--------------------------------------------------------------------------
--------------------------------------------------------------------------


10.STOCK-BASED COMPENSATION AND OTHER STOCK-BASED PAYMENTS

--------------------------------------------------------------------------
--------------------------------------------------------------------------
                           Three-month period            Nine-month period
                     ended September 30, 2008     ended September 30, 2008
--------------------------------------------------------------------------
                  Conventional      Quebecor    Conventional      Quebecor
                 Class B stock     Media Inc.  Class B stock    Media Inc.
                       options  stock options        options stock options
--------------------------------------------------------------------------
Balance at
 beginning             983,693        258,678        983,693       328,159
--------------------------------------------------------------------------
Exercised                    -        (12,694)             -       (82,175)
--------------------------------------------------------------------------
Balance as at
 September 30,
 2008                  983,693        245,984        983,693       245,984
--------------------------------------------------------------------------
--------------------------------------------------------------------------



During the first quarter of 2008, the Company increased the number of Class B
shares that could be issued according to the terms of the Class B stock option
plan for managers from 1,400,000 to 2,200,000. Of the number of options
outstanding as at September 30, 2008, 179,509 conventional Class B stock options
at an average exercise price of $19.37 and 2,239 Quebecor Media Inc. stock
options at an average exercise price of $30.99 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 $992,000. As at September 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:




-------------------------------------------------------------------
-------------------------------------------------------------------
                           Three-month periods   Nine-month periods
                            ended September 30   ended September 30
-------------------------------------------------------------------
                               2008       2007     2008        2007
-------------------------------------------------------------------
Pension plans
 Defined benefit plans         $672     $1,176   $2,072      $3,063
 Defined contribution plans     627        584    1,874       1,643
Other retirement benefits       $47        $46     $141        $139
-------------------------------------------------------------------
-------------------------------------------------------------------



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
and related parties (classified as other liabilities) approximates their fair
value since these items will be realized or paid within one year. As at
September 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 September 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 September 30, 2008, 10,4% 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 $4,120,000 as of September 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.


iv) 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
$985,000 on an annual basis using debt level prevailing as of September 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 September 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 1st, 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.  For the three-month period ended
September 30, 2008, the Company recorded an expense for the Part II licence fees
of $575,000, thereby bringing total liability to $6,285,000 as at September 30,
2008.



15. SEGMENTED INFORMATION

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




--------------------------------------------------------------------------
--------------------------------------------------------------------------
                                 Three-month periods    Nine-month periods
                                  ended September 30    ended September 30
--------------------------------------------------------------------------
                                     2008       2007       2008       2007
--------------------------------------------------------------------------
Operating revenues
Television                        $70,791    $67,194   $240,735   $222,297
Publishing                         19,197     21,291     59,098     59,886
Distribution                        2,937      4,129     12,345     13,103
Intersegment items                   (676)      (994)    (2,415)    (3,873)
---------------------------------------------------------------------------
                                   92,249     91,620    309,763    291,413

Operating, selling and
 administrative expenses
Television                         61,932     59,458    204,576    191,549
Publishing                         16,753     18,322     51,679     53,651
Distribution                        3,454      2,882     12,240     13,310
Intersegment items                   (739)      (866)    (2,671)    (3,684)
--------------------------------------------------------------------------
                                   81,400     79,796    265,824    254,826

Income (loss) before
 amortization, financial
 expenses, restructuring
 costs of operations,
 income taxes, non-controlling
 interest and equity in
 income of companies
 subject to
 significant influence
Television                          8,859      7,736     36,159     30,748
Publishing                          2,444      2,969      7,419      6,235
Distribution                         (517)     1,247        105       (207)
Intersegment items                     63       (128)       256       (189)
--------------------------------------------------------------------------
                                  $10,849    $11,824    $43,939    $36,587
--------------------------------------------------------------------------
--------------------------------------------------------------------------

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.


--------------------------------------------------------------------------
--------------------------------------------------------------------------
                                      September 30, 2008 December 31, 2007
--------------------------------------------------------------------------

Total assets
Television                                      $343,378          $342,500
Publishing                                        84,217            84,237
Distribution                                      17,658            19,763
Unallocated items                                 11,262            11,262
--------------------------------------------------------------------------
                                                $456,515          $457,762
--------------------------------------------------------------------------
--------------------------------------------------------------------------