Not for Release, Publication Or Distribution in the United States of America, Australia, Canada Or Japan

Not for release, publication or distribution in the United States of America, Australia, Canada or Japan

Press release

Hilversum, 22 November 2005

Endemol N.V. announces Offer Price and Number of Shares Offered in its Initial Offering of Ordinary Shares

• Endemol N.V. (the “Company”) announced today that the subscription period for institutional investors for the initial offering (the “Offering”) of ordinary shares of the Company (the “Shares”) ended on 21 November 2005 at 5.00 p.m. (CET).

• Based on interest from investors, the Company, Endemol Investment B.V. (the “Selling Shareholder”), Merrill Lynch International (the “Global Coordinator and Lead Bookrunner”) and ABN AMRO Rothschild and Credit Suisse First Boston (Europe) Limited (collectively, the ‘‘Joint Bookrunners’’ and, together with the Global Coordinator and Lead Bookrunner and the other managers in the Offering, the “Banks”) have agreed on the final terms of the Offering, including the initial offering price per Share (the “Offer Price”) and the number of Shares offered:

— Offer Price: EUR 9.00 per Share.

— Number of Shares Offered: 27,901,786 existing Shares (constituting 22.3% of the issued share capital of the Company (currently consisting of 125,000,000 Shares)).

• In addition, pursuant to the terms of the Offering, the Selling Shareholder has granted to the Banks an option exercisable, in whole or in part, by Merrill Lynch International on behalf of the Banks, within 30 days of the commencement of trading of the Shares on Euronext Amsterdam N.V.’s Eurolist by Euronext, to purchase an additional 3,348,214 Shares representing 12.0% of the number of Shares offered in the Offering to cover over-allotments, if any, and short positions resulting from stabilisation transactions.

• Trading of the Shares on Eurolist by Euronext is expected to commence on an as-if-when- issued basis on or about 12:30 p.m. on 22 November 2005.

THE INFORMATION CONTAINED HEREIN SHALL NOT CONSTITUTE OR FORM ANY PART OF ANY OFFER OR INVITATION TO SUBSCRIBE FOR, UNDERWRITE OR OTHERWISE ACQUIRE, OR ANY SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR, SECURITIES INCLUDING IN THE UNITED STATES, AUSTRALIA, CANADA, OR JAPAN.

THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION OR DISTRIBUTION INTO THE UNITED STATES, AUSTRALIA, CANADA, OR JAPAN. NEITHER THIS ANNOUNCEMENT NOR ANY COPY OF IT MAY BE TAKEN OR DISTRIBUTED OR PUBLISHED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES, AUSTRALIA, CANADA, OR JAPAN OR DISTRIBUTED TO U.S. PERSONS.

THE MATERIAL SET FORTH HEREIN IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED, AND SHOULD NOT BE CONSTRUED, AS AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES OR ANY OTHER JURISDICTION. SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, OR AN EXEMPTION FROM REGISTRATION. THE SECURITIES OF THE COMPANY DESCRIBED HEREIN HAVE NOT BEEN AND WILL NOT BE SO REGISTERED. THERE WILL BE NO PUBLIC OFFER OF SECURITIES IN THE UNITED STATES, AUSTRALIA, CANADA, OR JAPAN.

THIS PRESS RELEASE IS ONLY DIRECTED, AND ANY OFFERING WILL ONLY BE DIRECTED, TO INSTITUTIONAL INVESTORS.

THIS PRESS RELEASE DOES NOT FORM PART OF ANY PROSPECTUS AND HAS NOT BEEN APPROVED BY THE NETHERLANDS AUTHORITY FOR THE FINANCIAL MARKETS, WHICH IS THE DUTCH COMPETENT AUTHORITY FOR THE PURPOSE OF RELEVANT IMPLEMENTING MEASURES UNDER DIRECTIVE 2003/71/EC (THE “PROSPECTUS DIRECTIVE”) IN THE NETHERLANDS.

PROSPECTUS DATED 10 NOVEMBER 2005

(Incorporated in the Netherlands) Offer of ordinary shares with a nominal value of EUR 0.10 per Share

This prospectus relates to the initial offering of ordinary shares (the “Shares”) of Endemol N.V. (the “Company”), a naamloze vennootschap organised under the laws of the Netherlands. On behalf of Endemol Investment B.V., our sole shareholder (the “Selling Shareholder”), we are offering a certain number of Shares, constituting a minority interest in the Company, to be determined as set out below, held by the Selling Shareholder, in a global offering (the “Offering”) consisting of (i) an offering to institutional investors outside the United States, Canada, Japan and Australia in reliance on Regulation S (“Regulation S”) under the United States Securities Act of 1933, as amended (the “Securities Act”), and (ii) an offering to qualified institutional buyers (“QIBs”) within the United States in reliance on Rule 144A (“Rule 144A”) under the Securities Act. The Shares are being offered, as specified in this prospectus, subject to prior sale and withdrawal, cancellation or modification of such offer without notice and subject to certain other conditions. This document comprises a prospectus relating to the Company in the form of a single document within the meaning of Article 3 of the Directive 2003/71/EC (the “Prospectus Directive”). This prospectus has been approved by the Netherlands Authority for the Financial Markets (the “AFM”), which is the Dutch competent authority for the purpose of relevant implementing measures in the Netherlands. Prior to the Offering there was no public market for the Shares. Application has been made by us to list all of our Shares on Euronext Amsterdam N.V.’s Eurolist by Euronext (“Eurolist by Euronext”) (the “Admission”). Prospective investors may subscribe for the Shares for a period which is expected to commence on or about 10 November 2005 at 8.00 a.m. (CET) and is expected to end on or about 21 November 2005 at 5.00 p.m. (CET) (the “Subscription Period”). It is currently estimated that the initial offering price per Share (the “Offer Price”) will be between EUR 8.80 and EUR 12.80. The Offer Price and the number of Shares offered will be determined by us, the Selling Shareholder, the Lead Bookrunner and the Joint Bookrunners after termination of the Subscription Period on or about 22 November 2005 based on interest from investors and will be announced in a press release. The date on which trading of the Shares on Eurolist by Euronext will commence (the “Listing Date”) is expected to be on or about 22 November 2005. Payment for and delivery of the Shares is expected to be made on or about 25 November 2005 (the “Closing Date”). INVESTING IN THE SHARES INVOLVES RISKS. SEE “RISK FACTORS” BEGINNING ON PAGE 9 OF THIS PROSPECTUS FOR A DESCRIPTION OF SPECIFIC AND MATERIAL RISKS TO BE TAKEN INTO ACCOUNT IN CONSIDERING WHETHER TO INVEST IN THE SHARES. As the Shares will be listed and traded on Eurolist by Euronext on an “as-if-and-when-issued” basis, as of the Listing Date until the envisaged Closing Date, Euronext Amsterdam N.V. (“Euronext”) may annul all transactions effected in the Shares if the Shares are not delivered on the envisaged Closing Date. The Selling Shareholder will grant to the Managers (as defined below) an option exercisable, in whole or in part, by Merrill Lynch International on behalf of itself and each of the other managers in the Offering (the “Managers”) within 30 days of the commencement of trading of the Shares on Eurolist by Euronext, to procure purchasers for, or failing which, to purchase additional Shares representing 12% of the number of Shares to be offered in the Offering to cover over-allotments, if any, and short positions resulting from stabilisation transactions. The Shares have not been and will not be registered under the Securities Act and may not be offered or sold within the United States except to QIBs in reliance on the exemption from the registration requirements of the Securities Act provided by Rule 144A, or outside the United States in compliance with Regulation S. For a description of certain restrictions on transfer see “Transfer and Selling Restrictions”. Global Coordinator and Lead Bookrunner Merrill Lynch International Joint Bookrunners ABN AMRO Rothschild Credit Suisse First Boston 5IF1PXFSPG &NPUJPO IMPORTANT INFORMATION

PROSPECTIVE INVESTORS SHOULD READ THE ENTIRE PROSPECTUS AND, IN PARTICULAR, “RISK FACTORS” BEGINNING ON PAGE 9 OF THIS PROSPECTUS WHEN CONSIDERING AN INVESTMENT IN THE COMPANY.

No person has been authorised to give any information or to make any representations other than those contained in this prospectus and, if given or made, such information or representations must not be relied on as having been authorised by us or the Managers.

The contents of this prospectus are not to be construed as legal, financial or tax advice. Each prospective investor should consult his, her or its own legal adviser, independent financial adviser or tax adviser for legal, financial or tax advice.

Apart from the responsibility and liabilities, if any, which may be mandatorily imposed on them by the AFM or the regulatory regime in the Netherlands, neither the Managers nor the Selling Shareholder accept responsibility whatsoever for the contents of this prospectus nor for any other statement made or purported to be made by any of them or on their behalf in connection with us, the Selling Shareholder or the Shares. The Managers and the Selling Shareholder accordingly disclaim all and any liability whether arising in tort or contract (save as referred to above) which they might otherwise have in respect of this prospectus or any such statement.

The distribution of this prospectus and the offer of the Shares in certain jurisdictions may be restricted by law and therefore persons into whose possession this prospectus comes should inform themselves about and observe any such restrictions, including those set out in the section “Transfer and Selling Restrictions”. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

In connection with the Offering, Merrill Lynch International, as stabilising manager, or any of its agents, may (but will be under no obligation to), to the extent permitted by law, over-allot or effect other transactions which stabilise or maintain the market price of the Shares or any options, warrants or rights with respect to, or interests in, the Shares, in each case at a higher level than might otherwise prevail in the open market. Such transactions may commence on or after the date of commencement of trading on Eurolist by Euronext and will end no later than 30 days thereafter. Such transactions may be effected on Eurolist by Euronext, the over-the- counter market or otherwise. There is no assurance that such transactions will be undertaken and, if commenced, they may be discontinued at any time. Save as required by law, the stabilising manager does not intend to disclose the extent of any over-allotments and/or stabilisation transactions under the Offering.

CERTAIN UNITED STATES MATTERS

The Shares are being offered: (i) to institutional investors outside the United States, Canada, Japan and Australia in reliance on Regulation S; and (ii) to QIBs within the United States in reliance on Rule 144A. Prospective purchasers are hereby notified that sellers of the Shares may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. For a description of these and certain further restrictions on offers, sales and transfers of the Shares and the distribution of this prospectus, see “Transfer and Selling Restrictions”.

The Shares have not been approved or disapproved by the United States Securities and Exchange Commission, any state securities commission in the United States or any other United States regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the Offering or the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offence in the United States.

i NOTICE TO NEW HAMPSHIRE RESIDENTS ONLY

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

CERTAIN U.K. MATTERS

This prospectus is only being distributed in the United Kingdom to, and is only directed at, (a) persons who have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act (2000) (Financial Promotion) Order 2005, and to (b) persons to whom it would otherwise be lawful to distribute it (all such persons together being referred to as “relevant persons”). This prospectus is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this prospectus relates is available only to relevant persons and will be engaged in only with relevant persons.

FORWARD-LOOKING STATEMENTS

Some of the statements in the sections “Summary”, “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Business” and elsewhere in this prospectus may include forward-looking statements which reflect our current views with respect to future events and financial performance. Statements which include the words “expect”, “intend”, “plan”, “project”, “anticipate”, “will” and similar statements of a future or forward-looking nature identify forward-looking statements.

All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. These factors include but are not limited to those described in the section “Risk Factors”, which should be read in conjunction with the other cautionary statements that are included elsewhere in this prospectus, including:

G those discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting our Results of Operations”;

G our ability to compete in the regions in which we operate;

G decreased demand for our programming or increased competition in our area of programming;

G governmental factors, including the costs of compliance with regulations and the impact of regulatory changes;

G the impact of currency exchange rate and interest rate fluctuations;

G changes in accounting policies or practices; and

G other risks, uncertainties and factors inherent in our business.

These forward-looking statements speak only as of the date of this prospectus. Subject to any continuing obligations under the General Rules of the Euronext Amsterdam Stock Market, we undertake no obligation to publicly update or review any forward-looking statement contained in this prospectus, whether as a result of new information, future developments or otherwise.

ii If one or more of these or other risks or uncertainties materialise, or if our underlying assumptions prove to be incorrect, actual results may vary materially from those projected. Any forward-looking statements in this prospectus reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. Prospective investors should specifically consider the risks and other factors identified in this prospectus, which could easily cause actual results to differ, before making an investment decision.

PRESENTATION OF FINANCIAL INFORMATION

We completed an internal reorganisation (the “Reorganisation”) in preparation for the Offering pursuant to which, among other things, the Selling Shareholder and Endemol Holding N.V. (the top company of the Endemol group before the Reorganisation) have contributed the major part of the Endemol businesses to Endemol Holding B.V. See “Related Party Transactions—Reorganisation”. In accordance with item 20.2 of Annex I of Commission Regulation 2004/809/EC, we have included the following financial information of the Endemol group after the Reorganisation (the “Issuer Group”) in this prospectus:

G the pro forma consolidated financial information for the financial years ended 31 December 2002, 2003 and 2004 on the basis of Dutch GAAP;

G the pro forma consolidated financial information for the financial year ended 31 December 2004 on the basis of International Financial Reporting Standards (“IFRS”); and

G the pro forma consolidated interim financial information for the nine months ended 30 September 2005 (with pro forma consolidated interim financial information for the nine months ended 30 September 2004 for comparison purposes) on the basis of IFRS.

See “Index to Consolidated Financial Information”. Prospective investors are informed that the pro forma consolidated financial information for the nine months ended 30 September 2005 included herein has been prepared for the purpose of the Offering, and following the Offering we intend to report our results on a semi- annual basis.

The audited consolidated financial statements of Endemol Holding N.V. (the top company of the Endemol group before the Reorganisation) for the financial years ended 31 December 2002, 2003 and 2004 on the basis of Dutch GAAP and the pro forma consolidated interim financial information of the Issuer Group for the six months ended 30 June 2005 (with pro forma consolidated interim financial information for the six months ended 30 June 2004 for comparison purposes) on the basis of IFRS can be obtained free of charge on the Internet at www.historicalfinancials.com, and are incorporated into this prospectus by reference.

For a summary of certain differences among IFRS, US GAAP and Dutch GAAP affecting our pro forma consolidated financial information, see “Annex A: Differences among IFRS, US GAAP and Dutch GAAP Relevant to Endemol”.

Ernst & Young Accountants (“Ernst & Young”), which has been appointed as our independent auditors as of 28 June 2005, has conducted assurance work on the information that is, in scope and procedures, substantively similar to an audit and has issued assurance reports on the pro forma consolidated financial information of the Issuer Group for the financial year ended 31 December 2004 on the basis of IFRS, for the six months ended 30 June 2005 on the basis of IFRS and for the nine months ended 30 September 2005 on the basis of IFRS. Each of the assurance reports of Ernst & Young in respect of such periods expresses conclusions confirming that this information has been prepared in all material respects, in accordance with IFRS, and is included in this prospectus (or incorporated by reference), in the form and context in which it is included, with the consent of Ernst & Young. Ernst & Young performed assurance work on the adjustments relating to the Reorganisation with respect to the pro forma consolidated financial information for the financial years ended 31 December 2002, 2003 and 2004 on the basis of Dutch GAAP and delivered an assurance report. Ernst & Young is a member of the Royal Netherlands Institute of Registered Accountants (Koninklijk Nederlands Instituut van Registeraccountants). Ernst & Young is located at Euclideslaan 1, 3584 BL Utrecht, the Netherlands. Ernst & Young, as our current auditors, have reported on the pro forma consolidated financial information for the years 2002, 2003 and 2004 for efficiency reasons.

iii The consolidated financial statements of Endemol Holding N.V. for the financial years ended 31 December 2002, 2003 and 2004 on the basis of Dutch GAAP have been audited by KPMG. Each of the reports of KPMG in respect of such years expresses unqualified opinions and is incorporated by reference in this prospectus, in the form and context in which it is included, with the consent of KPMG. KPMG is a member of the Royal Netherlands Institute of Registered Accountants (Koninklijk Nederlands Instituut van Registeraccountants). KPMG is located at Burgemeester Rijnderslaan 10-20, 1185 MC Amstelveen, the Netherlands.

Ernst & Young has replaced KPMG as our auditors with effect from the current financial year as a result of our policy to change auditors from time to time. There is no other reason why we have not reappointed KPMG as our auditors. KPMG from the moment of their resignation onwards provides consulting services to Endemol from time to time.

Certain financial information in this prospectus has been rounded and, as a result, the totals of the data presented in this prospectus may vary slightly from the arithmetic totals of such information.

AVAILABLE INFORMATION

The Company has agreed that, for so long as any Shares are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, the Company will, during any period in which it is neither subject to Section 13 or 15(d) of the United States Securities Exchange Act of 1934, as amended nor exempt from reporting pursuant to Rule 12g3-2(b) thereunder, provide to any holder or beneficial owner of such restricted securities or to any prospective purchaser of such restricted securities designated by such holder or beneficial owner, upon the request of such holder, beneficial owner or prospective purchaser, the information required to be provided by Rule 144A(d)(4) under the Securities Act.

ENFORCEABILITY OF JUDGMENTS

We are a naamloze vennootschap organised under the laws of the Netherlands. None of the members of our Management Board and Supervisory Board are residents of the United States, and a substantial portion of the assets of the Company and such persons are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon the Company or such persons or to enforce against any of them in the United States courts judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state or territory within the United States.

ECONOMIC AND INDUSTRY DATA

Economic and industry data and industry forward-looking statements used throughout this prospectus are derived from various industry and other independent sources, including ‘The Global Trade in Television Formats’ published in April 2005 by Screen Digest Limited (“Screen Digest”), ‘The Global Entertainment and Media Outlook: 2005-2009’ published in June 2005 by PricewaterhouseCoopers LLP (“PWC”) and Eurodata TV Worldwide (“EurodataTV”). We have relied on the accuracy of such data and statements without carrying out an independent verification thereof. Accordingly, we accept responsibility only for accurately reproducing such data and statements and disclaim responsibility for the accuracy thereof. As far as we are aware and are able to ascertain, no facts have been omitted from such data and statements that would render it inaccurate or misleading. The industry forward-looking statements included in this prospectus may be materially better than actual results.

The PWC report contains anticipated compounded annual growth rates (“CAGR”), that are stated to cover the period 2004 to 2009. This period, in the PWC report, is defined as “2005-2009”; whereas in this prospectus we have defined this same period as “2004-2009”. Further, the PWC report uses USD as the reference currency in their analysis and projections. In this prospectus we have used EUR, to keep homogeneity with our financial information. The exchange rate we have used for the conversion is 0.8051 euro for 1 USD, including for the future projections. This exchange rate comes from the PWC report (page 9; chapter “Methodology”), and is an average of the exchange rate for the 2004 period. All global television advertisement spend figures are presented on a net basis, except for the United States, for which the television advertisement spend figures are presented on a gross basis, without taking into account reductions and commissions.

iv CURRENCIES

Unless otherwise indicated, all references in this prospectus to “EUR” or “euro” are to the lawful currency of the European Monetary Union, of which the Netherlands is a member.

DEFINED TERMS AND INTERPRETATION

Certain terms used in this prospectus are explained in “Annex B: Glossary of Industry Terminology”.

NO INCORPORATION OF WEBSITES

The contents of our websites, other than the financial information contained in www.historicalfinancials.com, do not form part of this prospectus.

v TABLE OF CONTENTS

Page

SUMMARY ...... 1 SUMMARY OF THE BUSINESS ...... 1 SUMMARY OF THE OFFERING...... 4 SUMMARY PRO FORMA CONSOLIDATED FINANCIAL INFORMATION ...... 6 RISK FACTORS...... 9 USE OF PROCEEDS ...... 20 DIVIDEND POLICY ...... 21 CAPITALISATION ...... 22 SELECTED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION ...... 23 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ...... 27 BUSINESS ...... 56 MANAGEMENT AND CORPORATE GOVERNANCE ...... 74 SELLING SHAREHOLDER ...... 87 RELATED PARTY TRANSACTIONS ...... 88 DESCRIPTION OF THE SHARES ...... 93 PLAN OF DISTRIBUTION...... 99 TRANSFER AND SELLING RESTRICTIONS ...... 102 MATERIAL TAX CONSIDERATIONS TO INVESTORS ...... 106 GENERAL INFORMATION...... 116 INDEX TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION ...... F-1

ANNEX A: DIFFERENCES AMONG IFRS, US GAAP AND DUTCH GAAP RELEVANT TO ENDEMOL ...... A-1 ANNEX B: GLOSSARY OF INDUSTRY TERMINOLOGY ...... B-1

vi SUMMARY

This summary highlights certain aspects of our business, the Offering and our pro forma consolidated financial information and must be read as an introduction to this prospectus. Any decision to invest in the Shares should be based on a consideration of the prospectus as a whole, including any amendment and supplement thereto and the documents incorporated by reference therein (see www.historicalfinancials.com). No civil liability is to attach to the Company solely on the basis of this summary, including any translation thereof, unless it is misleading, inaccurate or inconsistent when read together with the other parts of this prospectus. Where a claim relating to the information contained in this prospectus is brought before a court in a Member State of the European Economic Area, the plaintiff may, under the national legislation of the Member State where the claim is brought, be required to bear the costs of translating this prospectus before the legal proceedings are initiated.

In this prospectus, all references to “Endemol”, “the Company”, “we”, “us”, “our” and “ours”, refer to Endemol N.V. or Endemol N.V. and its subsidiaries, depending on the context. The Endemol group after the Reorganisation is referred to as the “Issuer Group”. See “Related Party Transactions—Reorganisation”.

SUMMARY OF THE BUSINESS

Company Overview

Endemol is a global leader in television and other audiovisual entertainment. We create premium entertainment ideas and sell them to the world’s leading broadcasters. We then produce shows based on such ideas to high standards, creating hits with strong brand value. Subsequently, we exploit the value of our brands across other media and communication platforms, including, for example, mobile phones and the Internet.

To create ideas and develop brands, we secure and motivate local entrepreneurs who are creative self- starters and cultivate strong creative teams. We distribute our content via aggregators such as broadcasters, who largely fund our productions, thus minimizing the risk of our business model. We earn our revenues principally from fees from broadcasters and, to a lesser extent, fees from advertisers and telecom and Internet companies. We minimise our investment in costly equipment and infrastructure, as we are an ideas-led company.

We exploit our programmes through our network of companies in 22 countries on five continents. In 2004, six of these countries (the UK, the Netherlands, the US, Spain, Italy and Germany) accounted for 87.4% of our net turnover. Our net turnover for the financial year ended 31 December 2004 was EUR 850.9 million, producing an EBITDA of EUR 132.4 million (15.6% of turnover) and an operating result of EUR 117.2 million, determined in accordance with IFRS. Prior to this Offering, Telefónica, S.A. (“Telefónica”) indirectly held 99.7% of our Shares.

Our Products

Our products are the content that we create for several media and communication platforms, primarily for television, but also for the Internet, mobile phones and other platforms. We believe we are a leading developer and producer of formats. A format is typically a programme structure and content based on an idea.

Among our most successful formats are Big Brother, Fear factor and Deal or No Deal. Big Brother, first aired six years ago, has been produced in 36 countries and has been constantly rejuvenated, providing an important base for exploitation on other platforms. Fear factor, developed by Endemol USA from an existing Dutch Endemol format, has become a very successful prime-time network reality show in the United States. Deal or No Deal has emerged as one of the most popular game shows in the world and has been produced in 26 countries. Other well known Endemol produced formats include Extreme Makeover: Home Edition, Operación Triunfo, Call TV (with all of its local variants), Changing Rooms, Ready Steady Cook, Domino Day, 1 vs. 100, Vivere and Cento Vetrine.

1 Main Business Areas

We have three principal types of products:

Non-scripted television – Consists of reality TV and other shows that are not based on a script and includes programmes which are primarily designed to entertain and also programmes which are intended to provide information in a way that is considered entertaining. Non-scripted television accounted for 78.7% of our net turnover in 2004.

Scripted television – Consists of scripted programmes with actors or comedians and includes subgenres such as drama and soap operas. Scripted television accounted for 12.3% of our net turnover in 2004.

Digital media – Consists of content created to be exploited on digital platforms (mainly mobile phones and the Internet), leveraging our television and other non-television brands. Digital media accounted for 9.0% of our net turnover in 2004.

Competitive Strengths

Creativity and intellectual property – We retain superior creative talent and have creative teams dedicated to each major market in which we operate. This enables us to develop, own and exploit ideas and intellectual property, which is essential to our strategy. Over the last five years, we have created an average of more than 100 new formats (including scripted titles) each year, and our library currently holds more than 900 formats (including approximately 150 scripted titles). Our teams also focus on rejuvenating our existing formats.

Production expertise – Our production capability meets high standards. We believe that our production standards differentiate us from many of our competitors and help to protect us from successful imitation.

Global network and presence – Our subsidiaries primarily focus on their home markets, developing programming for domestic audiences and adapting Endemol’s formats to their local cultures to increase their appeal. Our subsidiaries work together to develop and share formats and other intellectual property and to exchange production and other know-how.

Entrepreneurial management supported by strong internal structures and processes – Our entrepreneurial local management is supported by our strong internal structures and processes, enabling them to focus on the local market, and at the same time allowing us to exercise appropriate oversight and control.

Strong market relationships across a variety of countries and platforms – Members of our local management have a proven track record in television and related media fields and enjoy close relationships with local broadcasters.

Track record and market leadership – Our strong track record of creating and producing television formats around the globe gives us credibility when we approach new broadcasting clients and seek access to new markets.

Strategy

Focus on our core business – Our main priority is to maintain and expand our strong position in entertainment programming on the world's major commercial television networks. To achieve this we are exploiting our traditional strengths: continuous creativity, proactive management of format lifecycles, proactive management of our format library to stimulate trading of ideas and intellectual property around our group, strong relationships with major broadcasters and further deployment of revenue-enhancing and cost reduction initiatives.

2 Expand in North America – We believe that North America has the potential to provide substantial growth over the next few years. Endemol USA has built strong relationships with the major US networks. To achieve growth, we will focus on television networks (including syndication market), cable networks, scripted programming, the Hispanic market and Canada.

Increase scripted programming – We have a strong position in scripted programming in Italy, Spain and the Netherlands and believe there is growth potential in other markets. Scripted programming typically has more potential for profitable exploitation than non-scripted, due to a longer shelf-life and significantly stronger ready- made sales. It is also capable of capturing advertising revenues from programme sponsorship and product placement.

Digital media opportunities – Digital media platforms represent additional opportunities to exploit our programming and best known brands. We expect our growth in this segment to be fueled by Participation TV. We are leveraging our TV programme brands on to broadband and mobile phones. We also recently started producing tailor-made content for digital media, although this remains an emerging market.

Explore new territories – We have a two-tier entry strategy. The first tier covers territories where we already have direct sales (for example, South-east Asia and India) and where we plan to develop a direct presence through start-up companies in the short-term. The second tier includes territories that we consider attractive markets (for example, Central Europe and China) that we plan to enter in the medium term when particular opportunities arise.

Risk Factors

Prior to investing in the Shares, prospective investors should consider, together with the other information contained in this prospectus, certain risks and other factors set out in the section “Risk Factors”. These factors include the fact that our results may be adversely affected by (i) a reduction in broadcaster advertising revenues, (ii) increasing demand from broadcasters to acquire proprietary rights to formats, (iii) our ability to own or rely on intellectual property rights to protect our formats and format titles, (iv) frequent litigation to enforce our rights or defend claims, (v) competition, (vi) the immature nature of the digital media market, (vii) a reduction in the popularity of non-scripted programming, (viii) seasonal fluctuations in revenues, (ix) our ability to continue current growth, (x) financial market risks, (xi) our ability to retain qualified personnel, (xii) loss of one or more major customers, (xiii) our ability to rely on long-term production agreements, (xiv) dependence on a limited number of formats, (xv) deficit financing associated with scripted programming, (xvi) our relationship with freelancers and workers on temporary contracts, (xvii) the personal relationships between our managing directors and broadcasters, (xviii) the interests of Telefónica and the Selling Shareholder, (xix) broadcasters not meeting their minimum volume purchase obligations, (xx) our commercial relationship with the French Endemol business, (xxi) our ability to manage our joint ventures, (xxii) future acquisitions, (xxiii) investment obligations relating to previous acquisitions, (xxiv) restrictions imposed by financing agreements, (xxv) new legislation, (xxvi) political or religious pressure, (xxvii) legal and corporate governance compliance costs, and (xxviii) trends, developments or other events.

For an explanation of these risk factors and the risk factors related to our Shares and the Offering (which are not incorporated in this summary), see “Risk Factors”.

3 SUMMARY OF THE OFFERING

The Issuer ...... Endemol N.V.

The Offering ...... The Offering comprises the offer of a certain number of Shares, constituting a minority interest in the Company, to be determined as set out below under “Subscription Period” to (i) institutional investors outside the United States, Canada, Japan and Australia in reliance on Regulation S under the Securities Act; and (ii) qualified institutional buyers within the United States in reliance on Rule 144A under the Securities Act.

The Selling Shareholder ...... Endemol Investment B.V.

The Shares ...... Shares of the Company of nominal value EUR 0.10 each.

Over-allotment Option ...... An option exercisable, in whole or in part, by Merrill Lynch International on behalf of itself and each of the other Managers within 30 days of the date of commencement of trading to procure purchasers for or, failing which, to purchase additional Shares representing 12% of the number of Shares to be offered in the Offering to cover over-allotments, if any, and short positions resulting from stabilisation transactions.

Subscription Period ...... The period which is expected to commence on or about 10 November 2005 as of 8.00 a.m. (CET) and is expected to end on or about 21 November 2005 at 5.00 p.m. (CET). The Offer Price and the number of Shares offered will be determined by us, the Selling Shareholder, the Lead Bookrunner and the Joint Bookrunners after termination of the Subscription Period on or about 22 November 2005 based on interest from investors and will be announced in a press release.

Offer Price ...... An offering price per Share to be announced in a press release. At the date of this prospectus, the Offer Price is expected to be between EUR 8.80 and EUR 12.80 per Share.

Allotment Date ...... Allotment will occur following the Subscription Period, and is expected to take place before the start of trading on or about 22 November 2005, subject to acceleration or extension of the timetable for the Offering at the Company’s discretion.

Listing and Trading ...... Application has been made by us to list all of our Shares on Eurolist by Euronext and trading of the Shares on Eurolist by Euronext is expected to commence on the Listing Date. Prior to the Listing Date, there was no public market for our Shares.

Dividends ...... The Shares carry full dividend rights if and when declared from the date the holder acquires such rights.

Delivery, Settlement and Payment . . Payment for and delivery of the Shares is expected to be made on or about 25 November 2005 through the book-entry facilities of the Netherlands central securities depository (Nederlands Centraal Instituut voor Giraal Effectenverkeer B.V.) (“Euroclear Netherlands”), Clearstream Banking S.A. (“Clearstream”) and Euroclear Bank N.V./S.A. (“Euroclear Brussels”) in accordance with their normal settlement procedures applicable to equity securities.

Voting Rights ...... Each Share entitles its holder to one vote at our shareholders’ meetings.

4 Use of Proceeds ...... We will not receive any of the proceeds from the sale of the Shares.

Lock-up ...... Each of the Company and the Selling Shareholder has agreed that, without the prior written consent of Merrill Lynch International, on behalf of the Managers, it will not, subject to certain exceptions, during the 180 day period after the date of the Underwriting Agreement, issue, offer, sell, contract to sell, pledge or otherwise transfer or dispose of, or announce the proposed sale of, any Shares or other equity securities or securities linked to its share capital. See “Plan of Distribution”.

Security Codes ...... ISIN: NL0000345692 Common Code: 023440229 Securities Code: 34569 Eurolist by Euronext Symbol: EML

Global Coordinator and Lead Bookrunner ...... Merrill Lynch International.

Joint Bookrunners ...... ABN AMRO Rothschild and Credit Suisse First Boston (Europe) Limited.

Managers ...... ABN AMRO Rothschild, Banco Bilbao Vizcaya Argentaria, S.A., Credit Suisse First Boston (Europe) Limited, ING Bank N.V., Lehman Brothers International (Europe), Mediobanca – Banca di Credito Finanziario S.p.A. and Merrill Lynch International.

Listing Agents ...... ABN AMRO Bank N.V. and Merrill Lynch International.

5 SUMMARY PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

The summary pro forma consolidated financial information has been prepared to provide information about how the adjustments relating to the Reorganisation in preparation for the Offering could have affected the consolidated financial statements of Endemol Holding N.V. as though it had occurred as of 1 January 2002. See “Related Party Transactions—Reorganisation”. The pro forma consolidated financial information has been presented for illustrative purposes only and does not purport to (i) represent what the Endemol group’s results of operations or financial condition would have actually been had the Reorganisation in fact occurred as of 1 January 2002 or (ii) project the results of the Endemol group’s operations for any future period or its financial condition for any future date.

The pro forma consolidated financial information, together with the assurance reports of Ernst & Young and the accompanying notes, are included elsewhere in this prospectus. The financial information presented below should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our pro forma consolidated financial information and related notes elsewhere in this prospectus. For a summary of certain differences among IFRS, US GAAP and Dutch GAAP affecting our pro forma consolidated financial information, see “Annex A: Differences among IFRS, US GAAP and Dutch GAAP Relevant to Endemol”.

Income Statement Data

(*) Unaudited

Cash Flow Data

(*) Unaudited (**) Prepared in accordance with IFRS except for the fact that movements in short-term loans and borrowings (cash and cash equivalents credit) and cash and cash equivalents are not presented on a net basis. For the respective periods the movements in short-term loans and borrowings were EUR 47.1 million for the year ended 31 December 2004 IFRS, EUR 47.6 million for the nine months ended 30 September 2004 and EUR (55.2) million for the nine months ended 30 September 2005.

6 EBITDA Data

(*) Unaudited

We define EBITDA to mean operating result before depreciation and amortisation. EBITDA is not a standard measure, and it therefore should not be used to compare one company against another. EBITDA is not a direct measure of our liquidity and needs to be considered in the context of our financial commitments. EBITDA may not be indicative of our historical operating results, nor is it meant to be predictive of our potential future results.

Net Financial Indebtedness

EUR in millions As of 31 December As of 30 September ––––––––––––––––––––––––––––––––––––––––––––––––– –––––––––––––––––––––––– 2002 2003 2004 2004 2004* 2005 (Dutch (Dutch (Dutch GAAP) GAAP) GAAP) (IFRS) (IFRS) (IFRS) ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Cash and Cash Equivalents ...... (34.2) (20.0) (6.1) (117.8) (143.9) (102.9) Short-term Financial Debt ...... 159.7 83.0 14.4 129.2 128.7 184.4 Long-term Financial Debt ...... 3.5 0.9 0.4 0.4 0.9 2.3 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Net Financial Debt / (Cash) ...... 129.0 63.9 8.7 11.8 (14.3) 83.8

(*) Unaudited

7 Balance Sheet Data

EUR in millions As of 31 December As of 30 September ––––––––––––––––––––––––––––––––––––––––––––––––– –––––––––––––––––––––––– 2002 2003 2004 2004 2004* 2005 (Dutch (Dutch (Dutch GAAP) GAAP) GAAP) (IFRS) (IFRS) (IFRS) ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Non-current Assets ...... 214.2 236.4 295.5 315.6 327.2 223.0 Current Assets ...... 359.9 304.8 287.9 378.7 352.3 384.9 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Total Assets ...... 574.1 541.2 583.4 694.3 679.4 607.9

Non-current Liabilities ...... 35.9 47.8 43.0 46.3 57.5 9.5 Current Liabilities ...... 448.9 338.8 326.2 412.6 403.1 473.1 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Total Liabilities ...... 484.8 386.6 369.1 458.9 460.6 482.6 Shareholders’ Equity ...... 87.9 149.4 209.2 229.5 212.9 118.0 Minority Interests ...... 1.4 5.3 5.0 5.8 5.9 7.3 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Total Liabilities & Equity ...... 574.1 541.2 583.4 694.3 679.4 607.9

(*) Unaudited

8 RISK FACTORS

Prospective investors should carefully consider the risk factors described below, together with all the other information set out in this prospectus and incorporated herein by reference, before investing in the Shares. Should any of the following events or circumstances occur, our business, financial condition and results of operations could be materially adversely affected. In such circumstances, the market price of the Shares could decline and investors could lose all or part of the value of their investment.

Prospective investors should be aware that the value of the Shares may decrease and that they may not realise their initial investment.

The risks described below are the risks which we currently consider to be material but are not the only risks relating to us or an investment in the Shares. There may be additional risks that we do not currently consider to be material or of which we are not aware that could impair our business or results of operations.

Risk Factors Related to our Business

Reduced broadcaster revenues from advertising or other sources (e.g. subscription fees) could result in a reduction in demand for our formats.

Although television remains the predominant sector within the advertisement industry, advertisers are no longer willing to pay high rates for traditional television advertising. Rather, advertisers are demanding higher discounts, which may result in downward pressure on the net amount spent on television advertising. Furthermore, if new distribution channels like digital television and television over the Internet (“IPTV”) become widespread and the television audience is spread over additional media, advertisers’ budgets will be spread over more platforms, resulting in a decrease in programming budgets for traditional television. In addition, advertisers are continually looking for new ways to reach the consumer.

This reduction in advertising revenues puts pressure on broadcasters’ programming and production budgets and results in broadcasters seeking to reduce their programming costs. This in turn creates a need for different business models where content developers and advertisers co-operate and where alternative sources of income to content developers, such as the direct sponsorship of formats by advertisers, gain importance. If broadcasters purchase fewer formats from content developers, such as Endemol, in order to reduce their costs, and we are unable to generate additional income by applying new business models, our business, financial condition and results of operations could be materially adversely affected.

Broadcasters increasingly seek to acquire and retain the intellectual property rights relating to the formats, which could adversely affect our ability to generate revenues by exploiting these rights.

We generate our revenues by creating, producing and licensing formats and by exploiting them internationally. Broadcasters increasingly seek to acquire the intellectual property rights associated with formats that they distribute. It is vital for us to retain the ownership of, and the right to exploit, any intellectual property rights subsisting in, or associated with, our formats. This enables us to keep a large degree of control, to secure better deals, and to market the formats to multiple broadcasters, some of whom may be willing to pay a premium for highly sought after content. Furthermore, it is important to us to retain ownership of any intellectual property rights subsisting in, or associated with, our formats in order to enable us to freely exploit and leverage our formats on platforms other than television, including digital media. If we are not able to retain ownership of our intellectual property, our business, financial condition and results of operations could be materially adversely affected.

We may not be able to rely on intellectual property rights to protect our formats.

A substantial part of our business is the exploitation of formats. Our success depends, in part, on the ability to protect current and future formats by securing, enforcing and defending our intellectual property rights. However, both the legal status of these formats and the scope of protection available for them is uncertain. Most jurisdictions do not recognise format rights per se, and there is no generally recognised definition of the word “format”. We rely on a combination of copyright, trademarks, related torts such as passing off, unfair competition rules, music rights, trade secrets and contractual restrictions to define and protect our proprietary rights in our formats. These proprietary rights and contractual restrictions provide only limited protection and

9 vary among the countries in which we operate. As a result, there is no guarantee that these proprietary rights and contractual provisions will be adequate to prevent the misappropriation, infringement or otherwise unauthorised use of our formats by third parties (including competitors) in any or all of the jurisdictions in which we are doing and will do business, which could harm our business.

We also rely on our knowledge of and experience in production which may not be protected by registered intellectual property rights. We consider such trade secrets and proprietary know-how to form a further barrier to others who might seek to copy our formats. We generally require employees, managing directors, consultants and independent contractors to sign agreements containing confidentiality provisions, and, furthermore, we generally require them to sign agreements containing intellectual property assignments to us. However, we cannot be sure that all rights in intellectual property created by them will necessarily have been transferred to us in all jurisdictions, nor can we say that others will not develop similar ideas or that our secrecy and confidentiality will not be breached. In circumstances where our employees, managing directors, consultants and independent contractors have not formally assigned intellectual property rights to us, we might find that they are unwilling to sign confirmatory assignments of any such rights to us. In particular, Mr. John de Mol, former Chairman of Endemol Holding N.V., has not been willing to sign a confirmatory assignment in respect of any intellectual property rights created or co-created by him or by Talpa Holding and Talpa Management. He may argue that he retains an ownership interest in intellectual property rights subsisting in some of our formats. However, on the basis of a legal review that we believe to be appropriate under the circumstances, we do not believe that this will affect our current top ten formats.

We may not own all of the intellectual property rights regarding our formats, programmes and other activities.

Certain intellectual property rights, including copyrights, are still vested in our current or former employees, managing directors, consultants and/or independent contractors. Since August 2004, we have been in the process of repairing possible deficiencies in this regard. This project is still in progress and we cannot give assurances that it will be successfully completed, because we are dependent on the cooperation of other parties that may not all be willing to cooperate.

If we are unable to rely on confidentiality obligations and intellectual property rights to protect our formats, we may be unable to prevent third parties from copying or imitating our formats, which could have an adverse effect on our business, financial condition and results of operations.

We may be required to defend ourselves against claims of infringement of intellectual property rights or other proprietary rights of third parties or to take action to protect our own intellectual property and other proprietary rights.

We are active in an environment in which parties regularly threaten or commence litigation. We have faced in the past, currently face and may face in the future claims that we are infringing the intellectual property rights of third parties. We may also wish to bring proceedings to prevent third parties from misusing our intellectual property rights. Some of our employees have been previously employed at other companies that create or produce formats, including our competitors or potential competitors. We may be subject to claims that these employees have disclosed third party confidential information or trade secrets that we have inadvertently or otherwise used or disclosed.

The uncertainties inherent in such litigation make the outcome of such infringement actions, breach of confidentiality, contract or tort claims difficult to predict. Moreover, whether or not successful, the expense of litigation could have a material adverse effect on our financial condition, and such litigation could divert the attention of our management and key personnel from our business operations. In the event of successful claims by third parties, injunctions may be granted preventing us from developing or making use of certain formats or using certain titles. Also, we may be liable for substantial damages and be required to seek licenses of intellectual property rights from third parties in order to conduct our business. If any such licenses are required, we may be unable to obtain such licenses on commercially acceptable terms.

An adverse outcome of any dispute with respect to intellectual property, breach of contract or confidence or other third party claims may adversely affect our business, financial condition and results of operations.

10 We have not applied for trademark protection for some of our programme or format titles and therefore may not be able to prevent third party registration or use of the same or confusingly similar names or marks.

The success of our business depends, in part, on our continued ability to use our existing titles to increase awareness of our programmes. The actions we have taken may be inadequate to prevent imitation of our titles and concepts by others or to prevent others from claiming violations by us of their trademarks and proprietary rights. We have only applied in some countries for registered trademarks in respect of some of our programme or format titles. There is no guarantee that registered trademarks will be granted with respect to current or future trademark applications or that trademarks covering all of our programme or format titles can be obtained.

We have allowed third party use, and in some cases registration, of certain of our trademarks or programme or format titles without formally recording the terms permitting such use and registration in written license agreements. In those cases, there is a risk that our trademark rights are either weakened due to registrations being susceptible to challenge or potentially lost to those third parties.

The value of our formats may be diminished if trademark registrations for the relevant titles cannot be secured or maintained or if third parties cannot be prevented from using the same or confusingly similar names. This could have an adverse effect on our business, financial condition, profitability and results of operations.

The nature of our business subjects us to frequent litigation.

We are active in an environment in which parties often and easily commence or threaten litigation. This litigation primarily arises in connection with intellectual property rights, as described above, and our non- scripted formats. For example, people participating in formats such as Big Brother may claim to have suffered emotional or other damage based on defamation, slander or privacy infringement as a result of their participation. There can be no assurance that we would prevail in any such litigation or that any damages to be paid would be covered under our insurance policies. Such claims may not only distract attention of management from our business operations but may also result in the payment of damages to claimants and other additional costs.

Competition in our business is increasing, which could reduce our margins.

An aggressive consolidation of competitors in the television production industry has increased the competitive pressure on producers such as Endemol. In addition, broadcasters are producing more programming in-house and are contracting with production companies to produce shows for them. Furthermore, in some countries broadcaster budgets are under pressure as a result of fierce competition between broadcasters among other things. This has resulted in some producers using aggressive price tactics or giving away intellectual property rights in order to acquire package deals with broadcasters. In addition, we may also face competition from new entrants to the television production industry, such as telecom companies, Internet service providers, cable companies and Internet portals, in the event that they expand their businesses to create or produce television content. Increasing competition may put pressure on our margins and could have a material adverse effect on our business, financial condition and results of operations.

The digital media business is an immature market and developments in this market are unpredictable.

Although we are active in the digital media business and we believe that our business plans for digital media are closely related to our core business, digital media represents a higher risk than our television business because this market is still immature and uncertain in many respects. We cannot predict in what way the market will develop, the number and character of the parties that will become active in this market and the regulatory environment that may develop. If the market for digital media does not develop in the way we predict, we may not realize the expected financial returns of our digital media business.

We principally produce non-scripted programming and a widespread reduction in the popularity of non- scripted programming could adversely affect us.

Our past success has depended on increased audience interest in non-scripted programming such as reality TV and game shows. In some countries, we believe that the demand for non-scripted programming is slightly decreasing. If this becomes a trend and we fail to respond with programming that gains wide acceptance, our business, financial condition and results of operations would be adversely affected. We are unable to predict

11 future developments in audience preferences and we cannot assure you that our non-scripted formats will continue to be successful.

Our revenues are subject to seasonal fluctuations that may cause our results of operations to vary.

Demand by advertisers for television advertising has historically been subject to both cyclical and seasonal trends. In general, the television season does not match the calendar year, which is also our fiscal year. In many markets, particularly in Europe, the television season runs from summer to summer. In such cases, the calendar year cut-off occurs in the middle of the television season, our production period, which results in us having a large number of productions in progress at year-end. Also, generally, television broadcasters reduce their programming budgets when advertisers are spending less money on advertising. These cyclical and seasonal trends indirectly affect our business by reducing the funds broadcasters have available to purchase our formats, which could result in a reduction in demand for our formats.

We may not be able to continue our current sustained growth of revenues and our profitability.

We have experienced sustained growth of revenues and our profitability during the last few years, both organic and through acquisitions and start-ups. We cannot give assurances that this growth will continue. The future development of our market and our ability to keep up with such developments are uncertain. Also, we cannot give assurances that there will be any suitable opportunities for acquisitions and start-ups in the future.

Due to the informal culture of our industry, we frequently operate without written agreements in place, which may make it difficult for us to enforce our rights and exposes us to the risk of having to engage in litigation with third parties, or have third party proceedings brought against us.

Due to the informal culture of the industry, agreements have not always been made in writing, executed formally or drafted in a way that could result in a consistent interpretation of language. It may be difficult for us to enforce what we believe to be our rights, or our counterparties’ obligations, under such arrangements. Under such agreements there could be misunderstandings as to the scope of rights granted or assigned, or as to the parties' obligations, such as payment obligations. It may be necessary for us to bring proceedings against third parties for breach of contract or vice versa where such misunderstandings exist, and it may be difficult for us to establish what we believe to be our rights and our counterparties’ obligations under such arrangements to the satisfaction of the courts. Should such a situation occur with one of our main customers in the future, it could have a material adverse effect on our business, financial condition and results of operations.

In the ordinary course of our business, we are exposed to a variety of financial market risks that are typical for the industry and sector in which we operate.

The principal financial market risks that affect our financial condition, results of operations and prospects relate to foreign currency exchange rates and interest rates. We use derivative financial instruments to manage foreign currency risks and interest rate risks. While we have adopted certain mitigation strategies to limit our exposure to these market related risks, there can be no assurances that any mitigation strategies will be effective or that we will not be materially adversely affected by such risks in future periods.

Risk Factors Related to the Company, the Selling Shareholder and our Contracts

We must continue to be able to attract and retain qualified personnel, including television presenters, and our inability to do so would adversely affect our business.

We are dependent on our staff for the creation, production and marketing of formats. In particular, we depend on the creativity of our staff, including certain freelancers to develop successful new formats. We place great importance on recruiting and retaining creative staff. We believe we have succeeded in recruiting and retaining highly qualified, creative personnel. In addition, several persons on our key creative staff have entered into long-term agreements with us, which include post employment non-competition provisions. We believe that our relationship with our creative personnel is good. It is possible that in the future certain individuals may leave our company who cannot be easily replaced. Such a loss of personnel could make it more difficult for us to revitalize our most successful formats or create new blockbusters, and this could lead to a loss of customers, which in turn could have a material adverse effect on our business, financial condition and results of operations. A related risk is that if our personnel seek positions elsewhere, they may bring know-how important to our

12 formats or business to new employers, including our competitors, which could also have a material adverse effect on our business, financial condition and results of operations.

Furthermore, the success of a given format in a given market is often at least in part dependent on the anchors, presenters, hosts, or other individuals who serve as the public “face” of the programme. While there is no shortage of such individuals, casting the wrong individual can lead to the failure of a programme and losing such an individual can similarly affect an on-going programme’s future prospects. The failure or diminished success of a programme could have a material adverse effect on our business, financial condition and results of operations.

We are dependent on a limited number of major customers.

Currently, a substantial part of our turnover and margin is derived from a limited number of customers. Our top five customers contributed 48.9% of our total net revenues in 2004, although none of them represented more than 14.8% of such revenues. This is typical for our industry, because in many countries where we and our competitors are active, there is only a limited number of widely viewed broadcasters. If we were to lose any of our major customers and were not able to secure substitute business, this could have a material adverse effect on our business, financial condition and results of operations.

We cannot rely on long-term production agreements.

With the majority of our customers, we have not entered into long-term production agreements. Although we have entered into long-term production agreements with some of our most important customers in certain countries, it may not be possible nor desirable for various commercial reasons to continue these long-term production agreements. As a result, there will not be a large guaranteed off-take quantity for our formats, which could have a material adverse effect on our business, financial condition and results of operations.

We are dependent on a limited number of formats.

Our turnover and profit are generated to a large extent by a limited number of formats. In 2004, our top ten formats in terms of revenue contributed 56.6% of total net revenues, and our top five formats contributed 45.5% of total net revenues. If we are not able to develop and/or produce new successful formats when the lifecycles of these key formats end, this would have a material adverse effect on our business, financial condition and results of operations.

We have limited experience in producing scripted programming and because this may entail pre-financing and deficit financing growth in scripted programming subjects us to increased risk.

One of our key strategies is the expansion of our activities in the field of scripted programming. In this field, a different business model applies than in the other fields. In scripted programming the creation of formats and production of programmes are typically pre-financed by the producer (instead of a broadcaster), and may require deficit financing. We are seeking to implement a different business model with respect to our scripted programming, whereby the broadcaster will pre-pay a portion of the production costs. We cannot assure you that we will be successful in implementing this business model. If we are not, we may need to choose between abandoning our expansion into further scripted programmes or accepting increased production risk.

We frequently use freelancers and workers on temporary contracts, and if they are deemed to be our employees, our costs could increase significantly.

In the ordinary course of our business we often make use of freelancers and workers on temporary contracts for particular projects or specific productions. As of 30 September 2005, our workforce comprised 4,309 full time equivalents of which 707 were freelancers, 1,227 were workers on contracts for an indefinite term and 2,375 were workers on temporary contracts. Of our total workforce 71.5% are freelancers or workers on temporary contracts. If our freelancers or workers on temporary contracts were deemed to be our employees or workers on indefinite term contracts, respectively, this could lead to a significant decrease in our personnel flexibility and a significant increase in our labour and tax costs.

13 We rely on our managing directors and their personal relationships with broadcasters.

Most of our managing directors and some other key employees in certain countries have strong personal relationships with leading broadcasters in those countries or their management. The departure of those managing directors or employees could lead to a reduction in our ability to sell our formats, which could have a material adverse effect on our business, financial condition and results of operations.

Our principal direct and indirect shareholder may have interests that are different from yours and may make decisions that are adverse to your interests and may not necessarily remain a shareholder after the Offering.

At the date of this prospectus, Telefónica is the indirect holder, through the Selling Shareholder, among other companies, of 99.7% of our capital. The Selling Shareholder, and therefore, indirectly, Telefónica will initially maintain control over our Company.

This means that the Selling Shareholder, and therefore, indirectly, Telefónica, will be in a position to exercise control over Endemol with regard to decisions of the General Meeting of Shareholders as to corporate governance; the appointment, removal and discharge of members of the Management and Supervisory Boards; and the approval of significant transactions by Endemol. As a result, the Selling Shareholder will have the ability to control our policies and operations, including the appointment of management, the entering into of mergers, acquisitions, sales of assets, divestitures and other extraordinary transactions, future issuances of shares or other securities, the payment of dividends, if any, on our Shares, the incurrence of debt by us and the amendment of our articles of association. The Selling Shareholder will also have the ability to prevent any transaction that requires the approval of the General Meeting of Shareholders regardless of whether or not other members of our Management Board or shareholders believe that such a transaction is in Endemol’s best interests.

Additionally, the Selling Shareholder, Telefónica and their respective affiliates may from time to time acquire and hold interests in businesses that compete directly or indirectly with us. The Selling Shareholder and Telefónica may also pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us.

We may also have to compete with other companies in the Telefónica group that engage in activities similar to those within our business and strategy. As a consequence of this, the Telefónica group could decide not to take advantage of certain business opportunities through us, or decide that these opportunities should be shared jointly by us and other companies of the Telefónica group. In view of the foregoing, eventual conflict of interests may exist between Telefónica and its subsidiaries, on the one hand, and Endemol, on the other hand, where their interests do not coincide.

Furthermore, there is no commitment on the part of either the Selling Shareholder (in this case subject to certain contractual restrictions undertaken by it with respect to the Managers for a period of 180 days following the date of the Underwriting Agreement) or Telefónica to remain a shareholder or to retain a minimum interest in our Company. As a result, no investment decision should be made on the basis that any of the Selling Shareholder or Telefónica will retain any interest in our Company following the Offering.

In addition, the disposition of our Shares by either the Selling Shareholder or Telefónica, among other events, may, depending on the specific circumstances, constitute a change of control in our Company under certain of our licensing and other agreements. This may result in the termination or amendment of such agreements or require us to renegotiate such agreements on terms that are less favourable to us. To the extent any of our material agreements are terminated, there can be no assurance this would not have a material adverse effect on our business, financial condition or results of operations.

Broadcasters may not meet their minimum volume purchase obligations under their contracts with us, and our remedies may be limited.

We have concluded agreements with certain broadcasters that require a minimum off-take in a certain period, in some cases subject to monetary penalties. Some of these broadcasters do not meet their minimum volume purchase obligations from time to time. Typically we are compensated for such failures in accordance with the provisions of the contracts we have negotiated. However, if due to a dispute or otherwise, certain of our larger customers did not pay to us the compensation due to us for such failures in full, we may not be able to

14 collect these payments without losing such customer(s). If this were to become a general trend, it could have a material adverse effect on our business, financial condition and results of operations.

Our commercial relationship with the French Endemol business was established on the same basis as other Endemol group companies.

The French Endemol business is not part of the Issuer Group. However, we have extensive commercial and management relationships with the French Endemol business, most of which were established at the time when there was no corporate separation between the Issuer Group and the French companies. In addition, some of our agreements with the French Endemol business have not always been made in writing or executed formally. We are not renegotiating those relationships and we anticipate that these relationships will continue into the future on a similar basis. If, however, these relationships were to be renegotiated, it is possible that we would be able to do so on terms that are more favorable to us. See “Related Party Transactions—The French Endemol Business”.

The structure of certain of our acquisitions requires us to make additional investments in future years in order to maintain our ownership interest.

Our growth has in part been the result of our acquisition of interests in other companies. From time to time these acquisitions are structured such that we have a call option to increase our interest or the seller has a put option requiring us to make an additional investment to purchase its interest. Although we may not be contractually obligated to exercise a call option, in practice it may be necessary for us to do so, for example, when the failure to exercise an option triggers a call option on our interest for the benefit of another party. The put options typically provide that the other shareholders have the right at a certain point in time following the initial acquisition, to sell all or a portion of their interest to us. Such mechanisms may continue to be included in future acquisitions. The consideration to be paid for the interest to be acquired under these arrangements may depend upon future developments and is typically not capped. As a result, these arrangements may lead to significant financial exposure. The estimated cash payment related to the call options is EUR 24.0 million as of 30 September 2005 (EUR 33.1 million as of 31 December 2004). The estimated cash payment related to the put options is EUR 9.2 million as of 30 September 2005 (EUR 13.2 million as of 31 December 2004).

Because we do not have full control over the operations we conduct through joint ventures or in which we have a minority interest, our ability to manage them effectively may be limited.

We currently have interests in a number of joint ventures and may in the future enter into further joint ventures as a means of conducting our business. For example, we may seek to enter into a joint venture with a local business when entering a new market, in order to take advantage of that business’s local knowledge and relationships. In addition, we have several minority interests in other companies. Depending upon the structure of the joint venture or other company, we may not be able to fully control its operations or assets, and we may not be able to make major decisions or take timely actions unless our joint venture partners or other shareholders agree. Furthermore, cooperation in some joint ventures is subject to ongoing discussions, which may affect the way we do business in the countries concerned.

If we acquire or invest in other businesses, we will face certain risks inherent to such transactions.

Our strategy is focused on profitable growth and market leadership. We plan to acquire businesses, to start up companies and to enter into joint ventures and partnerships in order to maintain growth. We cannot assure you that we will be successful in our acquisitions or that we will realize the expected operational and financial advantages of these future transactions. If we make such acquisitions or investments or enter into strategic alliances, we will face certain risks inherent to such transactions. For example, gaining regulatory approval for significant acquisitions or investments could be a lengthy process, and there can be no assurance of a successful outcome. We could face difficulties in managing and integrating newly acquired operations. If we make any future acquisitions, investments, strategic alliances or joint ventures, we cannot assure you that they will be completed in a timely manner, that they will be structured or financed in a way that will enhance our creditworthiness or that they will meet our strategic objectives or otherwise be successful. Failure to effectively manage any of these transactions could result in material increases in costs or reductions in expected revenues, or both.

15 Our principal finance agreement contains restrictions that limit our flexibility in operating our business.

On 29 September 2005 we entered into a term sheet in respect of a EUR 250.0 million three-year multicurrency revolving credit facility, which we intend to enter into with a number of banks before the consummation of the Offering. The loans under the facility will be guaranteed by three of our operating subsidiaries. The facility will require us to satisfy and maintain specified financial ratios and other tests of financial condition. Our ability to meet those financial ratios and tests can be affected by events beyond our control, and in the future we may be unable to meet those ratios and tests. A breach of any of these covenants could result in a default under the facility. Upon the occurrence of an event of default under the facility, the lenders could elect to declare all amounts outstanding to be immediately due and payable and terminate all commitments to extend further credit. In addition, the facility will have customary terms restricting our ability to make fundamental changes to our business, dispose of our formats and incur other bank debt above EUR 300.0 million in aggregate. We will also be restricted in paying dividends and making other distributions if certain financial conditions are not satisfied.

Risk Factors Related to Regulation

The enactment of additional, increasingly restrictive legislation with respect to Participation TV and comparable digital media activities could adversely affect our revenues.

Participation TV and activities in the digital media field entailing participation by the audience may be considered gaming, gambling, a lottery or a competition in certain countries and, consequently, be or become subject to restrictive legislation. This regulation of gambling and other similar activities is becoming more restrictive in some countries and such changes in regulation could result in a decrease of our Participation TV revenues in those countries. In addition, the development of our digital media activities could be adversely affected. These developments could have a material adverse effect on our business, financial condition and results of operations.

Changing requirements on minimum independently produced content may affect our business.

The European Commission is currently revising the Television without Frontiers Directive (TVWF), which regulates the EU broadcasting market and imposes a quota requirement for EU member states to ensure that broadcasters commission a minimum percentage of programming from independent producers. A decrease in such quota may lead to a rise in in-house production by broadcasters, resulting in more severe competition. In addition, if the definition of independent producer currently employed by EU member states is narrowed, we may no longer be able to qualify as such and would lose business as a result.

Government regulation or political or religious pressure may limit our ability to exploit certain types of formats in certain jurisdictions.

In certain countries where we are or may become active, limitations or prohibitions on certain types of formats may be imposed by law or political or religious pressure. As a result, we may not be able to exploit certain formats in such countries.

Increased costs associated with corporate governance compliance may significantly affect our results of operations.

As a result of being a Dutch company listed on Eurolist by Euronext, the Dutch Corporate Governance Code, the General Rules of the Euronext Amsterdam Stock Market as well as certain legislation applicable to listed companies will apply to us. This requires changes in some of our corporate governance and securities disclosure and compliance practices, and will require a review of our internal control procedures. We expect these developments to increase our legal compliance and financial reporting costs. In addition, they could make it more difficult for us to attract and retain qualified members for our Management Board and Supervisory Board. Finally, directors and officers liability insurance for public companies like us can be difficult and expensive to obtain, and we may be required to accept reduced coverage or incur higher costs to obtain coverage that is satisfactory to us and our officers and directors. We are presently evaluating and monitoring regulatory developments and cannot estimate the timing or magnitude or additional costs we may incur as a result. In addition to the above, as our accounts are consolidated by Telefónica, we are indirectly subject to certain

16 provisions of the Sarbanes-Oxley Act of 2002 and other legislation in other countries where Telefónica is listed, which leads to additional compliance and financial reporting costs.

Our large market share in certain markets may result in restrictions being placed on our business, including restrictions on our ability to make acquisitions.

In general, our business may be restricted by competition law. In particular, if the relevant markets in which we operate were defined very narrowly by a court or an antitrust agency and/or if our market position were to strengthen over time, we may be considered a dominant market player. This may in turn result in restrictions being placed on our business, by limiting our ability to make additional acquisitions in certain countries consistent with our strategy or by exposing us to potential claims of abuse of dominance. Either of these developments could have a material adverse effect on our business, financial condition and results of operations.

Our operating companies may not all be in full compliance with, or have procedures in place that are sufficient to satisfy legislation which requires the protection of personal data.

In many jurisdictions, the processing of personal data is subject to regulation. Personal data is used in, and is important to, our business. Endemol has put in place a comprehensive set of measures designed to ensure, wherever possible, that all operating companies in each jurisdiction in which Endemol has operations have and keep in place procedures in order to satisfy the requirements of legislation dealing with the protection of personal data. In most cases, our operating companies are in compliance with relevant legislation but there can be no assurance that all operating companies will be deemed to have complied with all relevant laws and regulations relating to the protection of personal data. To the extent that any such failure to comply with all relevant laws and regulations prevents or hinders our operations in the relevant country, or results in adverse judicial or administrative action against us, our results of operations, financial position, public reputation or business activites may be adversely affected. We may also be exposed to penalties and/or fees in respect of any such failure to comply with relevant laws and regulations relating to the protection of personal data.

The enactment of new or revised legislation requiring differences in the way in which personal data is currently protected could result in additional compliance costs.

If new legislation with respect to personal data is introduced in jurisdictions in which we operate where no legislation previously existed, or if changes are made to existing legislation which require commensurate alterations to be made to our current procedures, it is possible that this new or revised legislation may affect our business and result in additional costs being incurred by our operating companies.

Our business operations in countries worldwide subject us to trends, developments or other events in such countries that may affect us adversely.

We have local operations in 22 countries worldwide and derive a material portion of our combined revenues from diverse sources on five continents. As a result, our business is subject to certain risks inherent in international trade, many of which are beyond our control. These include changes in laws and policies affecting trade, tariffs, investment and taxes (including laws and policies relating to the repatriation of funds, price controls and withholding taxes), differing degrees of protection for intellectual property, potentially longer collection periods and the instability of foreign economies and governments. There can be no assurance that in the future we will be able to insure or hedge against these risks, or ensure compliance with all of the applicable regulations, without incurring additional costs.

We conduct a significant part of our business outside the European Monetary Union and exchange rate differences with the euro may have an impact on our financial results which are presented in euro. Several of our smaller subsidiaries operate or plan to operate in countries whose currencies are subject to devaluations or have economies subject to significant inflation, including Argentina, China, Mexico, Russia and South Africa. Sudden devaluations of local currencies or hyper-inflation in the countries in which we operate may decrease the value of our investment in such countries, increase our costs and reduce our consolidated revenues (which are presented in euro). Furthermore, financing may not be available in countries with less than investment-grade sovereign credit ratings. As a result, it may be difficult to create or maintain profit-making operations in developing countries. In addition, our results can be affected by trends, developments and other events in individual countries. There can be no assurance that in the future these or other country-specific trends, developments or other events will not have a material adverse effect on our business, financial condition, and results of operations.

17 Risk Factors Related to our Shares and the Offering

Future issuances of Shares may affect the market price of the Shares and could dilute the interests of existing shareholders.

We may issue Shares in future public offerings, in private placements, under an employee share and stock option plan or in connection with acquisitions. We are not per se required under Dutch law to offer any such Shares to existing shareholders on a pre-emptive basis. Therefore, it may not be possible for existing shareholders to participate in such future Share issues, which may dilute the existing shareholders’ interests in the Company. In addition, the issue of additional Shares by us, or the possibility of such issue, may cause the market price of the Shares to decline.

The market price of the Shares could be negatively affected by sales of substantial amounts of the Shares in the public markets.

Sales by us or the Selling Shareholder of a substantial number of Shares in the public markets following this Offering, or the perception that these sales might occur, could cause the market price of the Shares to decline and could impair our ability to raise capital through a future sale of, or pay for acquisitions using, our equity securities.

We cannot guarantee that dividends will be declared or paid.

The payment of any dividend and any future increases in our dividend payments will depend upon a number of factors, including the successful management of our business, our results of operations, and the limitations contained in the multicurrency revolving credit facility which we intend to enter into as described above, as well as any limitations that may be contained in our other future agreements. In addition, our ability to pay dividends is entirely dependent on our subsidiaries’ ability to pay us dividends, which ability may be limited by such subsidiaries’ results of operations or local law requirements in the jurisdictions in which they operate. Therefore, there can be no guarantee that we will be able to pay any dividends or, if we do pay dividends, that the dividends that we pay will increase over time.

The market price of our Shares may fluctuate widely in response to different factors.

The market price of the Shares may be subject to wide fluctuations in response to many factors, including variations in the operating results of the Company, divergence in financial results from stock market expectations, changes in earnings estimates by analysts, a perception that other market sectors may have higher growth prospects, general economic conditions, legislative changes in our sector and other events and factors outside our control. The market value of a Share may vary considerably from its underlying net asset value.

Other factors which could cause the price of the Shares to fluctuate or could damage the reputation of the Issuer Group include any adverse publicity derived from any business affairs, contingencies, litigation or other proceedings and related actions affecting the Selling Shareholder, its assets (including the imposition of any lien) or its management, other subsidiaries of the Selling Shareholder or the Telefónica group, of which we are currently a part. This adverse publicity, for instance, could relate to the determination of the amount of an additional payment in relation to the acquisition of the French Endemol business as described in “Related Party Transactions—Reorganisation”.

In addition, stock markets have from time to time experienced extreme price and volume volatility which, in addition to general economic and political conditions, could adversely affect the market price for the Shares.

There may not be an active market for the Shares, which may cause the Shares to trade at a discount to the Offer Price and make it difficult to sell the Shares you purchase.

There is currently no public market for the Shares. We cannot assure you that an active trading market for the Shares will develop or, if it develops, will be sustained after this Offering or how liquid that market will be. A significant portion of our Shares will continue to be held by the Selling Shareholder. The Offer Price and the number of Shares offered in this Offering will be determined by negotiations between us, the Selling Shareholder, the Lead Bookrunner and the Joint Bookrunners, based on interest from investors. We cannot assure you that the Offer Price will correspond to the price at which the Shares will trade in the public market

18 subsequent to this Offering or that the price of the Shares available in the public market will reflect our actual financial performance.

As the Shares will be listed and traded on Eurolist by Euronext on an “as–if–and–when–issued” basis as of the Listing Date until the envisaged Closing Date, Euronext may annul all transactions effected in the Shares if the Shares are not delivered on the envisaged Closing Date.

As of the Listing Date until the envisaged Closing Date, the Shares will be listed and traded on Eurolist by Euronext on an “as-if-and-when-issued” basis. Investors that wish to enter into transactions in the Shares prior to the envisaged Closing Date, whether such transactions are effected on Eurolist by Euronext or otherwise, should be aware that the Closing Date may not take place on or about 25 November 2005, or at all, if certain conditions are not satisfied or waived or if certain events occur on or prior to such date. Such conditions include the receipt of legal opinions and comfort letters and such events include the suspension of trading on Eurolist by Euronext or a material adverse change in our financial condition or business affairs or in the financial markets.

Euronext has indicated that it will annul all transactions effected in the Shares if the Shares are not delivered on the envisaged Closing Date. Euronext has indicated it cannot be held liable for any damage arising from the listing and trading on an ‘‘as-if-and-when-issued’’ basis as of the Listing Date until the envisaged Closing Date.

19 USE OF PROCEEDS

All of the Shares to be sold in the Offering are sold by the Selling Shareholder. Consequently, we will not receive any of the proceeds from the sale of the Shares. All the net proceeds from the Offering will be paid to the Selling Shareholder. The expenses of the Offering will be borne by the Selling Shareholder.

The rationale for the Offering is to increase the visibility of Endemol’s business through independent public valuation and to improve the ability to align management objectives with the Company’s strategy.

20 DIVIDEND POLICY

Our general dividend policy following the Offering is to pay dividends at levels consistent with maintaining a reasonable level of liquidity. The current intention of our Management Board is to distribute approximately 60% of the net income attributable to shareholders. Our dividend policy is subject to:

G the terms of our financing facilities that contain restrictions on dividend payments if certain financial conditions are not satisfied; see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Anticipated Sources of Liquidity’’ and “Risk Factors—Our principal finance agreement contains restrictions that limit our flexibility in operating our business”;

G the discretion of our Management Board, Supervisory Board and the General Meeting of Shareholders; and

G such factors as future earnings, financial condition, cash needs, capital adequacy, compliance with applicable statutory and regulatory requirements and general business conditions.

21 CAPITALISATION

The following table sets out the consolidated cash and cash equivalents and capitalisation of the Issuer Group as of 30 September 2005. Since the Offering does not involve the issue of new Shares by the Company and the Company will not receive any proceeds from the Offering, the Offering will have no direct effect on the capitalisation of the Company.

This table is derived from and should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our pro forma consolidated financial information and related notes elsewhere in this prospectus.

Capitalisation as of 30 September 2005 (on the Basis of IFRS)

EUR in millions 30 September 2005 –––––––––––––––––– Equity Attributable to the Shareholders ...... 118.0 Minority Interests ...... 7.3 –––––––––– Total Equity ...... 125.3

Short-term Loans and Borrowings ...... 184.4 Long-term Loans and Borrowings ...... 2.3 –––––––––– Financial Debt ...... 186.7

–––––––––– Total Capitalisation...... 312.0 ––––––––––

Cash and Cash Equivalents ...... (102.9)

Net Financial Debt / (Cash) ...... 83.8

Short-term loans and borrowings consist of all loans and borrowings with a maturity of less than one year. These include drawings under our temporary overdraft facility, drawings under local bilateral credit facilities and negative bank balances under overdraft agreements. The latter include the gross bank positions under the cash pool agreements. Under IFRS, both the debit and the credit amounts are reflected separately. For interest calculation purposes these amounts are netted. No third party has guaranteed our debts. We have not granted rights in rem to secure our debts.

22 SELECTED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

The selected pro forma consolidated financial information has been prepared to provide information about how the adjustments relating to the Reorganisation in preparation for the Offering could have affected the consolidated financial statements of Endemol Holding N.V. as though it had occurred as of 1 January 2002. See “Related Party Transactions—Reorganisation’’. The pro forma consolidated financial information has been presented for illustrative purposes only and does not purport to (i) represent what the Endemol group’s results of operations or financial condition would have actually been had the Reorganisation in fact occurred as of 1 January 2002 or (ii) project the results of the Endemol group’s operations for any future period or its financial condition for any future date.

Such information is derived from:

G the pro forma consolidated financial information for the financial years ended 31 December 2002, 2003 and 2004 on the basis of Dutch GAAP;

G the pro forma consolidated financial information for the financial year ended 31 December 2004 on the basis of IFRS; and

The selected pro forma consolidated financial information should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our pro forma consolidated financial information and related notes elsewhere in this prospectus. For a summary of certain differences among IFRS, US GAAP and Dutch GAAP affecting our pro forma consolidated financial information, see “Annex A: Differences among IFRS, US GAAP and Dutch GAAP Relevant to Endemol”.

Our financial information has been prepared in accordance with IFRS since 2004.

23 Income Statement Data

9 months ended EUR in millions Year ended 31 December 30 September ––––––––––––––––––––––––––––––––––––––––––––––––– –––––––––––––––––––––––– 2002 2003 2004 2004 2004* 2005 (Dutch (Dutch (Dutch GAAP) GAAP) GAAP) (IFRS) (IFRS) (IFRS) ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Net Turnover ...... 708.4 739.7 850.9 850.9 585.8 615.8 Cost of Outsourced Work and Other External Costs ...... (408.1) (413.3) (506.0) (509.0) (349.2) (367.9) Personnel Costs ...... (131.7) (140.8) (129.7) (137.1) (92.8) (96.8) Other Operating Expenses ...... (79.0) (58.5) (76.2) (72.5) (41.7) (39.7) Depreciation ...... (13.4) (12.2) (13.9) (14.7) (8.8) (11.4) Amortisation...... (8.6) (7.3) (8.8) (0.5) (0.5) (0.1) ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Operating Result ...... 67.7 107.7 116.5 117.2 92.8 99.8 Financial Results ...... (3.2) (4.9) (5.7) (7.7) (6.9) 0.2 Income from Participating Interests ...... (0.2) 1.5 1.7 1.7 1.4 0.9 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Income Before Tax ...... 64.3 104.3 112.5 111.2 87.3 100.9 Taxes...... (24.5) (39.8) (45.1) (41.5) (31.6) (37.0) ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Net Income ...... 39.8 64.5 67.4 69.8 55.7 63.8 Minority Interests ...... (3.8) (1.4) (5.5) (5.3) (3.7) (4.0) ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Net Income Attributable to Shareholders 36.0 63.1 61.9 64.5 52.0 59.8

(*) Unaudited

Cash Flow Data

Cash at the Beginning of the Period...... 45.7 34.2 20.0 107.2 107.2 117.8 Cash at the End of the Period ...... 34.2 20.0 6.1 117.8 143.9 102.9

Capital Expenditure...... 14.8 12.0 15.2 15.2 10.7 7.1

24 EBITDA Data

(*) Unaudited

Net Financial Indebtedness

(*) Unaudited

25 Balance Sheet Data

EUR in millions As of 31 December As of 30 September ––––––––––––––––––––––––––––––––––––––––––––––––– –––––––––––––––––––––––– 2002 2003 2004 2004 2004* 2005 (Dutch (Dutch (Dutch GAAP) GAAP) GAAP) (IFRS) (IFRS) (IFRS) ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Non-current Assets Intangible Assets ...... 133.1 145.3 142.7 148.5 151.1 156.0 Property, Plant and Equipment...... 45.7 44.6 41.4 41.4 44.6 40.0 Financial Assets ...... 35.4 46.4 111.3 125.7 131.5 27.0 Current Assets ...... 359.9 304.8 287.9 378.7 352.3 384.9 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Total Assets ...... 574.1 541.2 583.4 694.3 679.4 607.9

(*) Unaudited

26 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis is based on and should be read together with our pro forma consolidated financial information for the years ended 31 December 2002, 2003 and 2004, as well as our pro forma consolidated interim financial information for the nine-month periods ended 30 September 2004 and 2005 and the related notes thereto beginning on page F-1 of this prospectus.

Our pro forma consolidated financial information for 2002 and 2003 has been prepared in accordance with Dutch GAAP, and our pro forma consolidated financial information for 2004 has been prepared in accordance with Dutch GAAP and in accordance with IFRS. Our pro forma consolidated interim financial information for the nine-month periods ended 30 September 2004 and 2005 has been prepared in accordance with IFRS. Prospective investors should be aware that Dutch GAAP, IFRS and US GAAP differ from each other in certain significant respects. For a description of these differences, see “Annex A: Differences among IFRS, US GAAP and Dutch GAAP Relevant to Endemol”.

Certain information contained in the following discussion and analysis and elsewhere in this prospectus includes forward-looking statements that involve risks and uncertainties. See “Important Information—Forward- Looking Statements” and “Risk Factors” for a discussion of the important factors that could cause actual results to differ materially from the results described or implied by the forward-looking statements contained in this prospectus.

Overview

Our net turnover for the financial year ended 31 December 2004 was EUR 850.9 million, producing an EBITDA (earnings before interest, taxes, depreciation and amortisation) of EUR 132.4 million (15.6% of turnover) and an operating result of EUR 117.2 million, determined in accordance with IFRS.

We generate revenues primarily by creating and, to a lesser extent, acquiring great ideas, producing them to high standards and seeking to exploit them to their full commercial limits. For the year ended 31 December 2004, our non-scripted productions and formats accounted for EUR 669.6 million (78.7%), our scripted productions accounted for EUR 104.3 million (12.3%) and our digital media productions accounted for EUR 77.0 million (9.0%) of our net turnover, respectively.

Basis of Financial Presentation

In preparation for this Offering, we have completed the Reorganisation pursuant to which the Company was incorporated as a new company and then acquired the majority of the Endemol businesses from the Selling Shareholder and Endemol Holding N.V. We did not acquire the French Endemol business.

As we are a new company that was incorporated on 28 October 2005, we do not have historical financial statements. Our indirect parent company, Endemol Holding N.V., has prepared historical financial statements on the basis of Dutch GAAP for the years ended 31 December 2002, 2003 and 2004, which were audited by KPMG. These historical financial statements reflect both the results of our predecessor businesses and those of the French Endemol business. Because these financial statements of Endemol Holding N.V. are not representative of our results as a stand-alone business, we have not discussed them in this prospectus. As these historical financial statements relate to our indirect parent company prior to the Reorganisation, investors should not rely on them with respect to our past or future results of operations or financial condition. These historical financial statements are incorporated into this prospectus by reference and can be obtained free of charge on the Internet at www.historicalfinancials.com.

27 In connection with the Reorganisation, we have prepared financial information and accompanying notes on a pro forma basis that takes into account the Reorganisation as if it had occurred on 1 January 2002. Specifically, we have prepared the following:

G pro forma consolidated financial information for the financial years ended 31 December 2002, 2003 and 2004 on the basis of Dutch GAAP (the “2002-2004 Dutch GAAP Information”);

G pro forma consolidated financial information for the financial year ended 31 December 2004 on the basis of IFRS (the “2004 IFRS Information”); and

G pro forma consolidated interim financial information for the nine months ended 30 September 2005 (with pro forma consolidated interim financial information for the nine months ended 30 September 2004 for comparison purposes) on the basis of IFRS (the “Interim IFRS Information”).

We have prepared pro forma consolidated financial information for the nine months ended 30 September 2005 for the purpose of the Offering and following the Offering we intend to report our results on a semi-annual basis.

The 2002-2004 Dutch GAAP Information and the 2004 IFRS Information were prepared on the basis of the audited consolidated financial statements of Endemol Holding N.V. adjusted to exclude the individual results of Endemol Holding N.V., Endemol Investment B.V. (previously named Endemol B.V.) and the French Endemol business. The 2004 IFRS Information and the Interim IFRS Information include all adjustments that we believe will be necessary for a presentation of financial information on the basis of IFRS. It is possible that, in connection with the preparation of financial statements as of and for the year ended 31 December 2005, further adjustments to the 2004 IFRS Information will be required.

Under Dutch accounting rules, the 2002-2004 Dutch GAAP Information, the 2004 IFRS Information and the Interim IFRS Information for the nine months ended 30 September 2005 are not permitted to be described as “financial statements”; rather, this information should be characterized as “pro forma financial information”. Ernst & Young is not permitted to provide the same audit report normally issued on historical financial information on this pro forma financial information. Ernst & Young has conducted assurance work, substantively similar to an audit, on the financial information and provided us with assurance conclusions thereon as follows:

G With respect to the 2002-2004 Dutch GAAP Information, Ernst & Young has performed assurance work, substantively similar to an audit, on the adjustments relating to the Reorganisation from the consolidated financial statements of Endemol Holding N.V., which financial statements were audited by KPMG Accountants N.V. Ernst & Young has delivered an assurance report, included on page F-31 to the effect that the 2002-2004 Dutch GAAP Information has been properly compiled and provides a reasonable basis for presenting the significant effects directly attributable to such adjustments.

G With respect to the 2004 IFRS Information, Ernst & Young has performed assurance work on the information that is, in scope and procedures, substantively similar to an audit and delivered an assurance report, included on page F-101 to the effect that this information has been prepared, in all material respects, in accordance with IFRS and that the 2004 IFRS Information has been properly compiled and provides a reasonable basis for presenting the significant effects directly attributable to the adjustments in relation to the Reorganisation.

G With respect to the Interim IFRS Information for the nine months ended 30 September 2005, Ernst & Young has performed assurance work on the information that is, in scope and procedures, substantively similar to an audit and delivered an assurance report, included on page F-160 to the effect that this information has been prepared, in all material respects, in accordance with IFRS and that the Interim IFRS Information for the nine months ended 30 September 2005 has been properly compiled and provides a reasonable basis for presenting the significant effects directly attributable to the adjustments in relation to the Reorganisation.

The following discussion of our results of operations and financial condition is, unless otherwise stated, based on the 2002-2004 Dutch GAAP Information, the 2004 IFRS Information and the Interim IFRS Information.

28 Factors Affecting our Results of Operations

Production of Formats

We are a company organised around the creation and production of television formats. Because the production of formats proceeds on a project by project basis, movements in our net turnover and other operating results depend upon the major programmes being produced at any point in time. By their nature, project oriented businesses such as ours have fluctuating results, and period to period comparisons are significantly influenced by the large formats that were in production in each period. Our results of operations in any period depend on our ability to continue to generate widely viewed quality programming. Our use of temporary staff, freelancers and other services is also dependent on the number of formats we have in production at any time.

In general the television season does not match the calendar year, which is also our fiscal year. In many markets, but especially in Europe, the television runs from summer to summer. In such cases, the calendar year cut-off occurs in the middle of the television season, our production period, which results in us having a large number of productions in progress at year-end.

Television Advertising Cycles and Trends

The price at which television advertising is sold by broadcasters generally depends on demand, audience share and any commercial discounts, volume rebates and agency commissions negotiated by advertisers. Demand for television advertising historically has been subject to both cyclical and seasonal trends. Because our revenues primarily consist of fees related to the production of television formats for broadcasters, our business can be indirectly impacted by the advertising cycle. Television broadcasters generally have smaller programming budgets when advertisers are spending less money on advertising. In addition, spending by advertisers differs by geographic market.

We seek to identify trends in the advertising market that may impact our business. Where we have identified advertising trends, such as the expansion of Internet advertising and direct sponsorship of programmes, we have produced programmes, such as Big Brother and Extreme Makeover: Home Edition, that are structured to benefit from these trends.

Television advertising cycles are influenced by general levels of economic growth and trends in levels of television viewership, among other factors. For a discussion of trends in the television advertising market, see “Business—Market”.

Geographical Diversity

Our net turnover is generated by our operating companies in 22 countries throughout the world. This geographical diversity allows us to focus our efforts in markets where advertising revenues are increasing, which can help to offset less favorable results in more difficult markets, such as where advertisers have reduced their spending. As a result, the effects of market developments in particular countries on our consolidated results of operations tend to be moderated.

Acquisitions

Our business has evolved from the merger in 1994 of two major television production companies in the Netherlands, Joop van den Ende Productions and John de Mol Produkties. Since that merger, our business has grown through a combination of acquisitions, joint ventures and strategic alliances as well as internally developed start-up operations.

Acquisitions are typically structured to provide for the initial purchase of a substantial minority or small majority (40-60%) stake in a company, with the purchase price consisting of an initial cash payment, and a subsequent earn-out payment based on or related to the target company's performance following the acquisition.

If our initial investment performs as expected, we typically seek to increase our stake in the target company over a multi-year period. In furtherance of this goal, we have entered into call and put options with the other shareholders in the target company in connection with past acquisitions. The call options typically provide that we have the right, at a certain point in time following the initial acquisition, to purchase a portion of the other

29 shareholders’ interest in the target company. The put options typically provide that the other shareholders have the right, at a certain point in time following the initial acquisition, to sell all or a portion of their interest to us. The consideration to be paid for the interests acquired pursuant to these call and put options is typically based on the performance of the applicable target company. Based upon our expectations of the future performance of these target companies, we estimate that the aggregate purchase price of the interests we have the right to acquire pursuant to these call options is EUR 24.0 million, and the aggregate purchase price of the interests we could be required to acquire pursuant to put options is EUR 9.2 million, in each case as of 30 September 2005.

Acquisitions may affect the comparability of our results of operations and financial condition from period to period, particularly when the full results of a subsidiary investment are included in our consolidated results. Our pro forma consolidated financial information includes the results of operations of each company in which we hold a majority interest or otherwise exercise a controlling influence (or jointly exercise a controlling influence) over its business and financial policy. For a more detailed overview of our acquisitions, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Acquisitions”. Five transactions that have had a significant effect on our results of operations and financial condition since 1 January 2002 are the following:

G the merger of Rene Stokvis Produkties and Ivo Niehe Produkties into Stokvis & Niehe Producties (Netherlands) and the subsequent increase of our interest, which contributed an additional EUR 12.2 million in net turnover in 2003 compared to 2002;

G the acquisition of our 51% stake in True Entertainment (United States) in October 2003, which resulted in additional net turnover in 2004 of EUR 7.8 million as compared to 2003;

G the increase in our stake in Endemol Southern Star (Australia) in October 2003 to a controlling stake, which resulted in additional net turnover in 2004 of EUR 13.5 million as compared to 2003;

G the acquisition of an additional 17.5% stake in Palomar (Italy) in August 2004 which resulted in an additional net turnover in 2004 of EUR 13.1 million as compared to 2003; and

G the acquisition of an additional 25% stake in Meta (Germany) in January 2005, which contributed an additional EUR 5.1 million in net turnover for the nine months ended 30 September 2005 compared to the nine months ended 30 September 2004.

Description of Income Statement Items and Other Financial Measures

Net Turnover

Our net turnover is derived principally from non-scripted television productions and, to a lesser extent, scripted television productions and digital media productions. With respect to television productions, our net turnover principally consists of production and license fees paid to us by broadcasters. A portion of our net turnover from television productions is also derived from fees paid directly to us by advertisers in connection with television formats that they fully fund, sponsor or otherwise have an interest in, such as through product placement arrangements.

For digital media, net turnover principally consists of the following:

G fees paid to us in respect of telephone calls placed, SMS (short message service) text messages or MMS (multimedia messaging service) messages sent or received from mobile phones or other similar devices in connection with viewer participation during the broadcast of a television format;

G fees paid to us in connection with the sale of games developed based upon our television formats; and

G fees paid to us in connection with the streaming or downloading of video content derived from our television formats.

If applicable, in productions in which we share the turnover with third parties, turnover attributable to such parties is excluded from our net turnover. Furthermore, in our net turnover all intercompany turnover between entities within the Endemol group is excluded.

30 Net turnover is recognized when programming or services have been sold and produced and not at the time that payment is made. In the case of pre-sold programming, net turnover is recognised on a proportional basis as the programming is completed and delivered to the broadcaster.

Operating Expenses

Our operating expenses consist principally of:

G Costs of outsourced work and other external costs. These external costs consist of costs related to productions such as studio rent, costs of equipment rental, costs associated with temporary personnel hired for productions, including programme hosts, and other direct costs associated with productions. These costs are charged to the income statement for the production and the period to which they relate.

G Personnel costs. Personnel costs consist of the salaries, social security charges, pension and early retirement costs and other personnel costs paid to administrative and operational personnel and, in certain cases, actors and actresses appearing in our formats. These costs include, for example, payments made under bonus and retention plans and share and/or stock option plans. Personnel costs are charged to the income statement for the period to which they relate.

G Other operating expenses. Other operating expenses consist of building expenses (such as rental, maintenance and other building expenses), selling expenses, travel expenses and other indirect costs. Other operating expenses are charged to the income statement for the period to which they relate.

Under the accrual basis of accounting, transactions and events are recognised when they occur (and not as cash or its equivalent if received or paid) and are recorded in the period to which they relate.

Depreciation and Amortisation

Our tangible assets are stated on our balance sheet at historic cost and depreciated on a straight-line basis over a period of years corresponding to the estimated economic useful life of the asset. Permanent decreases in value are charged against income at the time such decreases occur. The average depreciation period for our tangible assets (other than land, which is not depreciated) varies between three and ten years.

Our intangible assets consist principally of goodwill, format rights and television rights. Format rights and televison rights are depreciated beginning at the time production commences in proportion to the number of episodes (for formats) or as revenue is received (for TV movies). Depreciation of format rights and television rights related to productions that are not yet recognised in the income statement is charged to amounts due to or from customers. Upon recognition of the production in the income statement, the depreciation is charged to the cost of outsourced work and other external costs.

Goodwill arising on an acquisition represents the excess of the cost of the acquisition over the net equity value of the net identifiable assets acquired. Goodwill has been amortised on a straight-line basis over its estimated useful life under Dutch GAAP. Under IFRS, goodwill amortisation no longer takes place. Although goodwill is no longer amortised, it is subject to impairment tests and reviews which are conducted at least annually.

Financial Income and Financial Expenses

Financial income consists principally of interest income and foreign exchange results. Financial expenses consist principally of interest expenses and foreign exchange results.

Under IFRS, financial income and financial expenses also include fair value adjustments on financial instruments, such as foreign exchange contracts, interest rate swaps and call and put options. In addition, the financial income and expenses include the discounting interest on earn-out obligations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates”.

31 Participating Interests

Participating interests represent investments where we own less than 50% of the equity interest in a company and do not exercise control and consequently do not consolidate their results. Only our share in the net result of these companies is included in our financial information under the equity method. Cash dividends are not received in the same period in which the related results are recognised.

Taxes

Tax on our profits is determined on the basis of our results of operations, taking into account exempted profit components, such as results from participating interests, amortisation of goodwill, interest on earn-out obligations and fair value adjustments to financial instruments. Tax on our results of operations is calculated according to the tax system of the country in which the profits are earned.

Our effective tax rate is calculated based on our tax liability as shown on our income statement account divided by our operating result for the same period adjusted for interest expense and other tax deductible items.

Profit and Loss Applicable to Minority Interests

Profit and loss applicable to minority interests reflects the portion of our profit and loss that is attributable to holders of minority interests in our subsidiaries.

Results of Operations

For the Nine Months Ended 30 September 2004 and 30 September 2005

The following table presents our results of operations for the nine months ended 30 September 2004 and the nine months ended 30 September 2005.

EUR in millions 9 months ended 30 September ––––––––––––––––––––––––– 2004* 2005 (IFRS) (IFRS) ––––––––––– ––––––––––– Net Turnover ...... 585.8 615.8 Cost of Outsourced Work and Other External Costs ...... (349.2) (367.9) Personnel Costs...... (92.8) (96.8) Other Operating Expenses ...... (41.7) (39.7) Depreciation ...... (8.8) (11.4) Amortisation ...... (0.5) (0.1) ––––––––––– ––––––––––– Operating Result ...... 92.8 99.8 Financial Results...... (6.9) 0.2 Result from Participating Interests ...... 1.4 0.9 ––––––––––– ––––––––––– Income Before Tax...... 87.3 100.9 Taxes ...... (31.6) (37.0) ––––––––––– ––––––––––– Net Income...... 55.7 63.8 Minority Interests ...... (3.7) (4.0) ––––––––––– ––––––––––– Net Income Attributable to Shareholders...... 52.0 59.8

(*) Unaudited

Net Turnover

Net turnover for the nine months ended 30 September 2005 increased 5.1% to EUR 615.8 million from EUR 585.8 million for the nine months ended 30 September 2004.

32 The increase in turnover of EUR 30.0 million was primarily the result of an increase of turnover in the United Kingdom of EUR 10.1 million in 2005, mainly as a result of the good performance of Big Brother. Growth resulting from acquisitions accounted for EUR 5.1 million. This amount relates to the step acquisition of Meta Productions (Germany). Business at the Italian subsidiary Palomar increased substantially, contributing an additional EUR 8.6 million to turnover. Endemol Spain had a strong start of the production of Operación Triunfo, resulting in a total increase in turnover of EUR 6.8 million for Endemol Spain in 2005 as compared to 2004.

True Entertainment (United States) showed a positive development in the production of new series and productions. In addition, the turnover was positively influenced by the production of the Belgian version of Star Academy and Stanley's Route and the production of Big Brother and Deal or No Deal at Endemol Southern Star (Australia). These favourable results were partly offset by lower turnover in the Latin American countries. Of the companies we acquired in 2002, 2003 and 2004, Endemol Southern Star represents EUR 27.7 million, True Entertainment represents EUR 11.6 million, Stokvis & Niehe Producties represents EUR 14.0 million and Palomar represents EUR 19.6 million of our net turnover for the nine months ended 30 September 2005.

Turnover per Country

9 months ended 30 September –––––––––––––––––––––––––––––––––––––––––––––––– 2004* (IFRS) 2005 (IFRS) ––––––––––––––––––––––– –––––––––––––––––––––––– EUR in % of EUR in % of millions Turnover millions Turnover ––––––––––– ––––––––––– ––––––––––– –––––––––––

The Netherlands ...... 93.8 16.0% 93.3 15.2% United Kingdom ...... 109.6 18.7% 119.7 19.4% USA ...... 90.4 15.4% 94.4 15.3% Spain ...... 77.3 13.2% 84.1 13.6% Italy ...... 63.9 10.9% 73.9 12.0% Germany ...... 57.0 9.7% 61.3 10.0% Rest of the World and Inter-segment ...... 93.8 16.1% 89.2 14.5% ––––––––––– ––––––––––– ––––––––––– ––––––––––– Total ...... 585.8 100.0% 615.8 100.0%

(*) Unaudited

Turnover per Type of Product

Non-Scripted...... 465.5 79.5% 474.3 77.0% Scripted...... 64.6 11.0% 83.4 13.5% Digital Media ...... 55.7 9.5% 58.1 9.4% ––––––––––– ––––––––––– ––––––––––– ––––––––––– Total ...... 585.8 100.0% 615.8 100.0%

(*) Unaudited

33 For the nine months ended 30 September 2005, our top five customers, including international broadcaster groups, contributed 46.7% to our total net turnover. None of these broadcaster groups represented more than 13.8% of our total net turnover.

For the nine months ended 30 September 2005, our top ten formats contributed 59.0% to our total net turnover, and our top five formats accounted for 44.2% of our total net turnover. For the nine months ended 30 September 2005, none of our formats represented more than 21.5% of our total net turnover.

Costs of Outsourced Work and Other External Costs

Costs of outsourced work and other external costs for the nine months ended 30 September 2005 increased 5.4% to EUR 367.9 million from EUR 349.2 million for the nine months ended 30 September 2004. This increase was principally due to the higher production volume which increased 5.1%. As a percentage of turnover, costs slightly increased from 59.6% to 59.7%. This increase in costs as a percentage of turnover was due to the receipt of Fear factor syndication revenues in the nine months ended 30 September 2004, which has very low associated costs.

The number of freelancers hired as of 30 September 2005 was 707.

Personnel Costs

Personnel costs for the nine months ended 30 September 2005 increased 4.4% to EUR 96.8 million from EUR 92.8 million for the nine months ended 30 September 2004. Our total number of full time equivalents as of 30 September 2005, including both workers on temporary contracts and workers on contracts for an indefinite term was 3,602. The number of workers on temporary contracts as of 30 September 2005 was 2,375.

Other Operating Expenses

Other operating expenses for the nine months ended 30 September 2005 decreased 4.7% to EUR 39.7 million from EUR 41.7 million for the nine months ended 30 September 2004. This decrease resulted from lower travel related expenses, selling expenses and other general expenses.

Depreciation and Amortisation

Depreciation expense for the nine months ended 30 September 2005 increased 29.4% to EUR 11.4 million from EUR 8.8 million for the nine months ended 30 September 2004. This increase was principally due to additional depreciation of intangible assets related to acquisitions made in 2004 and in the first nine months of 2005 (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations— Acquisitions”). These acquired intangibles are being depreciated over their expected useful life.

Under IFRS, we no longer amortise goodwill. Impairment charges of EUR 0.1 million and EUR 0.5 million were recognised with respect to the goodwill associated with Overloaded (the Netherlands) and Denis Spencer Productions (New Zealand), in September 2004 and September 2005, respectively.

Operating Result

Our operating result for the nine months ended 30 September 2005 increased 7.6% to EUR 99.8 million from EUR 92.8 million for the nine months ended 30 September 2004. The increase in turnover and savings in other operating expenses are partly offset by high depreciation charges for the nine months ended 30 September 2005 as a result of the depreciation of intangible assets related to step acquisitions. Operating result as a percentage of turnover increased from 15.8% in the nine months ended 30 September 2004 to 16.2% in the nine months ended 30 September 2005.

Financial Results

Financial results for the nine months ended 30 September 2005 increased to a net financial income of EUR 0.2 million from a net financial expense of EUR 6.9 million for the nine months ended 30 September 2004. The improvement of the net financial result was principally due to positive fair value adjustments of financial instruments, including call and put options, in the amount of EUR 6.7 million. In September 2005, other

34 financing costs were included in financial results, relating to fees paid in connection with our multicurrency revolving credit facility. Also included in the financial results is the discounting interest on earn-out obligations.

Income from Participating Interests

Income from participating interests for the nine months ended 30 September 2005 decreased 36.8% to EUR 0.9 million from EUR 1.4 million for the nine months ended 30 September 2004. This decrease was principally due to a lower positive contribution from our participating interest in Metronome, a Swedish venture.

Income Before Tax

Income before tax for the nine months ended 30 September 2005 increased 15.5% to EUR 100.9 million from EUR 87.3 million for the nine months ended 30 September 2004. The increase of the income before tax of EUR 13.6 million is the result of the higher net turnover for the nine months ended 30 September 2005 (up by EUR 30.0 million) and the resulting higher contribution to our operating result, enforced by the increase of the net financial result by EUR 7.1 million.

Taxes

Tax on our operations for the nine months ended 30 September 2005 increased 17.3% to EUR 37.0 million from EUR 31.6 million for the nine months ended 30 September 2004. This increase of EUR 5.5 million was principally due to higher operating results and a tax provision made for a German tax exposure.

Net Income

Net income for the nine months ended 30 September 2005 increased 14.5% to EUR 63.8 million from EUR 55.7 million for the nine months ended 30 September 2004. This increase was principally due to higher operating results and an increase of the net financial result, partially offset by a higher tax charge.

Minority Interests

Profit and loss applicable to minority interests for the nine months ended 30 September 2005 increased 8.2% to EUR 4.0 million from EUR 3.7 million for the nine months ended 30 September 2004. This increase was principally due to higher results of Palomar (Italy) and Endemol Southern Star (Australia).

Net Income Attributable to Shareholders

Net income attributable to shareholders for the nine months ended 30 September 2005 increased 15.0% to EUR 59.8 million from EUR 52.0 million for the nine months ended 30 September 2004. This increase relates to a higher net income, partially offset by an increase in the minority interest.

35 For the Years Ended 31 December 2002, 31 December 2003 and 31 December 2004

The comparison presented below with respect to our results of operations relates to our financial information prepared in accordance with Dutch GAAP.

EUR in millions Year ended 31 December ––––––––––––––––––––––––––––––––––––– 2002 2003 2004 (Dutch (Dutch (Dutch GAAP) GAAP) GAAP) ––––––––––– ––––––––––– ––––––––––– Net Turnover ...... 708.4 739.7 850.9 Cost of Outsourced Work and Other External Costs ...... (408.1) (413.3) (506.0) Personnel Costs...... (131.7) (140.8) (129.7) Other Operating Expenses ...... (79.0) (58.5) (76.2) Depreciation ...... (13.4) (12.2) (13.9) Amortisation ...... (8.6) (7.3) (8.8) ––––––––––– ––––––––––– ––––––––––– Operating Result...... 67.7 107.7 116.5 Financial Results...... (3.2) (4.9) (5.7) Result from Participating Interests ...... (0.2) 1.5 1.7 ––––––––––– ––––––––––– ––––––––––– Income Before Tax ...... 64.3 104.3 112.5 Taxes ...... (24.5) (39.8) (45.1) ––––––––––– ––––––––––– ––––––––––– Net Income...... 39.8 64.5 67.4 Minority Interests ...... (3.8) (1.4) (5.5) ––––––––––– ––––––––––– ––––––––––– Net Income Attributable to Shareholders...... 36.0 63.1 61.9

Net Turnover

Net turnover for the year ended 31 December 2004, 31 December 2003 and 31 December 2002 was EUR 850.9 million, EUR 739.7 million and EUR 708.4 million, respectively.

Turnover per Country Year ended 31 December –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 2002 (Dutch GAAP) 2003 (Dutch GAAP) 2004 (Dutch GAAP) –––––––––––––––––––––––– –––––––––––––––––––––––– –––––––––––––––––––––––– EUR in % of EUR in % of EUR in % of millions Turnover millions Turnover millions Turnover ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– The Netherlands ...... 159.7 22.5% 169.9 23.0% 145.9 17.1% United Kingdom ...... 103.6 14.6% 131.8 17.8% 146.1 17.2% USA ...... 53.2 7.5% 66.1 8.9% 136.9 16.1% Spain ...... 134.1 18.9% 115.5 15.6% 118.1 13.9% Italy ...... 82.2 11.6% 95.6 12.9% 111.3 13.1% Germany ...... 76.6 10.8% 81.1 11.0% 85.3 10.0% Rest of the World and Inter-segment ...... 99.0 14.0% 79.7 10.8% 107.3 12.6% ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Total ...... 708.4 100.0% 739.7 100.0% 850.9 100.0%

36 Net turnover for the year ended 31 December 2004 increased 15.0% to EUR 850.9 million from EUR 739.7 million for the year ended 31 December 2003. Growth resulting from acquisitions accounted for EUR 34.4 million of this increase. This amount related to three acquisitions. The acquisition of our 51% stake in True Entertainment (United States) and the increase of our stake in Endemol Southern Star (Australia), both of which occurred in October 2003, resulted in additional net turnover of EUR 21.3 million in 2004 as compared to 2003. The acquisition of our additional 17.5% share in Palomar (Italy) in August 2004 resulted in additional net turnover in 2004 of EUR 13.1 million as compared to 2003.

In the year ended 31 December 2004, a substantial increase in net turnover was attributable to Endemol USA where Fear factor went into syndication and a number of new productions were sold. Combined with the full consolidation of True Entertainment, this resulted in an increase in net turnover of EUR 70.9 million in the United States as compared to the year ended 31 December 2003. In Italy, we produced two series of the Italian version of Big Brother (Grande Fratello) and introduced Deal or No Deal to the Italian market, partly offset by lower turnover related to soap operas attributable to our sharing of turnover in our 50%/50% joint venture with RTI (part of Mediaset), called Mediavivere.

Additionally, in the year ended 31 December 2004, EUR 14.3 million of the increase in net turnover was due to the production of The Farm in the United Kingdom and the strong performance of Participation TV in Belgium.

These favorable results were partly offset by lower net turnover in the highly competitive Dutch market.

Net turnover for the year ended 31 December 2003 increased 4.4% to EUR 739.7 million from EUR 708.4 million for the year ended 31 December 2002. Growth resulting from acquisitions accounted for EUR 16.7 million of this increase, primarily in the Netherlands as a result of the merger of Rene Stokvis Produkties and Ivo Niehe Produkties and in the United States as a result of the acquisition of True Entertainment. The increase in net turnover in the United Kingdom (EUR 28.2 million) resulted from the favorable performance of the Salon I and II series, Fame Academy and the success of Participation TV’s Brainteaser. Our United States operations experienced a modest increase in net turnover resulting from a new series of Big Brother, Fear factor and The Soundmix Show. These turnover increases were partially offset by less favorable results in Spain, Portugal and Belgium.

Turnover per Type of Product Year ended 31 December –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 2002 (Dutch GAAP) 2003 (Dutch GAAP) 2004 (Dutch GAAP) –––––––––––––––––––––––– –––––––––––––––––––––––– –––––––––––––––––––––––– EUR in % of EUR in % of EUR in % of millions Turnover millions Turnover millions Turnover ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Non-Scripted ...... 541.6 76.5% 560.7 75.8% 669.6 78.7% Scripted ...... 115.8 16.3% 117.1 15.8% 104.3 12.3% Digital Media ...... 51.0 7.2% 61.9 8.4% 77.0 9.0% ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Total ...... 708.4 100.0% 739.7 100.0% 850.9 100.0%

Our non-scripted net turnover has increased over each of the last three years, representing more than 75% of our net turnover. Scripted net turnover has remained above EUR 100.0 million each year. The decrease in scripted net turnover from 2003 to 2004 resulted primarily from the commencement of our Italian scripted productions 50%-50% joint venture (Mediavivere) with RTI (part of Mediaset) beginning in early 2004. Prior to that time, our Italian scripted programming was produced within Endemol Italia. The subsequent sharing of revenues had a negative impact of approximately EUR 25 million on our net turnover for 2004. However, we believe we have benefited as a result of this long-term cooperation in the production of soap operas.

The increase in our net turnover attributable to digital media is primarily the result of the favorable performance of Participation TV in a number of countries.

37 Our top ten formats in terms of turnover for the years 2002, 2003 and 2004 are set forth below.

Position Top Formats 2002 Top Formats 2003 Top Formats 2004 ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 1 Big Brother Big Brother Big Brother 2 Operación Triunfo Operación Triunfo Fear factor 3 Fear factor Call TV Call TV 4 Who Wants to be a Millionaire Fear factor Who Wants to be a Millionaire 5 Vivere Who Wants to be a Millionaire Deal or No Deal 6 Call TV Vivere Extreme Makeover: Home Edition 7 Cento Vetrine Crónicas Marcianas The Farm 8 Crónicas Marcianas All you need is Love Operación Triunfo 9 The Bill Cento Vetrine Crónicas Marcianas 10 Star Academy Westenwind Gente di Mare

For the year ended 31 December 2004, our top ten formats contributed 56.6% to our total net turnover, and approximately 300 formats contributed the remaining 43.4%. Our top five formats accounted for 45.5% of our total net turnover. For the year ended 31 December 2004, none of our formats represented more than 21.8% of our total net turnover.

For the year ended 31 December 2004, our top five customers, including international broadcaster groups, contributed 48.9% to our total net turnover. None of these broadcaster groups represented more than 14.8% of our total net turnover.

Costs of Outsourced Work and Other External Costs

Costs of outsourced work and other external costs for the year ended 31 December 2004 increased 22.4% to EUR 506.0 million from EUR 413.3 million for the year ended 31 December 2003. This increase was principally due to our higher production volume in 2004. As a percentage of net turnover, costs of outsourced work increased from 55.9% to 59.5%. In 2003 these costs included a substantial release of accrued production costs related to 2002. Without this release of accrued production costs, our costs of outsourced work as percentage of net turnover in 2004 would have been similar to the percentage in 2003.

Costs of outsourced work and other external costs for the year ended 31 December 2003 increased 1.3% to EUR 413.3 million from EUR 408.1 million for the year ended 31 December 2002. As a percentage of net turnover, costs of outsourced work decreased from 57.6% to 55.9% as a result of the above mentioned releases in 2003 of accrued production costs related to 2002.

The number of freelancers hired as of 31 December 2004 was 500, compared to 295 as of 31 December 2003.

Personnel Costs

Personnel costs for the year ended 31 December 2004 decreased 7.9% to EUR 129.7 million from EUR 140.8 million for the year ended 31 December 2003. This decrease was partly due to higher costs for incentive schemes in the United Kingdom in 2003.

Personnel costs for the year ended 31 December 2003 increased 6.9% to EUR 140.8 million from EUR 131.7 million for the year ended 31 December 2002. This increase was principally due to the accrual for all expenses related to the incentive schemes in the United Kingdom, to the extent that the relative part of the vesting period for these schemes had elapsed (four out of six years). Without taking these schemes into account, personnel costs as a percentage of net turnover would have decreased from 18.6% to 18.1% of net turnover, primarily as a result of the personnel reorganisations at Endemol Nederland and Endemol Deutschland in 2002.

The number of our full time equivalents as of 31 December 2004, including both workers on temporary contracts and workers on contracts for an indefinite term, was 3,249 compared to 2,964 as of 31 December 2003. The number of workers on temporary contracts as of 31 December 2004 was 2,032 compared to 1,753 as of 31 December 2003.

38 Other Operating Expenses

Other operating expenses for the year ended 31 December 2004 increased 30.3% to EUR 76.2 million from EUR 58.5 million for the year ended 31 December 2003. This increase was principally due to additional accrued property rental expenses in 2004 as well as general reorganisation accruals at Endemol Nederland and Stokvis & Niehe Producties.

Other operating expenses for the year ended 31 December 2003 decreased 25.9% to EUR 58.5 million from EUR 79.0 million for the year ended 31 December 2002. This decrease was principally due to the general reorganisation costs of Endemol Nederland and Endemol Deutschland incurred in 2002, which were not incurred in 2003.

Depreciation and Amortisation

Depreciation expense for the year ended 31 December 2004 increased 14.0% to EUR 13.9 million from EUR 12.2 million for the year ended 31 December 2003. This increase was principally due to higher depreciation expense relating to tangible assets (leasehold improvements) of Endemol Nederland.

Amortisation (including impairment charges) of goodwill increased 20.1% to EUR 8.8 million for the year ended 31 December 2004 from EUR 7.3 million for the year ended 31 December 2003. This increase was principally due to the amortisation of goodwill associated with new acquisitions and the amortisation of additional goodwill resulting from increases in estimated earn-out obligations.

Depreciation expense decreased 8.9% to EUR 12.2 million for the year ended 31 December 2003 from EUR 13.4 million for the year ended 31 December 2002 as in 2002 additional depreciation charges were included for leasehold improvements of Endemol Nederland and land and buildings of Fuchsia, a company that was divested in 2003.

Amortisation (including impairment charges) of goodwill decreased 15.1% to EUR 7.3 million for the year ended 31 December 2003 from EUR 8.6 million for the year ended 31 December 2002. This decrease of EUR 1.3 million was principally due to higher impairment charges in 2002. Impairment of goodwill for the years ended 31 December 2003 and 31 December 2002 was EUR 0.2 million and EUR 3.4 million, respectively. In 2002, we recognised an impairment of EUR 3.4 million to the goodwill position on Endemol Argentina resulting from the devaluation of the Argentinean Peso.

Operating Result

Our operating result for the year ended 31 December 2004 increased 8.2% to EUR 116.5 million from EUR 107.7 million for the year ended 31 December 2003. Higher net turnover in 2004 (up by EUR 111.2 million) and the resulting higher contribution to our operating result was partially offset by accrued property rental expenses and general reorganisation expenses in the Netherlands. As a result of the foregoing, our operating result as a percentage of net turnover decreased from 14.6% in 2003 to 13.7% in 2004.

Our operating result for the year ended 31 December 2003 increased 59.0% to EUR 107.7 million from EUR 67.7 million for the year ended 31 December 2002. Higher net turnover in 2003 (up by EUR 31.3 million) resulted in a higher contribution to our operating result. In addition, accrued production costs of EUR 20.2 million related to 2002 were released in 2003. In 2002, personnel reorganisation expenses in Endemol Nederland and Endemol Deutschland negatively influenced our operating result. As a result of the foregoing, our operating result as a percentage of net turnover increased from 9.6% in 2002 to 14.6% in 2003.

Financial Results

Financial results for the year ended 31 December 2004 increased 17.0% to EUR 5.7 million net expense from EUR 4.9 million net expense for the year ended 31 December 2003. Included in our financial results for 2004 was a fair value adjustment on our interest rate swaps, which resulted in an expense of EUR 3.4 million. The remainder of the financial expenses relates to the level of our financial indebtedness.

39 Financial results for the year ended 31 December 2003 increased 52.8% to EUR 4.9 million net expense from EUR 3.2 million net expense for the year ended 31 December 2002, due to higher interest expenses as a result of higher fixing of interest rates in our interest rate swaps.

Income from Participating Interests

Income from participating interests for the year ended 31 December 2004 increased 13.7% to EUR 1.7 million from EUR 1.5 million for the year ended 31 December 2003. This increase was principally due to the improved results of our minority participations.

Income from participating interests for the year ended 31 December 2003 increased to EUR 1.5 million from a loss of EUR 0.2 million for the year ended 31 December 2002. This increase was principally due to improved performance of our minority participations.

Income Before Tax

Income before tax for the year ended 31 December 2004 increased 7.8% to EUR 112.5 million from EUR 104.3 million for the year ended 31 December 2003. This increase was due to a higher operating result that was partially offset by higher net financial expenses. Income before tax for the year ended 31 December 2003 increased 62.3% to EUR 104.3 million from EUR 64.3 million for the year ended 31 December 2002. This increase was due to a strong increase of the operating result after the release of accrued production costs in 2003.

Taxes

Tax on our operations for the years ended 31 December 2004, 31 December 2003 and 31 December 2002 was EUR 45.1 million, EUR 39.8 and EUR 24.5 million, respectively. The effective tax rates amounted to 37.9%, 36.2% and 33.5%, respectively. In each of 2004 and 2003, a proportionally higher part of our results was realised in countries with higher corporate tax rates, such as the United States, Italy and Germany, as compared to the prior year.

Net Income

Net income for the year ended 31 December 2004 increased 4.5% to EUR 67.4 million from EUR 64.5 million for the year ended 31 December 2003. This increase was principally due to increases in production revenues, partially offset by higher other operating expenses.

Net income for the year ended 31 December 2003 increased 62.1% to EUR 64.5 million from EUR 39.8 million for the year ended 31 December 2002. This increase was principally due to higher production volume, as well as a reduction in net income in 2002 resulting from the reorganisation costs incurred by Endemol Nederland and Endemol Deutschland.

Minority Interests

Profit applicable to minority interests for the year ended 31 December 2004 increased to EUR 5.5 million from EUR 1.4 million for the year ended 31 December 2003. This increase was principally due to the full consolidation of Palomar (Italy) in 2004, resulting in an increase of the minority interest. Palomar was proportionally consolidated in 2003.

Profit applicable to minority interests for the year ended 31 December 2003 decreased 62.3% to EUR 1.4 million from EUR 3.8 million for the year ended 31 December 2002. This decrease was principally due to the acquisition of the remaining shares of Gestmusic Endemol in 2002, in which we previously held a 60% interest.

Net Income Attributable to Shareholders

Net income attributable to shareholders for the year ended 31 December 2004 decreased 1.8% to EUR 61.9 million from EUR 63.1 million for the year ended 31 December 2003.

Net income attributable to shareholders for the year ended 31 December 2003 increased 75.2% to EUR 63.1 million from EUR 36.0 million for the year ended 31 December 2002.

40 Comparison of Results for the Year Ended 31 December 2004 Prepared in Accordance with IFRS and such Results Prepared in Accordance with Dutch GAAP

EUR in millions Year ended 31 December ––––––––––––––––––––––––– 2004 2004 (Dutch GAAP) (IFRS) –––––––––––– ––––––––––––

Net Turnover ...... 850.9 850.9 Cost of Outsourced Work and Other External Costs ...... (506.0) (509.0) Personnel Costs...... (129.7) (137.1) Other Operating Expenses ...... (76.2) (72.5) Depreciation ...... (13.9) (14.7) Amortisation ...... (8.8) (0.5) –––––––––––– –––––––––––– Operating Result ...... 116.5 117.2 Financial Results...... (5.7) (7.7) Result from Participating Interests ...... 1.7 1.7 –––––––––––– –––––––––––– Income Before Tax...... 112.5 111.2 Taxes ...... (45.1) (41.5) –––––––––––– –––––––––––– Net Income...... 67.4 69.8 Minority Interests ...... (5.5) (5.3) –––––––––––– –––––––––––– Net Income Attributable to Shareholders...... 61.9 64.5

Net Turnover

There were no differences in net turnover between IFRS and Dutch GAAP.

Costs of Outsourced Work and Other External Costs

Subsequent events and further insights and knowledge gained with respect to our 2004 activities since the closing of the consolidated accounts for Endemol Holding N.V. under Dutch GAAP, are reflected in the 2004 IFRS Information. This resulted in additional expenses of EUR 3.0 million in 2004, under IFRS, relating to the uncertain legal situation regarding the state gambling commission position on Participation TV in Belgium.

Personnel Costs

The costs associated with the portion of the Telefónica stock option plans attributable to Endemol are included under IFRS in our personnel costs, and recognised over the applicable vesting period. This resulted in additional personnel costs in 2004 of EUR 7.4 million. This expense neither has a cash flow nor an equity impact as we are compensated by Telefónica for this amount by way of share premium contribution.

Other Operating Expenses

Subsequent events and further insights and knowledge gained with respect to our 2004 activities since the closing of the consolidated accounts for Endemol Holding N.V. under Dutch GAAP, are reflected in the 2004 IFRS Information. This resulted in a release of cost accruals and a provision for doubtful debts under IFRS in an aggregate amount of EUR 3.7 million in 2004.

41 Depreciation

Under IFRS, intangible assets are separated from goodwill at the moment of a step acquisition. These intangible assets consist of formats and are depreciated over their expected useful lives, leading to an additional depreciation charge of EUR 0.8 million.

Amortisation

Under IFRS, there is no amortisation of goodwill. Accordingly, only the impairment charges relating to our acquisitions of interests in Overloaded (the Netherlands) and Denis Spencer Productions (New Zealand) are reflected in the 2004 IFRS Information.

Financial Results

The additional financial expenses are primarily the result of the discounting interest under IFRS on the earn- out obligations of a negative amount of EUR 2.5 million. Under IFRS, call and put options and foreign exchange contracts are valued at fair value, and any adjustments to fair value are included in our financial results. In 2004, our fair value adjustments resulted in net financial costs of EUR 2.8 million.

Taxes

Tax charges under IFRS are reduced by EUR 3.6 million as compared to Dutch GAAP, primarily as a result of the tax deductibility of the expenses attributable to Endemol's share in the Telefónica stock option plans. Additionally, the deferred tax liability on the intangible assets related to the step acquisitions has been written off in line with the depreciation of the intangibles.

Net Income Attributable to Shareholders

Net income attributable to shareholders is increased by EUR 2.5 million from EUR 61.9 million under Dutch GAAP to EUR 64.5 million under IFRS as a result of the above described differences between IFRS and Dutch GAAP.

42 Selected Balance Sheet Items

EUR in millions As of 31 December As of 30 September ––––––––––––––––––––––––––––––––––––––––––––––––– –––––––––––––––––––––––– 2002 2003 2004 2004 2004* 2005 (Dutch (Dutch (Dutch GAAP) GAAP) GAAP) (IFRS) (IFRS) (IFRS) ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Non-current Assets Intangible Assets ...... 133.1 145.3 142.7 148.5 151.1 156.0 Property, Plant and Equipment...... 45.7 44.6 41.4 41.4 44.6 40.0 Financial Assets ...... 35.4 46.4 111.3 125.7 131.5 27.0 Current Assets ...... 359.9 304.8 287.9 378.7 352.3 384.9 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Total Assets ...... 574.1 541.2 583.4 694.3 679.4 607.9

(*) Unaudited

Goodwill Positions

The main amount included under the intangible assets is the goodwill position related to acquisitions. Goodwill amounts to EUR 148.0 million as of 30 September 2005.

Earn-out Obligations

Included under both the non-current and current liabilities are the earn-out obligations payable in the coming years for a total amount of EUR 23.9 million as of 30 September 2005. The majority of these relate to the acquisitions in the United Kingdom and Spain. Earn-out obligations are stated at their discounted value.

Positions Due from and to Customers

Productions in progress as of the balance sheet date are reported at the net amount of work in progress, uninvoiced turnover, deferred revenues and accrued production costs. The net amount is calculated per production and can therefore result in an amount due from or an amount due to customers. As of 30 September 2005 the amounts due from customers amount to EUR 80.6 million (included under the current assets) and the amounts due to customers represent an amount of EUR 84.0 million (included under the current liabilities).

43 Net Financial Indebtedness

The following table presents the financial indebtedness of Endemol as of 31 December in each of the years 2002, 2003 and 2004 and as of 30 September in each of the years 2004 and 2005.

(*) Unaudited

Cash and Cash Equivalents

As of 30 September 2005, all cash is at our disposal. Under Dutch GAAP, we netted our bank positions and the balances of our cash pooling arrangements. Therefore, the balances for 2002, 2003 and 2004 include both debit and credit positions already netted, resulting in lower figures for the aforementioned balances.

Under IFRS, we are not permitted to net our bank account positions and the balances of our cash pooling arrangements, resulting in an adjustment of approximately EUR 73 million. As of 30 September 2005, our bank debt was EUR 186.7 million of which EUR 125.4 million was drawn under the temporary overdraft facility.

Off Balance Sheet Arrangements and Contingent Liabilities

We have issued various guarantees in the ordinary course of our production business which are not reflected on our balance sheet. As of 30 September 2005 and 31 December 2004, respectively, these contingent liabilities represent an amount of EUR 4.4 million and EUR 1.0 million, respectively.

Endemol is involved in several legal disputes and claim procedures. If considered necessary, provisions are recognised to cover the possible financial liability.

Endemol participates in a number of partnerships where Endemol is jointly liable for debts incurred in those partnerships. The external financial exposure from those liabilities is limited.

We enter into currency swap arrangements and other derivative transactions from time to time for hedging purposes. Such derivatives are recorded on our balance sheet at fair value.

Except as set out above, we did not engage in other off balance sheet arrangements.

Put and Call Options

Endemol has entered into various call and put options in the past in connection with some of its acquisitions. The call options typically provide that we have the right, at a certain point in time following the initial acquisition, to purchase a portion of the other shareholders interest in the target company. The put options typically provide that the other shareholders have the right, at a certain point in time following the initial acquisition, to sell all or a portion of their interest to us. The consideration to be paid for the interest to be acquired is based on the performance of the relevant target company. The estimated cash payment related to the call options as of 30 September 2005 is EUR 24.0 million. These relate to call options on our prior acquisitions of shares in our entities in the Netherlands, Italy, Argentina and the United States. The estimated cash payment related to the put options as of 30 September 2005 is EUR 9.2 million. These relate to put options on our prior acquisitions of shares in our entities in the Netherlands and Germany.

44 Cash Flows

Our net turnover and costs are recognised based on the accrual and matching concept. Related cash flows are generally paid or received in the same period. With respect to certain revenue items and related costs, such as income from our digital media activities, however, cash flows are generated in a later period than the related net turnover and costs are recognised. This timing difference also occurs with respect to participating interests, where dividends are received in a later period than our share in the result is recognised.

As of 31 December 2004, we had cash and cash equivalents of EUR 117.8 million, and as of 30 September 2005, we had cash and cash equivalents of EUR 102.9 million, determined in accordance with IFRS.

For the Nine Months Ended 30 September 2004 and 30 September 2005

The following table presents our cash flows from operating, investing and financing activities for the periods indicated (based on an indirect cash flow calculation). The analysis of the interim cash flows presented below relates to our financial information prepared in accordance with IFRS, except for the fact that movements in short-term loans and borrowings (cash and cash equivalents credit) and cash and cash equivalents are not presented on a net basis. For the respective periods the movements in short-term loans and borrowings were EUR 47.1 million for the year ended 31 December 2004 IFRS, EUR 47.6 million for the nine months ended 30 September 2004 and EUR (55.2) million for the nine months ended 30 September 2005.

EUR in millions 9 months ended 30 September ––––––––––––––––––––––––– 2004* 2005 (IFRS)** (IFRS)** ––––––––––– ––––––––––– Operating result...... 92.8 99.8 Depreciation and amortisation ...... 9.3 11.5 Movement in working capital and other financial items...... 11.1 (52.5) ––––––––––– ––––––––––– Cash Flow from Operating Activities ...... 113.2 58.9

Acquisitions ...... (14.4) (29.0) Investment in tangibles ...... (8.3) (8.2) Investment in intangibles ...... (6.2) (3.7) ––––––––––– ––––––––––– Cash Flow from Investing Activities ...... (28.9) (40.9)

Movement in short-term bank loans ...... (47.6) 55.2 Movement in long-term bank loans ...... - 1.9 Dividends ...... - (90.0) ––––––––––– ––––––––––– Cash Flow from Financing Activities ...... (47.6) (32.9) ––––––––––– ––––––––––– Net Cash Flow ...... 36.7 (14.9)

Cash at the beginning of the period ...... 107.2 117.8 Cash at the end of the period...... 143.9 102.9

Capital Expenditure ...... 10.7 7.1

45 Cash Flow from Operating Activities

Cash Flow from Investing Activities

Cash flow from investing activities primarily consists of the payments made in relation to acquisitions. These payments include down payments made upon the initiation of an acquisition, earn-out payments, and payments made as a result of the exercise of call and put options. In the nine months ended 30 September 2005, our cash outflow in relation to acquisitions was EUR 29.0 million, which related to deferred acquisition payments in Spain (Gestmusic Endemol), the United Kingdom (Brighter Pictures) and the Netherlands (NL TV), and the exercise of call and put options in the Netherlands, Germany and the United States. In the nine months ended 30 September 2004, our cash outflow in relation to acquisitions was EUR 14.4 million, primarily consisting of earn-out payments made to Endemol UK and its subsidiaries and the exercise of a call option in Italy.

Other investments relate to investments in tangible and intangible assets . During the nine months ended 30 September 2005 and 30 September 2004 we recorded a net cash outflow from investments both in tangible and intangible assets of EUR 11.9 million and EUR 14.5 million, respectively.

The following table sets out our capital expenditures for the nine months ended 30 September 2004 and 30 September 2005:

EUR in millions 9 months ended 30 September ––––––––––––––––––––––––– 2004* 2005 (IFRS) (IFRS) ––––––––––– –––––––––––

Land and Buildings...... 2.0 0.9 Plant and Equipment...... 3.5 2.2 Other Tangible Assets ...... 5.2 4.0 ––––––––––– ––––––––––– Capital Expenditure ...... 10.7 7.1

(*) Unaudited

Cash Flow from Financing Activities

46 For the Years Ended 31 December 2002, 31 December 2003 and 31 December 2004

EUR in millions Year ended 31 December –––––––––––––––––––––––––––––––––––––––––––––––––– 2002 2003 2004 2004 (Dutch (Dutch (Dutch GAAP) GAAP) GAAP) (IFRS)* ––––––––––– ––––––––––– ––––––––––– –––––––––––

Operating result ...... 67.7 107.7 116.5 117.2 Depreciation and amortisation ...... 22.0 19.5 22.7 15.2 Movement in working capital and other financial items ...... (60.2) (30.2) (49.3) (38.8) ––––––––––– ––––––––––– ––––––––––– ––––––––––– Cash Flow from Operating Activities ...... 29.5 96.9 89.8 93.7

Acquisitions ...... (87.4) (19.2) (21.6) (21.6) Investment in tangibles ...... (5.5) (11.1) (10.7) (10.7) Investment in intangibles ...... (0.5) (1.6) (2.3) (3.2) ––––––––––– ––––––––––– ––––––––––– ––––––––––– Cash Flow from Investing Activities ...... (93.4) (31.8) (34.6) (35.4)

Movement in short-term bank loans ...... 54.0 (76.7) (68.6) (47.1) Movement in long-term bank loans ...... (1.6) (2.6) (0.5) (0.5) Dividends ...... ---- ––––––––––– ––––––––––– ––––––––––– ––––––––––– Cash Flow from Financing Activities ...... 52.4 (79.3) (69.1) (47.6) ––––––––––– ––––––––––– ––––––––––– ––––––––––– Net Cash Flow ...... (11.5) (14.2) (13.9) 10.7

Cash at the beginning of the period ...... 45.7 34.2 20.0 107.2 Cash at the end of the period ...... 34.2 20.0 6.1 117.8

Capital Expenditure ...... 14.8 12.0 15.2 15.2

(*) Prepared in accordance with IFRS, except for the fact that movements in short-term loans and borrowings (cash and cash equivalent credits) and cash and cash equivalents are not presented on a net basis. For the year ended 31 December 2004 IFRS, the movement in short-term loans and borrowings was EUR 47.1 million.

Cash Flow from Operating Activities

Cash flow from operating activities primarily consists of our operating result including changes in our working capital, depreciation and amortisation, financial expenses and taxes paid. During the years ended 31 December 2004, 31 December 2003 and 31 December 2002, we recorded a net cash inflow from operating activities of EUR 89.8 million, EUR 96.9 million and EUR 29.5 million, respectively. The decrease in cash flow from operating activities from the year ended 31 December 2003 to the year ended 31 December 2004 was primarily a result of the working capital development in 2004 attributable to payments to creditors, an increase in the loan to Endemol France Holding and higher other financial items mainly resulting from higher tax charges in 2004 compared to 2003.

The increase in cash flow from operating activities from the year ended 31 December 2002 to the year ended 31 December 2003 was partially attributable to an increase in our operating result. In addition, our operating cash flow for the year ended 31 December 2002 reflects a one-time welcome bonus payment of EUR 44.0 million to Endemol employees, granted by Telefónica in connection with the acquisition of Endemol by Telefónica in 2000. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Anticipated Uses of Liquidity—Welcome Bonus”.

47 Cash Flow from Investing Activities

Cash flow from investing activities primarily consists of the payments made in relation to acquisitions. These payments include down payments made upon the initiation of an acquisition, earn-out payments, and payments made as a result of the exercise of call and put options. In 2004, our cash outflow in relation to acquisitions was EUR 21.6 million, which related to a deferred acquisition payment in the United Kingdom made in connection with our acquisition of Brighter Pictures, and the exercise of call and put options in the Netherlands and Italy. In 2003, our cash outflow in relation to acquisitions was EUR 19.2 million, primarily consisting of earn-out payments made in respect of Endemol Italia (EUR 13.7 million) and the acquisition of True Entertainment (EUR 4.8 million). In 2002, our cash outflow related to acquisitions was EUR 87.4 million, primarily relating to the acquisition of the remaining 40% interest in Gestmusic Endemol (EUR 30.0 million) and earn-out payments made in respect of Zeppelin, Endemol Italia and the UK entities.

Our investing activities also include investments in tangible and intangible assets. During the years ended 31 December 2004, 31 December 2003 and 31 December 2002, we recorded a net cash outflow from investments in tangible and intangible assets of EUR 13.0 million, EUR 12.7 million and EUR 6.0 million, respectively. Variances in these cash flows are related to an incidental disposal in 2002.

The following table sets out our capital expenditures for the years ended 31 December 2002, 31 December 2003 and 31 December 2004:

EUR in millions Year ended 31 December –––––––––––––––––––––––––––––––––––––––––––––––––– 2002 2003 2004 2004 (Dutch (Dutch (Dutch GAAP) GAAP) GAAP) (IFRS) ––––––––––– ––––––––––– ––––––––––– ––––––––––– Land and Buildings...... 3.2 2.7 4.0 4.0 Plant and Equipment...... 3.0 1.6 4.1 4.1 Other Tangible Assets ...... 8.6 7.7 7.1 7.1 ––––––––––– ––––––––––– ––––––––––– ––––––––––– Capital Expenditure ...... 14.8 12.0 15.2 15.2

Cash Flow from Financing Activities

Cash flow from financing activities consists of changes in the amounts outstanding under our short- and long-term bank loans, principally in the form of drawings and repayments under our multicurrency revolving credit facility. During the years ended 31 December 2004 and 31 December 2003, we recorded a net cash outflow from financing activities of EUR 69.1 million and EUR 79.3 million, respectively. In 2002 we recorded a net cash inflow of EUR 52.4 million. The cash outflow in the years 2003 and 2004 relates to the repayment of our drawings under our multicurrency revolving credit facility and the repayment of the smaller bilateral facilities. The cash inflow in 2002 relates to additional drawings under our multicurrency revolving credit facility for financing the acquisitions and the welcome bonus payments.

IFRS Cash Flow Statement

The 2004 IFRS cash flow statement differs from the cash flow statement under Dutch GAAP. The cash flow statement presents on an indirect basis the movement in the cash and cash equivalents position. Under IFRS this position is not netted and additionally, the trust account cash is reclassified from cash to financial assets. The actual (direct) cashflows of the Company are not affected by the change to IFRS.

Liquidity and Capital Resources

We believe that cash flow from operating activities will be sufficient to satisfy our present working capital requirements. We expect that our future acquisition plans and the obligations under our earn-out and call and put option agreements will be financed in part by our cash flow from operating activities, with the remainder financed through the use of our credit facilities.

48 Anticipated Sources of Liquidity

Our principal anticipated sources of liquidity are cash on hand, cash flow from operating activities, our multicurrency revolving credit facility and our other bilateral financing arrangements.

Multicurrency Revolving Credit Facility

On 29 September 2005 we entered into a term sheet in respect of a EUR 250.0 million multicurrency revolving credit facility which we intend to enter into before the consummation of the Offering. This facility is to replace a previous facility that expired in September 2005. Currently we have been granted a temporary overdraft facility in an amount of EUR 150.0 million, which will be repaid once the new multicurrency revolving credit facility is in place. The new EUR 250.0 million facility will have a three-year term (with an option to extend to a maximum of 5 years) and will be a multicurrency revolving credit facility with a number of banks which will be available to fund our working capital, acquisition and other cash needs. Loans under the facility will be guaranteed by several of our operating subsidiaries.

The multicurrency revolving credit facility will require us to maintain certain financial ratios and has customary terms restricting our ability to make fundamental changes to our business, sell and acquire assets (including formats) and incur debt above a maximum aggregate amount of EUR 300.0 million, including amounts drawn under the facility. We will be restricted in paying dividends and making other distributions if certain financial conditions are not satisfied. See “Dividend Policy”.

Other Financing Arrangements

In addition to the multicurrency revolving credit facility described above, we maintain a number of bilateral facilities as follows:

G local facilities between Endemol N.V. and each of ABN AMRO Bank and ING Bank, both in the Netherlands, each for EUR 25.0 million, which are used for the day-to-day cash management and centralisation of the group cash pooling facilities; and

G smaller local facilities within Italy, Argentina, the United States and Spain, most of which have very limited usage.

Anticipated Uses of Liquidity

Our primary needs for liquidity are to fund our present and future operations, our working capital needs, our future acquisitions, our earn-out, call and put option obligations with respect to prior acquisitions, our service of our financial indebtedness, our lease obligations, our other long-term obligations and other financial needs.

Welcome Bonus

In 2001, Telefónica confirmed that as part of its public offer for Endemol it would grant a bonus of EUR 100.0 million for distribution to Endemol employees if Endemol’s results for the 12 months ended 31 July 2001 met certain criteria. As of 31 December 2004, the entire amount of the bonus has been assigned to Endemol’s employees. As of 30 September 2005, of the total amount of EUR 100.0 million, an amount of EUR 11.2 million is still payable in instalments at the end of 2005 and 2006.

49 Financial Commitments

The following table presents expected future cash outflows resulting from long-term debt, lease obligations, earn-out obligations, put options and other long-term liabilities of Endemol as of 31 December 2004, determined on a basis consistent with the preparation of our financial information in accordance with IFRS, assuming that any available rollover provisions are inapplicable:

EUR in millions Cash outflow (nominal) in the respective year ended 31 December Total cash 31 December ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– outflow 2004 2005 2006 2007 2008 2009 After (Nominal) ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––

Long-term Liabilities re. Acquisitions (discounted) ...... 33.7 - 35.0 ----35.0 Debt to Credit Institutions (nominal) ...... 0.4 - 0.4 ----0.4 Derivative Financial Instruments (discounted) 2.0 - - - 2.0 - - 2.0 Other Long-term Obligations (nominal) 5.1 - 5.1 ----5.1 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Total Balance . . . . . 41.2 - 40.5 - 2.0 - - 42.5

Under IFRS, our long-term earn-out obligations are valued at their amortised costs which is equivalent to their net present values. Accordingly, our earn-out obligations reflected in the 31 December 2004 column in the table above have been discounted, amounting to EUR 33.7 million. The nominal amount of EUR 35.0 million payable in 2006 relates to earn-outs payable in respect of the acquisition of Gestmusic Endemol in Spain (EUR 30.0 million) and Endemol UK (EUR 5.0 million).

The long-term debt to credit institutions presented in the table above relates to Gestmusic Endemol and is expected to be repaid in 2006.

The derivative financial instruments presented in the table above relate to the fair value of a put option on 15% of the share of Stokvis & Niehe Producties B.V. which can be exercised by our co-shareholder and managing director of Stokvis & Niehe Producties B.V. in November 2008.

The other long-term obligations presented in the table above relate to the last payment to be made in respect of Endemol UK’s phantom bonus incentive schemes. This will be payable upon approval of the statutory accounts for the year ended 31 December 2005. Advance payments on these schemes were made in 2003 and 2004.

Pensions

As we do not have a group pension plan, the different group companies participate in local state pension plans and/or pension plans with insurance companies, based on local legislation or regulations.

All of our employees are covered by defined contribution plans, other than employees of our Dutch and Italian subsidiaries, which are covered under defined benefit plans. Our anticipated obligations under defined benefit plans as of 31 December 2004 are EUR 0.4 million, all of which fall due after 2009.

There are no overdue contributions (achterstallige premies) or other substantial liabilities or risks involved. There are no overdue contributions (achterstallige premies) in respect of the defined benefit plans in the Netherlands and Italy.

50 For substantially all of the employees in the Netherlands, a defined benefit plan exists at Pensioenfonds PNO Media (Dutch Media Pension Fund). The latter plan is a ‘multi-employer defined benefit pension plan’, which is accounted for as a defined contribution plan because not sufficient information is available for defined benefit accounting. The Annual Accounts 2004 of Pensioenfonds PNO Media show a deficit of EUR 5.0 million and a reserve position of EUR 387.6 million negative as of 31 December 2004. Endemol is a participant in this pension fund (for approximately 3%). As of 31 December 2004, Endemol estimates, based on the information available to it, that its exposure amounts to approximately EUR 3.0 million. If in the future a deficit in this multi- employer defined benefit pension plan remains, we may become liable for our share in these deficits.

Financial Markets Related Risks

In the ordinary course of our business, we are exposed to a variety of financial market risks that are typical for the industry and sector in which we operate. The principal financial market risks that affect our financial condition, results of operations and prospects relate to foreign currency exchange rates and interest rates. In accordance with our policy, we do not enter into or deal in market sensitive instruments for trading or speculative purposes. We do, however, use derivative financial instruments to manage foreign currency risks and, to a more limited extent, interest rate risks. While management has adopted these and other mitigation strategies to limit our exposure to these market related risks, there can be no assurances that any mitigation strategies will be effective or that we will not be materially adversely affected by such risks in future periods.

Foreign Exchange Rate Risks

In conducting our business in various countries around the world we occasionally receive revenues in local currencies but incur costs in other currencies. In order to hedge anticipated cash flows and foreign currency balances between the date of entering into an agreement and the date on which payment under the agreement falls in such currencies as the U.S. dollar, the U.K. pound sterling and the currencies of other countries, we enter into derivative instruments, including foreign exchange forward contracts.

Additionally, we designate forward contracts used to hedge future production costs as cash flow hedges, and designate certain forward contracts as a hedge of the foreign currency exposure of the net financing in a foreign operation. The change in fair value of the non-designated contracts is included in current period results as part of the financial results.

As part of our overall risk management strategy, we manage the use of foreign exchange derivatives centrally. As of 30 September 2005, the notional value of all foreign exchange contracts was EUR 29.7 million, of which EUR (0.8) million related to the hedging of future productions costs and EUR 30.5 million related to the hedging of the net financing position of a foreign operation. These foreign exchange contracts are mainly related to the hedging of the U.S. dollar and U.K. pound sterling against the euro. These contracts may expire and do not hedge against all foreign currency risk.

Translation Risks

We earn revenues and incur costs in a number of different countries. This exposes us to movements in foreign exchange rates when translating amounts from foreign local currencies to the euro, which is the currency we use for reporting our results of operations.

In 2004 approximately 42% of our net turnover and 41% of our operating result was generated in foreign currencies. A 10% appreciation of the euro compared to all other group currencies for the year ended 31 December 2004 (or a similar 10% depreciation of the other group currencies to the euro), would have a negative effect on our net turnover of approximately EUR 36.0 million and a negative effect on our operating result of approximately EUR 6.0 million.

Interest Rate Risks

We do not believe that we are exposed to any significant risks connected with fluctuations in interest rates, as our net financial indebtedness is relatively limited. Nevertheless, the amount of our short-term borrowings is subject to interest rate fluctuations during the course of the year in accordance with working capital changes and investments that we make from time to time during the course of the year. In 2002, we entered into a number of interest rate swap agreements with maturities varying between three and five years with an aggregate value of

51 EUR 120.0 million in order to minimise the negative impact of any adverse movements in short-term interest rates. The first agreements, representing EUR 40.0 million of notional value will expire in November 2005. The remaining EUR 80.0 million will expire in the fourth quarter of 2007. The interest rate swap agreements have no underlying value as a result of our very limited net financial indebtedness, and the fair value of all of our interest rate swap agreements has been reflected in our financial results in 2004 and 2005.

Critical Accounting Policies and Estimates

The financial information we include in this prospectus has been prepared on the basis of Dutch GAAP or IFRS. Dutch GAAP and IFRS set forth rules for presentation of financial information that are often straight- forward in their application. However, some amounts included in this financial information must be estimated, requiring us to make assumptions with respect to values or conditions that cannot be known with certainty at the time the financial information is prepared. We believe that the accounting policies set forth below are the most important “critical accounting policies” for Endemol. A “critical accounting policy” is one that requires management to make difficult, subjective or complex judgments. Often, this involves making estimates about the effect of matters that are inherently uncertain. We evaluate these policies on an ongoing basis, based upon historical results and experience, consultation with experts and other methods that we consider reasonable in the particular circumstances under which the judgments and estimates are made, as well as in light of our forecasts as to the manner in which such circumstances may change in the future. Actual results may differ from these estimates under different assumptions or conditions.

Recognition of Net Turnover

Turnover from non-scripted television productions, which consist of entertainment and infotainment formats, is recognised based upon the percentage of completion method, pursuant to which turnover is recognised in the income statement account in proportion to the stage of completion of the production as of the balance sheet date. Income recognition of scripted television productions, such as drama productions and soap operas, is based on the achievement of the deliverables in the production, for example partial completion of the production. Each of these methods relies on initial estimates by management of the total cost of producing a given programme and provides for the recognition of turnover during a reporting period of an amount of other operating revenue corresponding to the percentage of total estimated costs actually incurred during the period. Because these revenue amounts are based upon management’s initial assessments of expected production costs for a programme, levels of recognised revenue in a period are subject to change as the production of a programme progresses to the extent that actual production costs differ from those originally estimated by management. The stage of completion is assessed by reference to surveys of work performed.

Income from merchandising, music and other sources is recognised at the time of delivery. Revenue from the sale of licensing rights on formats is recognised in the profit and loss account when the significant risks and rewards of ownership have been transferred to the buyer and the turnover can be reliably estimated.

Turnover of digital media is recognised based on our estimates of the number of calls (or in some cases, the minutes spent on calls), SMS messages received or Internet hits made. In addition, in other cases, turnover may be recognised for digital media, based on the number of games or subscriptions sold.

Provision for Taxation

Endemol is subject to income taxes in numerous foreign jurisdictions and Endemol is continuously audited by tax authorities. Significant judgment is required in determining the worldwide provision for income taxes. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, we believe that our tax reserves reflect the probable outcome of known contingencies. An estimated effective tax rate for a year is applied to quarterly operating results. In the event there is a significant or unusual item recognised in the quarterly operating results, the tax attributable to that item is separately calculated and recorded in the same quarter. A number of years may elapse before a tax return containing tax matters, for which a reserve has been established, is audited and finally resolved.

52 Accounting for Goodwill

Endemol typically acquires subsidiaries at a purchase price that consists of initial cash payments and a subsequent earn-out payment, which is based on or related to the post acquisition performance of the acquired company. Any adjustment in Endemol’s projected earn-out obligation has a corresponding effect on the goodwill.

All business combinations are accounted for under IFRS by applying the purchase method. Goodwill represents amounts arising on acquisition of subsidiaries, associates and joint ventures. In respect of business acquisitions that have occurred since 1 January 2004, goodwill represents the difference between the cost of the acquisition and the fair value of the net identifiable assets and (contingent) liabilities acquired. Excess of acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost is recognized directly in the income statement. In respect of acquisitions prior to 1 January 2004, goodwill is included on the basis of its deemed cost, which represents the amount recorded under Dutch GAAP.

Endemol regularly acquires business combinations in stages, with or without the use of call and put options. For each so-called step acquisition, the fair value of the acquired business is determined in accordance with IFRS 3 and intangible assets, which include formats, are identified and separately recognised once the recognition criteria are met. Any excess of the purchase price over this value is accounted for as goodwill.

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is tested annually for impairment. The carrying amount of goodwill is reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. Both of these judgments involve management discretion. An impairment loss is recognised whenever the carrying amount of an asset or a cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the profit and loss account.

Call and Put Options Relating to Acquisition Contracts

Endemol has entered into various call and put options in the past in connection with some of its acquisitions. Call options are valued at fair value and recognised when the option price is lower than the underlying fair value of the potential future investee and included in the financial or current assets depending on the exercise date. Put options (held by other parties) are valued at fair value and recognised when the option price is higher than the underlying fair value of the entity involved and included in the short- or long-term liabilities depending on the exercise date. The fair value of these options is re-measured at each reporting date. Calculating the fair value of these options involves management discretion and judgment. All changes in fair value are accounted for in the profit and loss account in financial results.

Earn-out Obligations

Endemol typically acquires subsidiaries at a purchase price that consists of initial cash payments and a subsequent earn-out payment which is based on or related to the post acquisition performance of the acquired company. Projected earn-out obligations are recalculated at least annually on the basis of the expected future results of the applicable company after the business plan cycle or earlier when updated forecasts warrant a recalculation. Under Dutch GAAP, earn-out obligations are stated at nominal value. Under IFRS, earn-out obligations are stated at amortised cost with any difference between cost and redemption value being recognised in the profit and loss account over the earn-out period on an effective interest basis.

Adoption of International Financial Reporting Standards

Prior to 31 December 2004, Endemol Holding N.V. prepared its consolidated financial statements in accordance with Dutch GAAP. In June 2002, the European Union adopted a regulation requiring all companies that are governed by the laws of a member state of the European Union and whose securities are admitted to trading on a regulated market of any member state, which after this Offering will include Endemol, to apply IFRS for accounting periods commencing on or after 1 January 2005. Due to this regulation, we will be required to prepare our accounts in accordance with IFRS beginning with the year ended 31 December 2005 with a presentation of comparative financial information for the year ended 31 December 2004. Endemol prepared pro forma consolidated financial information on the basis of IFRS for the year ended 31 December 2004, which is included in this prospectus.

53 Acquisitions

Presented below is a summary of the principal acquisition transactions we have undertaken since 2002. Each of the acquired entities discussed below is consolidated in our accounts.

G In February 2002, Endemol UK increased its stake in the comedy production company Zeppotron from 25% to 100%, and we have fully consolidated the results of Zeppotron since that time.

G In September 2002, Endemol acquired a minority share of 40% in NL TV, an Amsterdam based company active in scripted productions.

G Endemol increased its stake in the Spanish production company Gestmusic Endemol from 60% to 100% in 2002 (Gestmusic Endemol was already fully consolidated). Turnover of Gestmusic Endemol for the year ended 31 December 2004 was EUR 67.0 million.

G In October 2003, Endemol USA acquired a 51% stake in True Entertainment, a company based in New York active in the production of factual television entertainment. The results of True Entertainment have been fully consolidated with a minority interest. Turnover of True Entertainment for the year ended 31 December 2004 was EUR 12.2 million. In May 2005, we acquired an additional 16% of the shares in True Entertainment, which increased our stake to 67%.

G In the last quarter of 2003, Endemol incorporated a subsidiary in Russia (Endemol Moscow) through an 80% owned Dutch subsidiary. The net turnover, mainly consisting of licensing revenues, attributable to that subsidiary was EUR 3.5 million for the year ended 31 December 2004. The results of Endemol Moscow have been fully consolidated with a minority interest.

G In October 2003, Endemol expanded its interest to a controlling interest of 51% in Endemol Southern Star in Australia, and since that time its results have been fully consolidated with a minority interest. Endemol Southern Star contributed net turnover of EUR 23.9 million for the year ended 31 December 2004.

G In September 2004, Endemol incorporated its fourth subsidiary in the Latin American market, Endemol Chile, which is 65% owned and fully consolidated by Endemol. Endemol Chile contributed net turnover of EUR 0.2 million for the year ended 31 December 2004. The results of Endemol Chile have been fully consolidated with a minority interest.

G The acquisition of an additional 17.5% of the shares in Palomar in Italy increased our share to 68.5% in August 2004, and since that time its results have been fully consolidated in our accounts with a minority interest. Net turnover attributable to Palomar for the year ended 31 December 2004 was EUR 21.8 million.

G The acquisition of an additional stake in 625 TV Produkties increased our stake to 100% in November 2004. The results were already fully consolidated in our accounts prior to that date with a minority interest. The net turnover of 625 TV Produkties for the year ended 31 December 2004 was EUR 7.7 million.

G In 2004, Endemol paid a total of EUR 18.5 million for earn-out arrangements with respect to prior year acquisitions in the United Kingdom.

G The acquisition of an additional 25% of the shares in Meta Entertainment increased our stake to 65% in January 2005, and since that time, its results have been fully consolidated in our accounts with a minority interest.

G The acquisition of a further stake in Stokvis & Niehe Producties in April 2005, which increased our stake to 85%. The results of Stokvis & Niehe Producties were already being consolidated in our accounts prior to that date.

G The acquisition of a 75% interest in Showrunner, a start-up scripted company in the United Kingdom in July 2005, and since that time its results have been fully consolidated into our accounts.

54 G In the nine months ended 30 September 2005, Endemol paid a total amount of EUR 25.3 million for earn- out arrangements with respect to prior year acquisitions in Spain, the Netherlands and the United Kingdom.

The acquisition of additional shares in True Entertainment in 2005, in Palomar in 2004, in 625 TV Produkties in 2004 and Meta Entertainment in 2005 qualify as step acquisitions under IFRS.

Recent Developments

We are in the process of divesting Overloaded Pocket Media, a small Dutch company which is involved in the design and production of information and entertainment for mobile platforms, which we acquired at the end of 2002.

Since 1999 we have operated a joint venture, Endemol Neovision, in Poland with ITI, the owner of the majority of the shares in TVN, one of the major broadcasters in Poland. Endemol Neovision produced non- scripted formats solely for TVN, at the same time limiting possible sales to other broadcasters in the country. We have reached an initial agreement with ITI pursuant to which we intend to purchase its 50% share in Endemol Neovision. We expect that this will allow us to operate as a fully independent TV production company in Poland in the course of the fourth quarter of 2005.

We are in the process of starting up a production company for the Andean region, comprising Venezuela, Colombia, Bolivia, Ecuador and Peru as well as companies in India and Thailand.

Outlook

Endemol’s overall strategy for the coming years is to continue its focus on profitable growth and market leadership. Maintaining and further expanding our position in our core business remains our key priority. In addition, we intend to pursue growth in four areas of opportunity. Among these, we view further expansion in North America as our most significant opportunity. We also expect scripted programming and digital media to contribute to our growth. Expansion into new territories is not expected to have a significant impact on our turnover in the next few years, although it does represent an additional business opportunity in the mid to long- term.

55 BUSINESS Overview

Endemol is not owned or controlled by any television broadcaster or broadcasting group. Prior to this Offering, Telefónica indirectly held 99.7% of our Shares.

History

In 1994, the production companies of two major television producers in the Netherlands, Joop van den Ende and John de Mol, merged to become Endemol. This merger triggered the international development of the Endemol group and since that time Endemol has rapidly expanded to become a leading format creation and production company. This rapid growth has been achieved through both acquisitions and internally developed start-ups of television production companies. Endemol, with its head office in Hilversum, the Netherlands, now has subsidiaries and joint ventures in 22 countries, including the United Kingdom, the United States, Spain, Italy, Germany and the Netherlands, as well as in Latin America, South Africa and Australia.

Our indirect parent company, Endemol Holding N.V. was listed on the Amsterdam stock exchange in 1996. Telefónica made a public offer for all of the outstanding shares of Endemol Holding N.V. in 2000, pursuant to which it acquired 99.7% of such shares. Following completion of the acquisition, Endemol Holding N.V.’s listing on the Amsterdam Stock Exchange was terminated. Currently, Telefónica holds 99.7% of the shares of Endemol Holding N.V. The holders of the remaining 0.3% of such shares are generally private individuals who did not tender their shares under the public offer.

Market

Certain market information and views on future market developments used in this section, and in particular the information regarding the net amount spent on television advertisement, are derived from ‘The Global Entertainment and Media Outlook: 2005-2009’ published in June 2005 by PWC, ‘The Global Trade in Television Formats’published in April 2005 by Screen Digest and EurodataTV. See “Important Information—Economic and Industry Data”.

The television market comprises numerous genres and subgenres of programmes. Set out below is a list and brief description of each of the genres that we believe are the most significant.

G Entertainment. This genre includes varied programmes that are not based on a script, which are primarily designed to entertain rather than challenge, provoke or inform the audience. These shows are increasingly becoming format driven. Examples of programmes in this genre include reality shows, game shows and talent shows. The entertainment genre is among the most competitive because entertainment programming typically receives some of the highest ratings. Notwithstanding the strong competition, entertainment programming also provides some of the most favourable opportunities for growth, through the exploitation of the intellectual property upon which the programmes are based across markets and platforms.

G Infotainment. This genre includes programming which is intended to provide information in a way that is entertaining to its viewers. Examples of programmes in this genre include docusoaps and lifestyle programming. The infotainment genre provides broadcasters with a relatively inexpensive programming alternative, which can be shown for long periods of time. Infotainment programmes are a particularly popular alternative for daytime programming, and are increasingly becoming a larger part of broadcasters’ schedules.

G Fiction. This genre includes scripted programmes with actors or comedians. Examples of programmes in this genre include dramas, soap operas and comedies. The fiction genre includes programmes that are the most directly influenced by the culture of the local market, and locally developed programming is experiencing growth in this genre.

56 G Children. This genre includes both scripted and non-scripted programming that is specifically produced to be viewed by children younger than 13. Examples of programmes in this genre include animation, informational and educational programming. The children’s programming genre, comprised mainly of animation, is typically characterized by greater financial risk because of its deficit financed nature and higher speculative revenues, especially merchandising. Notwithstanding this risk, however, this genre provides significant growth opportunities through interactivity and digital media exploitation.

G Sports. This genre includes non-scripted programming that has sports or sportsmen as a central theme. Examples of programmes in this genre include live sports and sports information programmes. The sports genre provides producers with an opportunity to produce programmes without the need to create or acquire rights to formats. Since most producers do not own the sports event, they merely act as a service provider, without building up any intellectual property rights in the programmes. Creating a sports event provides an upside to producers but also entails substantial risk.

G News and documentaries. This genre includes news programmes and traditional documentaries. Programming in the documentaries subgenre has increasingly come under pressure as broadcasters’ public service obligations are being reduced, and reality programming has supplanted documentary programming to a certain extent in broadcasters’ schedules.

Television relies on the cooperation of a number of participants which form a value chain. Key steps in this value chain include: the creation of a format; the production of the format, which involves the transformation of the format into the actual programme; the aggregation of the programme with other types of content to set up a programming schedule; and the distribution of the programme to an audience.

The following graph illustrates the traditional television value chain:

G Content creation – A content creator devises an idea and develops it into a format. Two main types of content creation companies can be distinguished:

– purely creative companies (companies focused on creating new formats but not producing programmes based on the formats) which license intellectual property to a third party for production in return for a license fee; and

– creative and production companies, such as Endemol, which create the formats and also produce programmes based on the formats.

57 G Production – Production companies transform a format into programmes that can be broadcast. Three types of production companies can be differentiated:

– production companies, such as Endemol, that produce programmes mainly based upon internally developed formats;

– production companies that concentrate only on producing programmes and that license formats from a third party, for which they pay a licence fee; and

– “for hire” production companies, which are line producers for broadcasters or format creators and operate as subcontractors or service providers.

G Aggregation – An aggregator, which is typically a broadcaster, manages the overall programming schedule by combining different programmes, which can be produced by external producers or by in- house line producers affiliated with the broadcaster. Advertisers purchase time-slots from aggregators to place advertisements for products and services based upon the viewers of the programmes that the advertisers are trying to reach.

G Distribution – A distributor is the company that delivers finished programming to the viewer through cable, satellite, ADSL (asymmetric digital subscriber line) or another distribution platform. A distributor, often a platform owner, generates revenues through subscription fees from customers.

The following graph illustrates the typical television revenue streams:

As the graph above illustrates, revenues originate from four major sources:

G advertisers (typically the main revenue source);

G pay-TV subscription fees;

G public broadcasting fees; and

G digital media and ancillary revenues.

Advertising has represented the main revenue source with which broadcasters fund their programming. Consequently, the evolution of television advertising is relevant to the future business of companies such as Endemol that rely on broadcasters for a majority of their revenue. Currently, the global audiovisual entertainment industry appears to have recovered from a downturn experienced in the years 2001-2002. For the 2004-2009 period, it is expected that global advertising will grow from EUR 288.0 billion in 2004 to EUR 384.0 billion in 2009, representing a 5.9% CAGR, whereas the CAGR of global gross domestic product for 2004-2009 is expected to be 5.6% (PWC). Television is likely to remain the predominant medium for advertising, accounting for EUR 110.0 billion in 2004 (38.2% of the total amount of money spent on advertising) and is expected to account for EUR 150.0 billion (39.1% of the total) in 2009 (PWC). This represents a CAGR of 6.4% for 2004- 2009.

58 The development of other forms of television advertising, primarily the direct sponsorship of programmes, is expected to have an impact on spot advertising. Some companies are shifting a portion of their advertising budgets from traditional media, such as television advertising, to more direct forms of advertising, such as programme sponsorship. This trend is driven by a perceived reduction in the value of television spot advertising. Devices such as personal video recorders, which we expect to be gradually introduced into the market, allow viewers to avoid commercials as they watch programmes whenever they please. In response, advertisers are now increasingly seeking to have commercial messages integrated into the programmes. Several forms of alternative advertising can currently be observed in the television market, the most important of which are:

G advertiser-funded programmes, where an advertiser commissions the specific content it desires and therefore fully funds a programme directly;

G sponsorship, where an advertiser partially pays a fee in return for having its name or brand attached to the programme (sponsorship arrangements are typically mediated by a broadcaster);

G bartering, an arrangement in which an advertiser pays for a programme in return for unrelated advertising spots; and

G product placement, which consists of inserting a product or service of the advertiser into the natural sequence of a programme.

We benefit from these alternative advertising forms developing in the market and have entered into a number of arrangements with advertisers, including certain large multinational companies in respect of Extreme Makeover: Home Edition (USA); Sixpack (the Netherlands); Orange Playlist (United Kingdom); Big Brother and All You Need is Love (Argentina); and Deal or No Deal (six Latin American countries).

In addition, viewers typically prefer to watch certain forms of non-scripted programming we produce, in particular reality programming, on a live or ‘as live’ basis (as is also the case with sports). In light of the expected growth of the use of personal video recorders, we believe that broadcasters will increasingly perceive such non-scripted programming as premium content.

The traditional television business model in entertainment production, in which we predominantly operate, has a low risk profile. Broadcasters typically fund nearly all production costs with a portion of the payment made before production commences and before the production company might have incurred any significant costs. The model is, however, different for other genres, such as scripted programming. Broadcasters may only partially fund the production of scripted programming, which in turn may require a deficit finance investment by the production company. Producers may be compensated for this additional risk through the potential revenues that could result from the rerun possibilities that successful scripted programming offers. These reruns can make a scripted production more profitable than non-scripted programming in the mid to long-term (alternatively, producers could accept a reasonable profit on the production and accept a small back-end fee in return for not being involved in the funding of the programme). However, our strategy is generally not to deficit finance projects, as we prefer to share the risk with partners.

Another important development in the television market is the redefinition of traditional market structures in the digital media arena due to recent technological developments and changes in consumer behaviour. The expansion of the Internet and mobile phone markets is blurring the historical boundaries between the telecommunications, media and information technology industries. Both broadcasters and producers are bringing their content to the Internet and mobile markets, making use of the new television platforms and technologies (for example, cable and ADSL), which allow for an interactive relationship with viewers. These developments generate numerous new opportunities for content companies, including:

G Possibilities to develop content for other platforms and to develop new content through traditional platforms – for example, streaming video clips on the Internet, interactive games on television and mobile television formats.

G Possibilities to develop new clients – for example, partnerships with telecommunications companies and Internet service providers for content delivery through mobile, broadband and new digital television channels.

59 Notwithstanding the market development described above, content creation and production remains the core of our business. We believe we are well positioned to benefit from market developments as long as we maintain strong links with broadcasters, platform owners and creative talent.

Our Products

Our products are the content that we create for several media and communication platforms, primarily for television, but also for the Internet, mobile phones and other platforms. In particular, we believe that we are a leading developer and producer of formats. A format is typically a programme structure and content based on an idea. Our products comprise scripted content, non-scripted content and digital media content.

G Scripted programmes are entertainment programmes such as drama, comedy and soap operas for which writers have been employed to pre-determine the script and structure of shows.

G Non-scripted programmes are programmes such as reality, entertainment and talent shows where the main events within the programming are not pre-determined by writers and producers but are the result of actual events happening within the duration of the show.

G Digital media products are mainly but not exclusively brand exploitations of Endemol’s main programming, including ringtones, ‘wallpaper’ for PCs, broadband streaming of programming over the Internet and mobile phones, mobile and online games and interactive viewing services.

Most of our programming is developed internally. By creating and owning the intellectual property rights subsisting in or associated with our formats, we can exploit such formats, including through ancillary forms of exploitation, such as interactive applications and branded games, and by licensing the rights to the formats in countries where Endemol does not have a permanent presence. Keeping the creative process in-house and not being limited to producing third party formats has a positive impact on our profitability. We consider creativity our main asset. Creativity is a permanent topic on the agenda of our Management Board, and one of our Management Board members, the Chief Creative Officer, is fully devoted to it.

Group-wide incentives are in place to stimulate the creation and sharing of new formats in the Endemol group. This is overseen by the Global Creative Team (“GCT”). The GCT is comprised of top creative and commercial managers from across the group. The GCT has access to a special Creative Development Fund for the development and piloting of new formats. A separate Formats Acquisition Fund is reserved to acquire third party formats, although this market is getting more competitive with format owners often seeking to sell to broadcasters directly.

In addition to the GCT meetings, Creative Exchanges, where creative directors from all main subsidiaries discuss the latest formats developed by each subsidiary, are currently held twice a year to promote format transfer across the group. Global management meetings, at which operational and strategic cooperation within the group is reviewed, are generally held as well twice a year. Formats in development across the group are closely monitored by a specific team, the Creative Development Unit, in order to detect potential synergies. This is detailed in regular synergy reports which have proved a valuable tool in coordinating the process of bringing formats to air. In addition, this process enables the joint production of pilots.

One of our most valuable assets is our format library, which currently holds more than 900 formats (including approximately 150 scripted titles). We own and control the distribution rights to most of these formats. We share the ownership of approximately 10% of the formats in our library with third parties, for example, with the original broadcaster. The library can be accessed by all our subsidiaries through intercompany general license and distribution agreements. For purposes of internal exchange of format information, we have created a company intranet system called Premier. The system provides confidential and categorised information on available formats, ratings of territories where formats are broadcast, video streams and other useful information. Premier is a source for the latest Endemol and non-Endemol related information from around the globe and serves as both a creative stimulus and a sales tool.

Most of our non-scripted programming is developed in-house. In 2004, eight of our top ten formats in terms of net turnover were developed in-house. Our 2004 top ten formats contributed 56.6% of our total net turnover and approximately 300 formats contributed the remaining 43.4%. No single format in production in 2004 accounted for more than 21.8% of our total net turnover. The Farm and Who Wants To Be A Millionaire, together

60 accounting for 6.6% of our total net turnover, were licensed from third parties. Operación Triunfo and Crónicas Marcianas are licensed from related parties. See “Related Party Transactions—Other Related Party Transactions”.

Among our most successful formats are Big Brother, Fear factor and Deal or No Deal. Big Brother was broadcast in 1999 in one country, in 2000 in ten countries, in 2001 in 17 countries, in 2002 in 16 countries, in 2003 in 19 countries, in 2004 in 12 countries and in 2005 in 22 countries. Fear factor was broadcast in 2002 in eight countries, in 2003 in seven countries, in 2004 in ten countries and in 2005 in eight countries. Deal or No Deal was broadcast in 2002 in one country, in 2003 in four countries, in 2004 in 16 countries and in 2005 in 25 countries.

Of our 2004 top ten formats, three were developed originally in the Netherlands, two were developed in Spain, one was developed in each of the United States and Italy and one was developed by our Global Creative Unit. Six of our top ten formats have been in the top ten for the last three years, demonstrating that Endemol is capable of creating successful formats with a prolonged lifecycle.

The following table sets out our top ten produced formats in terms of turnover in the years 2004, 2003 and 2002:

In 2004 and 2005 to date we have launched more than 60 new programmes. They include The Match, 8 out of 10 Cats, Fool Around With (UK), La Casa de tu Vida (Spain), Il Ristorante, the Perfect Couple (Italy), the Last Passenger, Doble Vida (Argentina), Guess Who is Coming Over? (USA) and Een Goed Begin (the Netherlands).

Competitive Strengths

We believe our success is due, in large part, to the following competitive strengths:

G Creativity and intellectual property – We recruit, train and retain superior creative talent. We also have appropriate processes and structures in place to properly manage the entire creative process. We have creative teams dedicated to each major market in which we operate. This presence enables us to develop, own and exploit ideas and intellectual property, which is essential to our strategy. Over the last five years, we have created an average of more than 100 new formats (including scripted titles) each year, and our

61 library currently holds more than 900 formats (including approximately 150 scripted titles). Furthermore, we believe that our teams excel in rejuvenating and readapting existing formats. Our local management and experienced consultants adapt our formats to the local tastes in each market to increase their local appeal. These creative skills have made us a preferred provider of content that delivers strong ratings for major broadcasters worldwide. We believe that these capabilities distinguish us from many of our competitors.

G Production expertise – In addition to creating successful formats, we believe that our production capability meets high standards. In some cases, we are able to simultaneously produce a format for several countries around the world, which allows us to better and more economically meet the needs of our broadcasting clients. We believe that our production standards differentiate us from many of our competitors and help to protect us from successful imitation.

G Global network and presence – Our global network allows our subsidiaries to benefit from the advantages of belonging to an international group and provides a geographically diversified source of revenues. Our subsidiaries are primarily focused on their home markets, developing programming specifically for their domestic audience and adapting Endemol’s international formats to their local cultures to increase their appeal. In addition, our subsidiaries also work together to develop and share new formats and other intellectual property, which may become international hits. They also exchange production and other know-how and best practices, and benefit from the facilities, services and strategic initiatives offered by our head office.

G Entrepreneurial management supported by strong internal structures and processes – Our entrepreneurial local management is complemented and supported by strong internal structures and processes that we have developed as a global company, covering, among others, the areas of human resources, finance, legal and compliance, and intellectual property management. These structures and processes enable local management to have a better focus on the local market, and at the same time allow us to exercise an appropriate level of oversight and control of our subsidiaries.

G Strong market relationships across a variety of countries and platforms – Our local management consists of experienced professionals with a proven track record in television and related media fields and who enjoy close relationships with local broadcasters.

G Track record and market leadership – Endemol and its predecessors have a 20-year track record of creating and producing television formats around the globe. We are now a leading format producer, and our strong position gives us a degree of credibility when we approach new broadcasting clients and seek access to new markets.

Our Main Geographical Markets

Certain market information and views on future market developments used in this section, and in particular the information regarding the net amount spent on television advertisement, are derived from ‘The Global Entertainment and Media Outlook: 2005-2009’ published in June 2005 by PWC, ‘The Global Trade in Television Formats’ published in April 2005 by Screen Digest and Eurodata TV. See “Important Information—Economic and Industry Data”.

Endemol has local operations in 22 countries, and has sold formats and ready-made programmes to over 100 other countries. When we acquire or start up a new local subsidiary, we look for creative and committed entrepreneurs who have a successful track record in audiovisual entertainment.

Of the 22 countries in which we have a permanent presence, six of them generated 87.4% of our net turnover in 2004. These countries comprise (ranked by television advertisement spending) the United States, the United Kingdom, Italy, Germany, Spain and the Netherlands. Each of these markets is briefly described below. We do not include a description of the market in France (the fourth largest European market in terms of television advertisement spending), as we do not have a direct presence in this country.

62 United States

The United States is by far the largest television market in terms of television advertisement spending, with EUR 27.1 billion gross (without taking into account reductions and commissions) spent in 2004 (PWC). This accounts for approximately 25% of the worldwide television advertisement spending market. The CAGR for gross television advertising spending in the United States is projected to be 5.9% for the 2004 – 2009 period (PWC).

The six networks (NBC, ABC, Fox, CBS, UPN and The WB) account for EUR 14.5 billion value in television advertising revenues (54% of the total; PWC), while cable networks account for the remaining EUR 12.6 billion (46% of the total; PWC). Cable television advertisement spending, with a CAGR for the period 2004-2009 of 7.3%, is expected to outperform network television advertising spending, with a CAGR of 4.5%, for the same period (PWC).

The demand for non-scripted programming is steadily growing in the United States. Until reality shows emerged in 2000 (for example, Big Brother and Survivor (not an Endemol format)), game shows (primarily produced in-house by broadcasters) were the most prevalent programmes. Currently, reality and docusoap programming are popular in the US market; as well as more ‘family friendly’ formats such as Endemol’s Extreme Makeover: Home Edition. However, the most significant growth in new programme commissions for 2005 is in scripted one-hour drama and, to a lesser extent, comedies. The UK is the most important source of formats imported into the United States.

We have been present in the United States since late 2000. Endemol USA is based in Los Angeles (primarily focused on the network business), and True Entertainment is based in New York City (primarily focused on cable). The top four Endemol produced programmes in terms of revenues in the United States in 2004 were Fear factor, Extreme Makeover: Home Edition, Big Brother and Next Great Champ.

United Kingdom

The UK is the largest European market in terms of net television advertisement spending. It was estimated to account for EUR 5.1 billion in total in 2004 and is projected to have a CAGR of 4.7% for the 2004-2009 period (PWC).

BBC1 and ITV are the most popular channels, accounting for almost half of the audience share (24.7% and 22.8% respectively) in 2004. They are followed by BBC2 with a 10% audience share and Channel 4 with a 9.8% audience share in 2004 (EurodataTV).

The UK creates, produces and broadcasts more formats than any other market (Screen Digest). Reality television remains a popular genre with, for example, Strictly Come Dancing, I’m A Celebrity – Get Me Out Of Here (not an Endemol format) and Big Brother, each constituting one of the highest rated shows for BBC1, ITV1 and Channel 4, respectively. The trend set by Endemol towards celebrity-led reality shows has proved successful, while the development of celebrity sport shows has shown potential (for example, The Match).

Scripted programming is expected to grow in the UK market. The production market has historically been dominated by the large in-house production units at the BBC and ITV (Granada). The BBC has now voluntarily offered a further 25% of its non-news production hours to free and fair competition between in-house producers and independent producers, potentially creating more opportunities for independent producers, particularly in scripted programming. These changes have increased interest from investors in the independent television production sector. Also, independent television production companies are now consolidating, some with support from private equity investors or public offerings and market listings.

Endemol entered the UK market in 1998 by acquiring a 50% stake in a leading independent television producer, Broadcast Communications (now Endemol UK), from the Guardian Media Group (GMG). Endemol in the UK currently consists of six integrated companies, each with its own specific focus. The top four Endemol produced programmes in terms of revenues in the UK in 2004 were Big Brother, Call TV, The Farm and 24 Hour Quiz.

63 Italy

Italy is comparable to the UK in terms of net television advertisement spending with EUR 4.7 billion in total in 2004, but has a higher projected CAGR of 7.3% for the 2004 – 2009 period (PWC).

The Italian television market is dominated by two main broadcasters, RAI and RTI (part of Mediaset), which together have nearly 90% of the total audience share. During 2004, RAI (with a 44.3% audience share) performed better than RTI (with a 42.9% audience share). Although insignificant compared to the two leading broadcasters, the average audience share of satellite broadcasters has grown in recent years to 4.1% of the total audience share in 2004 (EurodataTV).

Game shows are the most popular formats in the Italian market and their importance has increased over recent years. By contrast, no consistent trend can be observed for reality programming, broadcast hours of which increased from 2002 to 2003 but declined in 2004 (Screen Digest). Traditionally, scripted programming has also enjoyed strong popularity, with Endemol’s Vivere and Cento Vetrine (each jointly owned with RTI (part of Mediaset) as examples of recent successful series.

Endemol has been present in the Italian market since 1997. It currently operates through three material subsidiaries, Endemol Italia (acquired in 1997), Palomar (acquired in 2000 and focused on producing high quality drama) and a 50%-50% joint venture (Mediavivere) with RTI (part of Mediaset). Mediavivere contributed less than 25% of the total revenues of Endemol Italy in 2004. The top four Endemol produced programmes in terms of revenues in Italy in 2004 were Big Brother, Gente di Mare, Vivere and Cento Vetrine.

Germany

Germany is the third largest European market in terms of net television advertisement spending after the UK and Italy. It was estimated to account for EUR 3.9 billion total net television advertisement spending in 2004 and is projected to have a CAGR of 4.0% for the 2004-2009 period (PWC).

ARD, RTL Television, ZDF, Sat1 and Pro7 are the most popular channels, accounting for almost a 60% of the audience share in 2004 (13.9%, 13.8%, 13.6%, 10.3% and 7.0%, respectively) (EurodataTV).

Game and variety shows are highly popular, with successful formats like Wer wird Millionaire (Who Wants To Be A Millionaire) and Wetten Das, neither of which is an Endemol format, although Endemol produces Who Wants To Be A Millionaire. We expect that there will be growth in reality, comedy, family entertainment programming and telenovelas in the future.

We currently operate in the German market through two subsidiaries, Endemol Germany, founded in 1994, and Meta Productions, acquired in 1998. The top four Endemol produced programmes in terms of revenues in Germany in 2004 were Big Brother, Who Wants To Be A Millionaire, Rescue 911 and All You Need is Love.

Spain

Spain is the fifth largest European market in terms of net television advertisement spending, with total volume in 2004 estimated at EUR 2.7 billion. Spain is recovering from a decrease experienced in recent years. This positive trend is expected to continue in the coming five years, where a CAGR of 5.8% is projected for the 2004-2009 period (PWC).

Tele 5 has become the leading broadcaster with an average audience share in 2004 of 22.1%. It was followed by TVE1 and Antena3 with an average audience share of 21.4% and 20.8% respectively in 2004 (EurodataTV). A new regulatory framework will be applicable to TVE before the end of 2005, which may limit advertisement air time and give TVE a more public-service orientation. The entrance of two new terrestrial channels is also expected, one before the end of 2005 and a second one in 2006.

Scripted programming is increasing in popularity in the Spanish market. Game shows are the most important format genre in terms of hours broadcast and have shown strong growth in recent years. Reality and variety are the second and third most important format genres and their audience share remains constant.

64 Endemol entered the Spanish market in 1994 when it acquired a 60% stake in Gestmusic Endemol, followed in 1997 by the acquisition of a 45% share in Zeppelin. Endemol obtained full ownership of the two companies in 2002 and in 2000, respectively. We are in the process of integrating the operations of Gestmusic Endemol and Zeppelin. The top four Endemol produced programmes in terms of revenues in Spain in 2004 were Big Brother, Crónicas Marcianas, The Farm and La Casa de tu Vida.

The Netherlands

The Netherlands is a relatively small market in terms of net television advertisement spending with approximately EUR 0.8 billion spent in 2004. A CAGR of 3.4% is expected for the 2004-2009 period (PWC).

Nederland 2, RTL 4, Nederland 1, SBS 6 and Nederland 3 are the most popular channels, accounting for approximately 60% of the audience share in 2004 (18.4%, 15.4%, 11.1%, 9.6% and 6.6%, respectively) (EurodataTV).

The Dutch television market traditionally has been considered as both innovative, introducing programmes such as Big Brother, Call TV and Deal or No Deal (Miljoenenjacht), and lucrative due to the historically strong creation and export of formats. Game shows are by far the most important format genre in terms of broadcast hours. Reality has traditionally been a popular genre and is experiencing a rebirth with the launch of Big Brother after a two years absence from Dutch television. Scripted programming remains significantly popular in the Netherlands, including Goede Tijden, Slechte Tijden, which is not an Endemol format, but which we have jointly exploited with the format owner for the past 15 years, and a number of long-running American titles. Call TV, which was created in the Netherlands and continues to be popular, is expected to face more legal constraints in the future. See “Business—Regulation”.

We operate in the Netherlands through various subsidiaries, each with its own specific focus. The top four Endemol produced programmes in terms of revenues in the Netherlands in 2004 were Call TV, Onderweg naar Morgen, Goede Tijden Slechte Tijden and Staatsloterijshow.

Our Relationship with Broadcasters

We are a leading supplier of formats to major broadcasters around the world. These relationships are built on a consistent track record of delivering high-quality compelling shows. In some cases, these relationships are formalised in contracts with a duration of more than one year and under which productions are commissioned from Endemol, typically in return for a first-option access to our format catalogue.

Due to our scale and homegrown content, we typically supply our programming to more than one broadcaster in each territory. If we agree to produce exclusively for only one broadcaster in a certain country, we will in general agree to do so only in return for a certain volume guarantee.

We strive to secure and retain any intellectual property rights subsisting in or associated with our formats in order to be able to retain the potential of ancillary exploitation and ready-made distribution of our formats. Although broadcasters are increasingly trying to acquire intellectual property rights, to date, the combination of our creativity and high quality production has enabled us to negotiate on comparatively favourable terms with broadcasters.

In 2004, our top five customers, including international broadcaster groups, accounted for 48.9% of total net turnover. None of these customers represented more than 14.8% of our total net turnover in this same year.

Competition

In our view, we face competition from three types of participants in the television production business:

G In-house production companies – Most broadcasters own at least one production company that produces content for them. In some cases, these companies compete more or less freely in the market, even offering their content to unaffiliated broadcasters. In addition, some broadcasters have their own internal capacity to produce programmes.

65 G Local, small players – Endemol also faces competition from a number of local independent production companies that focus on one or a few territories.

G Global players – We believe that there is currently one company that competes with Endemol on a global scale, FremantleMedia. FremantleMedia is an international developer and producer of television programming, with a similar size and global presence to Endemol. FremantleMedia produces drama, entertainment and factual entertainment programming, developing and acquiring worldwide rights in formats. FremantleMedia is a wholly owned subsidiary of the RTL Group (owned by Bertelsmann AG in Germany). RTL Group is a pan-European television and radio broadcast company. Endemol, in contrast, is independent from any broadcasting group and also supplies programming to RTL’s various television channels in Europe.

In some of the markets in which we operate, price pressure is increasing due to decreasing broadcaster budgets and consolidation of our competitors. We are also facing competition from smaller format developers and other creative companies. There is a tendency among some producers to use aggressive pricing tactics or to give away intellectual property rights in order to acquire package deals with broadcasters.

We believe that the challenges faced by competitors seeking to enter the television content industry are mostly non-financial, as the investments required to start production companies are not high. The four most important barriers to entry are:

G Creative skills and intellectual property - The established ability to create and protect ideas that drive the broadcasters’ audience share and revenues.

G Market credibility as evidenced by brand name, track record and production ability – The recognition and brand reputation for having the ability to produce high quality programmes.

G Commercial capabilities – Local contacts and close relationships with programme commissioners at local broadcasters, often reflected in output contracts.

G International network - Benefiting from being part of a global, multicultural group that facilitates intellectual property sharing, exchanging best practices, sharing facilities and services and engaging in other coordinated activities across many geographical markets.

Strategy

Endemol’s overall strategy for the coming years is to continue its focus on profitable growth and market leadership. Maintaining and further expanding our position in our core business remains our key priority. In addition, we intend to pursue growth in four areas of opportunity. Among these four areas of opportunity, we view further expansion in North America as our most significant opportunity. We also expect scripted programming and digital media to contribute to our growth. Expansion into new territories is not expected to have a significant impact on our turnover in the next few years, although it does represent an additional business opportunity in the mid-to long-term. In detailing each of our key strategies below, we have listed them in order of priority, starting with the highest priority.

Focus on our Core Business

Our main strategic priority for the coming years is to maintain and further expand our strong position in entertainment programming on the world’s major commercial television networks. In order to do so, we are taking a number of actions, based on our traditional strengths:

G Continuous creativity to deliver the best formats via the best talent. As explained above, creativity and quality production expertise are our key assets. It differentiates us from the competition. Our larger companies are organized around teams which create and produce ideas. We will continue these efforts in the future.

G Proactive management of the lifecycle of our formats. Our experience demonstrates that vigorous management of the lifecycle of a programme can deliver positive results. An example of this is Big Brother, a format originally created in 1999 which still delivers a robust financial performance. Another

66 example is Fear factor, which was derived from an existing Dutch format and was readapted into an exciting, action game show by our US subsidiary. Endemol aims to build on this model, reviving other formats in our library.

G Proactive management of our library of formats to stimulate trading of ideas and intellectual property trading around the Endemol group. We are fully aware of the potential of our library (containing more than 900 formats, including approximately 150 scripted titles) and are committed to exploiting this potential. Some of our inactive formats have been turned into hits once again. Relevant initiatives include a new incentive scheme to fuel intellectual property sharing throughout the group; the Global Creative Team to spearhead intellectual property circulation; and Premier, an intranet system developed by Endemol, to facilitate the use of our format library. Premier, which is accessible to all our operating companies, provides confidential and categorised information on available formats, ratings of territories where formats are broadcast and video streams, among other things. It is both a creative stimulus and a sales tool.

G Sustain our strong relationships with major broadcasters. We have built up strong and valuable relationships with broadcasters across the world. This has been achieved by providing them with high quality programming that repeatedly delivers impressive viewing figures. In many countries Endemol has been responsible for helping broadcasters grow their overall channel share and advertising revenues. Endemol’s top programming translates into strong ratings, high channel profile and, because of its business model, high ancillary revenues and interactivity with viewers.

G Further deployment of cross-company revenue-enhancing and cost reduction initiatives. We intend to take various measures to increase our profitability. These include various revenue-enhancing measures, for example, in the areas of merchandising (consumer products), music publishing and ready-made sales. In addition, we plan to take further cost reduction measures, for example, through the back-office integration of subsidiaries in the same country or region.

Expand in North America

The United States is the largest television market in terms of the amount spent on advertisement in the world with total gross television advertisement spending of EUR 27.1 billion in 2004, according to PWC. Endemol has been successful in the United States since it began operations there in 2000, building up strong relationships with the major US television networks. In order to further develop our position in North America (United States and Canada), we will focus on five areas:

G Television networks (including the syndication market). As one of the few larger independent production companies in the United States, Endemol USA has had shows on air at all major networks. Our strategy is focused on creating more non-scripted prime time network shows as well as syndicated programming. The syndication market consists of local stations that form syndicates typically because their individual budgets are too low to finance original programmes individually. Two kinds of syndicated programming can be differentiated: (i) first-run syndication consisting of content not previously broadcast elsewhere in the United States; and (ii) second-run syndication consisting of previously shown content in the United States. A syndicated show might be broadcast several times which generates additional revenues. For example, Endemol USA’s Fear factor was the first prime time network reality show to make it into syndication which positively impacted our operational results in 2004. Other programmes could potentially become candidates for second run syndication in the future. To further expand this model, Endemol USA is developing formats which meet specific syndication requirements.

G Cable. Endemol is active in this business through New York based True Entertainment and to a lesser extent through Endemol USA in Los Angeles. True Entertainment was acquired in late 2003 and has supplied programming to cable operators such as Discovery and National Geographic. Further growth in cable will be pursued by a combination of organic and non-organic growth.

G Scripted. Scripted programming is an attractive market segment as it accounts for a large part of the total viewing hours. Endemol USA has recently hired a well-known and respected executive to head its fiction business. Work has already started to attract script writers who will focus on pitching scripts for potential series to be developed by Endemol USA. The economic model is based on selling scripted projects to networks thereby transferring the risk of potential deficits, typically to the network’s studio.

67 G Hispanic market. Endemol USA has recently appointed a Hispanic executive to be based in Miami, to exploit the potential of this growing community (approximately 14% of total US population in July 2004, according to the US Census Bureau). This person will work in close cooperation with the other entities at Endemol USA, as well as with our Latin American and Spanish companies.

G Canada. Our strategy for Canada includes backing a Canadian operation, to be led by a Canadian executive with extensive experience in this market. We intend to ensure coordination of our Canadian operations with our US operations.

Increase Scripted Programming

We have a strong position in scripted programming in three of our main operating markets: Italy, Spain and the Netherlands. The top five Endemol produced scripted programmes in terms of revenues in 2004 were Gente di Mare, Vivere, Cento Vetrine and Cefalonia (all broadcast in Italy) and Onderweg naar Morgen (broadcast in the Netherlands). We believe there is potential for further growth in other markets. Scripted programming typically has stronger potential for profitable exploitation than non-scripted programming, due to a longer shelf- life and significantly stronger ready-made sales. Also, in the future, as advertisers seek to get closer to programming via programme sponsorship and product placement, scripted programming will be a genre capable of capturing these revenues. Our main reasons for moving further into scripted programming are the following:

G scripted programming is a significant genre in terms of viewing hours;

G we produce scripted programming in nine countries (in particular, the Netherlands, Spain and Italy) accounting for 12.3% of total net turnover in 2004 (EUR 104.3 million);

G scripted programming complements our other prime-time hits;

G there is a global appetite for English-language scripted programming;

G scripted programming has the potential for direct funding by advertisers in the future;

G we can offer one-stop shopping for our major clients; and

G we can leverage our current business and market know-how and previously successful scripted hits.

Our strategy for each market will depend on our current position in that market, as well as its strategic importance to us. In the United States and the UK, our strategy is to build our position, while in Spain and Germany we will seek to grow our market share. In the Netherlands and Italy, we will seek to maintain our market share.

Pre-financing is needed for many scripted projects, especially international co-productions. However, our strategy is generally not to deficit finance projects, as we prefer to share the risk with partners. We are establishing a scripted programming support team, which will aim to attract good scripts from the United States for our European markets, in order to spearhead a drive in ready-made sales and encourage co-productions within the Endemol group.

Digital Media Opportunities

We believe that digital media platforms represent additional opportunities to exploit our programming and best known brands, often with revenue-raising interactivity. We expect that our growth in this segment will be fueled by Participation TV (television programmes the core element of which is viewer interaction, for example Call TV, Auction TV and Homeshopping). Call TV has been produced in 25 countries and is starting to be produced in much longer segments on new digital television channels. We also expect to exploit our best known brands across new platforms. This began with in-programme activities, such as voting for Big Brother and call to win in Deal or No Deal, and was expanded to off-programme activities like ring tones, Internet games and on-line/mobile streaming videos of programmes. In addition, we recently started producing tailor-made content for digital media, although this remains an emerging market. Our digital media growth opportunities are likely to be largely through acquisitions.

68 Explore New Territories

We believe that the countries where we do not have a direct presence represent limited potential in the short- term, although some of them will offer emerging opportunities in the mid-to long-term. We intend to proceed using a two-tier entry strategy:

G First tier: countries and regions where Endemol already has direct sales, for example, South-east Asia and India, and where we plan to develop a direct presence through start-up companies in the short-term.

G Second tier: attractive markets from a market potential perspective, for example, Central Europe (we already have a direct presence in Poland and Russia) and China, which we will address in a second stage, planning to enter in the mid-term, with timing contingent on particular opportunities as they arise.

By applying this strategy we concentrate our focus and follow the appropriate timeline to enter these markets, because some of the markets are not yet sufficiently developed.

Mergers and Acquisitions Policy

Our growth over the last ten years has been strongly supported by non-organic growth, mainly acquisitions and start-ups. Our management team has strong experience in sourcing, acquiring and integrating new group companies and starting-up new businesses.

The market analysis and sourcing of acquisition candidates is done by both a dedicated team at our head office as well as by our local operating companies. When we examine a potential target company, the strategic fit is key. Also, the management of the target company should be willing to stay on for a multiyear period. Other criteria we apply are the target company having demonstrated creative skills and matched our growth and profitability expectations. Any target company active in the television segment should be financially solid, whereas a digital media target should be about or above break-even, having recurrent paying customers and a B2B focus.

We typically structure our acquisitions to provide for an initial purchase of a substantial minority or small majority (40-60%) stake in a target company, with the purchase price consisting of an initial cash payment, and a subsequent earn-out payment based on or related to the target’s performance following our acquisition of it. If our initial investment in a target performs as or better than expected, we typically seek to increase our stake in the target company over a multi-year period. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting our Results of Operations—Acquisitions”.

To us, this transaction structure can be a good instrument to lock-in and motivate management of the target company. Based on the specific circumstances, we may use different transaction structures in the future with the aim to ensure that any given deal has a positive impact on our earnings and results of operations in the mid- to long-term. In addition, committing management and managing our exposure will remain a key objective.

Intellectual Property

A substantial part of our business consists of the exploitation of formats. Our success depends, in part, on our ability to protect current and future formats through securing, enforcing and defending our intellectual property rights. However, both the legal status of these formats and the scope of protection offered for them is uncertain. Most jurisdictions do not recognise format rights per se and there is no generally recognised definition of the word “format”.

We rely on a combination of copyrights, trademarks, torts such as passing off, unfair competition rules, music rights, trade secrets and contractual restrictions to define and protect proprietary rights in our formats. Our contractual arrangements with our employees, freelance personnel and other independent contractors generally impose confidentiality restrictions on, and provide for the transfer to us of any intellectual property rights subsisting in any works created by, such employees or independent contractors. These proprietary rights and contractual restrictions provide only limited protection and vary among the countries in which we operate.

69 We seek to put third parties on notice of our interests in our formats by implementing a uniform credit title policy, which aims to ensure that all television programmes produced from our formats and written programme proposals have a credit line stating that the format is owned by us.

We also rely on our knowledge and experience of production, which may not be protected by registered intellectual property rights. We consider such trade secrets and proprietary know-how relating to production details and skills to form a further barrier for others who might seek to copy our formats.

We believe we have implemented a strong and efficient internal system of intellectual property protection. A team headed by an IP Rights Manager oversees a system called Format Registration Procedure (FRP) under which all Endemol group companies register their formats and have them internally recorded as original ideas. Over the last five years, Endemol has created an average of more than 100 new formats every year, and, through FRP we seek to ensure the timely registration of all associated copyrights, patents, domain names (registered Internet addresses) and URL’s (Internet addresses). In this manner, Endemol is able to demonstrate the process through which it developed an original idea, which may serve as evidence in intellectual property litigation against other parties in connection with such idea. FRP, by assisting Endemol in identifying whether or not an idea is original, also minimizes the possibility of Endemol infringing any other party’s intellectual property. In addition, we endeavour to quickly take legal action anywhere in the world to prevent or stop the broadcast of formats that threaten Endemol’s intellectual property rights.

Regulation

Our business is subject to and may be affected by various laws and regulations, the most important of which are briefly summarised below. Information on intellectual property rights protection is included in the above paragraph.

Competition Law

Our strategy is focused on profitable growth and in this context we plan to acquire companies, including start-ups, and to participate in joint ventures and partnerships. The acquisition of a company, a merger or the participation in a partnership and/or joint venture may require the prior approval of a competition authority or other similar governmental body. There can be no assurance, in respect of any transaction, that such approval will be awarded. In addition, competition authorities or other similar governmental bodies may require approval of any sale of a company of our group or a part of the business of our group. There is also no guarantee that approval will be awarded for such sales.

In conducting our business, we take due care not to breach prohibitions on restrictive agreements (such as Article 81 EC, its national counterparts in the EU member states and equivalent regulation in other countries). In several countries we are a leading player in the market for the production of TV programmes, although we do not believe we have a dominant position for purposes of the prohibition on abuse of dominance (Article 82 EC, its national counterparts in the EU member states and equivalent regulation in other countries), which, consequently, we believe is presently not applicable to our business. However, market conditions may change and we could acquire such a dominant position in the future, in which case the prohibition on abuse of dominance would impose certain limitations on our business in the areas in which we are most successful, including but not limited to an obligation to refrain from below cost pricing, excessive pricing, certain rebates, certain exclusivity provisions, discrimination and certain refusals to supply.

We are currently unaware of our involvement in any competition or antitrust proceedings, nor do we know of any current investigations of our business by competition authorities or other similar governmental bodies. However, we cannot guarantee that our current activities will not be subject of future competition or antitrust investigations and/or proceedings, nor is there any guarantee that such investigations and/or proceedings will result in a favourable outcome for us.

Gaming and Gambling Regulation

Legal restrictions on gaming, gambling, lotteries and competitions have always been particularly relevant for the conduct of Participation TV and we expect this will also be the case in respect of our formats and activities aimed at audience participation in the digital media field. In many jurisdictions, including but not limited to the United States, Spain and Germany, certain of our formats will be considered as gaming, gambling,

70 a lottery or a competition. Consequently, such formats may be currently forbidden or very strictly regulated and the exploitation of such formats in such jurisdictions may be difficult or even impossible.

To comply with such legal restrictions, Endemol has adopted a two fold approach to:

G continuously reinvent the Call TV format to ensure it is fully aligned with any new legislation or regulation which is introduced from time to time; and

G explore other kinds of Participation TV, such as Auction TV or Homeshopping, where the legal framework is not as restrictive.

Data Protection Regulation

Because Endemol collects data about individuals, it is subject to rules and regulations concerning the treatment of this information. The European Union has adopted the Data Protection Directive 95/46/EC, which applies both to companies established in the European Economic Area (“EEA”) or to companies using equipment in the EEA to process personal data. The Data Protection Directive has been implemented in all EEA jurisdictions in which Endemol operating companies are currently active. The Data Protection Directive imposes restrictions on the collection, use and processing of personal data, and guarantees rights to individuals who are the subject of that personal data. A company will be deemed to be a “data controller” if that company determines the purpose of and means for processing of personal data. Data processing is any operation or set of operations concerning personal data such as the collection, use, storage, transfer to another entity and erasure. A majority of the Endemol operating companies may therefore be regarded as data controllers for the purposes of regulation.

The Privacy and Electronic Communications Directive 2002/58/EC was adopted by the European Union on 12 July 2002 and governs the processing of personal data on all public electronic communications systems. The Privacy and Electronic Communications Directive restricts the use of automated calling systems, facsimile machines, email and SMS for direct marketing purposes. In particular, companies may not send unsolicited email communications for the purposes of direct marketing unless the recipient has given his/her consent.

Although the Data Protection Directive and the Privacy and Electronic Communications Directive harmonise data protection laws across the EEA, there is still real variation between EEA member states in the implementation of the Directives into national law. In some non-EEA states in which Endemol operates, regulations have been brought into force which are similar to those which operate in the EEA. In others, there are no regulations governing the protection of personal data. Endemol may therefore be obliged to comply with substantially different legislative requirements in each of the jurisdictions in which it operates.

Regulation of Television Sponsorship and Advertisement

In the European Union, the Television Without Frontiers Directive 89/552/EEC imposes certain restrictions on the content of television programmes. The Television Without Frontiers Directive has been enacted in all jurisdictions in the EU in which Endemol has operations. Other non-European jurisdictions have similar regulatory regimes including, in particular, the United States where the content of television programmes is regulated by the Federal Communications Commission (“FCC”).

Although the precise restrictions differ from jurisdiction to jurisdiction, most jurisdictions now enforce prohibitions on the advertisement of tobacco and prescription medicinal products and limitations on the manner in which advertisements for alcoholic products may be broadcast. Teleshopping, programme sponsorship, advertiser involvement in programmes and product placement are often restricted or forbidden and there are commonly rules which govern the volume and scheduling of advertising which is permitted to be shown by broadcasters. Restrictions on the form and content of advertising, and any changes to the rules which govern this area, may indirectly affect the programme commissioning budgets of broadcasters. In turn, this may also impact on the level of business which production companies such as Endemol might expect to obtain from those broadcasters.

Advertisement activities such as programme sponsorship, masthead programming and product placement constitute a source of income which is of growing importance to Endemol. Regulation in this field is undergoing change, most particularly in the EU. The European Commission is currently embarking on a wholesale revision of the Television Without Frontiers Directive. See ‘‘Business—Market”.

71 Requirements for Broadcasters on the Commissioning of Programming from Independent Producers

In many countries in which Endemol operates, broadcasters are required to broadcast a minimum amount of content which is produced by independent producers, produced in a certain country or in an EU member state, or which is produced in a certain language.

The Television Without Frontiers Directive 89/552/EEC imposes a requirement on all EU member states to ensure, where practicable, that broadcasters reserve at least 10% of their transmission time or 10% of their programming budget for programming that is produced by independent producers. The Directive does not contain a definition of “independent producer” although the European Commission did state in its 1997 amendments to the Directive that member states should take appropriate account of criteria such as the ownership of the production company, the amount of programmes supplied to the same broadcasters and the ownership of secondary rights when arriving at their own definitions. In practice, each EU member state employs slightly different criteria for defining an “independent producer” although most employ a test which states that a broadcaster in that member state may not own a shareholding of more than 25% in the production company.

Each member state also imposes different minimum independent production commissioning quotas on classes of broadcasters. The majority of member states have, however, opted to adopt a higher minimum commissioning quota than that set out in the Directive. In the UK, for example, the major terrestrial public service broadcasters are required to ensure that a minimum of 25% of the time on their channels is devoted to programming commissioned from independent producers. In Germany, there is a complex system in force which requires broadcasters which achieve an annual average viewer rating of 10% to allocate 260 minutes of airtime per week (although the requirement can be reduced in certain circumstances) to programming provided by independent third parties.

These minimum commissioning quotas are advantageous to independent producers generally because they provide a degree of certainty for the independent production sector, and in particular they ensure that independent producers will not be forced to compete with in-house broadcaster production units for the entirety of the programming schedule on the regulated channels. The quotas may also be advantageous specifically to Endemol to the extent that Endemol is able to produce content that qualifies under the relevant regulatory regime and to the extent that Endemol itself qualifies as an independent producer in each EU member state.

Regulation in this field is undergoing significant change, most particularly in the EU with the possibility of a substantial revision of the Television Without Frontiers Directive. See “Business—Regulation—Regulation of Television Sponsorship and Advertisement”. Endemol is working to ensure that it can continue to benefit from the regulations after the European Commission has concluded its project to revise and update the Directive.

Properties

Our worldwide corporate headquarters are in Hilversum, the Netherlands, where we lease approximately 8,500 square meters of space. In addition, our subsidiaries lease properties for use throughout the world, including in Spain, Germany, Italy, the United Kingdom, the United States and Latin America. Only two subsidiaries, Gestmusic Endemol and Endemol Argentina, own real estate. The types of properties required to support our business include offices and production facilities, such as studios. The aggregate annual rent paid for 2004 by the Issuer Group amounted to approximately EUR 10.2 million. Our leases are for varying terms ranging from month-to-month to year-to-year and can be for terms of 10 years or longer, and many provide for renewal options. We believe that our existing properties are adequate for the current operating requirements of our business and that additional space will be available as needed.

Employees

We seek to recruit, develop and retain the best talent in all areas of our business.

In most of our markets, we benefit from a good reputation and an attractive image. This is important for the recruitment of high quality personnel for format creation and production as well as for the corporate and commercial areas.

72 For the development of our employees, we have professional appraisal systems in place in the majority of our territories. Individual development plans are drafted for employees at the higher management levels, with a view to succession planning and identification of employees with high potential.

Endemol has a strong record in the retention of talent. The number of “regretted losses” has generally been low in recent years. Retention is enhanced by competitive rewards and incentive packages, an enjoyable atmosphere of “structured creativity” and, where relevant and possible, non-compete and non-solicitation clauses in contracts.

Most of our key employees are employed on contracts for an indefinite term, some with long notice provisions. Most of our senior executives have fixed term contracts with a duration until 2009. In general, only the core creative and production employees are hired on a permanent basis. In addition, we have many workers on temporary contracts and hire freelancers for specific projects. As of 30 September 2005, our workforce comprised 4,309 full time equivalents of which 707 were freelancers, 1,227 were workers on contracts for an indefinite term and 2,375 were workers on temporary contracts. Endemol may need to institute a works council at the level of Endemol Holding B.V. in the future, which works council may exercise certain mandatory employee advisory rights. Employees in some jurisdictions in which we operate are subject to collective bargaining agreements. We consider our relationship with our employees to be good.

Pensions

As we do not have a group pension plan, our group companies participate in state pension plans and/or pension plans with insurance companies, based on local legislation or regulations. Except for the Dutch group companies and a severance plan in Italy, all of our employees are covered under defined contribution plans.

In respect of the defined contribution plans, there are no overdue contributions (achterstallige premies) or other substantial liabilities or risks involved. In respect of the defined benefit plans in the Netherlands and Italy there are no overdue contributions (achterstallige premies).

For substantially all of our employees in the Netherlands, a defined benefit plan exists at Stichting Bedrijfstakpensioenfonds voor de media PNO (Dutch media pension fund). This plan is a ‘multi-employer defined benefit pension plan’, which is accounted for as a defined contribution plan because sufficient information is not available for defined benefit accounting. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Anticipated Uses of Liquidity—Pensions”.

Legal and Arbitration Proceedings

We are involved in a number of legal proceedings and disputes, primarily in connection with intellectual property rights and some of which relate to our major formats and titles. We intend to exploit our format Deal or No Deal in the United States. We are aware of a third party claiming prior rights to a mark similar to the mark Deal or No Deal in the United States and claiming that the format for Deal or No Deal has been copied. This party could attempt to prevent us from exploiting this format and using the name Deal or No Deal in the United States. To the best of our knowledge, none of these proceedings may have or have had in the recent past a material adverse effect on our or the Issuer Group’s financial position or profitability.

The general meeting of shareholders of Endemol Holding N.V., the parent company of the Selling Shareholder, held on 31 October 2005, approved the Offering. An association representing retail investors’ interests, which owns approximately 0.00003% of the shares of Endemol Holding N.V., and which was present at such meeting and voted in favour of the resolution approving the Offering, has subsequently contested by letter the validity of the shareholder approval decision on formal grounds. We believe, after having obtained legal advice, that such contest has no merits.

Material Adverse Change

There has been no material adverse change in the financial or trading position of the Issuer Group since 30 September 2005.

73 MANAGEMENT AND CORPORATE GOVERNANCE

We have a two-tier board structure consisting of a Management Board (Raad van Bestuur) and a Supervisory Board (Raad van Commissarissen).

The Management Board is responsible for our day-to-day management, whereas the Supervisory Board is responsible for the supervision and advising of the Management Board.

Management Board

Powers, Composition and Functioning

The Management Board was established upon our incorporation, at which time all the members of the Management Board were appointed.

The Management Board is responsible for our day-to-day management. The Management Board is required to keep the Supervisory Board informed, consult with the Supervisory Board on important matters and submit certain important decisions to the Supervisory Board for its prior approval, as described below. See “Management and Corporate Governance—Supervisory Board”.

The Management Board may perform all acts necessary or useful for achieving our corporate purpose, with the exception of those acts that are prohibited by law or by our Articles of Association. The Management Board as a whole is authorised to represent us, as is the Chief Executive Officer acting alone. If a member of the Management Board, acting in his personal capacity, enters into an agreement with us, or in his private capacity conducts litigation against us, we shall be represented in any such matter by another member of the Management Board or by a member of the Supervisory Board, unless the General Meeting of Shareholders designates a person for that purpose.

The General Meeting of Shareholders appoints the members of the Management Board.

Our Articles of Association provide that the number of members of the Management Board will be determined by the Chief Executive Officer, and will consist of a minimum of one member. Each member of the Management Board is appointed for a maximum of four years, which appointment can be renewed for another period of not more than four years at a time. The Supervisory Board shall appoint one of the members of the Management Board as Chairman of the Management Board, who shall have the title of Chief Executive Officer. The General Meeting of Shareholders and the Supervisory Board may suspend Management Board members at any time. A resolution of the General Meeting of Shareholders to appoint, suspend or dismiss members of the Management Board requires an absolute majority (i.e. more than 50% of the votes validly cast).

The Chief Executive Officer draws up the rules concerning, among other things, the decision making process within the Management Board and division of responsibilities among its members. At meetings of the Management Board, the Chief Executive Officer may cast two votes and each other member of the Management Board may cast one vote. Where there are two or more members of the Management Board in office, they shall pass resolutions by an absolute majority, including the affirmative vote of the Chief Executive Officer. In the event of a tie of votes, the Supervisory Board shall decide. A meeting of the Management Board may be convened at any time.

Our Articles of Association require decisions of the Management Board to be also approved by the Supervisory Board for, inter alia, the following matters:

G the issue, disposal or acquisition of any of our Shares or debt instruments, or of debt instruments issued by a limited or general partnership of which we are a fully liable partner;

G the co-operation in the issue of registered depository receipts;

G the application to or withdrawal from listing on any stock exchange of any of our Shares or debt instruments, or of debt instruments issued by a limited or general partnership of which we are a fully liable partner;

74 G entry into or termination of a partnership, joint venture or other long-term contractual arrangement involving us or a dependent company (afhankelijke maatschappij) with another legal entity or as a fully liable partner in a limited or general partnership, if such cooperation or termination is material to our operations;

G exclusion or limitation on pre-emptive rights in relation to an issue of shares;

G participation by us or a subsidiary of ours in the capital of another company valued at 25% or more of our issued share capital plus reserves, according to our most recently adopted annual balance sheet, as well as a significant increase in or reduction of such participating interests;

G entry into any investments involving an amount equal to 25% or more of our issued share capital plus reserves, according to our most recently adopted annual balance sheet;

G a proposal to amend our Articles of Association;

G a proposal to dissolve (ontbinden) us;

G a proposal to conclude a legal merger (juridische fusie) or a demerger (splitsing), involving us;

G an application for bankruptcy (faillissement) and for suspension of payments (surséance van betaling) by us;

G termination of the employment of a significant number of our employees or the employees of a dependent company (afhankelijke maatschappij) of ours at the same time or within a short time span;

G a far-reaching change in the working conditions of a considerable number of our employees or of a dependent company (afhankelijke maatschappij) of ours;

G a proposal to reduce our issued share capital;

G our operational and financial objectives;

G our strategy designated to achieve the objectives; and

G the parameters to be applied in relation to the strategy.

Pursuant to the Dutch Civil Code and our Articles of Association, decisions of the Management Board involving a significant change in our identity or character are subject to the approval of a General Meeting of Shareholders. Such changes include:

G the transfer of all or substantially all of our business to a third party;

G the entry into or termination of a long-term co-operation or participation of ours or of any of our subsidiaries, with another legal entity or company or of our position as a fully liable partner in a limited or general partnership, if such a co-operation or participation or the termination thereof, is of far reaching significance to us; and

G the acquisition or disposal, by us or any of our subsidiaries, of a participating interest in the capital of a company valued at 33% or more of our assets according to our most recently adopted consolidated annual balance sheet.

75 Members of the Management Board

The following table sets out information with respect to each of the members of the Management Board and Jan Peter Kerstens, acting Chief Financial Officer, their respective ages, and their positions at Endemol as of the date of this prospectus:

Name Age Position –––––––––––––––––––––––– –––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– Joaquim Agut Bonsfills 51 Chief Executive Officer, Chairman of the Management Board Tom Barnicoat 53 Chief Operating Officer Peter Bazalgette 52 Chief Creative Officer

Jan Peter Kerstens 43 Senior Vice President Finance (not a member of the Management Board)

The term of office of any member of the Management Board shall lapse on the day of the Annual General Meeting of Shareholders to be held in 2009, unless such member has resigned or has been dismissed previously. At present, none of the members of the Management Board has the intention to resign before the Annual General Meeting of Shareholders in 2009.

The business address of all members of our Management Board is: Bergweg 70, 1217 SC (P.O. Box 678, 1200 AR) Hilversum, the Netherlands.

Joaquim Agut Bonsfills

Chairman of the Management Board and Chief Executive Officer. Joaquim Agut joined the Endemol group as CEO in February 2004. Prior to joining us, Mr. Agut was Executive Chairman of Terra Lycos, a listed company, and responsible for the strategic direction and day-to-day operations of that company. Before joining Terra Lycos, Mr. Agut was leader of the European Corporate Executive Council of General Electric (“GE”) and was the First Executive of GE in Europe. At GE, Mr. Agut held the roles of Vice President and General Manager of Marketing and Sales, President and CEO of GE Power Controls, and GE National Executive for Spain and Portugal and Chairman of the Pan European GE Quality Council. Prior to joining GE, Mr. Agut worked for Agut, S.A., his family's company that was later acquired by GE. In 1980, Mr. Agut was General Manager of Synthese, S.A., a subsidiary of the Dutch Group AkzoNobel, where he was the Director of Business Development in Barcelona. Mr. Agut earned a Bachelor of Science degree in electrical engineering from the Universitat Politécnica de Catalunya in Barcelona, Spain, and an MBA from IESE at Universidad de Navarra. Mr. Agut is not employed by Endemol. Mr. Agut is also a board member of Laboratories Uriach, S.A. Mr. Agut is and may for the time being remain a member of the Management Board of Endemol Investment B.V. (previously named Endemol B.V.) and Endemol Holding N.V.. See “Management and Corporate Governance––Remuneration” and “Management and Corporate Governance––Secondment Agreements”.

Tom Barnicoat

Chief Operating Officer. Tom Barnicoat joined the Endemol group in 1998. He was appointed as COO of the Endemol group in January 2005 and is responsible for all of our operating companies across 22 countries, as well as our digital media operations and commercial affairs division. Before becoming our COO, Mr. Barnicoat had, since 1995, been CEO of Endemol UK. Endemol UK had, when Mr. Barnicoat joined in 1995, been known as Broadcast Communications and was wholly-owned by the Guardian Media Group. We acquired 50% of the company in 1998 and the remainder in 2000. Before becoming CEO of Endemol UK, Mr. Barnicoat had been Director of Corporate Development and was responsible for the acquisitions that became the core of the UK company's activity and growth. Educated at the French Lycee in London and at Oxford University, Mr. Barnicoat joined the BBC as a graduate trainee before becoming a producer in news and current affairs. Mr. Barnicoat is employed by our wholly owned subsidiary Endemol UK Plc. See “Management and Corporate Governance––Remuneration” and “Management and Corporate Governance––Secondment Agreements”.

Peter Bazalgette

Chief Creative Officer. Peter Bazalgette joined the Endemol group in 1998. He was appointed as CCO of the Endemol group in January 2005 and is responsible for overseeing the creation of content across our entire

76 group. In addition, Mr. Bazalgette serves as the Chairman of Endemol UK. Prior to joining us, Mr. Bazalgette was the Non-Executive Director of Channel 4 in the UK and he is currently a board member of the English National Opera. Mr. Bazalgette has created several internationally successful television formats, such as Ready Steady Cook and Changing Rooms. He was awarded The Fellowship by the British Academy of Film and Television Arts in 2000. Mr. Bazalgette gave the MacTaggart Lecture at 1998’s Edinburgh Television Festival and The Wheldon Lecture for the Royal Television Society in 2001 and received The Judges Award from the Royal Television Society in 2003. Mr. Bazalgette is a regular commentator on media affairs via television, radio and newspapers. He also serves as Deputy Chairman of the National Film and Television School and is a Non- Executive Director and member of the audit committee of You Gov (listed on AIM, London). His book about the business of television formats Billion Dollar Game was published in 2005. He has a degree in Law from Cambridge University. Mr. Bazalgette is employed by our wholly-owned subsidiary Endemol UK Plc. See “Management and Corporate Governance—Remuneration” and “Management and Corporate Governance— Secondment Agreements”.

Jan Peter Kerstens

Acting Chief Financial Officer. Currently, we have no Chief Financial Officer. Our internal finance issues are the responsibility of Jan Peter Kerstens, Senior Vice President Finance, who has served in such position since October 2005. He has worked in Endemol's finance department since 2000. Mr. Kerstens is not a member of the Management Board. We are currently in the process of searching for the right person to serve as CFO and act as our contact with external investors. While this search process is ongoing, Mr. Kerstens will act as contact with external investors, although, our internal finance issues will remain his main responsibility. We have entered into an employment agreement with Mr. Kerstens for an indefinite period of time, which includes a non-compete obligation for a period of one year after the termination of the agreement, as well as a non-solicitation obligation. Mr. Kerstens' business address is at Bergweg 70, 1217 SC Hilversum, the Netherlands.

Further Information on the Management Board as a Whole

At the date of this prospectus, no member of our Management Board nor Mr. Kerstens has, in the previous five years (i) been convicted of any offences relating to fraud; (ii) held an executive function at any company at the time of or immediately preceding any bankruptcy, receivership or liquidation; (iii) been subject to any official public sanction by any statutory or regulatory authority (including any designated professional body); and (iv) been the subject of any official public incrimination or been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of a company or from acting in the management or conduct of the affairs of any company. Except as disclosed in this prospectus, no member of the Management Board nor Mr. Kerstens has a conflict of interest (actual or potential) between his private interests and duties to the Company.

No member of the Management Board nor Mr. Kerstens holds a supervisory or non-executive position in a listed company or carries on principal activities outside the Company which are significant with respect to the Company, except for Mr. Bazalgette.

Supervisory Board

Powers, Composition and Functioning

The Supervisory Board was established on the date of our incorporation, at which time all of the members of the Supervisory Board were appointed.

The Supervisory Board does not engage in our day-to-day management, but oversees the policies pursued by the Management Board and the general course of our business. It also provides advice to the Management Board. In performing its duties, the Supervisory Board is required to act in the interests of us and our business as a whole. The members of the Supervisory Board are generally not authorised to represent us in dealing with third parties.

The General Meeting of Shareholders appoints the members of the Supervisory Board. Our Articles of Association provide that the number of members of the Supervisory Board will be determined by the General Meeting of Shareholders, and will consist of a minimum of three and a maximum of four members. Given the size of our Supervisory Board, the Supervisory Board shall have no committees. Instead, the Supervisory Board

77 as a whole shall perform the tasks recommended by the Dutch Corporate Governance Code to be attributed to an audit committee, a selection and nomination committee and a remuneration committee. As such, the Supervisory Board will be responsible for, among other things, considering matters relating to financial controls and reporting, internal and external audits, the scope and results of audits, the independence and objectivity of auditors. It will monitor and review our audit function and, with the involvement of our independent auditor, will focus on compliance with applicable legal and regulatory requirements and accounting standards. The Supervisory Board will also be responsible for establishing and reviewing material aspects of the group’s policy on compensation of members of the Management Board and senior managers.

Each member of the Supervisory Board is appointed for a maximum of four years, which appointment can be renewed for another period of not more than four years at a time. The members of the Supervisory Board retire periodically in accordance with a rotation plan to be prepared by the Supervisory Board. The Supervisory Board shall prepare a profile for its size and composition, taking into consideration the nature of the business, its activities and the desired expertise and background of the Supervisory Board members. The Supervisory Board appoints a Chairman from its members. The General Meeting of Shareholders shall appoint and may, at any time, suspend or remove members of the Supervisory Board. A resolution of the General Meeting of Shareholders to appoint, suspend or remove members of the Supervisory Board requires an absolute majority (i.e. more than 50% of the votes validly cast).

In accordance with our Articles of Association, a meeting of the Supervisory Board may be convened at any time if a majority of its members or its Chairman deems necessary. At least four times annually, the Supervisory Board must meet formally in conjunction with a meeting of the Management Board. At least once annually, the Supervisory Board must meet independently of the Management Board to discuss issues relating to its own functioning, composition and size and the powers, composition, and functioning of the Management Board. In addition to these formal meetings, the members of the Supervisory Board must maintain regular informal contact and meet when necessary either in person or by teleconference.

Decisions of the Supervisory Board are taken by majority vote. In the event of a tie vote the proposal shall be rejected.

The Supervisory Board will be assisted by the company secretary, who will be appointed and dismissed by the Management Board, subject to the approval of the Supervisory Board.

Members of the Supervisory Board

The following table sets out information with respect to each of the Supervisory Board members and their respective ages and positions at Endemol as of the date of this prospectus:

Name Age Position –––––––––––––––––––––––––––––– –––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– Santiago Fernández Valbuena 47 Member of the Supervisory Board Luis Badia Almirall 58 Member of the Supervisory Board Gert Smit 57 Member of the Supervisory Board

The term of office of any member of the Supervisory Board shall lapse on the day of the Annual General Meeting of Shareholders to be held in 2009, unless such member has resigned or has been dismissed previously.

Santiago Fernández Valbuena

Supervisory Board Member. Santiago Fernández Valbuena was appointed as a Supervisory Board member at the date of the incorporation of the Company. He has served as supervisory board member of Endemol Holding N.V. since 2003. Mr. Fernández Valbuena holds a PhD and Masters (M.S.) in Economics & Finance from Northeastern University in Boston and also has a degree in Economics from the Universidad Complutense de Madrid. He has taught at the Manchester Business School, the Instituto de Empresa, Universidad Complutense de Madrid and the Universidad de Murcia. Since January 2000 he has been President of the Research Committee of the Spanish Investment Analysts’ Association (IEAF) and Head of the Portfolio Management area for the Certificate in International Investment Analysis (CIIA). From 1989 to 1994 he worked at Beta Capital where he was Head of Research, Equity Director and a member of the Investment Committee. From 1994 to 1996 he was General Manager of Société Genérale Valores. Mr. Fernández Valbuena joined the

78 Telefónica group in January 1997 as CEO of Fonditel, Telefónica group’s pension fund manager. In July 2002 he was appointed CFO of Telefónica. In addition, Mr. Fernández Valbuena serves as a board member of Metrovacesa and Gecina, Spanish and French real estate companies respectively, as well as of Cesky˘ ´ Telecom, of which company's audit committee he is a member. Mr. Fernández Valbuena is a “financial expert” within the meaning of the Dutch Corporate Governance Code. Mr. Fernández Valbuena will remain a member of the Supervisory Board of Endemol Holding N.V. Mr. Fernández Valbuena's business address is Gran Vía 28, 28013 Madrid, Spain.

Luis Badia Almirall

Supervisory Board Member. Luis Badia Almirall was appointed as a Supervisory Board member at the date of the incorporation of the Company. Mr. Badia Almirall holds a degree in Law from the Universitat de Barcelona. He also has a diploma of the Centre of Fiscal and Financial studies of the Universitat de Barcelona, a diploma of INSEAD at Fontainebleau and he is a Financial Analyst from the Delegation of Catalonia. Mr. Badia Almirall holds different Board memberships in Managing Society of the Stock Exchange Market of Barcelona (since 1990), Metropolis Inmobiliarias y Restauraciones (since 1995), Tejidos Royo (since 1997), Terra Networks (from 2003 to July 2005) and Leti Laboratories (since June 2005). From 1985 until 2001 he was Partner Founder, Vice President and executive board member of the Beta Capital Group. Since 2001 he is Vice President of Beta Capital Meespierson, S.A. and Beta Capital, SV, S.A. Mr. Badia Almirall's business address is Paseo de Gracia, 56, 5, 08007 Barcelona, Spain.

Gert Smit

Supervisory Board Member. Gert Smit was appointed as a Supervisory Board member at the date of the incorporation of the Company. He has served as supervisory board member of Endemol Holding N.V. since 1996. Mr. Smit holds degrees in economics and accountancy from the University of Amsterdam. He was Chairman of the executive board of Vedior until 2000. He is a supervisory board member of Transavia Airlines and Buhrmann, as well as audit committee member of the latter company. In addition, Mr. Smit is Chairman of the supervisory board of Martin Schilder Holding, M.S.J. Beheer and the cooperative Univé Regio+ U.A. and Chairman of the board of advice of Halder Invest. In addition, Mr. Smit is the sole executive board member and a shareholder of Schoutsbosch Beheer B.V. and the sole executive board member of Trifinance Holding B.V. Mr. Smit will resign from the Supervisory Board of Endemol Holding N.V. prior to the consummation of the Offering or shortly thereafter. Mr. Smit's business address is Bergweg 70, 1217 SC (PO Box 678, 1200 AR) Hilversum, The Netherlands.

Further Information on the Supervisory Board as a Whole

At the date of this prospectus, no member of our Supervisory Board has, in the previous five years, (i) been convicted of any offences relating to fraud, (ii) held an executive function at any company at the time of or immediately preceding any bankruptcy, receivership or liquidation, (iii) has been subject to any official public sanction by any statutory or regulatory authority (including any designated professional body) or (iv) been the subject of any official public incrimination or been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of a company or from acting in the management or conduct of the affairs of any company. Except as disclosed in this prospectus, no member of the Supervisory Board has a conflict of interest (actual or potential) between his private interests and his duties to the Company.

No member of the Supervisory Board holds a supervisory or non-executive position in a listed company or carries on principal activities outside the Company which are significant with respect to the Company, except as disclosed in this prospectus.

Senior Management

Our Management Board is supported by our senior management team, which holds various positions with us and with our subsidiaries.

79 The following table sets out information with respect to each member of our senior management team (who are not also members of our Management Board), their respective ages, and their positions with us and with our subsidiaries, as applicable, at the date of this prospectus:

Name Age Position –––––––––––––––––––––––– –––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– Marco Bassetti 48 Consultant to Endemol Italy Paolo Bassetti 42 Managing Director of Endemol Italy Borris Brandt 44 Managing Director of Endemol Germany Toni Cruz 59 Managing Director of Endemol Spain David Goldberg 41 Managing Director of Endemol US Tim Hincks 38 Creative Director of Endemol UK Josep Mainat 59 Managing Director of Endemol Spain Paul Römer 43 Managing Director of Endemol Netherlands

Marco Bassetti

Marco Bassetti is a consultant to Endemol Italy through his company Lefin. Prior to that, Mr. Bassetti served as a managing director to Endemol Italy until May 2004. He was one of the shareholders of La Italiana Produzioni Audiovisive and Aran, which he sold to Endemol in several stages between 1998 and 2003 and which now form part of Endemol Italy. We have entered into a consultancy agreement with Lefin and Mr. Bassetti for a period ending on 30 September 2006, which includes a non-compete obligation expiring on 31 December 2006, as well as a non-solicitation obligation. Mr. Bassetti serves on the board of our joint venture (Mediavivere) with RTI (part of Mediaset). In addition, he is board member of La Risacca, Stage Holding Italy and Syndication Italiana and general partner of Lefin. Mr. Bassetti's business address is at Via Pasubio 4, 5th Floor, 00195 Rome, Italy. Mr. Marco Bassetti is the brother of Mr. Paolo Bassetti mentioned below.

Paolo Bassetti

Paolo Bassetti is the managing director for Endemol Italy. Prior to that, Mr. Bassetti was one of the shareholders of La Italiana Produzioni Audiovisive and Aran, which he sold to Endemol in several stages between 1998 and 2000 and which now forms part of Endemol Italy. We have entered into a management agreement with Mr. Bassetti for a period ending on, subject to certain conditions being fulfilled, 31 December 2008, which includes a non-compete obligation for a period of six months after the termination of the agreement, as well as non-solicitation obligation. Mr. Bassetti serves on the board of several Italian Endemol companies and joint ventures. In addition, he is a partner of Assifin, an insurance company, and a board member of La Italiana Produzioni, a real estate company. Mr. Bassetti's business address is at Via Pasubio 4, 5th Floor, 00195 Rome, Italy. Mr. Paolo Bassetti is the brother of Mr. Marco Bassetti mentioned above.

Borris Brandt

Borris Brandt has been the managing director of Endemol Germany since 2001. Prior to that, Mr. Brandt served as head fiction and programme director of ProSieben and as board member of Senator Film. We have entered into a management agreement with Mr. Brandt for a period ending on 31 December 2009, which includes a non-compete obligation for a period of one year after the termination of the agreement, as well as a non-solicitation obligation. Mr. Brandt's business address is at Am Coloneum 3-7, 50829 Cologne, Germany.

Toni Cruz

Toni Cruz is a managing director of Endemol Spain. He is the co-founder of its subsidiary Gestmusic Endemol (which he sold to Endemol in two stages, in 1994 and 2002) and has created formats such as Crónicas Marcianas and Operación Triunfo. We have entered into a management agreement with Mr. Cruz for a period ending on 31 December 2008, which includes a non-compete obligation for a period of at least one year after termination of the agreement, as well as a non-solicitation obligation. Mr. Cruz also serves as a general manager and is a shareholder of 3A Management, his personal holding company, and of Portalmix, a digital media company. Mr. Cruz's business address is at Sta. Elionor 3, 08024 Barcelona, Spain.

80 David Goldberg

David Goldberg has been the president and Chief Executive Officer of Endemol USA since 2000. Prior to that, Mr. Goldberg served as a programming executive at Warner Bros. for ten years. Under Mr. Goldberg, Endemol USA has won the 2005 Emmy Award for Outstanding Reality Program for Extreme Makeover: Home Edition. We have entered into an employment agreement with Mr. Goldberg for a period ending on 31 December 2009, which includes a non-compete obligation for the duration of the agreement, as well as a non-solicitation obligation. Mr. Goldberg’s business address is at 9255 Sunset Boulevard, Suite 1100, CA 90069 Los Angeles, United States of America.

Tim Hincks

Tim Hincks is the creative director of Endemol UK. Prior to that, Mr. Hincks has served as television content creator at Endemol UK since 1999. We have entered into a service agreement with Mr. Hincks for a period ending on 31 December 2007, which includes a non-compete obligation for a period of one year after the termination of the agreement, as well as a non-solicitation obligation. Mr. Hincks is the Chairman of the Edinburgh International Television Festival. Mr. Hincks' business address is Shepherd’s Building Central, Charecroft Way, Shepherds Bush, London W14 OEH, United Kingdom.

Josep Mainat

Josep Mainat is a managing director of Endemol Spain. He is the co-founder of its subsidiary Gestmusic Endemol (which he sold to Endemol in two stages, in 1994 and 2002) and created formats such as Crónicas Marcianas and Operación Triunfo. We have entered into a management agreement with Mr. Mainat for a period ending on 31 December 2008, which includes a non-compete obligation for a period of at least one year after termination of the agreement, as well as a non-solicitation obligation. Mr. Mainat also serves as a board member and is a shareholder of Corporacion Tanam and of its subsidiary TV Flash Producciones, of Xalet de Montjuic, and Portalmix, a digital media company. Mr. Mainat's business address is at Sta. Elionor 3, 08024 Barcelona, Spain.

Paul Römer

Paul Römer has been a managing director of Endemol Netherlands since 2002. Prior to that, Mr. Römer served as an entertainment producer with Endemol Netherlands. In 2000, Mr. Römer was a producer of the first Big Brother series in the United States. We have entered into an employment agreement with Mr. Römer for an indefinite period of time, which includes a non-compete obligation for a period of one year after the termination of the agreement, as well as a non-solicitation obligation. Mr. Römer's business address is at Van Cleeffkade 15, 1431 BA Aalsmeer, the Netherlands.

Related party transactions in which senior managers are involved as well as potential conflicts of interest have been described under “Related Party Transactions—Other Related Party Transactions”.

Further Information on Senior Management as a Whole

At the date of this prospectus, no member of our senior management has, in the previous five years (i) been convicted of any offences relating to fraud, (ii) held an executive function at any company at the time of or immediately preceding any bankruptcy, receivership or liquidation, (iii) been subject to any official public sanction by any statutory or regulatory authority (including any designated professional body) or (iv) been the subject of any official public incrimination or been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of a company or from acting in the management or conduct of the affairs of any company. Except as disclosed in this prospectus, no member of the senior management has a conflict of interest (actual or potential) between his private interests and his duties to the Company. See “Related Party Transactions—Other Related Party Transactions”.

No member of the senior management holds a supervisory or non-executive position in a listed company or carries on principal activities outside the Company which are significant with respect to the Company, except as disclosed in this prospectus.

81 We are in discussions, or will prior to the consummation of the Offering begin discussions, with some members of the senior management with a view to extending the terms of their employment agreements with us.

Remuneration

The general policy with regard to the remuneration of members of the Management Board shall be adopted by the General Meeting of Shareholders upon a proposal of the Supervisory Board. The remuneration and other conditions of employment of the members of the Management Board shall be determined by the Supervisory Board with due regards to the remuneration policy adopted by the General Meeting of Shareholders. The Supervisory Board submits to the General Meeting of Shareholders for approval any scheme providing for the remuneration of the members of the Management Board in the form of shares or options.

Pursuant to a resolution to be passed prior to the consummation of the Offering by our General Meeting of Shareholders, the general remuneration policy will be determined to include the following. Firstly, existing contractual commitments, also in respect of those members of the Management Board that are not employed by, but seconded to us, will be honoured. Secondly, the members of the Management Board shall participate in an incentive scheme in a manner to be approved by the Supervisory Board. Thirdly, the incentive scheme shall be performance based. Fourthly, we shall neither grant loans to, nor guarantee obligations of the members of the Management Board.

Pursuant to the same resolution, the remuneration granted to the members of the Supervisory Board has been determined.

Indemnity

Current and former members of the Management Board and the Supervisory Board shall be reimbursed for litigation expenses and any damages they are ordered to pay in relation to acts or omissions in the performance of their duties, unless such acts or omissions amount to willful misconduct or recklessness, unless this would not be reasonable and fair.

Management Board Remuneration

The remuneration of the members of the Management Board shall be set, with due regard for the general policy as to remuneration as adopted by the General Meeting of Shareholders upon proposal of the Supervisory Board, by the Supervisory Board.

The remuneration paid to Mr. Agut in 2004 was EUR 698,232.

In 2005, the base salary to be paid by Endemol UK to each of Mr. Barnicoat and Mr. Bazalgette, who were appointed in January 2005, is GBP 400,000 (including loyalty bonus). In 2005, the variable component of their remuneration is GBP 100,000.

Supervisory Board Remuneration

The compensation of the members of the Supervisory Board is determined by the General Meeting of Shareholders. The remuneration of the members of the Supervisory Board will be determined by the General Meeting of Shareholders at the annual general meeting in 2006. Members of the Supervisory Board do not participate in our incentive plan.

Senior Management Remuneration

The total cash remuneration of those members of our senior management team listed above under “Management and Corporate Governance—Senior Management” in 2004 amounted to approximately EUR 6.0 million. This aggregate figure does not include or contemplate any payments due to earn-outs or other compensation arising from acquisition agreements relating to the purchase of certain of our subsidiaries, which payments may be substantial. The members of our senior management listed above received an aggregate of 236,339 Telefónica options. In addition to the existing pension schemes (see “Business—Pensions”), there are no amounts set aside or accrued in respect of pension, retirement or similar benefits for these persons.

82 Long-term Incentive Plan

Prior to the consummation of the Offering, we intend to adopt an equity-based long term incentive plan (the “Plan”). The Plan comprises two elements: a performance share plan and a performance option plan. Under the Plan, up to 6.5% of our present total issued share capital (the “Incentive Pool”) may be applied for grants of performance shares or performance options, of which up to 5.1% of our present total issued share capital may be newly issued shares. Prior to the consummation of the Offering performance shares and/or performance options may be granted representing up to 43.5% of the Incentive Pool and the remainder of the Incentive Pool shall be at the disposal of our Supervisory Board for distribution among our employees and other workers upon terms summarised below.

Performance Shares Plan

A performance share is a grantee’s right to receive one Share for no consideration subject to (i) the grantee remaining in our service for a period of three years following the date of grant (the “Vesting Period”) and (ii) a predetermined performance condition based on total stockholder return (including dividend per Share) (“TSR”) being met on the date following the last day of the Vesting Period (the “Vesting Date”). If the performance condition has not been met, all or some of the performance shares may lapse on a sliding scale basis. For the performance shares granted prior to the consummation of the Offering, if the cumulative TSR over the three year Vesting Period is less than 25%, no performance shares will vest. If TSR performance is 25%, 50% of the performance shares will vest. If TSR performance is 35% or more, 100% of the performance shares will vest. For TSR performance between 25% and 35%, the percentage of performance shares that vest will be determined by linear interpolation.

Upon vesting, the grantee will receive one share for each performance share. Such Shares may not be traded during the two year period following the Vesting Date, or until termination of the grantee's employment, whichever is the earlier.

Performance Options Plan

A performance option is a grantee's right to acquire one Share at a pre set price (the “Exercise Price”). The Exercise Price will be equal to the average closing price of Endemol’s ordinary shares, as stated in the daily official listing, on the five days (during which the stock exchange was open for business) immediately preceding the date on which the performance options are granted. For the performance options granted prior to the consummation of the Offering, the exercise price will be the Offer Price.

A performance option will be granted by our Supervisory Board and may only be exercised if (i) the grantee has remained in our service during a period of three years following the date of grant (the “Vesting Period”) and (ii) a predetermined performance condition based on TSR has been met on the date following the last day of the Vesting Period (the “Vesting Date”). Vested performance options may be exercised during a period of 5 years from the Vesting Date. For the performance options granted prior to the consummation of the Offering all or some of the performance options may lapse on a sliding scale basis, if the performance condition has not been met. If the cumulative TSR over the three year Vesting Period is less than 25%, no performance options will vest. If TSR performance is 25%, 50% of the performance options will vest. If TSR performance is 35% or more, 100% of the performance options will vest. For TSR performance between 25% and 35%, the percentage of performance options that vest will be determined by linear interpolation.

Insider Dealing Rules

Transactions relating to performance options and performance shares are subject to any applicable regulation under applicable law and customary rules on the prevention of insider trading that apply. Such rules provide that, among other things, transactions in those securities must not be exercised, and shares must not be sold, during specified periods.

Events Affecting Performance Options or Performance Shares

In the event of our dissolution, liquidation, sale, merger, split, consolidation, takeover, reorganisation or similar transaction, change of control or share-for-share exchange; the Supervisory Board shall have the power to (i) cancel any performance share or performance option and pay to the grantee an amount equal to the

83 (economic) value of the securities as at the date of cancellation, or (ii) exchange each outstanding performance share or performance option with a performance share or performance option on shares that are exchanged in the transaction, which new rights are in the opinion of our auditors no less valuable overall than the prior rights.

In the event of any variation in our share capital due to a capitalization or rights issue, consolidation, reduction or otherwise, the Supervisory Board may make such adjustments as it considers appropriate to the terms of a grant of performance options or performance shares.

Performance Shares and Options Granted to Management Board and Senior Management

Prior to the consummation of the Offering, we shall grant each member of the Management Board the right to receive 82,813 performance shares and 82,813 performance options. For a new CFO to be appointed we have reserved 31,250 performance shares and 31,250 performance options.

Prior to the consummation of the Offering, we shall grant senior management in aggregate up to 590,628 performance shares and in aggregate 590,628 performance options. No allocations have been made so far.

Rewards Granted to Other Beneficiaries

A certain group of employees (other than the Management Board and senior management) will also participate in the performance options plan. Prior to the consummation of the Offering, we intend to grant in total 1,794,375 performance options to in total 94 persons.

Eligible employees that do not participate in the Plan will participate in an initial public offering celebration cash award, the amount of which depends on the level of the employee to be paid in equal parts in December 2005 and December 2007. The total amount of awards including both installments is expected to be EUR 8,685,000.

Telefónica Stock Options

Existing members of senior management and our Management Board have in the past received stock options relating to stock in Telefónica. See “Related Party Transactions—Telefónica Stock Options”.

Secondment Agreements

Our Chief Executive Officer is not employed by us, and our Chief Creative Officer and Chief Operating Officer are employed by Endemol UK Plc.

Since September 2000, Mr. Agut has been employed by Telefónica. He has been seconded to Endemol by Telefónica for an indefinite period of time as of 1 February 2004. Pursuant to a secondment agreement between among others, Telefónica and us, Mr. Agut shall act in our best interests and the interests of our stakeholders during his secondment to us. Each of us and Telefónica may terminate the secondment agreement with a notice period of 3 months. Pursuant to the secondment agreement, Telefónica shall on-charge to us an annual amount up to EUR 1.3 million for every year that Mr. Agut is seconded to us. In the event that Mr. Agut is involuntarily removed as a Management Board member of Endemol, we shall be required to make a payment to Telefónica. This payment shall be in accordance with the number of years Mr. Agut served as a Management Board member of Endemol and amount to a maximum of two years of base salary.

As of 1 January 2005, Mr. Bazalgette and Mr. Barnicoat are seconded to Endemol by our subsidiary Endemol UK Plc until 31 December 2009 pursuant to a secondment agreement between, among others, Endemol UK and us. We and Endemol UK may terminate the secondment agreement with a notice period of two weeks. Pursuant to the respective secondment agreements with Mr. Bazalgette and Mr. Barnicoat, we shall reimburse Endemol UK for costs resulting from the respective service agreements pursuant to which Mr. Bazalgette and Mr. Barnicoat are employed by Endemol UK. The costs include their salaries and bonuses, as well as a pension contribution of 10% of their annual fixed salaries. Upon termination of their secondment or service Mr. Bazalgette and Mr. Barnicoat will not be entitled to receive any termination payment from us. They are entitled to an exit payment payable by Endemol UK upon the involuntary removal of any of them without cause. Such exit payment equals all amounts (excluding performance bonus) due for the remainder of the respective service agreements as if the agreements had not been terminated.

84 Pursuant to these agreements, each member of our Management Board remains subject to confidentiality and non-competition clauses upon termination.

Corporate Governance

Dutch Corporate Governance Code

On 9 December 2003, a committee commissioned by the Dutch government (Commissie Tabaksblat) published a Dutch corporate governance code (the “Code”). The provisions of the Code took effect on 1 January 2004 and apply to annual reports for financial years starting on or after 1 January 2004. Dutch companies whose shares are listed on a government-recognised stock exchange must discuss compliance with the Code in their annual report. If a company does not apply the best practice provisions of the Code, it must explain the reasons why it does not apply them.

The main issues covered by the Code, to the extent that they are relevant to us, are:

G the requirement of a made-to-measure internal risk management and control systems;

G the maximum severance pay of Management Board members (one year's base salary, with a hardship clause allowing up to two years);

G limitations on the number of Management Board and Supervisory Board memberships held by the same person;

G limitations on the period of appointment for Management Board and Supervisory Board members;

G restrictions on options and shares awarded to Management Board members;

G strict requirements concerning investments by Management Board and Supervisory Board members;

G the independence of all Supervisory Board members (except for one);

G the training of Supervisory Board members in financial, reporting and other areas;

G reduction of the obstacles for shareholders to dismiss Management Board and Supervisory Board members;

G communication between shareholders and auditor (shareholders should be able to question the auditor at the General Meeting of Shareholders about the accuracy and fairness of the financial statements); and

G disclosure of the Company's corporate governance structure (key points should be placed in a separate chapter of the annual report, in which the Company states explicitly whether it applies the Code and the reasons for any non-application).

Application

We apply the Dutch Corporate Governance Code. In certain respects, some of which are described below, we do not follow certain best practice provisions of the Code, but we believe that we have sound explanations for departing from such provisions.

G We depart from best practice provision II.2.7. that states that severance payments to Management Board members shall at best not exceed two years of base salary, because we are contractually bound to pay more, for example to our Chief Creative Officer and our Chief Operations Officer.

85 G The performance shares that are granted under the Plan must be retained during an additional holding period of two years after the expiration of a three-year Vesting Period. The holding period was set on the basis of a broad interpretation of best practice provision II.2.3. This means that, instead of applying a five-year holding period after vesting, a two-year holding period was used, which, together with the three- year Vesting Period, still constitutes a total of five years required by that provision. We note that, after the expiry of the Vesting Period the grantee may sell a portion of his or her performance shares to cover the tax due, which we consider to be a reasonable exception to the holding period.

G In respect of our Chief Executive Officer’s remuneration, we depart from best practice provision II.2.10 that requires disclosure of the fixed and variable part of the remuneration of the Management Board members and best practice provision II.2.11 that requires that certain elements (in addition to the elements mentioned under “Management and Corporate Governance—Secondment Agreements” of the remuneration of Management Board members are disclosed, as we pay a secondment fee to Telefónica for the secondment of our Chief Executive Officer and we do not control decisions made by Telefónica on his remuneration.

G We are in the process of implementing certain best practice provisions which we currently anticipate completing by the end of this year or as soon as reasonably practicable. These include best practice provisions II.1.3 (publication of code of conduct on our website), II.1.5 (publication of ‘‘whistleblower’’ procedure on our website), II.2.6 (publication of regulation concerning the holding and dealing in securities other than our Shares), III.3.1 (publication of profile of our Supervisory Board on our website), III.3.6 (publication of Supervisory Board notation schedule on our website) and III.4.3 (appointment of a company secretary by our Management Board).

Sarbanes-Oxley Act

As a foreign private issuer registered under the Securities Act, our indirect principal shareholder Telefónica is required to comply with certain provisions of the Sarbanes-Oxley Act of 2002. In connection with these requirements, as a consolidated subsidiary of Telefónica, we are in the process of implementing certain internal controls over our accounting procedures for financial reporting as necessary for Telefónica to be rendered compliant. However, at this time, neither Telefónica nor our auditors have attested or certified as to the effectiveness of such controls. We have not determined whether the internal controls we are implementing on behalf of Telefónica would be adequate if we were ourselves subject to the requirements of the Sarbanes-Oxley Act of 2002.

Structure Regime

If in the future the equity capital plus reserves of our subsidiary, Endemol Nederland Holding B.V. amounts to at least EUR 16.0 million (as of 30 September 2005 it amounted to EUR 2.1 million), it is likely that three years after such date this company will become subject to the “structure regime” for large companies in the Netherlands. This would require implementation of a Supervisory Board, which by law has various powers, including a right of prior approval in respect of important Management Board decisions and the right to appoint Management Board members. As long as Telefónica holds (directly or indirectly) at least 50% of the shares of Endemol Nederland Holding B.V., this second right will not apply. Supervisory Board members are appointed by the general meeting of shareholders and the works council has a significant influence in respect of one third of its members. In fulfilling its duties, the Supervisory Board must be guided by the interests of the company and the related enterprises, and must take into account the relevant interests of the company’s stakeholders.

86 SELLING SHAREHOLDER

All our Shares are at the date of this prospectus held by Endemol Investment B.V. (previously named Endemol B.V.), the Selling Shareholder. The address of the Selling Shareholder is Bergweg 70, 1217 SC Hilversum, The Netherlands. Telefónica holds approximately 99.7% of the shares in Endemol Holding N.V. which in turn holds all shares in Endemol Investment B.V. (previously named Endemol B.V.).

Telefónica, the parent company of the Telefónica group and of the Endemol companies, is quoted on the Spanish Stock Exchanges, as well as the stock exchanges of London, Paris, Frankfurt, Tokyo, New York, Lima, Buenos Aires and São Paulo, and has telecommunication clients in more than 17 countries. Accordingly, legal and regulatory requirements subject Telefónica and its sub-holdings and subsidiary companies to various filing, tax, audit, periodical reporting, compliance and financial consolidation obligations. Endemol, as a consolidated group company of the Telefónica group, is compelled and will be compelled after the Offering to provide Telefónica with all necessary information, including non-public information not available to other shareholders in Endemol, in order to comply with the obligations described above. We have entered into a confidentiality agreement with Telefónica, under which Telefónica has undertaken to keep such information confidential, except as may be required by law regulations or rules of any stock exchange, regulator or court order. Such agreement is required under Dutch insider dealing rules.

87 RELATED PARTY TRANSACTIONS

Reorganisation

In preparation for this Offering and for various other corporate purposes, we have completed the Reorganisation to restructure our corporate structure as set out below.

On 14 September 2005, a corporate reorganisation took place as a result of which the legal and beneficial ownership of the French Endemol business was separated from the rest of the Endemol group. The primary reason for the Reorganisation is an unresolved situation regarding the final earn-out payment for the acquisition of the French Endemol business in December 2000.

Pursuant to a share purchase agreement dated 21 December 2000, Endemol France Holding S.A.S., a subsidiary of our parent company (the Selling Shareholder), acquired the 50% of the French Endemol business which it did not already own. Endemol Investment B.V. (previously named Endemol B.V.) acquired the first 50% in July 1998. The sellers of the shares acquired pursuant to the share purchase agreement of December 2000 were two individuals who currently manage the French Endemol business. Under the share purchase agreement, Endemol France Holdings S.A.S. agreed to make additional payments in respect of the purchase price in the future on a contingent basis, depending on the profitability of the purchased French operations between 1 September 1999 and 31 December 2005. As a result, the amounts due under these earn-out arrangements are still subject to calculation following the end of the relevant period and the basis over which such amounts shall be calculated has not yet been agreed. We do not expect that this situation will be resolved in the short-term.

Our reason for isolating the French Endemol business from the rest of the Endemol group was to eliminate an element of uncertainty in the valuation of our business.

The graphs below set forth the main companies of the pre-Reorganisation Endemol group and the post- Reorganisation Endemol group:

Pre-Reorganisation

Endemol Holding NV Endemol International BV

Endemol BV

Endemol Endemol Endemol Endemol France Netherlands Italy Finance BV

Other Operating Companies

88 Post-Reorganisation

Endemol Holding NV

Endemol Investment BV(1)

Issuer Group Endemol France Holding SAS

Endemol NV

Endemol France

Endemol Holding BV

Endemol Endemol Endemol Netherlands Finance BV International BV

Other Operating Companies (including Endemol Italy

(1) Prior to the consummation of the Offering, Endemol B.V. was renamed Endemol Investment B.V.

In addition to the steps discussed above, we have also taken the following actions in order to complete the Reorganisation as of 14 September 2005:

G Endemol International B.V. sold all its shares in the capital of Big Brother Selections and Participations B.V. to Endemol B.V. at a nominal value of EUR 20,000.

G Endemol B.V. contributed the shares in the capital of Endemol Nederland Holding B.V. by way of share premium to Big Brother Selections and Participations B.V.

G Endemol Holding N.V. contributed the shares in the capital of Endemol International B.V. as share premium to Endemol B.V.

G Endemol B.V. contributed the shares in the capital of Endemol International B.V. as share premium to Big Brother Selections and Participations B.V.

G Endemol B.V. contributed the shares in Endemol Finance B.V. as share premium to Big Brother Selections and Participations B.V.

G Big Brother Selections and Participations B.V. was renamed Endemol Holding B.V.

On 28 October 2005, Endemol B.V. incorporated us (Endemol N.V.) and contributed the shares in the capital of Endemol Holding B.V. as share capital and share premium to us.

Prior to the consummation of the Offering, Endemol B.V. was renamed Endemol Investment B.V.

89 On 30 September 2005, as part of the Reorganisation, Endemol Holding B.V. entered into a business purchase agreement with Endemol Investment B.V. (previously named Endemol B.V.) and Endemol Holding N.V. Under this agreement, the following has been transferred to Endemol Holding B.V.: the employees, assets, certain liabilities and contracts (including secondment agreements between Endemol UK Plc, Endemol Investment B.V. and Endemol Holding N.V. for the secondment of Mr. Bazalgette and Mr. Barnicoat).

The transfers discussed above excluded the French Endemol business in its entirety, which is discussed in greater detail below. The price paid for the assets and liabilities transferred amounts to EUR 9.0 million, which price has been mainly calculated on the basis of book value. The price of the tangible assets equals the valuation made by an independent valuer and has resulted in an income relative to the book value of EUR 0.5 million. All receivables and liabilities have been valued at their nominal value. The contracts for the supply of goods and services have been valued at zero. In addition, we will acquire from Endemol Investment B.V. (previously named Endemol B.V.) for no consideration an exclusive license to use the tradename and trademark ‘‘Endemol’’ in all countries in the world except France and certain French overseas territories for a period of five years with an option for extension for another five years.

On 15 June 2005, via two transactions, we moved the entire share capital of our Italian operations to Endemol Italia Holding e Servizi S.p.A., a wholly-owned subsidiary of Endemol Finance B.V. Firstly, Endemol Investment B.V. (previously named Endemol B.V.) transferred all of its shares in the capital of Endemol Italia Holding S.p.A. (representing 42.22% of the company’s issued share capital) to Endemol Italia Holding e Servizi S.p.A., a company wholly owned by Endemol Finance B.V. Secondly, Endemol Finance B.V. transferred all of its shares in the capital of Endemol Italia Holding S.p.A. (representing 57.78% of the company’s issued share capital) to Endemol Italia Holding e Servizi S.p.A.

On 16 September 2005, Endemol Investment B.V. (previously named Endemol B.V.) sold and transferred 0.5% of the shares in the share capital of Endemol Portugal L.d.a to Endemol International B.V. in order to bring the entire share capital of Endemol Portugal L.d.a. into the Issuer Group.

On 8 December 2003, Endemol Finance B.V. acquired 42,022 shares in the capital of Endemol España Holding S.L. by way of a capital contribution in kind by its then-shareholder, Endemol Investment B.V. (previously named Endemol B.V.) As a result, Endemol Finance B.V. holds all shares in the capital of Endemol España Holding S.L.

The French Endemol Business

Despite the Reorganisation, the French Endemol business remains operationally and creatively closely connected to us, both directly and through the Selling Shareholder.

We have agreed with Endemol Investment B.V. (previously named Endemol B.V.) to provide the French Endemol business, for and on behalf of Endemol Investment B.V., with certain consultancy services regarding, among other things, legal, tax, mergers and acquisitions, controlling and administrative support at actual cost, as long as the companies belonging to the French Endemol business are subsidiaries of Endemol Investment B.V. In addition, Endemol Finance B.V. will for an as-yet undetermined period of time render certain treasury and financing services, including the granting of loans, to the French Endemol business, such as accepting deposits of excess cash at an interest rate equal to the interest rate paid to our group companies for similar deposits. In line with this, Endemol Finance B.V. has assigned a receivable of EUR 83.9 million owed by Endemol France Holding S.A.S. to Endemol Investment B.V., by way of a distribution from the freely distributable reserves.

Existing agreements between our group (after the Reorganisation) and the companies of the French Endemol business on the intra-group distribution and licensing of formats and finished programmes remain in place. This means, among other things, that Endemol International B.V. remains the exclusive distributor outside France and certain French overseas territories of formats and programmes owned or controlled by the French Endemol business and, at the same time, that the French Endemol business is entitled to license formats that are owned or controlled by companies of the Endemol group for exploitation in France and certain French overseas territories. The compensation agreements under which the regularly arising mutual rights and obligations under the agreements with the French Endemol business are monthly settled, will also remain in place.

90 which in some cases are not evidenced by executed written agreements and/or do not constitute arms-length transactions. Under the existing distribution and license arrangements with the French Endemol business, Endemol International B.V. claims as per 30 September 2005 an amount of approximately EUR 5.0 million, which claim is disputed by the French Endemol business.

Furthermore, representatives of the French Endemol business are allowed to participate in intra-group creative and other initiatives, from which both the French Endemol business and we can benefit.

Offering of the Shares

We have entered into an agreement with the Selling Shareholder, under which:

G the Selling Shareholder authorises us to and we undertake to offer the Shares offered in the Offering on behalf of the Selling Shareholder, as well as the additional Shares that may be offered pursuant to the Over-Allotment Option;

G we agree to indemnify and hold harmless the Selling Shareholder from any claim in relation to this prospectus and the Offering; and

G we agree to apply for the listing of the Shares on Eurolist by Euronext.

Telefónica Stock Options

In order to fulfil the commitments assumed by Telefónica in the acquisition of Endemol in mid 2000 and in order to establish a competitive compensation system, Telefónica approved a stock option plan that targets Endemol group employees. The plan granted stock options on Telefónica shares to all permanent Endemol group employees as of 1 January 2001 (except those who were participating in another similar stock or stock option plan) on each of the following grant dates: 1 January 2001, 2002, 2003 and 2004. The duration of the options is four years from the grant date, and half of the options may be exercised after the third year, and the remaining half after the fourth year, following the relevant grant date, generally so long as the beneficiary remains in the continuous employ of an Endemol group company. The option exercise price is calculated with reference to an average of the Telefónica share price at the time of grant.

The following table sets forth the number of options on Telefónica shares outstanding as of 31 December 2004:

Year Stock Options Outstanding ––––––––––– ––––––––––––– 2002 ...... 1,402,849 2003 ...... 2,131,640 2004 ...... 2,052,286

Other Related Party Transactions

Other material related party transactions include the following:

G On 29 September 2005, we paid a dividend of EUR 90.0 million to the Selling Shareholder.

G We have entered into a secondment agreement with Telefónica on the services rendered to us by Mr. Agut, our Chairman of the Management Board and Chief Executive Officer. See also “Management and Corporate Governance—Secondment Agreements” and “Management and Corporate Governance— Remuneration”.

G Most of our insurance policies are taken out by Telefónica on a group basis. Some insurance policies are taken out by Endemol Investment B.V. (previously named Endemol B.V.).

G The former wife and the former sister-in-law of Mr. Cruz, a managing director of Endemol Spain, were employed by Endemol Spain until October 2004 and July 2005 respectively. Mr. Cruz is a director and

91 shareholder of 3A Management, his personal holding company. Several formats (including Operación Triunfo and Crónicas Marcianas) are co-owned by 3A Management and TV Flash Producciones and licensed to Endemol. Under this licence, 3A Management and TV Flash Producciones are jointly entitled to up to 50% of profits related to these formats. Endemol has paid to 3A Management under the licence agreement an amount of approximately EUR 1.2 million in 2004. On 8 April 2005 we entered into a new agreement with Mr. Cruz regarding the transfer of new format rights by 3A Management and Mr. Cruz to us for a fixed annual fee of EUR 177,000 plus a share of the profits related to these formats. Also in 2005, the agreement under which Endemol acquired Gestmusic Endemol from, Mr. Cruz, among others, has been amended further stipulating the earn out arrangement to which Mr. Cruz is entitled. Mr. Cruz is a board member and shareholder of Portalmix, a digital media company that from time to time renders services to Endemol. In 2004, no fees became due to Portalmix from the Company. The purchase of Mr. Cruz’ shares in Portalmix by Endemol is currently being negotiated.

G Mr. Mainat is director and shareholder of TV Flash Producciones, his personal holding company. Several formats (including Operación Triunfo and Crónicas Marcianas) are co-owned by TV Flash Producciones and 3A Management and licensed to Endemol. Under this licence, 3A Management and TV Flash Producciones are jointly entitled to up to 50% of profits related to these formats. Endemol has paid to TV Flash Producciones under the license agreement an amount of approximately EUR 1.7 million in 2004. On 8 April 2005 we entered into a new agreement with Mr. Mainat regarding the transfer of new format rights by TV Flash Producciones and Mr. Mainat to us for a fixed annual fee of EUR 177,000 plus a share of the profits related to these formats. Also in 2005, the agreement under which Endemol acquired Gestmusic Endemol from Mr. Mainat, among others, was amended further stipulating the earn out arrangement to which Mr. Mainat is entitled. Mr. Mainat is a board member and shareholder of Portalmix, a digital media company that from time to time renders services to Endemol. During 2004, no fees became due to Portalmix from the Company. The purchase of Mr. Mainat’s shares in Portalmix by Endemol is currently being negotiated.

G The brother of Mr. Römer, a managing director of Endemol Netherlands, has been working with Endemol Netherlands prior to Mr. Römer joining the Company and currently serves as a creative producer of drama.

G The wife of Mr. Hincks performed research work for Endemol UK for eight weeks in 2003 for a customary fee.

G Mr. Paolo Bassetti is a partner of Assifin, an insurance company which is a party to certain insurance contracts with Endemol Italy, pursuant to which the Company paid Assifin approximately EUR 65,000 in 2004. In addition, Mr. Bassetti is the board member of La Italiana Produzioni, a real estate company which leases office space to Endemol Italy in Milan for a rent of EUR 51,000 in 2004. Mr. Bassetti's sister in law was employed by Endemol Italy until September 2004.

G Mr. Marco Bassetti is board member of La Risacca, Stage Holding Italy and Syndication Italiana and general partner of Lefin. Lefin is Mr. Bassetti's company through which consultancy services are rendered to Endemol Italy. Mr. Bassetti is a shareholder of La Italiana Produzioni, a real estate company which leases office space to Endemol Italy in Milan for a rent of EUR 51,000 in 2004. In addition, Mr. Bassetti is the owner of real estate in Milan rented by Endemol Italy for an amount of EUR 24,000 in 2004. Mr. Bassetti’s wife was employed by Endemol Italy until September 2004.

G In the ordinary course of business, from time to time, we do business with parties that are or were affiliated with Telefónica, including Antena 3 TV in 2002 and 2003, (the amounts invoiced by us were EUR 13.8 million and 10.4 million, respectively), Sogecable in 2004 (the amount invoiced by us was EUR 0.6 million) and Telefe in 2002, 2003 and 2004 (the amounts invoiced by us were EUR 0.4 million, 1.1 million and 1.1 million, respectively).

92 DESCRIPTION OF THE SHARES

We were incorporated as a naamloze vennootschap on 28 October 2005 under Dutch law. Set forth below is information concerning our share capital and related summary information concerning the material provisions of our Articles of Association and applicable Dutch law. Because it is a summary, it does not contain all of the information that is in our Articles of Association and is qualified in its entirety by reference to our Articles of Association and the Dutch Civil Code. See “Management and Corporate Governance”.

Our authorized share capital as of the date of this prospectus is EUR 50,000,000, divided into 500,000,000 Shares, each with a nominal value of EUR 0.10. Our issued share capital as of the date of this prospectus is EUR 12,500,000, divided into 125,000,000 Shares, each with a nominal value of EUR 0.10. All of the issued Shares are paid up in full.

Our Articles of Association contain provisions, inter alia, to the following effect:

Voting Rights

At the General Meeting of Shareholders, each Share confers the right to cast one vote. Each shareholder is entitled to attend the General Meeting of Shareholders either in person or through a written proxy, and to address such meeting and exercise voting rights, in accordance with our Articles of Association. The General Meeting of Shareholders is to be held within the first six months of the end of the financial year.

At the General Meeting of Shareholders, shareholders shall consider the following matters:

G the written annual report prepared by the Management Board;

G the adoption of the annual accounts;

G the Company’s reserves and dividend policy and any proposal to pay dividends;

G in connection with the adoption of the annual report, the formal release of the Management Board and the Supervisory Board from legal liability under Dutch law for their business role over the previous year;

G the appointment and dismissal of Management Board members and Supervisory Board members;

G any substantial change in the corporate governance structure of the Company; and

G any proposals placed on the agenda by the Management Board or shareholders.

Unless otherwise required by the Articles of Association or Dutch law, all resolutions of the General Meeting of Shareholders shall be adopted by an absolute majority of the votes cast as specified below. The Supervisory Board members and the Management Board members have, as such, the right to render advice in the General Meeting of Shareholders.

The following matters may be decided by a majority of votes cast, unless less than half of the issued capital is represented at the meeting, in which case a 2/3 super majority is required:

G limitation or exclusion of pre-emptive rights or designation of the Management Board as the authorized corporate body to resolve on these matters; and

G reduction of the Company’s capital.

The following matters may be decided by a majority of the votes cast if the matters are proposed by the Management Board or Supervisory Board; otherwise, they require a 2/3 super majority approval at a meeting where at least 1/2 of the issued capital is represented:

G amendment of the Articles of Association;

G dissolution of the Company; and

93 G merger or demerger of the Company (but for a merger or demerger, a 2/3 super majority vote is also required if less than half the issued capital is requested at the meeting).

Where the quorum is not present at a meeting, a second meeting shall be convened. This meeting may pass the resolution by a 2/3 super majority vote, irrespective of the share capital represented at the meeting.

We will publish a notice of each meeting of shareholders in a national daily newspaper distributed throughout the Netherlands and in the Daily Official List of Euronext.

The shareholder shall have the right to vote on Shares that are subject to a right of usufruct (vruchtgebruik) or a right of pledge. The usufructuary or the pledgee shall, however, have the right to vote on Shares if so determined upon the establishment of the usufruct or pledge.

All shares in the Company (including those held by the Selling Shareholder) carry the same voting rights.

Dividends and Other Distributions

Each year, the Management Board shall, subject to the approval of the Supervisory Board, determine which part of the Company’s profits for the year, if any, shall be placed in a reserve account. The remaining profits, if any, shall be available to our General Meeting of Shareholders for distribution as dividend on the Shares or to be further added to the reserves or for such other purpose within our objects as the meeting shall decide. A legally required reserve must be maintained in respect of our share in the retained earnings of our participating interests and joint ventures.

Distributions to shareholders may only be made insofar as our shareholders’ equity exceeds the sum of the paid up and called up share capital and the reserves required to be maintained by applicable law and our Articles of Association. Any distribution of profit through a dividend may only be made after the adoption of the financial statements by the General Meeting of Shareholders.

The Management Board may decide to announce one or more interim dividends, subject to the approval of the Supervisory Board and as permitted under applicable law and our Articles of Association.

The General Meeting of Shareholders may, acting on a proposal of the Management Board that has been approved by the Supervisory Board, decide that a dividend distribution shall be made wholly or partly in the form of our Shares or that a distribution to shareholders shall be charged against the freely distributable reserves.

Distributions are payable as of the date determined by the Management Board. Distributions that have not been claimed within five years as from the date that they have become available shall lapse in favour of the Company.

See also “Dividend Policy”.

Form and Transfer of Shares

Our Shares are in registered form. No share certificates shall be issued.

Issue of Shares and Pre-emption Rights

Shares may be issued pursuant to a resolution of the General Meeting of Shareholders. The General Meeting of Shareholders may also delegate the authority to issue new Shares to the Management Board, with the approval of the Supervisory Board, for a renewable period of five years.

Each holder of Shares shall have pre-emptive rights to subscribe for any issue of Shares pro rata to the aggregate amount of such holder’s existing holding of the Shares. Each holder shall, however, have no pre- emptive right on Shares issued for a non-cash contribution. In addition, each shareholder shall have no pre- emptive right with respect to Shares issued to our or our subsidiaries’ employees or to a person who exercises a previously acquired right to subscribe for Shares.

94 Pre-emptive rights may be restricted or excluded by a resolution of the General Meeting of Shareholders, or by the Management Board with the approval of the Supervisory Board, if so delegated. This shall apply mutatis mutandis to the granting of rights to subscribe for Shares, but shall not be applicable to the issue of Shares to persons exercising a previously granted right to subscribe for Shares.

Repurchase of our Own Shares

We may acquire fully paid Shares at any time for no consideration, or, subject to certain provisions of Dutch law and our Articles of Association, if (i) our shareholders’ equity minus the payment required to make the acquisition, does not fall below the sum of called-up and paid-up share capital and any statutory reserves, and (ii) we and our subsidiaries would thereafter not hold Shares or hold a pledge with an aggregate nominal value exceeding 10% of its issued share capital.

An acquisition of Shares for a consideration should be authorized by the General Meeting of Shareholders. Such authorisation may apply for a maximum period of 18 months and must specify the number of Shares that may be acquired, the manner in which Shares may be acquired and the price limits within which Shares may be acquired. The acquisition may only be effected by a resolution of the Management Board, subject to approval of the Supervisory Board.

Any Shares held by us in our own capital may not be voted on or counted for quorum purposes.

Capital Reduction

The General Meeting of Shareholders may, subject to Dutch law and our Articles of Association, resolve to reduce the issued share capital. A resolution of the General Meeting of Shareholders to reduce the issued share capital shall designate the Shares to which the resolution applies and shall make provisions for the implementation of such resolution. A partial repayment or exemption from the obligation to pay up Shares, must be made pro rata, unless all the shareholders concerned agree otherwise, and shall be effected in accordance with the relevant provisions of the Dutch Civil Code. A resolution of the General Meeting of Shareholders to reduce the issued share capital requires a majority of at least 2/3 of the votes cast (if less than 1/2 of the issued share capital is represented at the meeting).

General Meeting of Shareholders

The annual General Meeting of Shareholders shall be held within six months after the end of each financial year to, inter alia, discuss the written annual report of the Management Board with respect to the general state of affairs, adopt the financial statements and annual accounts, grant discharge to members of the Management Board and to members of the Supervisory Board, and appoint members for any vacancies on either of the Management Board or the Supervisory Board. The Management Board and the Supervisory Board may determine the items on the agenda of the General Meeting of Shareholders, as well as shareholders and others entitled to attend such meetings, representing at least 1% of the issued capital or a value of at least EUR 50.0 million.

The General Meetings of Shareholders may be convened by the Supervisory Board or the Management Board, subject to the time limit stipulated in our Articles of Association. Shareholders that represent alone or in aggregate at least 10% of our issued share capital may, pursuant to the Dutch Civil Code, request that a General Meeting of Shareholders be convened. An extraordinary General Meeting of Shareholders can be held whenever the Management Board or the Supervisory Board deems it necessary.

Annual Accounts

Annually, and within five months after the end of our financial year (unless the General Meeting of Shareholders has extended this period by a maximum of six months on account of special circumstances), the Management Board is required to prepare the statutory financial statements, which must be accompanied by an annual report and an auditor’s report. All Management Board members and Supervisory Board members must sign the financial statements.

95 The financial statements, the annual report, the advice of the Supervisory Board, and the auditor’s report must be made available to the shareholders for review as from the day of the notice convening the annual General Meeting of Shareholders. The financial statements shall be adopted by the General Meeting of Shareholders.

Amendment to our Articles of Association and Dissolution

The General Meeting of Shareholders may resolve to amend our Articles of Association or to dissolve us. Amendments to our Articles of Association or our dissolution each require a resolution of the General Meeting of Shareholders taken with a 2/3 majority at a meeting where at least 1/2 of our issued nominal share capital is represented if not proposed by the Management Board or the Supervisory Board. If such a proposal is made, an absolute majority is sufficient.

Liquidation Rights

In the event of our dissolution, we must be liquidated according to applicable Dutch law. During liquidation, our Articles of Association shall remain in force insofar as possible. The balance of our equity remaining after payments of debts (and the costs of liquidation) shall be distributed to our shareholders pro rata to the aggregate amount of Shares held by each shareholder.

Disclosure of Information

As a Dutch company listed on Eurolist by Euronext, we will be required to make our annual accounts (including the annual report) and our semi-annual report available to the public within five months and four months, respectively, of the end of the period to which the information relates. We must also make public certain “inside information”. Inside information is information that is specific and pertains directly or indirectly to us or our securities or the trading thereof: (a) that has not been made public and (b) where disclosure could have a significant effect on the price of the securities in question or derivatives of those securities.

Pursuant to the rules against insider trading we have, among other things, adopted rules governing the holding of and carrying out transactions in our securities by our Management Board and our Supervisory Board directors and our employees. Further, we have drawn up a list of those persons working for us who could have access to inside information on a regular or incidental basis and have informed the persons concerned of the rules against insider trading and market manipulation including the sanctions which can be imposed in the event of a violation of those rules.

Potential Mandatory Offer Rules

Dutch law does currently not provide for mandatory takeover bids. Dutch rules on mandatory takeovers are expected to become effective in the first half of 2006. The directive of the European Parliament and the Council of the European Union on takeover bids (the “Takeover Directive”) of 21 April 2004 must be implemented by each European Union member state not later than 20 May 2006. The Takeover Directive applies to all companies governed by the laws of a European Union member state of which all or some securities are admitted to trading on a regulated market in one or more member states. Pursuant to the Takeover Directive, the member states should ensure protection of minority shareholders by obliging the person that acquires control of a public company to make an offer to all the holders of that company’s securities for all their holdings at a equitable price. The laws of the member state in which the company has its registered office will determine the percentage that is regarded to confer control over the company.

On 31 March 2005, the Dutch government published its draft proposal for the implementation of the Takeover Directive (the “Proposal”). Pursuant to the Proposal, any shareholder or group of shareholders acting in concert who holds 30% or more of the outstanding share capital of a Dutch public company or who could exercise, directly or indirectly, 30% or more of the votes in the shareholders meeting of such company is considered to control such company. Pursuant to the Proposal, shareholders with controlling interests as of the date on which the new legislation enters into force will be exempt from the obligation to make a takeover bid.

Dutch Squeeze-out Proceedings

If a person or company or group company (the “Controlling Entity”) holds a total of at least 95% of a

96 company’s issued share capital by nominal value for its own account, Dutch law permits the Controlling Entity to acquire the remaining ordinary shares in the Controlled Entity by initiating proceedings against the holders of the remaining ordinary shares. The price to be paid for such ordinary shares will be determined by the Enterprise Chamber of the Amsterdam Court of Appeal. A shareholder who holds less than 95% of the ordinary shares, but in practice controls the Controlled Entity’s General Meeting of Shareholders, could attempt through a legal merger with another company, by subscribing to additional ordinary shares in the Controlled Entity (for example, in exchange for a contribution of part of its own business), through other form of reorganisation to raise its interest to 95% or to obtain through other means full ownership of the business of the Controlled Entity.

Significant Ownership of Shares

Current Regime

Holders of our Shares may be subject to reporting obligations under the Dutch Act on Disclosure of Holdings in Listed Companies 1996 (Wet melding zeggenschap in ter beurze genoteerde vennootschappen 1996) (the “Disclosure Act”) and the Dutch Act on the Supervision of the Securities Trade 1995 (Wet toezicht effectenverkeer 1995) (the “Dutch Securities Act”). Pursuant to the Disclosure Act, any person who holds an interest in our capital or voting rights at the time of our Shares being admitted to listing on Eurolist by Euronext, must give written notice to us and, by means of a standard form, the Netherlands Authority for the Financial Markets (Autoriteit Financiele Markten) (the “AFM”) within four weeks of the Shares being admitted to listing, unless such person holds less than 5% of the capital or voting rights of the Company. In addition, any person who, directly or indirectly, acquires or disposes of an interest in our capital or voting rights must immediately give written notice to us and, by means of a standard form, to the AFM if, as a result of such acquisition or disposal, the percentage of capital interest or voting rights is in any of the following ranges: 0–5%, 5-10%, 10- 25%, 25-50%, 50-66 2/3%, and 66 2/3% or more. The term shares within the meaning of the Disclosure Act includes depository receipts issued for shares and rights under an agreement to acquire shares or depository receipts issued for shares.

Pursuant to section 2a of the Disclosure Act, every member of our Management Board and every member of our Supervisory Board must notify us and the AFM (a) immediately after the Shares are admitted to listing on Eurolist by Euronext, of the number of Shares he holds and the number of votes he is entitled to cast in respect of our issued capital, and subsequently (b) of each change in the number of Shares he holds and each change in the number of votes he is entitled to cast in respect of our issued capital immediately after such change. In case a member of our Management Board is a legal entity, the above notification obligations will apply mutatis mutandis to the natural persons determining the day-to-day policy of such legal entity and to the natural persons supervising the management policy and the general course of affairs thereof.

Expected New Regime

On 3 July 2003, a draft bill to replace the Disclosure Act was submitted to the Second Chamber of the Dutch Parliament. According to the explanatory notes to the draft bill, it is anticipated that the following percentage ranges will be introduced: 0-5%, 5-10%, 10-15%, 15-20%, 20-25%, 25-30%, 30-50%, 50-75% and 75% or more.

For the purpose of calculating the percentage of capital interest or voting rights, the following interests must be taken into account: (i) Shares directly held (or acquired or disposed of) by any person; (ii) Shares held (or acquired or disposed of) indirectly held by such person (e.g., through a company); (iii) Shares held by a third party for such person’s account or by a third party with whom such person has concluded an oral or written voting agreement; and (iv) Shares which such person (directly or indirectly) or third party referred to above, may acquire pursuant to any option or other right to acquire Shares. Special rules apply to the attribution of Shares which are part of the property of a partnership or other community of property. A holder of a pledge or right of usufruct in respect of Shares can also be subject to the reporting obligations, if such person has, or can acquire, the right to vote the Shares. The acquisition or (conditional) voting rights by a pledgee or beneficial owner may also trigger the reporting obligations as if such pledgee or beneficial owner were the legal holder of the Shares.

Insider Transactions Disclosure Obligations

Once the Company has made a request for admission to trading on Eurolist by Euronext, its insiders within the meaning of Section 47a of the Dutch Securities Act are obliged to notify the AFM if they carry out or cause

97 to be carried out, for their own account, a transaction in Shares of the Company or in securities whose value is at least in part determined by the value of the Shares. Insiders of the Company within the meaning of Section 47a of the Dutch Securities Act are: (i) members of the Management Board, (ii) members of the Supervisory Board, (iii) persons who have a managerial position within the Company and in that capacity are authorised to make decisions which have consequences for the future development and prospects of the Company and can have access to inside information on a regular basis, (iv) spouses, registered partners or life partners of the persons mentioned under (i) to (iii), or other persons who live together with these persons as if they were married or as if they had registered their partnership, (v) children of the persons mentioned under (i) to (iii) who fall under their authority or children who are placed under the guardianship (curatele) of these persons, (vi) other relations by blood or marriage of the persons mentioned under (i) to (iii) who - on the date of the transaction - have shared a household with these persons for at least one year, and (vii) legal entities, trusts within the meaning of Section 1(c) of the Act on the Supervision of Trust Offices, or partnerships: (a) the managerial responsiblity for which lies with a person as referred to under (i) to (vi), (b) which are controlled by such a person, (c) which have been incorporated or set up for the benefit of such a person, or (d) whose economic interests are in essence the same as those of such a person.

This notification must be made no later than the fifth week day after the transaction date on a form drawn up by the AFM. In case a member of the Management Board or Supervisory Board has a duty of notification under both the Disclosure Act and the Dutch Securities Act, a notification to the AFM within the meaning of the Disclosure Act is sufficient. The notification obligation within the meaning of section 47a of the Dutch Securities Act does not apply to transactions based on a discretionary management agreement as described in section 8 of the Market Abuse Decree. The notification pursuant to section 47a of the Dutch Securities Act may be delayed until the moment that the value of the transactions performed for that person's own account, together with the transactions carried out of the persons associated with that person, reach or exceed the amount of EUR 5,000 in the calendar year in question.

Non-compliance with the reporting obligations under the Disclosure Act or the Dutch Securities Act could lead to criminal fines, administrative fines, imprisonment or other sanctions. In addition, non-compliance with the reporting obligations under the Disclosure Act may lead to civil sanctions, including (i) a general suspension of voting rights in respect of the Shares, for a period of up to three years; and/or (ii) a court order prohibiting a person from (acquiring or) exercising voting rights in respect of the Shares, for a period of up to five years.

98 PLAN OF DISTRIBUTION

Under the terms and subject to the conditions contained in an underwriting agreement to be entered into prior to the consummation of the Offering (the “Underwriting Agreement”), Merrill Lynch International and each of the other Managers will severally agree to procure purchasers for or, failing which, to purchase, and the Selling Shareholder will agree to sell to them, the percentage of Shares offered in the Offering set forth opposite their names in the table below. Merrill Lynch International is the global coordinator and lead bookrunner of the Offering. The principal offices of Merrill Lynch International are located at Merrill Lynch Financial Centre, 2 King Edward Street, London EC1A 1HQ, United Kingdom.

Name Percentage of Shares offered in the Offering ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––

ABN AMRO Rothschild...... 15.56% Gustav Mahlerlaan 10, Amsterdam, The Netherlands

Banco Bilbao Vizcaya Argentaria, S.A...... 3.75% Alcalá, 16, 28014 Madrid, Spain

Credit Suisse First Boston (Europe) Limited ...... 15.56% One Cabot Square, London E14 4QJ, United Kingdom

ING Bank N.V...... 3.75% P.O.Box 1800, 1000 BV Amsterdam, The Netherlands

Lehman Brothers International (Europe) ...... 3.75% 25 Bank Street, London E14 5LE, United Kingdom

Mediobanca – Banca di Credito Finanziario S.p.A...... 3.75% Piazzetta Enrico Cuccia 1, 20121 Milano, Italy

Merrill Lynch International ...... 53.88% ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– –––––––––––––––––––––––– Total ...... 100.00%

The Managers propose to resell the Shares initially at the Offer Price by way of a global offering consisting of (i) an offering to institutional investors outside the United States, Canada, Japan and Australia in reliance on Regulation S, and (ii) an offering to QIBs within the United States in reliance on Rule 144A. See also “Transfer and Selling Restrictions”.

Payment for and delivery of the Shares is expected to be made on or about 25 November 2005 through the book-entry facilities of Euroclear Netherlands, Clearstream and Euroclear Brussels in accordance with their normal settlement procedures applicable to equity securities.

Prior to the Offering there was no public market in the Shares and no assurances can be given that an active trading market will develop or that the Shares will trade above the Offer Price.

The Selling Shareholder will pay to the Managers a commission of 1.85% of the gross proceeds from the Offering and from the sale of additional Shares pursuant to the Over-allotment Option. In addition, the Selling Shareholder may, in its sole discretion, pay to the Managers an incentive fee of up to 0.375% of the gross proceeds from the Offering and from the sale of additional Shares pursuant to the Over-allotment Option and a discretionary fee of up to 0.375% of the gross proceeds from the Offering. The Selling Shareholder will also reimburse certain costs incurred by the Managers in connection with the Offering.

As will be more fully set out in the Underwriting Agreement, we and the Selling Shareholder will indemnify the Managers against certain liabilities in connection with the Offering, including liabilities under applicable securities laws. We and the Selling Shareholder will provide the Managers with customary

99 representations and warranties in relation to their title of the Shares. The Underwriting Agreement will provide that the obligations of the Managers are subject to certain conditions precedent, including the absence of any material adverse change in our financial condition or business affairs. The Managers will be entitled to terminate the Underwriting Agreement in certain circumstances on or prior to the closing of the Offering. Since the closing of the Offering will take place after the commencement of trading in our Shares on Eurolist by Euronext, a termination of the Underwriting Agreement may result in the cancellation of any trades in our shares effected prior to such termination.

In addition to the Offer Price, purchasers of the Shares may be required to pay stamp taxes and other charges in accordance with the laws and practices of the country of purchase.

Until 40 days after the commencement of the Offering, an offer or sale of Shares within the United States by a dealer, whether or not participating in the Offering, may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A.

In connection with the Offering each of the Managers and any of their respective affiliates acting as an investor for its own account may take up Shares and in that capacity may retain, purchase or sell for its own account such securities and any securities of the Company or related investments and may offer or sell such securities or other investments otherwise than in connection with the Offering. Accordingly references in this document to the Shares being issued offered or placed should be read as including any issue, offering or placement of such securities to the Managers and any relevant affiliate acting in such capacity. The Managers do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so.

Lock-up Agreements

Each of the Company and the Selling Shareholder will agree with the Managers in the Underwriting Agreement that, prior to 180 days after the date of the Underwriting Agreement, it will not, without the prior written consent of Merrill Lynch International on its own behalf and on behalf of the other Managers, (i) directly or indirectly, issue, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, pledge, lend or otherwise transfer or dispose of any Shares or any shares convertible into or exercisable or exchangeable for Shares or file any registration statement under the Securities Act with respect to any of the foregoing or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Shares, whether any such swap or transaction described in (i) or (ii) above is to be settled by delivery of Shares or such other shares, in cash or otherwise. The foregoing sentence will not apply to (i) the sale of the Shares in the Offering or (ii) (a) in the case of the Company, any Shares issued or options to purchase Shares granted pursuant to any employee benefit plans of the Company referred to in this prospectus and (b) in the case of the Selling Shareholder, any Shares transferred in order to implement any employee benefit plans of the Company referred to in this prospectus. Telefónica has not made any commitment to remain a shareholder or to maintain a minimum interest in our Company.

Stabilisation and Over-allotment

Under the Underwriting Agreement, the Selling Shareholder will grant to the Managers an option, exercisable, in whole or in part, by Merrill Lynch International on behalf of itself and each of the other Managers within 30 days of the commencement of trading of the Shares on Eurolist by Euronext, to procure purchasers for or, failing which, to purchase additional Shares representing 12% of the number of Shares to be offered in the Offering to cover over-allotments, if any, and short positions resulting from stabilisation transactions.

100 Other Relationships

The Managers and their respective affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with the Company, the Selling Shareholder and Telefónica and any of their respective affiliates. The Managers have received customary fees and commissions for these transactions and services. ABN AMRO Rothschild (a joint bookrunner of the Offering) is the unincorporated equity capital markets joint venture between ABN AMRO Bank N.V. and NM Rothschild & Sons Ltd. ABN AMRO Bank N.V. and ING Bank N.V. (ING Bank N.V. (ING Wholesale Banking), a co-lead manager of the Offering) have in the past extended loans to us under bilateral credit facilities and under our former multicurrency revolving credit facility, which expired in September 2005. In addition, ABN AMRO Bank N.V. and ING Bank N.V. are currently lead arrangers of, and will extend loans under, our new multicurrency revolving credit facility. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Anticipated Sources of Liquidity”.

101 TRANSFER AND SELLING RESTRICTIONS

Selling Restrictions

No action has been taken by us, the Selling Shareholder or the Managers that would permit, other than under the Offering, an offer of Shares or possession or distribution of this prospectus or any other offering material in any jurisdiction where action for that purpose is required.

The distribution of this prospectus and the offer of Shares in certain jurisdictions may be restricted by law and therefore persons into whose possession this prospectus comes should inform themselves about and observe any such restrictions, including those in the paragraphs that follow. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdictions.

European Economic Area

In relation to each member state of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), each Manager will represent and agree that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of the Shares to the public in that Relevant Member State, except that it may, with effect from and including the Relevant Implementation Date, make an offer of Shares to the public in that Relevant Member State at any time:

G in (or in Germany, where the offer stands within) the period beginning on the date of publication of a prospectus in relation to Shares which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive;

G to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;

G to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than EUR 43,000,000 and (3) an annual net turnover of more than EUR 50,000,000, as shown in its last annual or consolidated accounts; or

G in any other circumstances which do not require the publication of a prospectus by the Company pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of Shares to the public” in relation to any Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Shares to be offered so as to enable an investor to decide to purchase or subscribe the Shares, as the same may be varied in that member state by any measure implementing the Prospectus Directive in that member state, and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

Each subscriber for or purchaser of Shares in the Offering located within a member state of the European Economic Area will be deemed to have represented, acknowledged and agreed that it is a “qualified investor” within the meaning of Article 2(1)(e) of the Prospectus Directive. The Company, the Managers and their affiliates, and others will rely upon the truth and accuracy of the foregoing representation, acknowledgment and agreement.

United Kingdom

Each Manager will represent, warrant and agree that (i) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 (the “FSMA”)) received by it in connection with the issue or sale of any Shares in circumstances in which section 21(1) of the FSMA does not apply to the Company; and (ii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Shares in, from or otherwise involving the United Kingdom.

102 United States

The Shares have not been and will not be registered under the Securities Act, and, subject to certain exceptions, may not be offered or sold within the United States.

The Shares are being offered and sold outside of the United States in reliance on Regulation S. The Underwriting Agreement provides that the Managers may arrange for the offer and resale of Shares within the United States only to qualified institutional buyers in reliance on Rule 144A.

In addition, until 40 days after the commencement of the offering of the Shares, an offer or sale of Shares within the United States by any dealer (whether or not participating in the offering) may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A.

France

Neither this prospectus nor any other material relating to the Offering has been submitted for clearance by the Autorité des marchés financiers in France. The Shares have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France. Neither this prospectus nor any other documents or materials relating to the Offering or the Shares has been or will be (i) released, issued, distributed, or caused to be released, issued or distributed, to the public in France or (ii) used in connection with any offer, sale or distribution of the Shares to the public in France. Such offers, sales and distributions may be made in France only to (i) providers of investment services relating to portfolio management for the account of third parties, and/or (ii) qualified investors (investisseurs qualifiés) investing for their own account, all as defined in, and in accordance with, Article L.411-2 of the French Code monétaire et financier. Investors in France and persons who come into possession of this prospectus or any other documents or materials relating to the Offering or the Shares are required to inform themselves about and observe any such restrictions.

Italy

The offering of the Shares has not been registered with the Commissione Nazionale per la società e la Borsa (“CONSOB”) (the Italian securities exchange commission) pursuant to the Italian securities legislation and, accordingly, each Manager has represented and agreed that it has not offered, sold or delivered any Shares nor distributed any copies of this prospectus or any other document relating to the Shares, and will not offer, sell or deliver any shares nor distribute any copies of this prospectus or any other document relating to the Shares in the Republic of Italy (“Italy”) in a solicitation to the public at large (sollecitazione all'investimento), and that the Shares in Italy shall only be:

G offered or sold to professional investors (operatori qualificati) as defined in Article 31, second paragraph of CONSOB Regulation No 11522 of 1 July 1998 (the “Regulation No 11522”), as amended; or

G offered or sold in circumstances where an exemption from the rules governing solicitations to the public at large applies, pursuant to Article 100 of Legislative Decree No 58 of 24 February 1998 (the “Financial Services Act”) and Article 33, first paragraph, of CONSOB Regulation No 11971 of 14 May 1999 (the “Regulation No 11971”), as amended, and shall in any event be effected in accordance with all relevant Italian securities, tax and exchange control and other applicable laws and regulations.

Moreover and subject to the foregoing, the Managers have represented and agreed that the Shares may not be offered, sold or delivered and neither this prospectus nor any other material relating to the Shares may be distributed or made available in Italy unless such offer, sale or delivery of Shares or distribution or availability of copies of this prospectus or any other material relating to the Shares in Italy:

G is in compliance with Article 129 of Legislative Decree No 385 of 1 September 1993 (the “Italian Banking Act”) and the implementing guidelines of the Bank of Italy, pursuant to which the issue or the offer of shares in Italy may need to be followed by an appropriate notice to be filed with the Bank of Italy depending, inter alia, on the aggregate value of the securities issued or offered in Italy and their characteristics; and

103 G is made by investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with the Financial Services Act, the Italian Banking Act, the Regulation No 11522, the Regulation No 11971 ad ay other applicable laws and regulations.

Insofar as the requirements above are based on laws which are superseded at any time pursuant to the implementation of the Prospectus Directive, such requirements shall be replaced by the applicable requirements under the Prospectus Directive.

Australia

This prospectus does not constitute a disclosure document under Chapter 6D of the Corporations Law of Australia (the “Corporations Law”) and will not be lodged with the Australian Securities and Investments Commission. The Shares will be offered to persons who receive offers in Australia only to the extent that such offers of Shares for issue do not need disclosure to investors under Chapter 6D of the Corporations Law. Any offer of Shares received in Australia is void to the extent that it needs disclosure to investors under the Corporations Law. In particular, offers of Shares will only be made in Australia in reliance on various exemptions from such disclosure to investors provided by section 708 of the Corporations Law. Any person to whom Shares are issued pursuant to an exemption provided by section 708 of the Corporations Law must not within 12 months after the issue, offer those Shares for sale in Australia unless that offer is itself made in reliance on an exemption from disclosure provided by that section.

Canada

This prospectus is not, and under no circumstances is to be construed as, a prospectus, an advertisement or a public offering of the securities described herein in any province or territory of Canada. No securities commission or similar authority in Canada has reviewed or in any way passed upon this document or the merits of the securities described herein, and any representation to the contrary is an offence.

Japan

The Shares have not been and will not be registered under the Securities and Exchange Law of Japan (Law No. 25 of 1948 as amended), and may not be offered or sold, directly or indirectly, in Japan or to a resident of Japan except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law of Japan and other relevant laws and regulations of Japan.

Transfer Restrictions

Rule 144A Shares

Each purchaser of Shares within the United States pursuant to Rule 144A, by accepting delivery of this prospectus, will be deemed to have represented, agreed and acknowledged that:

G It is (a) a qualified institutional buyer within the meaning of Rule 144A (“QIB”), (b) acquiring such Shares for its own account or for the account of a QIB and (c) aware, and each beneficial owner of such Shares has been advised, that the sale of such Shares to it is being made in reliance on Rule 144A.

G It understands that such Shares have not been and will not be registered under the Securities Act and may not be offered, sold, pledged or otherwise transferred except (a) in accordance with Rule 144A to a person that it and any person acting on its behalf reasonably believe is a QIB purchasing for its own account or for the account of a QIB, (b) in an offshore transaction in accordance with Rule 903 or Rule 904 of Regulation S or (c) pursuant to an exemption from registration under the Securities Act provided by Rule 144 thereunder (if available), in each case in accordance with any applicable securities laws of any State of the United States.

G It understands that such Shares, unless otherwise determined by the Company in accordance with applicable law, will bear a legend substantially to the following effect:

104 G THIS SHARE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT TO A PERSON THAT THE HOLDER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, (2) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR RESALES OF THIS SHARE.

G The Company, the Managers and their affiliates, and others will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements. If it is acquiring any Shares for the account of one or more QIBs, it represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgements, representations and agreements on behalf of each such account.

Prospective purchasers are hereby notified that sellers of the Shares may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A.

105 MATERIAL TAX CONSIDERATIONS TO INVESTORS

General

We urge investors to consult their own tax advisers regarding tax consequences of acquiring, holding and disposing of Shares. The comments below are of a general and non-exhaustive nature based on our understanding of the current revenue law and practice in the Netherlands, the United States and the United Kingdom, which is subject to change. The following summary does not therefore constitute legal or tax advice relating to an investment in our Shares and applies only to persons holding Shares as an investment and who are the beneficial owners thereof. The summary does not apply to persons who directly or indirectly alone control more than 5% or together with one or more associated or connected persons control more than 10% of the Company’s share capital.

Prospective investors should consult their professional advisers on the potential tax consequences of subscribing for, purchasing, holding, converting or selling Shares under the laws of their country and/or state of citizenship, domicile or residence.

Dutch Tax Aspects

The following is a general summary of certain Dutch tax consequences of the holding and disposal of the Shares. It is not intended to be applicable to all categories of investors and is included for general information purposes only. Potential Investors should consult their tax advisor with regard to the tax consequences of investing in the Shares in their particular circumstances.

This summary does not purport to describe all possible Dutch tax considerations or consequences that may be relevant to such a holder. In particular, this summary does not address tax considerations applicable to investors who will receive or have received these Shares as employment income, deemed employment income or otherwise as compensation nor does this summary purport to describe all possible Dutch tax considerations or consequences that may be relevant to substantial shareholders (generally owning at least a 5% interest in us).

Except as otherwise indicated, this summary (including the rates and other figures) only addresses Dutch national legislation and regulations as in effect at the date of this prospectus and as interpreted in published case law on the date hereof. Therefore, the summary is subject to change after that date, including changes that could have retroactive effect. Potential investors should note particularly that a change in legislation and/or regulations may thus invalidate part or all of this summary.

Withholding Tax

Dividends distributed by us generally are subject to Dutch dividend withholding tax at a rate of 25%. The expression “dividends distributed” includes, among others:

G distributions in cash or in kind;

G liquidation proceeds, proceeds of redemption of the Shares, or proceeds of the repurchase of these Shares by us or one of our subsidiaries or other affiliated entities to the extent such proceeds exceed the average paid-in capital of the Shares recognised for the purposes of Dutch dividend withholding tax;

G an amount equal to the par value of the Shares issued or an increase of the par value of the Shares, to the extent that it does not appear that a contribution, recognised for the purposes of Dutch dividend withholding tax, has been made or will be made; and

G partial repayment of the paid-in capital, recognised for the purposes of Dutch dividend withholding tax, if and to the extent that we have net profits (zuivere winst), unless the holders of Shares have resolved in advance at a general meeting to make such repayment and the par value of the Shares concerned has been reduced by an equal amount by way of an amendment of our Articles.

106 If a holder of Shares is resident in a country other than the Netherlands and if a double taxation convention is in effect between the Netherlands and such other country, such holder may, depending on the terms of that double taxation convention, be eligible for a full or partial exemption from, or refund of, Dutch dividend withholding tax.

Individuals and corporate legal entities who are resident or deemed to be resident in the Netherlands for Dutch tax purposes (either Dutch-resident individuals or Dutch-resident entities, as defined below), including individuals who have made an election for the application of the rules of the Dutch Income Tax Act 2001 as they apply to residents of the Netherlands, can generally credit the Dutch dividend withholding tax against their income tax or corporate income tax liability. In general, we will be required to remit all amounts withheld as Dutch dividend withholding tax to the Dutch tax authorities. However, under certain circumstances, we are allowed to reduce the amount to be remitted to the Dutch tax authorities to a certain extent. Although this reduction reduces the amount of Netherlands dividend withholding tax that we are required to pay to the Dutch tax authorities, it does not reduce the amount of tax that we are required to withhold on dividends.

Pursuant to legislation to counteract “dividend stripping” a reduction, exemption, credit or refund of Dutch dividend withholding tax is denied if the recipient of the dividend is not the beneficial owner. This legislation generally targets situations in which a shareholder retains its economic interest in Shares but reduces the withholding cost on dividends by a transaction with another party. It is not required for these rules to apply that the recipient of the dividends is aware that a dividend stripping transaction took place. The Dutch State Secretary of Finance takes the position that the definition of beneficial ownership introduced by this legislation will also be applied in the context of a double taxation convention.

Taxes on Income and Capital Gains

Dutch Resident Individuals

Individuals who are resident or deemed to be resident in the Netherlands for Dutch tax purposes, including individuals who have opted to be resident in the Netherlands for the purposes of the Dutch Income Tax Act 2001, (“Dutch resident individuals”) are in general annually taxed on deemed income in the amount of 4% of their net investment assets for the year at an income tax rate of 30% (“box 3 taxation”).

The net investment assets for a certain year are calculated as the average of (i) the fair market value of the investment assets less the allowable liabilities at the beginning of that year and (ii) the fair market value of the investment assets less the allowable liabilities at the end of that year. The Shares are included as investment assets. An annual threshold of EUR 19,522 of the net investment assets is generally available for each Dutch resident individual tax payer. Actual benefits derived from the net investment assets, including any income and capital gains realised on the disposal of the Shares, are not subject to Dutch income tax.

However, the following exceptions apply to the above general rule:

G if the Shares are attributable to an enterprise from which a Dutch resident individual derives a share of the profit, whether as an entrepreneur (ondernemer) or as a person who has a co-entitlement to the net worth of such enterprise, without being an entrepreneur or a shareholder, as defined in the Dutch Income Tax Act 2001, any benefit derived or deemed to be derived from the Shares will generally be subject to income tax at progressive rates with a maximum of 52% (“box 1 taxation”); and

G if the holding and/or disposal of the Shares is treated as miscellaneous activities (overige werkzaamheden), any benefit deriving from these Shares will be subject to income tax at a progressive rate with a maximum of 52% (“box 1 taxation”). The holding and/or disposal can be treated as miscellaneous activities in the event that the management of the portfolio of which the Shares form part exceeds regular asset management, among others in the event that the holder of Shares has privileged information regarding the Shares.

Dutch Resident Entities

Corporate and quasi corporate entities (including but not limited to non-transparent partnerships, associations, foundations and non-transparent mutual funds for joint account (open fondsen voor gemene rekening)), which are taxable under the Dutch Corporate Income Tax Act 1969 and are resident or deemed to be

107 resident in the Netherlands for Dutch tax purposes (“Dutch resident entities”) are, in principle, subject to Dutch corporate income tax at the statutory rate of 31.5%, with a rate of 27% applying to the first EUR 22,689 of taxable profits. Please note that these rates will be decreased to 29.6%-25.5% as from 1 January 2006 and to 29.1%-24.5% as from 1 January 2007.

Any benefit derived or deemed to be derived from the Shares held by Dutch-resident entities, including any capital gain on the disposal thereof, will generally be subject to corporate income tax, unless the Dutch participation exemption (deelnemingsvrijstelling) is applicable or the benefit is deemed to be included in the cost price of the Shares. The Dutch participation exemption is generally applicable if such entities own at least 5% of our nominal paid-up share capital.

Qualifying Dutch resident pension funds are exempt from Dutch corporate income tax. Qualifying Dutch- resident investment funds (fiscale beleggingsinstellingen) are exempt from Dutch corporate income tax if they meet certain conditions with respect to their shareholder base and the annual distribution of dividends to their shareholders. Income and capital gains deriving from our Shares will be exempt from Dutch corporate income tax in the hands of shareholders who are qualifying Dutch-resident pension funds or qualifying Dutch resident investment funds.

Non-Dutch Resident Holders

A holder of Shares will not be subject to Dutch taxes on income and capital gains deriving from Shares, provided that:

G such holder is neither resident nor deemed to be resident in the Netherlands for Dutch tax purposes, and, in the event such holder is an individual, has not opted to be a resident for purposes of the Dutch Income Tax Act 2001;

G such holder does not have an interest in an enterprise or a deemed enterprise which, in whole or in part, is either effectively managed in the Netherlands or is carried out through a permanent establishment, a deemed permanent establishment (a statutorily defined term) or a permanent representative in the Netherlands and to which enterprise or part of an enterprise, or to whom, Shares are attributable or deemed to be attributable; and

G the activities of such holder cannot be treated as miscellaneous activities, as defined under “Dutch resident individuals” second bullet point carried out in the Netherlands.

If the non-Dutch resident holder is taxable in the Netherlands pursuant to one of the three eventualities mentioned above, he will, in principle, be taxed in the same way as Dutch-resident taxpayers, as treated above.

If a tax treaty is in force between the Netherlands and the state of residence of the non-Dutch resident holder of Shares and if such holder qualifies as a resident under that tax treaty, capital gains on the Shares will, in general, not be taxable in the Netherlands, except insofar as they are attributable to a permanent establishment in the Netherlands.

Non-Dutch resident pension funds which are non-resident taxpayers for Dutch corporate income tax purposes, can qualify for the above mentioned corporate income tax exemption for Dutch-resident pension funds, provided the conditions formulated by the Dutch State Secretary for Finance in the Decree of 26 January 2000, nr. DB99/3511. are met.

Dutch Gift, Estate and Inheritance Tax

Dutch Resident Holders

Gift, estate and inheritance taxes will arise in the Netherlands with respect to a transfer of Shares by way of a gift by, or on the death of, a holder of such securities who is resident or deemed to be resident in the Netherlands at the time of the gift or his or her death. For purposes of Dutch gift, estate and inheritance taxes, among others, an individual who holds the Dutch nationality will be deemed to be resident in the Netherlands if he or she has been resident in the Netherlands at any time during the ten years preceding the date of the gift or his or her death. Additionally, for purposes of Dutch gift tax, an individual not holding the Dutch nationality will,

108 among others, be deemed to be resident in the Netherlands if he or she has been resident in the Netherlands at any time during the year preceding the date of the gift.

Non-Dutch Resident Holders

No Dutch gift, estate or inheritance taxes will arise on the transfer of Shares by way of a gift by, or on the death of, a holder who is neither resident nor deemed to be resident in the Netherlands, unless:

G such holder at the time of the gift has or at the time of his or her death had an enterprise or an interest in an enterprise that, in whole or in part, is or was carried out through a permanent establishment or a permanent representative in the Netherlands and to which enterprise or part of an enterprise Shares are or were attributable, or are or were deemed to be attributable;

G such holder at the time of the gift is, or at the time of his or her death was entitled to a share in the profits of an enterprise effectively managed in the Netherlands, other than by way of the holding of securities, or through an employment contract, to which enterprise the Shares are or were attributable, or are or were deemed to be attributable; or

G in the case of a gift of Shares by an individual who at the date of the gift was neither resident nor deemed to be resident in the Netherlands, such individual dies, within 180 days after the date of the gift, while being resident or deemed to be resident in the Netherlands.

Dutch Turnover Tax

No Dutch turnover tax will arise in respect of the acquisition, ownership and disposal of the Shares.

Other Dutch Taxes and Duties

No Dutch registration tax, customs duty, transfer tax, stamp duty or any other similar documentary tax or duty will be payable by a holder of Shares in respect of the holding and disposal of the Shares.

US Tax Aspects

To ensure compliance with the Internal Revenue Service Circular 230 disclosure requirements, we inform you that the United States federal tax advice contained herein (i) is written in connection with the promotion or marketing by others of the transactions or matters addressed herein and (ii) is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding U.S. tax penalties. Each taxpayer, with respect to the subject matter addressed herein, should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.

The following discussion summarizes certain material U.S. federal income tax consequences to U.S. holders (as defined below) with respect to the purchase, ownership and disposition of the Shares. This summary does not purport to be a complete analysis of all tax considerations that may be applicable to a decision to acquire the Shares by investors and does not address foreign, state, local or other tax laws or United States federal tax consequences (e.g., estate or gift tax) other than those pertaining to the income tax (but not including the alternative minimum tax). With respect to this summary of U.S. federal income tax consequences, this summary only applies to U.S. holders who purchase Shares in the initial offering at their original offering price and hold the Shares as capital assets within the meaning of section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”).

This summary does not address the tax consequences applicable to all categories of investors who are United States holders, some of which may be subject to special rules (for example, (1) banks, regulated investment companies, insurance companies, broker-dealers in securities or currencies, tax-exempt organisations or traders in securities who elect to mark to market; (2) U.S. holders holding the Shares as part of a straddle, hedge, conversion transaction or other integrated investment; (3) U.S. holders whose functional currency is not the U.S. dollar; (4) U.S. holders that own (directly or indirectly) 10% or more of the Company’s voting stock under U.S. federal income tax laws or (5) U.S. holders that are taxed as partnerships for U.S. federal income tax purposes. This summary is based on current law and is for general information purposes only. Future legislative, judicial or administrative changes or interpretations could be retroactive and could affect the information, beliefs

109 and conclusions in this discussion. There can be no assurances that the Internal Revenue Service (the “IRS”) will not challenge one or more of the tax consequences discussed herein. The tax treatment applicable to you may vary depending on your particular tax situation or status.

For purposes of this discussion a U.S. holder refers to a U.S. person that is a beneficial owner of the Shares. A U.S. person is defined as:

G a citizen or resident of the United States;

G a corporation or other entity (other than an entity taxed as a partnership for U.S. federal income tax purposes) created or organized in the United States or under the laws of the United States or of any political subdivision thereof;

G an estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source; or

G any trust if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust; or (ii) the trust has a valid election in effect under applicable U.S. treasury regulations to be treated as a U.S. person.

If a partnership holds the Shares, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If you are a partner of a partnership holding Shares, you should consult your tax advisor.

PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE SHARES IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES, AS WELL AS THE EFFECT AND APPLICABILITY OF ANY STATE, LOCAL OR FOREIGN TAX LAWS

Taxation of Distributions

Subject to the discussion below relating to the passive foreign investment company rules, cash distributions made with respect to the Shares will constitute dividends for U.S. federal income tax purposes to the extent paid out of our current or accumulated earnings and profits. U.S. holders generally will be subject to U.S. federal income tax on the receipt of such dividends, and dividends received by U.S. holders that are corporations generally will not be eligible for a dividends received deduction. To the extent a distribution exceeds our current and accumulated earnings and profits, it will be treated as a tax-free return of capital to the extent of the U.S. holder’s tax basis in the Shares and thereafter as capital gain from the sale or exchange of such Shares. We do not maintain calculations of our earnings and profits under U.S. Federal income tax principles. If we do not report to a U.S. holder the portion of a distribution that exceeds earnings and profits, U.S. holders should assume that the distribution will generally be taxable as a dividend even if that distribution would otherwise be treated as a non- taxable return of capital or as capital gain under the rules described above. The amount of any distribution of property other than cash will be the fair market value of that property on the date of distribution. See “Material Tax Considerations to Investors—US Tax Aspects—Sales, Exchanges or Other Taxable Dispositions of Shares” for a further discussion of the U.S. federal income tax consequences resulting from a sale of our Shares.

Under current law, non-corporate shareholders that meet certain holding period requirements generally are subject to United States federal income tax at a reduced highest marginal tax rate of 15% on dividends received from “qualified foreign corporations” prior to January 1, 2009. For purposes of this reduced tax rate, a foreign corporation is treated as a “qualified foreign corporation” if the corporation is eligible for the benefits of a comprehensive income tax treaty with the United States (including the double tax treaty between the United States and the Netherlands (the “Treaty”)) or the stock of the foreign corporation is readily tradable on an established securities market in the United States. A qualified foreign corporation does not include a PFIC (as defined below). The Company expects that it should qualify for benefits under the Treaty provided that the Shares are regularly traded on Eurolist by Euronext. Based on the US Department of Treasury Technical Explanation of the Treaty, the Shares generally will be considered regularly traded if at least 6% of the average outstanding Shares are traded in a taxable year. As discussed in this prospectus, the Selling Shareholder will

110 retain a significant portion of Shares immediately after the Offering, and it is not expected that these Shares will be traded. Although the Company anticipates that a sufficient number of its Shares will be traded so as to be treated as a ‘‘qualified foreign corporation’’ (subject to the discussion below under ‘‘Material Tax Consideration to Investors—US Tax Aspets—Passive Foreign Investment Companies’’), no assurances can be given that the Company will so qualify because of the highly factual nature of this requirement and the fact that testing must occur every twelve months. Additionally, whether a U.S. holder will be eligible to claim this reduced rate of tax on dividends is dependent on certain factors including the length of time the U.S. holder has held Shares and whether the dividend has been taken into account in determining the U.S. holder’s net investment income under Section 163(d)(4)(B) of the Code.

PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISORS CONCERNING THE ELIGIBILITY OF DIVIDENDS PAID WITH RESPECT TO OUR SHARES FOR THE REDUCED RATE OF TAX.

The amount of any distribution paid in a currency other than U.S. dollars (a ‘‘foreign currency’’) including the amount of any withholding tax thereon, will be included in the gross income of a U.S. holder in an amount equal to the U.S. dollar value of the foreign currencies calculated by reference to the exchange rate in effect on the date of receipt, regardless of whether the foreign currencies are converted into U.S. dollars. If the foreign currencies are converted into U.S. dollars on the date of receipt, a U.S. holder generally should not be required to recognize foreign currency gain or loss in respect of the dividend. If the foreign currencies received in the distribution are not converted into U.S. dollars on the date of receipt, a U.S. holder will have a basis in the foreign currencies equal to its U.S. dollar value on the date of receipt. Any gain or loss on a subsequent conversion or other disposition of the foreign currencies will be treated as ordinary income or loss.

Except as discussed herein and subject to certain conditions and limitations, generally income tax withheld by the Netherlands on dividends paid by the Company to U.S. holders may be deducted from taxable income or credited against a U.S. holder’s U.S. Federal income tax liability. However, it is not clear under current law whether U.S. holders will be allowed to claim a foreign tax credit with respect to the full amount of the withholding taxes imposed by the Netherlands on dividends paid by the Company. In general, upon making a distribution to shareholders, the Company is required to remit all amounts withheld as dividend withholding tax to the Dutch tax authorities and, in such circumstances, the full amount of the taxes so withheld would generally (subject to certain limitations and conditions) be eligible for the U.S. holder’s foreign tax deduction or credit. Currently, the Company may, with respect to dividends received from qualifying non-Dutch subsidiaries, credit taxes withheld from those dividends against the Netherlands’ withholding tax imposed on a dividend paid by the Company up to a certain maximum amount. This credit reduces the amount of dividend withholding tax that the Company is required to pay to the Dutch taxing authorities but does not reduce the amount of tax the Company is required to withhold from dividends paid to U.S. holders. In these circumstances, it is possible that under U.S. federal income tax law the portion of taxes that the Company is not required to pay to the Netherlands’ tax authorities with respect to dividends paid to U.S. holders would not qualify as a creditable tax for U.S. foreign tax credit purposes.

PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE GENERAL CREDITABILITY OR DEDUCTIBILITY OF NETHERLANDS’ WITHHOLDING TAXES IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES.

In addition, a U.S. holder is subject to a statutorily imposed limitation on its ability to claim a foreign tax credit. For purposes of calculating this limitation, dividends received by a U.S. holder with respect to the Shares will be treated as foreign source income. This limitation is calculated separately with respect to specific classes of income. Also, the amount of any qualified dividend income paid by the Company to a U.S. holder that is subject to the reduced dividend income tax rate of 15% discussed above must be reduced by the ‘‘rate differential portion’’ for purposes of calculating the U.S. holder’s foreign tax credit limitation. Assuming dividends paid by the Company to a U.S. holder qualify for the reduced tax rate on dividends (but, absent this reduced tax rate such dividends would be taxed at the current highest marginal tax rate applicable to individuals of 35%), such U.S. holder would be required to reduce the amount of the dividends paid by the Company by approximately 57.14% for purposes of calculating such U.S. holder’s foreign tax credit limitation.

111 THE RULES RELATING TO A U.S. HOLDER’S ABILITY TO CLAIM FOREIGN TAX CREDITS AND THE TIMING THEREOF ARE COMPLEX AND HIGHLY DEPENDENT UPON THE FACTS OF EACH PROSPECTIVE INVESTOR. PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE AVAILABILITY OF A FOREIGN TAX CREDIT UNDER THEIR PARTICULAR SITUATIONS.

A pro-rata distribution of additional Shares to U.S. holders with respect to their Shares generally will not be subject to U.S. Federal income tax unless U.S. holders can elect that the distribution be payable in cash.

Sales, Exchanges or Other Taxable Dispositions of Shares

Subject to the discussion below relating to PFICs, a U.S. holder will generally recognize gain or loss for U.S. federal income tax purposes upon the sale or exchange of Shares in an amount equal to the difference between the U.S. dollar value of the amount realized from such sale or exchange and the U.S. holder's tax basis for those ordinary shares. Selling expenses incurred by such U.S. holder will reduce the amount of gain or increase the amount of loss recognized by such U.S. holder upon a taxable disposition of the Shares. Such gain or loss generally may be capital gain or loss and should generally be long-term capital gain or loss if the U.S. holder held the Shares for more than one year immediately prior to such disposition under U.S. federal tax law principles. Long-term capital gains of individuals are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations. Such gain or loss should generally be treated as U.S. sourced income or losses.

If a U.S. holder receives foreign currency upon a sale or exchange of Shares, gain or loss, if any, recognized on the subsequent sale, conversion or disposition of such foreign currency will be ordinary income or loss and will generally be income or loss from sources within the United States for foreign tax credit limitation purposes. However, if such foreign currency is converted into U.S. dollars on the date received by the U.S. holder, the U.S. holder generally should not be required to recognize any gain or loss on such conversion.

Passive Foreign Investment Companies

The treatment of U.S. holders with respect to the ownership and sale of the Shares described above may be different if the Company is a “passive foreign investment company” (“PFIC”) at any time during the U.S. holder’s holding period and the U.S. holder did not make a ‘‘QEF Election’’ (as described below) with respect to its Shares or otherwise eliminate any of the ‘‘PFIC taint’’ with respect to its Shares to the extent provided in the Code.

Generally

In general, a non-U.S. corporation will be a passive foreign investment company or “PFIC” in any taxable year in which either:

G 75% or more of its gross income constitutes “passive income”; or

G on average 50% or more of its assets produce, or are held for the production of, passive income.

For purposes of the PFIC rules, “passive income” generally includes interest, dividends, annuities and other investment income. The PFIC statutory provisions also contain a look-through rule that states that, for purposes of determining whether a non-U.S. corporation is a PFIC, such non-U.S. corporation shall be treated as if it “received directly its proportionate share of the income” and as if it “held its proportionate share of the assets” of any other corporation in which it owns at least 25% of the value of the stock. Under the look-through rule, the Company would be deemed to own its proportionate share of the assets and to have received its proportionate share of the income of its subsidiaries for purposes of the two PFIC tests (i.e., the 75% income and 50% asset tests) described above. The PFIC rules contain an exception for companies in their “start-up year”. A corporation will not be treated as a PFIC for the first taxable year the corporation has gross income if (i) no predecessor of such corporation was a PFIC, (ii) the corporation establishes that it will not be a PFIC for either of the two years immediately following the start-up year and (iii) the corporation is in fact not a PFIC for either of those two years.

112 The Company does not believe that it will be a PFIC; however, the Company will not obtain a ruling from the IRS or an opinion of counsel with respect to whether it is a PFIC. If the Company were characterized as a PFIC, a U.S. holder of Shares would be subject to certain adverse federal income tax consequences, unless a “QEF election” or “mark-to- market” election (each as described below) is made. If the Company is determined to be a PFIC, U.S. holders generally will be subject to a special tax and an interest charge at the time of the sale of, or receipt of an “excess distribution” with respect to their Shares and a portion of any gain on the disposition of their Shares could be re-characterized as ordinary income. Such U.S. holder is treated as receiving an “excess distribution” if the amount of the distribution is more than 125% of the average distribution with respect to our Shares, as the case may be, during the three preceding taxable years (or shorter period during which the taxpayer held our Shares). In general, the special tax and interest charges are based on the value of the tax deferral of the taxes that are deemed due during the period the U.S. holder owned the Shares, computed by assuming that the excess distribution or gain (in the case of a sale) with respect to the Shares was taxed in equal portions throughout the U.S. holder’s period of ownership at the highest marginal tax rate. The interest charge is computed using the applicable rate imposed on underpayments of U.S. federal income tax throughout the U.S. holder's holding period (excluding tax years prior to the tax year during which the Company became a PFIC). In general, if a U.S. person owns stock in a non-U.S. corporation during any taxable year in which such corporation is a PFIC, the stock will generally be treated as stock in a PFIC for all subsequent years. In addition, a distribution paid by the Company to U.S. holders that are individuals that is characterized as a dividend and is not characterized as an excess distribution would not be eligible for the reduced 15 percent rate of tax for qualified dividends discussed above.

Additionally, a U.S. person that directly or indirectly owns stock of a PFIC is treated as owning a proportionate amount by value of any stock owned by that PFIC. If the PFIC owns shares in another PFIC, the excess distribution rules apply separately to the U.S. person with respect to its interest in such lower-tier PFIC on an indirect basis. Accordingly, if the Company is a PFIC, the Company’s non-U.S. subsidiaries may be treated as lower-tier PFICs to the extent such subsidiaries meet either the passive income or passive asset tests described herein and U.S. holders of the Company will be treated as indirect holders of the shares of such subsidiaries.

If the Company is treated as a PFIC in any taxable year, it may be possible for U.S. persons who own Shares to mitigate certain of the negative tax consequences to them under the PFIC rules. In particular, under certain limited circumstances, a U.S. person may be able to:

G make a timely qualified electing fund election, which we refer to as a QEF election, with respect to its shareholdings;

G avail itself of a protective QEF election with respect to the Shares it owns; or

G make a mark-to-market election with respect to the first taxable year the Company and any of its subsidiaries are considered PFICs during its holding period with respect to our Shares.

The availability of these elections is uncertain as a matter of law and in certain cases requires that we provide certain information. We cannot assure you that such information will be made available to persons who own Shares. If the Company is a PFIC each U.S. holder will be required to make an annual report of distributions received and gains realized with respect to the Shares on IRS Form 8621.

THE RULES REGARDING THE CLASSIFICATION OF A FOREIGN ENTITY AS A PFIC ARE EXTREMELY COMPLEX. PROSPECTIVE INVESTORS ARE STRONGLY URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO WHETHER AN INVESTMENT IN THE SHARES WILL CONSTITUTE AN INVESTMENT IN A PFIC AND THE CONSEQUENCES RESULTING THEREFROM.

Information Reporting and Back-up Withholding

Unless a U.S. holder is an exempt recipient, such as a corporation, payments with respect to the Shares may be subject to information reporting and may also be subject to U.S. federal back-up withholding tax at the applicable rate if such U.S. holder fails to supply an accurate taxpayer identification number or otherwise fails to comply with the applicable U.S. information reporting or certification requirements. Any amounts so withheld generally will be allowed as a credit against the U.S. holder’s U.S. federal income tax liability.

113 EACH U.S. HOLDER SHOULD CONSULT ITS TAX ADVISOR AS TO ITS QUALIFICATION FOR EXEMPTION FROM BACKUP WITHHOLDING AND THE PROCEDURE FOR OBTAINING SUCH EXEMPTION.

UK Tax Aspects

The comments below are of a general nature and are based on current United Kingdom (“U.K.”) law and the published practice of Her Majesty’s Revenue & Customs (“HMRC”) at the date of this document. Except as otherwise stated, the summary only discusses certain U.K. tax consequences of holding the Shares for the absolute beneficial owners of the Shares (i) who are individuals resident or ordinarily resident in the U.K. for tax purposes or who are companies treated as resident in the U.K. for the purposes of U.K. corporation tax (a “U.K. Holder”); (ii) who are not resident in the Netherlands; and (iii) who do not have a permanent establishment or fixed base or other presence in the Netherlands with which the holding of the Shares is connected. In addition, the summary (i) only addresses the tax consequences for U.K. Holders who hold the Shares as capital assets, and does not address the tax consequences which may be relevant to certain other categories of U.K. Holders, for example, dealers and (ii) assumes that the U.K. Holder does not either directly or indirectly control 10% or more of the voting power of the Company.

The following is intended only as a general guide and is not intended to be, nor should it be considered to be, legal or tax advice to any particular U.K. Holder. Accordingly, potential investors should satisfy themselves as to the overall tax consequences, including, specifically, the consequences under U.K. law and HMRC practice, of the acquisition, ownership and disposal of the Shares in their own particular circumstances, by consulting their own tax advisers.

Withholding Tax

Dividend payments in respect of the Shares will not be subject to U.K. withholding tax.

Taxation of Dividends

A U.K. Holder that receives a dividend on the Shares may be subject to U.K. income tax or corporation tax as the case may be, on the gross amount of any dividend paid before the deduction of any Netherlands withholding taxes, subject to the availability of any credit for Netherlands tax withheld. A U.K. Holder who is an individual and who is domiciled in the U.K. will generally be subject to U.K. income tax on the dividend paid on the Shares. A U.K. Holder who is an individual resident but not domiciled in the U.K. will generally be subject to U.K. income tax on the dividend paid on the Shares to the extent that the dividend is remitted, or treated as remitted, to the U.K. A corporate U.K. Holder will generally be subject to U.K. corporation tax on the dividend paid on the Shares.

Taxation of Disposals

The disposal by a U.K. Holder of interests in the Shares may give rise to a chargeable gain or allowable loss for the purposes of U.K. taxation of chargeable gains. A U.K. Holder who is an individual and who is domiciled in the U.K. will generally be liable to U.K. capital gains tax on any chargeable gains made on the disposal of the Shares. A U.K. Holder who is an individual but who is not domiciled, in the U.K. will generally be liable to U.K. capital gains tax to the extent that the chargeable gains made on the disposal of the Shares are remitted or treated as remitted to the U.K. An individual holder of the Shares who ceases to be resident or ordinarily resident in the U.K. for U.K. tax purposes for a period of less than five years and who disposes of such Shares during that period may also be liable for U.K. capital gains tax despite the fact that the individual may not be resident or ordinarily resident in the U.K. for U.K. tax purposes at the time of the disposal. A corporate U.K. Holder will generally be subject to U.K. corporation tax on any chargeable gain arising from a disposal of the Shares.

Effect of Netherlands Withholding Taxes

As discussed in “—Dutch Tax Aspects” above, dividend payments in respect of the Shares will be subject to Netherlands withholding taxes. A U.K. Holder should generally be entitled to a credit for Netherlands tax properly withheld from such payments (and not recoverable from the Dutch tax authorities) against a U.K. Holder’s liability to income tax or corporation tax on such amounts, subject to detailed U.K. tax rules for calculation of such a credit.

114 Stamp Duty and Stamp Duty Reserve Tax (‘‘SDRT’’)

Assuming that any document effecting a transfer of, or containing an agreement to transfer, one or more of the Shares is neither (i) executed in the U.K. nor (ii) relates to any property situate, or to any matter or thing done or to be done, in the U.K. (which may include involvement of U.K. bank accounts in payment mechanics), then no U.K. ad valorem stamp duty should be payable on such a document.

Since the Shares are not registered in a register kept in the U.K., no SDRT should be payable in respect of any agreement to transfer the Shares.

115 GENERAL INFORMATION

The Company

Our company was incorporated as Endemol N.V., a naamloze vennootschap under Dutch law by notarial deed dated 28 October 2005 and we operate under Dutch law. Our address is Bergweg 70, 1217 SC Hilversum, the Netherlands. We are registered in the commercial register of the Chamber of Commerce and Industry for Gooi- en Eemland under number 32111483. The telephone number of our registered office is +31 35 - 5399999.

Our objects are:

G to participate in, to finance or to have any other interest in, or to conduct the management of, other companies or enterprises;

G to furnish guarantees, provide security, warrant performance or in any other way assume liability, whether jointly and severally or otherwise, for or in respect of obligations of group companies; and

G to do anything which is, in the widest sense of the word, connected with or may be conducive to the attainment of these objects.

Responsibility

The Company accepts responsibility for the information contained in this prospectus, and having taken all reasonable care to ensure that such is the case, the information contained in this prospectus, to the best of our knowledge, is in accordance with the facts and contains no omissions likely to affect its import.

Shares in Book Entry Form

Our Shares are registered shares and will be in book entry form as from settlement through Euroclear Netherlands, Clearstream and Euroclear Brussels. Our Shares will be administered by Euroclear Damrak 70, 1012 LM Amsterdam, the Netherlands.

Availability of Documents

Copies of the following documents are available and can be obtained free of charge for twelve months from the date of publication of this prospectus at www.historicalfinancials.com:

G the Articles of Association of the Company;

G the pro forma consolidated financial information of the Issuer Group for the financial years ended 31 December 2002, 2003 and 2004 on the basis of Dutch GAAP;

G the pro forma consolidated financial information of the Issuer Group for the financial year ended 31 December 2004 on the basis of IFRS;

G the pro forma consolidated interim financial information of the Issuer Group for the six months ended 30 June 2005 (with pro forma consolidated interim financial information for the six months ended 30 June 2004 for comparison purposes) on the basis of IFRS;

G the pro forma consolidated interim financial information of the Issuer Group for the nine months ended 30 September 2005 (with pro forma interim consolidated financial information for the nine months ended 30 September 2004 for comparison purposes) on the basis of IFRS; and

G the audited consolidated financial statements of Endemol Holding N.V. for the financial years ended 31 December 2002, 2003 and 2004 on the basis of Dutch GAAP.

116 Copies of this prospectus may be obtained free of charge by sending a request in writing or by fax or by e- mail to us, ABN AMRO Bank N.V or Merrill Lynch International at the following addresses:

Endemol N.V. Bergweg 70 1217 SC Hilversum The Netherlands Facsimile: +31 35 53 99 960 E-mail: [email protected]

ABN AMRO Bank N.V. Service Desk MF 7020 Kemelstede 2 4817 ST Breda The Netherlands Facsimile: +31 76 579 96 43 E-mail: [email protected]

Merrill Lynch International Merrill Lynch Financial Centre Equity Capital Markets 2 King Edward Street London EC1A 1HQ United Kingdom Facsimile: +44 20 7995 2516

Alternatively, copies of this prospectus may be obtained in electronic form through the website of Euronext Amsterdam N.V. (www.euronext.com) by Dutch residents only.

117 Group Chart

The following chart sets out the current structure of Endemol N.V. and our most important subsidiaries.

Endemol N.V.

Endemol Holding B.V.

Endemol Nederland Endemol International B.V. Endemol Finance B.V. Holding B.V. Netherlands 100% Netherlands 100% Netherlands 100%

Endemol Nederland Endemol Italia Holding Endemol España Endemol Argentina B.V. e Servizi S.r.l. Holding S.L. S.A. Netherlands 100% Italy 100% Spain 100% Argentina 65%

Endemol Italia Holding Gestmusic Endemol Endemol Portugal Lda. 625 TV Produkties B.V. S.p.a. S.A.U. Portugal** 100% Netherlands 100% Italy 100% Spain 100%

Stokvis & Niehe Endemol Italia S.p.a. Zeppelin Televisión Endemol Southern Star Producties B.V. Italy 100% S.A.U. Pty. Ltd. Netherlands 85% Spain 100% Australia 51%

Mediavivere S.r.l. Endemol USA Holding, Endemol Mexico S.A. Italy 50% Inc. de C.V. USA 100% Mexico 50%

Endemol Deutschland Endemol USA, Inc. Endemol België N.V. GmbH USA 100% Belgium* 100% Germany 100%

Meta Produktions True Entertainment, Endemol Globo S.A. GmbH LLC. Brasil 50% Germany 65% USA 67%

Endemol UK Holding Endemol Russia Endemol Chile Ltd. Holding B.V. Holding Lda. United Kingdom 100% Netherlands 80% Chile 100%

OOO Endemol Moscow Endemol Chile S.A. Russia 100% Chile 65% Endemol UK Plc *** United Kingdom 100% Palomar S.p.a. Italy 68.5%

Brighter Pictures Ltd. Endemol South Africa United Kingdom 100% Holding (Pty) Ltd. South Africa 66.6%

Victoria Real Ltd. Endemol South Africa United Kingdom (Pty) Ltd. 98.45% South Africa 100%

Zeppotron Ltd. B&B Endemol A.G. United Kingdom 100% Switzerland 50%

Showrunner Ltd. Endemol Neovision Sp. United Kingdom 75% Z.o.o. Poland 50%

*** 1% of the shares are owned by Endemol International B.V. *** 0.5% of the shares are owned by Endemol International B.V. *** 1 share is owned by Endemol International B.V.

118 INDEX TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

PRO FORMA CONSOLIDATED FINANCIAL INFORMATION FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2004, 2003 AND 2002 ON THE BASIS OF DUTCH GAAP ...... F-3

PRO FORMA CONSOLIDATED FINANCIAL INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2004 ON THE BASIS OF IFRS...... F-33

PRO FORMA CONSOLIDATED INTERIM FINANCIAL INFORMATION FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2005 (WITH COMPARISON FIGURES FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2004) ON THE BASIS OF IFRS ...... F-103

F-1 This page has been intentionally left blank ENDEMOL N.V.

PRO FORMA CONSOLIDATED FINANCIAL INFORMATION 2004, 2003 AND 2002

ON THE BASIS OF DUTCH GAAP

10 NOVEMBER 2005 CONTENTS

PRO FORMA CONSOLIDATED BALANCE SHEET AS OF 31 DECEMBER 2004, 2003 AND 2002 ...... F-5

PRO FORMA CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2004, 2003 AND 2002 ...... F-6

PRO FORMA CONSOLIDATED CASH FLOW STATEMENT FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2004 AND 2003 ...... F-7

NOTES TO THE PRO FORMA CONSOLIDATED FINANCIAL INFORMATION FOR THE YEARS ENDED 31 DECEMBER 2004, 2003 AND 2002 ...... F-8 GENERAL PRINCIPLES FOR THE PREPARATION OF THE PRO FORMA FINANCIAL INFORMATION...... F-8 ACCOUNTING PRINCIPLES ...... F-13 NOTES TO THE PRO FORMA CONSOLIDATED BALANCE SHEET ...... F-17 NOTES TO THE PRO FORMA CONSOLIDATED PROFIT AND LOSS ACCOUNT . . . . . F-28

OTHER INFORMATION – AUDITORS’ ASSURANCE REPORT ON THE PRO FORMA CONSOLIDATED FINANCIAL INFORMATION OF ENDEMOL N.V. FOR THE YEARS 2004, 2003 AND 2002 ON THE BASIS OF DUTCH GAAP ...... F-31

F-4 PRO FORMA CONSOLIDATED BALANCE SHEET AS OF 31 DECEMBER 2004, 2003 AND 2002 (Before appropriation of net profit)

EUR 1,000 31 December 2004 31 December 2003 31 December 2002 ––––––––––––––––––––––– ––––––––––––––––––––––– ––––––––––––––––––––––– Fixed assets Intangible fixed assets ...... 142,715 145,340 133,058 Tangible fixed assets...... 41,426 44,616 45,715 Financial fixed assets ...... 111,342 46,422 35,436 Total fixed assets ...... 295,483 236,378 214,209

Current assets Stocks ...... 19,924 18,847 25,233 Receivables...... 261,876 266,043 300,503 Cash ...... 6,077 19,959 34,183 Total current assets...... 287,877 304,849 359,919 –––––––––– –––––––––– –––––––––– Total assets ...... 583,360 541,227 574,128 –––––––––– –––––––––– ––––––––––

Shareholders’ equity ...... 209,249 149,360 87,901

Minority interests ...... 5,008 5,291 1,390

Long-term liabilities...... 42,953 47,772 35,939

Current liabilities ...... 326,150 338,804 448,898 –––––––––– –––––––––– –––––––––– Total equity and liabilities ...... 583,360 541,227 574,128 –––––––––– –––––––––– ––––––––––

F-5 PRO FORMA CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2004, 2003 AND 2002

EUR 1,000 2004 2003 2002 ––––––––––––––––––––––– ––––––––––––––––––––––– –––––––––––––––––––––––

Net turnover ...... 850,943 739,698 708,393

Costs of outsourced work and other external costs ...... (505,962) (413,294) (408,055) Personnel costs ...... (129,693) (140,773) (131,677) Depreciation ...... (13,881) (12,180) (13,373) Amortisation of goodwill ...... (8,274) (7,079) (5,202) Impairment of goodwill ...... (495) (225) (3,400) Other operating expense...... (76,179) (58,477) (78,987)

Operating expense ...... (734,484) (632,028) (640,694)

Operating result ...... 116,459 107,670 67,699

Financial income ...... 8,062 5,799 8,201 Financial expenses ...... (13,774) (10,681) (11,396) Result from participating interests ...... 1,739 1,529 (217)

(3,973) (3,353) (3,412)

Result from ordinary operations before taxation ...... 112,486 104,317 64,287

Taxation on result from ordinary operations (45,097) (39,812) (24,504)

Result from ordinary operations after taxation...... 67,389 64,505 39,783

Minority interests ...... (5,459) (1,428) (3,789) –––––––––– –––––––––– –––––––––– Net profit ...... 61,930 63,077 35,994 –––––––––– –––––––––– ––––––––––

F-6 PRO FORMA CONSOLIDATED CASH FLOW STATEMENT FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2004 AND 2003 (Composed using the indirect method)

EUR 1,000 2004 2003 ––––––––––––––––––––––– ––––––––––––––––––––––– Operating result ...... 116,459 107,670

Depreciation and amortisation ...... 22,650 19,483

Changes in working capital Movement in receivables ...... 4,167 34,460 Movement in stocks ...... (1,077) 6,386 Movement current liabilities...... 60,757 (28,803) Other movements ...... (62,917) 1,826 –––––––––– –––––––––– 930 13,869 –––––––––– –––––––––– Cash Flow from Business Activities ...... 140,039 141,022

Financial expenses ...... (5,712) (4,882) Dividend received ...... 601 606 Tax ...... (45,097) (39,812) –––––––––– –––––––––– (50,208) (44,088) –––––––––– ––––––––––

Cash Flow from Operating Activities ...... 89,831 96,934

Acquisitions ...... (21,582) (19,150) Investment in tangibles ...... (10,692) (11,081) Investment in intangibles ...... (2,339) (1,612) –––––––––– –––––––––– Cash Flow from Investing Activities ...... (34,613) (31,843) –––––––––– –––––––––– Net Cash Flow (before Financing Activities) ...... 55,218 65,091

Movement in short-term bank loans ...... (68,610) (76,702) Movement in long-term bank loans ...... (490) (2,615) –––––––––– –––––––––– Cash Flow from Financing Activities ...... (69,100) (79,317) –––––––––– –––––––––– Net Cash Flow (after Financing Activities) ...... (13,882) (14,224)

Cash at the beginning of the financial year ...... 19,959 34,183 –––––––––– –––––––––– Cash at the end of the financial year...... 6,077 19,959

Differences between changes of balance sheet items included in the cash flow statement and these items included in the pro forma consolidated balance sheet are caused by reclassifications of current assets and liabilities to a long-term character, acquisitions, currency differences and divestments.

As 31 December 2001 pro forma consolidated financial information has not been prepared, the cash flow information for the year 2002 is not included in this pro forma consolidated financial information as the details are not available to make a separation of the working capital and other movements.

F-7 NOTES TO THE PRO FORMA CONSOLIDATED FINANCIAL INFORMATION FOR THE YEARS ENDED 31 DECEMBER 2004, 2003 AND 2002 General Principles for the Preparation of the Pro Forma Financial Information

General

Endemol Holding N.V. was established in 1994 as the result of a merger between two major television producers in the Netherlands: Joop van den Ende Productions and John de Mol Produkties. Since then, the company has had an aggressive international expansion through acquisitions of and by starting television production companies outside the Netherlands. The company, with its head office in the Netherlands, currently has subsidiaries and joint ventures in 22 countries, including the major European markets, the United States, Latin America, South Africa and Australia.

Since the summer of 2000, Endemol Holding N.V. is an almost wholly owned indirect subsidiary of Telefónica S.A. (“Telefónica”). Telefónica is the leading provider of telecommunication services in the Spanish- and Portuguese-speaking world.

The 2004, 2003 and 2002 pro forma consolidated financial information of Endemol N.V. represents the 2004, 2003 and 2002 pro forma consolidated financial information of the Endemol group, prepared on a Dutch GAAP basis, excluding the (deconsolidated) results of Endemol Holding N.V., Endemol Investment B.V. (previously named Endemol B.V.) and Endemol France Holding S.A.S. and its subsidiaries (consolidated) and including a number of adjustments for holding cost allocation. Endemol N.V. is fully owned by Endemol Holding N.V. through Endemol Investment B.V. (previously named Endemol B.V.). Endemol N.V. is hereafter referred to as “Endemol” or the “Company”.

This pro forma consolidated financial information has been prepared as part of the prospectus relating to the initial offering of ordinary shares of Endemol.

In respect of the Reorganisation (as defined below), reference is made to the next section.

Reorganisation

Reasons for the Reorganisation

In preparation for the initial offering and for various other corporate purposes, we have completed the reorganisation to restructure our corporate structure (the “Reorganisation”) as follows.

Pursuant to the share purchase agreement dated 21 December 2000, Endemol France Holding S.A.S., a subsidiary of our parent company, acquired the 50% of the French Endemol business, which it did not already own. Endemol Investment B.V. (previously named Endemol B.V.) acquired the first 50% in July 1998. The sellers of the shares acquired pursuant to the share purchase agreement of December 2000 were two individuals who currently manage the French Endemol business. Under the share purchase agreement, Endemol France Holding S.A.S. agreed to make additional payments in respect of the purchase price in the future on a contingent basis, depending on the profitability of the purchased French operations between 1 September 1999 and 31 December 2005. As a result, the amounts due under these earn-out arrangements are still subject to calculation following the end of the relevant period and the basis over which such amounts shall be calculated has not yet been agreed. We do not expect that this situation will be resolved in the short-term.

Our reason for isolating the French Endemol business from the rest of the Endemol group was to eliminate an element of uncertainty in the valuation of our business.

F-8 The graphs below set forth the main companies of the pre-Reorganisation Endemol group and the post- Reorganisation Endemol group:

Pre- Reorganisation Post-Reorganisation

Endemol Holding NV

Endemol Investment Endemol Endemol BV(1) Holding NV International BV Issuer Group Endemol France Holding SAS Endemol BV Endemol NV

Endemol France

Endemol Endemol Endemol Endemol Endemol Holding BV France Netherlands Italy Finance BV

Other Operating Endemol Endemol Endemol Companies Netherlands Finance BV International BV

Other Operating Companies (including Endemol Italy)

(1) Prior to the consummation of the Offering, Endemol B.V. was renamed Endemol Investment B.V.

In addition to the steps discussed above, we have taken the following actions in order to complete the Reorganisation as of 14 September 2005:

• Endemol International B.V. sold all its shares in Big Brother Selections and Participations B.V. to Endemol B.V. at a nominal value of EUR 20,000.

• Endemol B.V. contributed the shares in Endemol Nederland Holding B.V. by way of share premium to Big Brother Selections and Participations B.V.

• Endemol Holding N.V. contributed the shares in Endemol International B.V. as share premium to Endemol B.V.

• Endemol B.V. contributed the shares in Endemol International B.V. as share premium to Big Brother Selections and Participations B.V.

• Endemol B.V. contributed the shares in Endemol Finance B.V. as share premium to Big Brother Selections and Participations B.V.

• Big Brother Selections and Participations B.V. was renamed Endemol Holding B.V.

On 28 October 2005, Endemol B.V. incorporated us (Endemol N.V.), a naamloze vennootschap organised under the law of the Netherlands, whose corporate seat will be at Hilversum (address: 1217 SC Hilversum, Bergweg 70) and contributed the shares in Endemol Holding B.V. as share capital and share premium to us.

Prior to the consummation of the Offering the name of Endemol B.V. was changed to Endemol Investment B.V.

F-9 On 30 September 2005, as part of the Reorganisation, Endemol Holding B.V. entered into a business purchase agreement with Endemol Investment B.V. (previously named Endemol B.V.) and Endemol Holding N.V. Under this agreement, the following has been transferred to Endemol Holding B.V.: the employees, assets, certain liabilities and contracts (including secondment agreements between Endemol UK Plc, Endemol Investment B.V. (previously named Endemol B.V.) and Endemol Holding N.V. for the secondment of Mr Bazalgette and Mr Barnicoat).

The transfers discussed above excluded the French Endemol business in its entirety, which is discussed in greater detail below. The price paid for the assets and liabilities transferred amounts to EUR 9.0 million, which price has been mainly calculated on the basis of book value. The price of the tangible assets equals the valuation made by an independent valuer and has resulted in an income relative to the book value of EUR 0.5 million. All receivables and liabilities have been valued at their nominal value. The contracts for the supply of goods and services have been valued at zero. In addition, Endemol will acquire from Endemol Investment B.V. for no consideration an exclusive license to use the tradename and trademark ‘‘Endemol’’ in all countries in the world, except France and certain French overseas territories for a period of five years with an option for extension for another five years.

On 15 June 2005, via two transactions, we moved the entire share capital of our Italian operations to Endemol Italia Holding e Servizi S.p.A., a wholly-owned subsidiary of Endemol Finance B.V. Firstly, Endemol Investment B.V. (previously named Endemol B.V.) transferred all of its shares in Endemol Italia Holding S.p.A. (representing 42.22% of the company’s issued share capital) to Endemol Italia Holding e Servizi S.p.A., a company wholly owned by Endemol Finance B.V. Secondly, Endemol Finance B.V. transferred all of its shares in Endemol Italia Holding S.p.A. (representing 57.78% of the company’s issued share capital) to Endemol Italia Holding e Servizi S.p.A.

On 16 September 2005, Endemol Investment B.V. (previously named Endemol B.V.) sold and transferred 0.5% of the shares in the issued share capital of Endemol Portugal L.d.a to Endemol International B.V. in order to bring the entire share capital of Endemol Portugal L.d.a. into the Endemol group.

On 8 December 2003, Endemol Finance B.V. acquired 42,022 shares in the capital of Endemol España Holding S.L. by way of a capital contribution in kind by its then-shareholder, Endemol Investment B.V. (previously named Endemol B.V.). As a result, Endemol Finance B.V. hold all shares in the capital of Endemol España Holding S.L.

The French Endemol Business

Despite the Reorganisation, the French Endemol business remains operationally and creatively closely connected to us, both directly and through Endemol Investment B.V. (previously named Endemol B.V.).

We have agreed with Endemol Investment B.V. (previously named Endemol B.V.) to provide the French Endemol business, for and on behalf of Endemol Investment B.V., with certain consultancy services regarding, among other things, legal, tax, mergers and acquisitions, controlling and administrative support at actual cost, as long as the companies belonging to the French Endemol business are subsidiaries of Endemol Investment B.V. (previously named Endemol B.V.). In addition, Endemol Finance B.V. will for an as-yet undetermined period of time render certain treasury and financing services, including the granting of loans, to the French Endemol business, such as accepting deposits of excess cash at an interest rate equal to the interest rate paid to our group companies for similar deposits. In line with this, Endemol Finance B.V. has assigned a receivable of EUR 83.9 million owed by Endemol France Holding S.A.S. to Endemol Investment B.V. (previously named Endemol B.V.), by way of a distribution from the freely distributable reserves.

F-10 The terms of these distribution, license and compensation arrangements are generally equivalent to the terms that apply to similar agreements between Endemol International B.V. and other Endemol group companies. Under the existing distribution and license arrangements with the French Endemol business, Endemol International B.V. claims as per 30 September 2005 an amount of approximately EUR 5.0 million, which claim is disputed by the French Endemol business.

Furthermore, representatives of the French Endemol business are allowed to participate in intra-group creative and other initiatives, from which both the French Endemol business and we can benefit.

Preparation of Pro Forma Financial Information

The starting point for the preparation of the pro forma 2002, 2003 and 2004 consolidated information for the Company are the 2002, 2003 and 2004 Dutch GAAP consolidated financial statements of Endemol Holding N.V.

The consolidated 2002, 2003 and 2004 Dutch GAAP financial figures of the following companies have been adjusted to reflect the historical financial information of the Company (deconsolidated):

1. Endemol Holding N.V. 2. Endemol Investment B.V. (previously named Endemol B.V.) 3. Endemol France Holding S.A.S. (Consolidated)

In addition, a number of adjustments have been made to adequately reflect the financial impact of the Company’s activities. These adjustments relate mainly to cost allocation, whereby costs incurred by Endemol Investment B.V. (previously named Endemol B.V.) and Endemol Holding N.V. are allocated to the Company. This allocation takes place based on the fact that a portion of the activities and the related assets and liabilities of Endemol Investment B.V. (previously named Endemol B.V.) are for the benefit of the operation of the Company. Costs incurred relating to Endemol France Holding S.A.S. and its subsidiaries are not included in the results of the Company.

All shares of Endemol France Holding S.A.S. and its subsidiaries (“Endemol France”) are held by Endemol Investment B.V. (previously named Endemol B.V.). Endemol France is not included in the pro forma consolidated financial information of the Company. All outstanding receivable and payable amounts between the Company and Endemol France at balance sheet date are presented as amounts receivable from/payable to related companies. The results from transactions between the Company and Endemol France have been included in the pro forma income statement as had they been made with third parties.

Financing

On 29 September 2005 Endemol entered into a term sheet in respect of a EUR 250.0 million multicurrency revolving credit facility, which Endemol intends to enter into before the consummation of the Offering. This facility is to replace a previous facility that expired in September 2005. Currently we have been granted a temporary overdraft facility in an amount of EUR 150.0 million, which will be repaid once the new multicurrency revolving credit facility is in place. The new EUR 250.0 million facility will have a three-year term (with an option to extend to a maximum of 5 years) and will be a multicurrency revolving credit facility with a number of banks, which will be available to fund our working capital, acquisition and other cash needs. Loans under the facility will be guaranteed by several of our operating subsidiaries.

Divestments

In June 2002, Endemol sold its 50% share in Hurricane to the other shareholder Digame, both paying 50% of the settlement costs to dissolve the company. The settlement costs of EUR 1.2 million (Endemol share of this amount was 50%) are included in the other operating expense.

F-11 No material divestments were recorded in 2003.

In October 2003, Endemol Portugal found a buyer for the company Fuchsia S.A. including the land and buildings used for the productions of Blind Faith. Final closure of this sale has been effected and accounted for in March of 2004.

In May 2004, Endemol Southern Star Pty. Ltd. discontinued its New Zealand operations due to a lack of local activities and the opportunity for more effective central coordination through its Australian offices.

Acquisitions

In February 2002, Endemol UK increased its stake in the comedy production company Zeppotron from 25% to 100% and we have fully consolidated the results of Zeppotron since that time.

The Endemol stake in the Spanish production company Gestmusic Endemol, located in Barcelona, was increased during the course of 2002 from 60% to 100% (Gestmusic Endemol was already fully consolidated with a minority interest).

In August 2002, the merger was completed between the two famous Dutch television production companies René Stokvis Producties and Ivo Niehe Producties. Endemol already had a stake in the two companies and is now a majority shareholder in Stokvis & Niehe Producties (80%). The results have been fully consolidated with a minority interest since that time.

In September 2002, Endemol acquired a minority share of 40% in NL TV, an Amsterdam based company active in scripted productions. The results are included as results from participating interests.

At the end of 2002, Endemol acquired a controlling interest in the Amsterdam based company Overloaded Pocket Media, which is involved in the design and production of information and entertainment for mobile platforms. We have fully consolidated the results of Overloaded since that time with a minority interest.

In October 2003 Endemol USA acquired a 51% stake in True Entertainment, a company based in New York active in the production of factual television entertainment. The results of True Entertainment have been fully consolidated with a minority interest since that time.

Furthermore, also in October 2003, Endemol increased its interest from 50% to a controlling stake of 51% in Endemol Southern Star, Australia and since that time its results have been fully consolidated with a minority interest.

In the last quarter of 2003, Endemol incorporated a 80% owned subsidiary in Russia (Endemol Moscow). The results of Endemol Moscow have been fully consolidated with a minority interest.

In September 2004, Endemol incorporated its fourth subsidiary in the Latin American market, Endemol Chile, which is 65% owned by and fully consolidated with a minority interest with Endemol.

In November 2004, Endemol increased its interest in 625 TV Produkties by 10% to 100%. The results of 625 TV Produkties were already fully consolidated with a minority interest.

In 2004, Endemol paid a total amount of EUR 18.5 million for earn-out arrangements with respect to prior year acquisitions in the United Kingdom.

The acquisition of an additional 25% of the shares in Meta Entertainment increased our stake to 65% in January 2005, and as from 1 January 2005, its results have been fully consolidated with a minority interest.

F-12 Accounting Principles

Consolidation

The pro forma consolidated financial information shows the assets and liabilities and the results of Endemol and its group companies (hereinafter Endemol). Group companies are participating interests in which Endemol holds a majority interest or otherwise exercises a controlling influence over business and financial policy. All intra-Group accounts and transactions are eliminated in consolidation. The financial data of these companies are fully consolidated and the minority interests are disclosed separately in the consolidated profit and loss account and in the consolidated balance sheet.

Participating interests in which Endemol has a 50% interest or agreement where Endemol co-operates with other shareholders are proportionally consolidated. The accounting principles underlying the determination of the net assets and result are the same for all group companies. A full list of companies in which Endemol has a capital interest, within the meaning of Articles 379 and 414, Part 9, Book 2 of the Netherlands Civil Code, has been filed with the Trade Register of the Chamber of Commerce.

Participating interests where Endemol owns less then 50% of the shares and has significant influence, but not control, over the financial and operating policies, are included in the pro forma consolidated financial information at the Company’s share in the net result (result participating interest) and on an equity accounted basis.

Acquisitions

When a company is acquired or disposed of by Endemol, its results are brought into the consolidation for the period during which it was under the ultimate control of Endemol. Earnings of a company made prior to acquisition by Endemol are therefore not included in the consolidated profit and loss account, except to the extent that the company before acquisition was an associated company or had other wise controlling influence.

The net assets of an acquired company are valued at net equity value, at the date of acquisition. The remainder of the purchase price is considered to be goodwill. In case of an increase in Group ownership of an existing investment, the additional Endemol investment is valued at the net equity value acquired. However, the former Endemol interests in the same net assets are not revalued.

Foreign Currencies

The assets and liabilities of foreign participating interests are included in the pro forma consolidated financial information at the applicable exchange rates at the balance sheet date. Turnover, costs and results of foreign participating interests in the profit and loss account are converted into Euros at the applicable average monthly exchange rate. Exchange rate gains and losses on foreign participating interests, and related permanent financing, are reflected in the shareholders’ equity.

Other assets and liabilities denominated in foreign currencies are converted at the applicable exchange rates as of the balance sheet date, except where specific forward contracts have been concluded, in which case the rate at inception is used.

Transactions in foreign currencies are converted at the applicable exchange rate at the time of the transaction. The resulting foreign exchange differences are included in the profit and loss account.

Financial Instruments

Derivatives

The Company uses derivative financial instruments principally in the management of foreign currency risks and to a more limited extent to hedge interest rate risks. Endemol applies hedge accounting for the treatment of derivatives in the financial reporting. Therefore, Endemol reviews on an ongoing basis whether derivatives that are used are effective as a hedge. When a hedge is discontinued, Endemol records the fair value on its balance sheet and changes in the fair value are recognised in the profit and loss account.

F-13 Swaps and Forward Rate Agreements

The net interest to be paid or received under interest rate swaps and forward rate agreements (FRAs) is recorded on an accrual basis and included within net interest in the profit and loss account. The notional amounts of interest rate swaps and FRAs are recorded as off balance sheet items. Interest rate swaps are used to hedge the initial draw down and final repayment of interest bearing debt, as well as to hedge the risks of adverse interest rate movements.

Forward Exchange Contracts

Forward exchange contracts are recorded on the balance sheet at an amount equal to the difference between the amount payable and the amount receivable per currency, revalued at the closing exchange rate. The interest differential, being the difference between the contract rate and the spot rate on the date of entering into the forward exchange contract, is charged to the profit and loss account as interest over the life of the contract.

Principles of Valuation of Assets and Liabilities

General

Unless stated otherwise, assets are shown at historic cost less any necessary provision and liabilities are shown at their face value.

The preparation of the pro forma consolidated financial information requires management to make estimates and assumptions that affect amounts reported in the financial statements in order to conform to the generally accepted accounting principles of the Netherlands, some of which may not conform to generally accepted accounting principles in other countries. Actual results could differ from those estimates.

Intangible Fixed Assets

The intangible fixed assets primarily relate to goodwill, format rights and television movie rights.

Goodwill attributable to an acquisition represents the excess of the cost of the acquisition over the net equity value of the net identifiable assets acquired. Goodwill will be amortized on a straight-line basis over its estimated useful life with a maximum of 20 years. Goodwill will be tested for impairment on an annual basis and whenever indicators of impairment arise. For interactive media companies, an amortisation period up to a maximum of 5 years is adopted, based on its expected economic life.

The book value is reassessed periodically on the basis of actual income and expectations of future income. If and to the extent that a permanent impairment in value occurs, it is charged to the profit and loss account. Impairment loss is reported separately from the amortisation of goodwill.

Endemol typically acquires its subsidiaries at a purchase price that consists of (an) initial cash payment(s) and estimated future earn-out obligations, based primarily on estimates of future results. Earn-out obligations are recalculated at least annually on the basis of the expected future results of a company after the business plan cycle or earlier when updated forecasts warrant a recalculation. An adjustment in the earn-out obligation has a corresponding effect on the goodwill.

Acquired production rights and similar rights are stated at historic cost, which is the purchase cost plus all normal incidental costs. The rights acquired from third parties are written off from the time where the program format is taken into production and in proportion to the number of episodes.

(TV) movie rights acquired from third parties are written off to the extent to which the revenue generated in the period under review contributes to the expected total revenue, calculated over a maximum 10-year period. Permanent decreases in value are written off as soon as they occur.

Depending on the specific nature of an acquisition, a value may be assigned to the program formats and game concepts included in the acquisition. This value is related to the profitability of the rights and the minimum return on investment projects as required by the company, but may not exceed the acquisition price.

F-14 Tangible Fixed Assets

Tangible fixed assets are stated at historic cost, less straight-line depreciation, based on the estimated economic useful life of the asset. Land is not depreciated. The following depreciation rates apply:

• Buildings: 3% - 7.5% • Plant and machinery: 7.5% - 12.5% • Other fixed assets: 20% - 33%

Permanent decreases in value are charged to the result as soon as these occur.

Financial Fixed Assets

The non-consolidated participating interests in which Endemol exerts a significant influence over business and financial policy, but does not control, are valued at net asset value, determined in accordance with the accounting principles of Endemol. Participating interests in which this influence is not exerted are stated at acquisition cost or are written down to their estimated fair value if an other-than-temporary decline in value exists.

Long-term receivables are carried at face value less, if applicable, provisions for bad debts. Deferred tax assets are valued against the (future) tax rates applicable under the respective tax jurisdictions and are expected to be recoupable within a period of 5 years.

Stocks

All expenditure for unfinished productions is capitalised as productions in progress. These television productions in progress are stated at the direct production costs less provisions for expected lower realisable value.

Debt and Other Liabilities

Debt and other liabilities other than provisions are stated at face value.

Principles for Determination of the Result

General

The results are determined according to a system based on historic cost.

Net Turnover/Cost of Outsourced Work and Other External Costs

Turnover from non-scripted television productions (entertainment and infotainment) is recognised in the profit and loss account in proportion to the stage of completion of the production at the balance sheet date. The stage of completion is assessed by reference to surveys of work performed.

Income recognition of scripted television productions (drama productions or soaps) is based on the deliverables in the production, for example partial completion of the production. The remaining part of the costs and possible advance receipts will be capitalized as work-in-progress and current liabilities respectively. Income recognition of other television productions is based on the income and production costs of the completed episodes. Income from merchandising, music and other sources is recognised at the time of delivery. Revenue from the sale of licensing rights on intellectual property formats is recognised in the profit and loss account when the significant risks and rewards of ownership have been transferred to the buyer and the turnover can be reliably estimated.

Turnover of interactive business is recognised on the basis of the number of calls (or minutes), the number of sms messages received or the number of internet hits made. In addition, turnover is recognised for interactive stand alone business, based on the number of games sold and / or subscriptions sold in relation to the platforms provided.

F-15 Financial Income and Expenses

Interest income, interest expenses and foreign exchange results are recognised on an accrual basis, unless they relate to non-hedged positions, in which case the results are recorded at fair value.

Result From Participating Interests

For those participating interests over which significant influence is exercised, the share in the net profit is included. In the case of the remaining participating interests, the dividend is recognised.

Taxation

Tax on profit is determined on the basis of the results of operations taking into account exempted profit constituents. Tax on our results is calculated according to the tax system of the corresponding country. Deferred tax assets and liabilities are recognised for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Deferred tax assets arising from loss carry forwards, are recognised if it is more likely than not that the asset will be realised within the foreseeable future.

Compilation of Cash Flow Statement

The cash flow statement has been prepared on the basis of the indirect method. Cash and cash equivalents include cash at the bank.

F-16 Notes to the Pro Forma Consolidated Balance Sheet

Fixed Assets

Intangible Fixed Assets

EUR 1,000 Rights on (TV) movies, Format series and Goodwill rights other Total –––––––––– –––––––––– –––––––––– –––––––––– As of 31 December 2002 ...... 130,716 40 2,302 133,058 –––––––––– –––––––––– –––––––––– ––––––––––

Acquisitions/ investments...... 4,415 591 1,465 6,471 Divestments ...... - - (444) (444) Earn-out adjustments ...... 18,535 - - 18,535 Amortisation/ depreciation ...... (7,079) - (209) (7,288) Impairment ...... (225) - - (225) Exchange differences ...... (4,767) - - (4,767)

–––––––––– –––––––––– –––––––––– –––––––––– As of 31 December 2003 ...... 141,595 631 3,114 145,340 –––––––––– –––––––––– –––––––––– ––––––––––

Acquisition price...... 161,884 3,807 11,900 177,591 Cumulative amortisation...... (20,289) (3,176) (8,786) (32,251)

–––––––––– –––––––––– –––––––––– –––––––––– As of 31 December 2003 ...... 141,595 631 3,114 145,340 –––––––––– –––––––––– –––––––––– –––––––––– EUR 1,000 Rights on (TV) movies, Format series and Goodwill rights other Total –––––––––– –––––––––– –––––––––– –––––––––– As of 31 December 2003 ...... 141,595 631 3,114 145,340 –––––––––– –––––––––– –––––––––– –––––––––– Acquisitions/ investments...... 4,248 - 243 4,491 Inclusion of companies...... - - 1,545 1,545 Earn-out adjustments ...... 2,701 - - 2,701 Amortisation/ depreciation ...... (8,274) (235) (318) (8,827) Reclassifications and other movements ...... - (162) (2,398) (2,560) Impairment ...... (495) - - (495) Exchange differences ...... 522 - (2) 520 –––––––––– –––––––––– –––––––––– –––––––––– As of 31 December 2004 ...... 140,297 234 2,184 142,715 –––––––––– –––––––––– –––––––––– –––––––––– Acquisition price...... 168,742 1,713 12,284 182,739 Cumulative amortisation...... (28,445) (1,479) (10,100) (40,024) –––––––––– –––––––––– –––––––––– –––––––––– As of 31 December 2004 ...... 140,297 234 2,184 142,715 –––––––––– –––––––––– –––––––––– ––––––––––

As a result of the recalculation of the earn-out obligations, the goodwill was adjusted accordingly. These amounts are presented as earn-out adjustments.

F-17 2003

Of the total intangible fixed assets of EUR 145.3 million as of 31 December 2003, an amount of EUR 141.6 million relates to capitalized goodwill. The increase in goodwill (EUR 10.9 million) compared to 31 December 2002 (EUR 130.7 million) mainly relates to the increase of the earn-out obligations for the companies in the United Kingdom, partially offset by the amortisation in 2003. Acquired goodwill mainly relates to the acquisition of True Entertainment.

2004

Of the total intangible fixed assets of EUR 142.7 million as of 31 December 2004, an amount of EUR 140.3 million relates to capitalized goodwill. The decrease in goodwill (EUR 1.3 million) compared to 31 December 2003 (EUR 141.6 million) mainly relates to the amortisation in 2004, partially offset by an increase of goodwill as a result of higher earn out obligations for Endemol UK. Acquired goodwill relates to the acquisitions of Palomar and 625 TV Produkties.

The goodwill positions have undergone an impairment test at both year-end 2003 and 2004, which has not led to any impairment costs except for some minimal write-offs. In the instance that the earn-out obligation increases, this may lead to an impairment loss in the coming years.

F-18 Tangible Fixed Assets

EUR 1,000 Land and Plant and Other fixed buildings machinery assets Total –––––––––– –––––––––– –––––––––– –––––––––– As of 31 December 2002 ...... 21,682 9,706 14,327 45,715 –––––––––– –––––––––– –––––––––– –––––––––– Acquisitions ...... 446 60 762 1,268 Investments ...... 2,729 1,633 7,656 12,018 Disposals...... (173) (24) (1,892) (2,089) Reclassification...... (1,554) (54) 1,608 - Depreciation ...... (2,606) (2,011) (7,354) (11,971) Exchange differences ...... (151) (4) (170) (325) –––––––––– –––––––––– –––––––––– –––––––––– As of 31 December 2003 ...... 20,373 9,306 14,937 44,616 –––––––––– –––––––––– –––––––––– ––––––––––

Acquisition price...... 34,738 20,091 56,413 111,242 Cumulative depreciation...... (14,365) (10,785) (41,476) (66,626) –––––––––– –––––––––– –––––––––– –––––––––– As of 31 December 2003 ...... 20,373 9,306 14,937 44,616 –––––––––– –––––––––– –––––––––– ––––––––––

EUR 1,000 Land and Plant and Other fixed buildings machinery assets Total –––––––––– –––––––––– –––––––––– –––––––––– As of 31 December 2003 ...... 20,373 9,306 14,937 44,616 –––––––––– –––––––––– –––––––––– –––––––––– Acquisitions ...... - 27 15 42 Investments ...... 3,967 4,133 7,095 15,195 Disposals...... (158) (2,433) (1,206) (3,797) Exclusion of companies ...... (1,241) - (47) (1,288) Reclassification...... (859) 780 79 - Depreciation ...... (4,423) (2,015) (6,890) (13,328) Exchange differences ...... 36 (1) (49) (14) –––––––––– –––––––––– –––––––––– –––––––––– As of 31 December 2004 ...... 17,695 9,797 13,934 41,426 –––––––––– –––––––––– –––––––––– ––––––––––

Acquisition price...... 32,375 25,988 51,379 109,742 Cumulative depreciation...... (14,680) (16,191) (37,445) (68,316) –––––––––– –––––––––– –––––––––– –––––––––– As of 31 December 2004 ...... 17,695 9,797 13,934 41,426 –––––––––– –––––––––– –––––––––– ––––––––––

F-19 Financial Fixed Assets

EUR 1,000 Participating Deferred interests Tax Asset Loans Total –––––––––– –––––––––– –––––––––– –––––––––– As of 31 December 2002 ...... 4,900 - 30,536 35,436 –––––––––– –––––––––– –––––––––– –––––––––– Addition ...... - - 9,605 9,605 Redemption...... - - (683) (683) Sale ...... 1,143 - - 1,143 Share in the result ...... 1,529 - - 1,529 Dividend received ...... (606) - - (606) Exchange differences ...... (2) - - (2) –––––––––– –––––––––– –––––––––– –––––––––– As of 31 December 2003 ...... 6,964 - 39,458 46,422 –––––––––– –––––––––– –––––––––– ––––––––––

EUR 1,000 Participating Deferred interests Tax Asset Loans Total –––––––––– –––––––––– –––––––––– –––––––––– As of 31 December 2003 ...... 6,964 - 39,458 46,422 –––––––––– –––––––––– –––––––––– ––––––––––

Reclassification deferred tax asset ...... - 15,632 - 15,632 –––––––––– –––––––––– –––––––––– –––––––––– As of 31 December 2003 after reclassification ...... 6,964 15,632 39,458 62,054 –––––––––– –––––––––– –––––––––– –––––––––– Addition deferred tax asset - 6,851 - 6,851 Addition ...... - - 41,600 41,600 Redemption...... - - (164) (164) Sale/redemption ...... (131) - - (131) Share in the result ...... 1,739 - - 1,739 Dividend received ...... (601) - - (601) Exchange differences ...... (6) - - (6) –––––––––– –––––––––– –––––––––– –––––––––– As of 31 December 2004 ...... 7,965 22,483 80,894 111,342 –––––––––– –––––––––– –––––––––– ––––––––––

The deferred tax asset as of 31 December 2004 was classified as long-term. As of 31 December 2003, the deferred tax asset of EUR 15.6 million was reported under the current assets. It is estimated that the deferred tax asset of EUR 22.5 million, mainly within the Dutch fiscal entity, will be recoverable within the coming five years.

As of 31 December 2004 the loans receivable amount to EUR 80.9 million (2003: EUR 39.5 million). Of this amount, EUR 80.0 million relates to the loan receivable on Endemol France Holding S.A.S. (2003: EUR 38.5 million, 2002: EUR 30.0 million). In September 2005 Endemol Finance B.V. assigned to Endemol Investment B.V. (previously named Endemol B.V.), by way of a distribution in kind from the share premium reserve, the loan receivable on Endemol France Holding S.A.S., which amounted to EUR 83.9 million, including the accrued interest.

F-20 Current Assets

Stocks

EUR 1,000 As of 31 December –––––––––––––––––––––––––––––––––––– 2004 2003 2002 –––––––––– –––––––––– ––––––––––

Productions in progress ...... 19,765 18,395 25,016 Other stocks ...... 159 452 217 –––––––––– –––––––––– –––––––––– Total stocks ...... 19,924 18,847 25,233 –––––––––– –––––––––– ––––––––––

Receivables

Trade debtors ...... 109,800 125,706 140,540 Taxation and social security charges ...... 20,002 47,643 47,817 Receivable on participating interests ...... 269 279 231 Receivable on related companies ...... 6,210 4,096 16,003 Other receivables ...... 38,078 26,919 31,433 Uninvoiced turnover ...... 87,517 61,400 64,479 –––––––––– –––––––––– –––––––––– Total receivables ...... 261,876 266,043 300,503 –––––––––– –––––––––– ––––––––––

2003

Trade debtors receivable as of 31 December 2003 amounted to EUR 134.7 million and the provision for doubtful debts amounted to EUR 9.0 million, resulting in a net receivable of EUR 125.7 million. Uninvoiced turnover amounted to EUR 61.4 million.

2004

Trade debtors receivable as of 31 December 2004 amount to EUR 120.4 million. The provision for doubtful debts amounts to EUR 10.6 million, resulting in a net receivable of EUR 109.8 million, EUR 15.9 million lower than the level as of 31 December 2003. The provision for doubtful debts is at a similar level as of 31 December in 2003. Uninvoiced turnover amounted to EUR 87.5 million as of 31 December 2004, an increase of EUR 26.1 million from 31 December 2003, mainly due to the syndication of Fear factor episodes within Endemol USA.

Cash

All cash as of 31 December 2004 is at the free disposal of the Company, except for EUR 3.1 million (2003: EUR 6.1 million, 2002: EUR 9.4 million), which is restricted cash in production trust accounts, and EUR 11.7 million (2003: 0.0, 2002: 0.0) which is cash held on a special deposit for the purpose of making payments in relation to the Telefónica welcome bonus. Under Dutch GAAP, we netted our bank positions and the balances of our cash pooling arrangements. The balances for 2002, 2003 and 2004, therefore includes both debit and credit balances, resulting in the net balance reflected. Of the EUR 11.7 million amount, EUR 11.0 million is included as accrued bonus payable. In 2004, a special purpose entity was incorporated solely for the use of distribution of the Telefónica welcome bonus to employees. The need for such a special purpose entity arose because of the departure of Mr. de Mol in April 2004. In accordance with the terms of the bonus agreement Mr. de Mol would have to decide on the distribution of the remainder of the bonus to the Endemol employees. Therefore, the transfer of the funds and the responsibility for distribution to the special purpose entity was agreed upon between Mr. de Mol and Endemol. Endemol has consolidated this special purpose entity in its annual accounts for 2004.

F-21 Shareholders’ Equity

Endemol N.V. was incorporated on 28 October 2005 with an issued share capital of EUR 12,500,000 consisting of 125,000,000 ordinary shares with a nominal value of EUR 0.10. Pursuant to the Reorganisation of the Company, Endemol Investment B.V. (previously named Endemol B.V.) and Endemol Holding N.V. (the top company of the Endemol group before the Reorganisation) contributed the major part of the Endemol businesses, excluding the French Endemol business in its entirety, to Endemol Holding B.V. Subsequently, after the incorporation of Endemol N.V. by Endemol Investment B.V. (previously named Endemol B.V.), the latter contributed to the former the shares in Endemol Holding B.V. by way of share capital and share premium contribution. Endemol N.V. therefore does not have retained earnings or profit for the year.

EUR 1,000 Share capital- Legal share premium reserve Total –––––––––– –––––––––– –––––––––– Balance as of 1 January 2004...... 137,619 11,741 149,360 –––––––––– –––––––––– ––––––––––

Currency translation differences...... (2,041) - (2,041) Reclassification legal reserve ...... (3,037) 3,037 -

Profit for the year ...... 61,930 - 61,930 –––––––––– –––––––––– –––––––––– Balance as of 31 December 2004 ...... 194,471 14,778 209,249 –––––––––– –––––––––– ––––––––––

EUR 1,000 Share capital- Legal share premium reserve Total –––––––––– –––––––––– –––––––––– Balance as of 1 January 2003...... 73,843 14,058 87,901 –––––––––– –––––––––– –––––––––– Currency translation differences...... (1,618) - (1,618) Reclassification legal reserve ...... 2,317 (2,317) -

Profit for the year ...... 63,077 - 63,077 –––––––––– –––––––––– –––––––––– Balance as of 31 December 2003 ...... 137,619 11,741 149,360 –––––––––– –––––––––– ––––––––––

Legal Reserve

The legal reserve was formed for the retained profit from participations, which was not paid in the form of dividends, and payment of which cannot be realised by the Company itself.

F-22 Long-term Liabilities

Credit institutions ...... 365 854 3,467 Long-term liabilities with respect to acquisitions...... 35,130 43,824 32,186 Deferred tax liability...... 2,374 - - Other long-term liabilities ...... 5,084 3,094 286 –––––––––– –––––––––– –––––––––– Total long-term liabilities 42,953 47,772 35,939 –––––––––– –––––––––– ––––––––––

The interest rate on the amounts due to credit institutions is variable.

The long-term liabilities with respect to acquisitions (earn-out obligations) are estimated on the basis of the expected future results of the respective companies (performance related criteria) and are non-interest bearing.

Of the total long-term liability position of EUR 47.8 million as of 31 December 2003, EUR 43.8 million relates to the provision for long-term future earn-out payments. The increase of EUR 11.6 million in these earn-out obligations compared to at 31 December 2002 (EUR 32.2 million) mainly relates to an increase of the earn-out obligation of Gestmusic Endemol.

As of 31 December 2003, long-term liabilities due to credit institutions decreased by EUR 2.5 million from 31 December 2002, primarily as a result of the repayment of a government subsidized loan by Endemol Italia and a repayment of a long-term loan by Endemol UK, which together amounted to EUR 3.5 million.

A deferred tax liability of EUR 2.4 million was created in 2004 due to a reclassification from current tax liability. The deferred tax liability was primarily related to Palomar, which accounted for EUR 2.1 million.

Of the total long-term liability position as of 31 December 2004 of EUR 43.0 million, EUR 35.1 million relates to the provision for long-term future earn-out payments. The decrease of EUR 8.7 million in these earn- out obligations compared to as of 31 December 2003 (EUR 43.8 million) mainly relates to a reclassification of part of the long-term earn out obligations to short-term and a payment made for the earn-out obligation of Endemol UK. The main liabilities relate to the companies acquired in Spain and the United Kingdom.

Long-term liabilities to credit institutions as of 31 December 2004 decreased from 31 December 2003 with EUR 0.6 million mainly as a result of repayment of a government subsidized loan by Endemol Italia and a decrease of an external loan at Gestmusic Endemol, which together amounted EUR 0.5 million.

F-23 Current Liabilities

Credit institutions ...... 14,404 83,013 159,715 Trade creditors ...... 26,730 23,927 35,717 Liability to participating interests...... 21 481 495 Payable to related companies ...... 10,794 4,971 7,726 Taxation and social security charges ...... 25,985 28,127 23,385 Amounts received in advance ...... 56,312 35,757 40,288 Payable production costs ...... 80,442 60,843 51,740 Short term liabilities with respect to acquisitions...... 15,639 20,441 25,031 Other liabilities ...... 17,580 28,710 27,882 Accruals and accrued bonus allowances employees...... 78,243 52,534 76,919 –––––––––– –––––––––– –––––––––– Total current liabilities ...... 326,150 338,804 448,898 –––––––––– –––––––––– ––––––––––

In September 2002, Endemol entered into a multicurrency revolving credit facility for EUR 250.0 million with a syndicate of five banks. As of 31 December 2004, Endemol does not record any amounts drawn under this facility. In 2004 the short-term, 364-day part, of this facility was further extended for another 364 days. In addition Endemol has a total of EUR 16.0 million outstanding under other non-committed overdraft lines. The Company and some of its group companies have accepted joint and several liability for the credit facilities and are subject to restrictions on the transfer of format rights (in general Endemol does not capitalize own-developed format rights). Negative pledge clauses have been agreed for the debts to credit institutions, which are payable on demand in the event of certain ratios not being achieved.

On 29 September 2005 Endemol entered into a term sheet in respect of a EUR 250.0 million multicurrency revolving credit facility Endemol intends to enter into before consummation of the Offering. This facility is to replace a previous facility that expired in September 2005. Currently we have been granted a temporary overdraft facility in an amount of EUR 150.0 million, which will be repaid once the new multicurrency revolving credit facility is in place. The new EUR 250.0 million facility will have a three-year term (with an option to extend to a maximum of 5 years) and will be a multicurrency revolving credit facility with a number of banks, which will be available to fund our working capital, acquisition and other cash needs. Loans under the facility will be guaranteed by several of our operating subsidiaries.

In the accruals as of 31 December 2004, an amount of EUR 11.0 million is included regarding bonuses payable to Endemol employees in 2005 and 2006 in relation to the Telefónica welcome bonus, which was originally made available in 2001. Reference is also made to the disclosure on Cash.

F-24 Commitments and Contingent Liabilities

Contingent Liabilities

Trading guarantees (e.g. bank/production guarantees) ...... 967 1,847 3,496 –––––––––– –––––––––– ––––––––––

Endemol is involved in several legal disputes and claim procedures. If considered necessary, provisions are recognised to cover the possible financial liability.

Endemol participates in a number of partnerships where Endemol is jointly liable for debts incurred in these partnerships. The external financial exposure from these liabilities is limited.

Call and Put Options

Endemol has entered into various call and put options in connection with some of its acquisitions. In the case of a call option, Endemol has the future right, to purchase at a certain point in time, a portion of the shares from the other shareholders. In the case of a put option, the other shareholder has the future right to sell, at a certain point in time, a portion of their shares to Endemol. The consideration to be paid for the interest to be acquired under these arrangements may depend on the future performance of the respective company. The estimated cash payment related to the call options as of 31 December 2004 was EUR 33.1 million. The estimated cash payment related to the put options as of 31 December 2004 was EUR 13.2 million.

Leases

Group operating lease commitments, which are payable in the following year and analyzed according to the period in which each lease expires are as follows:

EUR 1,000 Land and Other Land and Other Land and Other buildings assets buildings assets buildings assets As of 31 December As of 31 December As of 31 December 2004 2004 2003 2003 2002 2002 –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––

Expiring within one year ...... 12,413 3,931 10,438 7,460 9,378 5,244 Expiring in years two to five ...... 34,505 4,295 34,680 4,164 30,437 2,948 Expiring thereafter ...... 5,626 - 20,748 - 25,612 -

Financial Instruments

Fair Value Long-Term Liabilities and Financial Instruments

The fair value of most of the long-term liabilities and financial instruments stated on the balance sheet, including accounts receivable, cash at bank and in hand and current liabilities, is close to its book value. The fair value of the long-term liabilities with respect to acquisitions and other derivative financial instruments at 31 December 2004 is disclosed below. The fair value may deviate from the book value at year-end 2004.

F-25 EUR 1,000 Fair value Book value 2004 2004 –––––––––– –––––––––– Long-term Liabilities Long-term liabilities with respect to acquisitions...... 34,068 35,130

Financial Instruments Foreign Currency Contracts ...... 491 (1,032) Interest Rate Swaps...... (3,375) (3,375)

Financial Instruments

Endemol uses financial instruments to hedge future foreign currency exposures resulting from assets, liabilities and operational cash flow. As of 31 December 2004, outstanding forward exchange contracts to buy currencies totaled EUR 24.3 million (2003: EUR 15.1 million), while forward exchange contracts to sell currencies totaled EUR 31.4 million (2003: EUR 9.7 million). Approximately EUR 46.9 million (2003: EUR 18.4 million) was related to hedging of financing transactions. EUR 8.8 million (2003: EUR 6.4 million) was related to hedging of trade exposures.

In 2002, Endemol entered into a series of interest rate swaps with a carrying value of EUR 120.0 million. These swaps, with durations of 3 and 5 years, were entered into in order to hedge long-term adverse interest movements. At 31 December 2004 the over-hedged part of the interest rate swaps, being the full EUR 120.0 million due to the limited funding needs of the Endemol group, was recognised at fair value, resulting in a negative effect of EUR 3.4 million on financial expenses in 2004.

Related Party Transactions

The pro forma consolidated financial information includes transactions entered into with related parties. The following table provides the total amount of transactions, which have been entered into with related parties for the relevant financial period.

The sales to related parties are made on at arm’s length basis.

Endemol France

Turnover with Endemol France amounted to EUR 3.2 million in 2004 (EUR 4.9 million in 2003 and EUR 0.7 million in 2002).

Following balances are outstanding with Endemol France: As of 31 December –––––––––––––––––––––––––––––––––––– EUR 1,000 2004 2003 2002 –––––––––– –––––––––– –––––––––– Loans receivable on related companies ...... 80,000 38,500 30,000 Receivable on related companies...... 6,210 4,096 16,003 Payable to related companies...... 10,794 4,971 7,726

Telefónica

We have entered into a secondment agreement with Telefónica on the services rendered to us by Mr. Agut, the Chairman of the Management Board and Chief Executive Officer.

Most of our insurance policies are taken out by Telefónica on a group basis. Some insurance policies are taken out by Endemol Investment B.V. (previously named Endemol B.V.).

F-26 In the ordinary course of business, from time to time we do business with parties that are or were related to Telefónica, including Antena 3 TV in 2002 and 2003 (the amounts invoiced by Endemol were EUR 13.8 million and EUR 10.4 million, respectively), Sogecable in 2004 (the amount invoiced by Endemol was EUR 0.6 million) and Telefe in 2002, 2003 and 2004 (the amounts invoiced by Endemol were EUR 0.4 million, 1.1 million and 1.1 million respectively).

Other Related Party Transactions

The former wife and the former sister-in-law of Mr. Cruz, a managing director of Endemol Spain, were employed by Endemol Spain until October 2004 and July 2005 respectively. Mr. Cruz is director and shareholder of 3A Management, his personal holding company. Several formats (including Operación Triunfo and Crónicas Marcianas) are co-owned by 3A Management and TV Flash Producciones and licensed to Endemol. Under this licence, 3A Management and TV Flash Producciones are jointly entitled to up to 50% of profits related to these formats. Endemol has paid to 3A Management under the licence agreement an amount of approximately EUR 1.2 million in 2004. On 8 April 2005 we entered into a new agreement with Mr. Cruz regarding the transfer of new format rights by 3A Management and Mr. Cruz to Endemol for a fixed annual fee of EUR 177,000 plus a share of the profits related to these formats. Also in 2005, the agreement under which Endemol acquired Gestmusic Endemol from, Mr. Cruz, among others, has been amended further stipulating the earn out arrangement to which Mr. Cruz is entitled. Mr. Cruz is board member and shareholder of Portalmix, a digital media company that from time to time renders services to Endemol. The purchase of Mr. Cruz’ shares in Portalmix by Endemol is currently being negotiated.

Mr. Mainat is director and shareholder of TV Flash Producciones, his personal holding company. Several formats (including Operación Triunfo and Crónicas Marcianas) are co-owned by TV Flash Producciones and 3A Management and licensed to Endemol. Under this licence, 3A Management and TV Flash Producciones are jointly entitled to up to 50% of profits related to these formats. Endemol has paid to TV Flash Producciones under the license agreement an amount of approximately EUR 1.7 million in 2004. On 8 April 2005 we entered into a new agreement with Mr. Mainat regarding the transfer of new format rights by TV Flash Producciones and Mr. Mainat to Endemol for a fixed annual fee of EUR 177,000 plus a share of the profits related to these formats. Also in 2005, the agreement under which Endemol acquired Gestmusic Endemol from Mr. Mainat, among others, was amended further stipulating the earn out arrangement to which Mr. Mainat is entitled. Mr. Mainat is a board member and shareholder of Portalmix, a digital media company that from time to time renders services to Endemol. The purchase of Mr. Mainat’s shares in Portalmix by Endemol is currently being negotiated.

F-27 Notes to the Pro Forma Consolidated Profit and Loss Account

Net Turnover

The geographical breakdown of net turnover is as follows: EUR 1,000 2004 2003 2002 –––––––––– –––––––––– –––––––––– The Netherlands...... 145,855 169,877 159,693 United Kingdom ...... 146,124 131,797 103,581 USA ...... 136,930 66,060 53,220 Spain ...... 118,064 115,516 134,129 Italy ...... 111,340 95,638 82,188 Germany ...... 85,350 81,062 76,592 Other countries (adjusted for intercompany turnover) ...... 107,280 79,748 98,990 –––––––––– –––––––––– –––––––––– Total net turnover ...... 850,943 739,698 708,393 –––––––––– –––––––––– –––––––––– Personnel Costs

EUR 1,000 2004 2003 2002 –––––––––– –––––––––– –––––––––– Salaries...... 101,407 113,540 104,561 Social security charges ...... 12,745 13,314 13,774 Pension and early retirement costs ...... 3,504 2,804 2,987 Other personnel costs...... 12,037 11,115 10,355 –––––––––– –––––––––– –––––––––– Total personnel costs ...... 129,693 140,773 131,677 –––––––––– –––––––––– ––––––––––

In the “other personnel costs” for 2004, the costs of the bonus- and retention plans in the United Kingdom, EUR 1.5 million are included. In the “other personnel costs” for 2003 an amount of EUR 6.8 million was included related to the bonus- and retention plans in the United Kingdom.

Number of Full Time Equivalents

The number of full time equivalents at year-end 2004, including both workers on temporary contracts and workers on contracts for an indefinite term, amounted to 3,249, compared to 2,964 at year-end 2003, excluding freelancers hired on productions. This represents an increase of 9.6 %, primarily as a result of the 100% consolidation of Palomar (compared to 51% in 2003) and higher volume in Endemol Italia. At year-end 2004, the number of workers on contracts for an indefinite term amounted to 1,217 and the number of workers on temporary contracts amounted to 2,032.

The geographical breakdown of full time equivalents is as follows: 2004 2003 2002 –––––––––– –––––––––– –––––––––– The Netherlands (incl. holding entities) ...... 943 1,065 1,005 Spain ...... 642 540 769 Italy ...... 544 373 51 United Kingdom ...... 500 442 126 Germany ...... 287 279 210 USA ...... 34 27 18 Other countries ...... 299 238 382 –––––––––– –––––––––– –––––––––– Total full time equivalents ...... 3,249 2,964 2,561 –––––––––– –––––––––– ––––––––––

F-28 Stock Option Plan Telefónica

Employees within the Endemol group participate in the Telefónica stock option plan. The total number of granted and accepted stock options at 31 December 2004 is 5,586,775. The number of granted and accepted stock options over the past three years has been:

2002 granted and accepted 1,402,849 at a strike price of EUR 12.61 (EUR 11.88 after dilution) 2003 granted and accepted 2,131,640 at a strike price of EUR 9.03 2004 granted and accepted 2,052,286 at a strike price of EUR 12.24

The 2002 stock options can be exercised in early 2005 and 2006.

Remuneration of Members of the Executive Board and Supervisory Board

The remuneration as stated in this note relates to the remuneration of the members of the Executive Board and Supervisory Board of Endemol Holding N.V. for the years ended 31 December 2004 and 2003.

Executive Board

Remuneration and pension charges relating to the members of the Executive Board amounted to EUR 2.5 million for 2004 and EUR 2.8 million for 2003. An additional amount of EUR 1.3 million and EUR 7.9 million was paid in 2004 and 2003, respectively in the form of other compensation. The remuneration of the individual members of the Executive Board was as follows:

Remuneration Executive Board 2004 Annual Other Total Salary incentive compensation cash –––––––––– –––––––––– –––––––––– –––––––––– J. Agut Bonsfills ...... 698,232 - 698,232 A. Schouwenaar (until April 1, 2004)...... 103,551 - - 103,551 J.H.H. de Mol (until May 1, 2004) ...... 211,668 - - 211,668 A.T.W.M. Oostvogel...... 340,291 170,145 97,766 608,202 R.A.M. Goes ...... 352,894 113,430 - 466,324 H.B.G. Deitmers ...... 340,291 1,181,835 1,522,126 –––––––––– –––––––––– –––––––––– –––––––––– Total ...... 2,046,927 283,575 1,279,601 3,610,103 –––––––––––– –––––––––––– –––––––––––– ––––––––––––

Remuneration Executive Board 2003 Annual Other Total Salary incentive compensation cash –––––––––– –––––––––– –––––––––– –––––––––– A. Schouwenaar ...... 328,175 100,000 4,500,000 4,928,175 J.H.H. de Mol ...... 635,004 635,004 A.T.W.M. Oostvogel...... 326,565 100,000 1,000,000 1,426,565 R.A.M. Goes...... 328,175 100,000 1,000,000 1,428,175 H.B.G. Deitmers ...... 326,404 100,000 1,000,000 1,426,404 U. Glorie (until October 2003) ...... 285,555 - 410,000 695,555 –––––––––– –––––––––– –––––––––– –––––––––– Total ...... 2,229,878 400,000 7,910,000 10,539,878 –––––––––––– –––––––––––– –––––––––––– ––––––––––––

Other compensation for Mr. Deitmers in 2004 included EUR 0.9 million relating to severance pay related to his discharge as a member of the Executive Board in January 2005. The total pension charges of the members of the Executive Board in 2004 and 2003 amounted to EUR 0.1 and EUR 0.2 million respectively.

F-29 Supervisory Board

Remuneration relating to the members of the Supervisory Board of Endemol Holding N.V. was EUR 0.05 million for 2004 and EUR 0.07 million for 2003. The remuneration of the individual members of the Supervisory Board was as follows:

Remuneration Supervisory Board 2004 2003 –––––––––– –––––––––– L.A. Abril ...... - 18,500 J.A. van den Ende (until March 1, 2004) ...... 5,000 14,000 G.H. Smit ...... 25,000 14,000 A. Schouwenaar (as from April 1, 2004) ...... 15,000 - J.B. Faura ...... - 14,000 A. Vila (as from June 2003) ...... - 7,000 S. Fernandez Valbuena (as from June 2003)...... - 7,000 –––––––––– –––––––––– Total ...... 45,000 74,500 –––––––––– ––––––––––

Members of the Executive Board have been granted stock options for Telefónica shares. The options can be exercised in two tranches, falling three and four years, respectively after the original year of granting.

Year Of Granting –––––––––––––––––––––––––––––––––––––––––––––––– 2002 2003 ––––––––––––––––––––––– ––––––––––––––––––––––– No. of Exercise No. of Exercise As per December 2004 options price options price –––––––––– –––––––––– –––––––––– –––––––––– A.T.W.M. Oostvogel...... 31,720 11.8827 66,445 9.0300 H.B.G. Deitmers ...... 15,860 11.8827 66,445 9.0300 P. Bazalgette ...... 23,790 11.8827 T. Barnicoat...... 23,790 11.8827 –––––––––– –––––––––– Total ...... 95,160 132,890 –––––––––– ––––––––––

Mr. Schouwenaar, a member of the Supervisory Board of Endemol Holding N.V. was granted 66,445 stock options in 2003 and 31,720 stock options in 2002 for Telefónica shares when he was a member of the Executive Board. As long as Mr. Schouwenaar continues to be a member of the Supervisory Board, these options can also be exercised in two tranches, falling three and four years, respectively, after the original year of the grant.

Taxation

For 2004 and 2003 the effective tax rate amounted to 40.1% and 38.2% respectively. Excluding non- deductible items such as amortisation of goodwill and income from participating interests (both in 2004 and 2003), the effective tax rate would be at 37.9% for 2004 and 36.2% for 2003. This increase is due to the fact that our gain in result before taxation has especially been realised in countries under “high tax” jurisdictions such as the United States, Italy and Germany and revaluing the deferred tax asset in the Netherlands based on lower future tax rates.

F-30 OTHER INFORMATION – AUDITORS’ ASSURANCE REPORT ON THE PRO FORMA CONSOLIDATED FINANCIAL INFORMATION OF ENDEMOL N.V. FOR THE YEARS 2004, 2003 AND 2002 ON THE BASIS OF DUTCH GAAP

Introduction

In accordance with the instructions of Endemol N.V. we report on the pro forma consolidated financial information of the Endemol group (after the Reorganisation) for the years 2004, 2003 and 2002 on the basis of Dutch GAAP (hereinafter pro forma consolidated financial information), representing the Dutch GAAP pro forma information, after the adjustments relating to the Reorganisation, as disclosed on pages F-8 to F-11 of the financial information, on the figures of Endemol Holding N.V. have been made.

This pro forma consolidated financial information has been prepared for illustrative purposes only to provide information about how the adjustments relating to the Reorganisation could have affected the audited consolidated financial statements for the years 2004, 2003 and 2002 of Endemol Holding N.V. on the basis of Dutch GAAP. Because of their nature, this pro forma consolidated financial information addresses a hypothetical situation and, therefore, does not necessarily represent the actual financial position or results for the years 2004, 2003 and 2002 of the Endemol group (after Reorganisation).

In their auditors’ reports on the underlying financial statements for the years 2004, 2003 and 2002 of Endemol Holding N.V. on which the financial data included in the pro forma consolidated financial information are based, KPMG Accountants N.V. expressed unqualified audit opinions on 19 April 2005, 9 March 2004 and 14 February 2003. Those audits were conducted in accordance with auditing standards generally accepted in the Netherlands (Dutch GAAS).

It is management’s responsibility to prepare the pro forma consolidated financial information in accordance with the requirements of EU Regulation 2004-809. It is our responsibility to provide the conclusion required by Annex II item 7 of EU Regulation 2004-809. We are not responsible for expressing any other conclusion on the pro forma consolidated financial information or on any of its constituent elements.

Scope

Conclusion

In our opinion, the pro forma consolidated financial information has been properly compiled on the basis stated in the introduction paragraph and provides a reasonable basis for presenting the significant effects directly attributable to the adjustments relating to the Reorganisation described on pages F-8 to F-11 of this financial information.

Utrecht, 10 November 2005

Ernst & Young Accountants

F-31 This page has been intentionally left blank

F-32 ENDEMOL N.V.

PRO FORMA CONSOLIDATED IFRS FINANCIAL INFORMATION 2004

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2004

10 NOVEMBER 2005

Eden_11-11-05_final proof CONTENTS

PRO FORMA CONSOLIDATED BALANCE SHEET AS OF 1 JANUARY 2004 AND 31 DECEMBER 2004...... F-36 PRO FORMA CONSOLIDATED INCOME STATEMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2004 ...... F-37 PRO FORMA CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ...... F-38 PRO FORMA CONSOLIDATED CASH FLOW STATEMENT ...... F-39 NOTES TO THE PRO FORMA CONSOLIDATED FINANCIAL INFORMATION...... F-40 1 GENERAL INFORMATION ...... F-40 2 REORGANISATION ...... F-42 3 ACQUISITIONS, DIVESTMENTS AND CONSOLIDATION...... F-46 4 STATEMENT OF COMPLIANCE...... F-47 5 BASIS OF PREPARATION ...... F-48 6 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES...... F-49 6.1 EARLY ADOPTION OF REVISED INTERNATIONAL ACCOUNTING STANDARDS ...... F-49 6.2 BASIS OF CONSOLIDATION ...... F-49 6.3 FOREIGN CURRENCY TRANSLATION...... F-50 6.4 FINANCIAL INSTRUMENTS ...... F-50 6.5 PROPERTY, PLANT AND EQUIPMENT ...... F-51 6.6 INTANGIBLE ASSETS...... F-52 6.7 IMPAIRMENT OF ASSETS ...... F-53 6.8 INVESTMENTS ...... F-54 6.9 INVENTORIES ...... F-54 6.10 DEFERRED TAX ASSET ...... F-54 6.11 OTHER FINANCIAL ASSETS...... F-55 6.12 TRADE AND OTHER RECEIVABLES...... F-55 6.13 CASH AND CASH EQUIVALENTS ...... F-55 6.14 MINORITY INTEREST ...... F-55 6.15 PROVISIONS...... F-55 6.16 INTEREST BEARING LOANS AND BORROWINGS...... F-55 6.17 EARN-OUT OBLIGATIONS ...... F-56 6.18 EMPLOYEE BENEFITS...... F-56 6.19 DEFERRED TAX LIABILITY ...... F-57 6.20 SHARE-BASED PAYMENTS...... F-57 6.21 TURNOVER ...... F-57 6.22 EXPENSES ...... F-57 6.23 EBITDA ...... F-58 6.24 SEGMENT REPORTING ...... F-58 6.25 COMPILATION OF CASH FLOW STATEMENT...... F-58 7 SUBSEQUENT EVENTS...... F-59 8 SEGMENT REPORTING...... F-60 9 EMPLOYEE BENEFIT EXPENSE ...... F-61 10 OTHER OPERATING EXPENSE ...... F-62 11 FINANCIAL INCOME AND EXPENSE...... F-63 12 INCOME TAX EXPENSE ...... F-64 13 PROPERTY, PLANT AND EQUIPMENT ...... F-65 14 GOODWILL AND OTHER INTANGIBLE ASSETS ...... F-66 15 INVESTMENTS IN SUBSIDIARIES AND JOINT VENTURES...... F-68 16 INVESTMENTS IN ASSOCIATES ...... F-69 17 OTHER FINANCIAL ASSETS ...... F-71 18 DEFERRED TAX ASSETS AND LIABILITIES ...... F-72 19 TRADE AND OTHER RECEIVABLES...... F-73 20 CASH AND CASH EQUIVALENTS...... F-74 21 ISSUED CAPITAL AND RESERVES ...... F-75 22 INTEREST-BEARING LOANS AND BORROWINGS ...... F-76 23 PENSIONS AND SIMILAR OBLIGATIONS ...... F-78 24 EARN-OUT OBLIGATIONS...... F-79

F-34 25 PROVISIONS ...... F-80 26 TRADE AND OTHER PAYABLES ...... F-81 27 SHARE-BASED PAYMENTS ...... F-82 28 FINANCIAL INSTRUMENTS...... F-84 29 COMMITMENTS, LITIGATION AND OTHER MATTERS ...... F-87 30 RELATED PARTY TRANSACTIONS...... F-89 31 EXPLANATION OF TRANSITION FROM DUTCH GAAP TO IFRS ...... F-91 32 RECONCILIATION BETWEEN IFRS AND DUTCH GAAP 2004 ...... F-93 OTHER INFORMATION – AUDITORS’ ASSURANCE REPORT ON THE PRO FORMA CONSOLIDATED FINANCIAL INFORMATION OF ENDEMOL N.V. FOR THE YEAR 2004 ON THE BASIS OF IFRS ...... F-101

F-35 PRO FORMA CONSOLIDATED BALANCE SHEET AS OF 1 JANUARY 2004 AND 31 DECEMBER 2004

EUR 1,000 Note 31 December 2004 1 January 2004 –––––– ––––––––––––––––––––––– ––––––––––––––––––––––– Non-current assets ...... Property, plant and equipment ...... 13 41,426 44,616 Goodwill ...... 14, 15 141,341 135,719 Other intangible assets...... 14 7,139 3,574 Investments in associates...... 16 15,052 14,140 Other financial assets...... 17 86,742 53,672 Deferred tax assets...... 18 23,915 29,356 315,615 281,077

Current assets Trade and other receivables ...... 19 241,963 210,351 Receivables from tax authorities ...... 18,902 17,590 Cash and cash equivalents ...... 20 117,824 107,173 378,689 335,114 –––––––––– –––––––––– Total assets ...... 694,304 616,191 –––––––––– –––––––––– Equity attributable to equity holders of the parent . . Share capital / share premium ...... 21 216,402 146,908 Legal reserve ...... 14,778 11,741 Translation reserve...... (2,039) – Hedging reserve...... (948) (1,422) Revaluation reserve ...... 1,337 – Retained earnings ...... – – Profit for the year...... – – 229,530 157,227

Minority interests...... 5,834 5,291 –––––––––– –––––––––– Total equity...... 235,364 162,518

Non-current liabilities Long-term loans and borrowings...... 22 364 854 Pensions and similar obligations ...... 23 431 431 Deferred tax liabilities ...... 18 4,706 – Long-term earn-out obligations ...... 24 33,680 40,182 Other non-current liabilities...... 7,122 4,899 46,303 46,366

Current liabilities Short-term loans and borrowings...... 22 129,253 176,342 Short-term provisions ...... 25 21,949 2,567 Short-term earn-out obligations...... 24 15,074 19,699 Trade and other payables ...... 26 222,675 180,572 Current tax payable ...... 23,686 28,127 412,637 407,307 –––––––––– –––––––––– Total liabilities ...... 458,940 453,673 –––––––––– –––––––––– Total equity and liabilities...... 694,304 616,191 –––––––––– ––––––––––

F-36 PRO FORMA CONSOLIDATED INCOME STATEMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2004

EUR 1,000 Note 2004 –––––– ––––––––––––––––––––––– Turnover ...... 8 850,943

Costs of outsourced work and other external costs . . . . . (508,962) Employee benefit expense ...... 9 (137,097) Other operating expense ...... 10 (72,468) (718,527) –––––––––– EBITDA ...... 132,416

Depreciation and amortisation expense...... (14,700) Impairment of goodwill and intangible assets...... (495) (15,195) –––––––––– Operating result...... 117,221

Financial income and expenses ...... 11 (7,736) Share in profit of associates...... 1,739 (5,997) –––––––––– Income before tax...... 111,224

Income tax expense ...... 12 (41,451) –––––––––– Net income ...... 69,773

Minority interest ...... (5,315) –––––––––– Net income attributable to shareholders ...... 64,458

Net income attributable to minority interest ...... 5,315 Net income attributable to the shareholders ...... 64,458 –––––––––– Net income ...... 69,773 ––––––––––

Basic earnings per share (EUR) ...... 0.56

F-37 PRO FORMA CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Equity attributable to equity holders of the parent ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– EUR 1,000 Share Capital / Share Legal Translation Hedge Revaluation Minority premium reserve reserve reserve reserve Total interest Total equity –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––

Balance as of 1 January 2004 ...... 146,908 11,741 – (1,422) – 157,227 5,291 162,518 –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– Currency translation . . . . . – – (2,039) – – (2,039) (137) (2,176)

Goodwill adjustment on acquisitions prior to 2000 (219) – – – – (219) – (219)

Reclassification legal reserve (3,037)3,037 – – – – – –

Business combinations resulting from step acquisitions – – – – 1,571 1,571 1,930 3,447

Reclassification of amortisation on re-valued assets ...... 234 – – – (234) – – –

Amortisation hedge reserve – – – 474 – 474 – 474

Dividend paid ...... – – – – – – (6,511) (6,511)

Contribution Telefónica for share option plans (Note 27)...... 7,985 – – – – 7,985 – 7,985

Other movements ...... 73 – – – – 73 – 73 –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– Net result recognised directly in equity ...... 5,036 3,037 (2,039) 474 1,337 7,845 (4,772) 3,073 –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– Net income 2004...... 64,458 – – – – 64,458 5,315 69,773 –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– Total recognised income for 2004 ...... 69,494 3,037 (2,039) 474 1,337 72,303 543 72,846 –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– Balance as of 31 December 2004 . . . . . 216,402 14,778 (2,039) (948) 1,337 229,530 5,834 235,364 –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––

Endemol N.V. was incorporated on 28 October 2005 with an issued share capital of EUR 12,500,000, consisting of 125,000,000 ordinary shares with a nominal value of EUR 0.10. Pursuant to the Reorganisation of the Company, Endemol Investment B.V (previously named Endemol B.V.) and Endemol Holding N.V. (the top company of the Endemol group before the Reorganisation, as defined below) contributed the major part of the Endemol businesses, excluding the French Endemol business in its entirety, to Endemol Holding B.V. Subsequently, after the incorporation of Endemol N.V. by Endemol Investment B.V. (previously named Endemol B.V.), the latter contributed to the former the shares in Endemol Holding B.V. by way of share capital and share premium contribution. Endemol N.V. therefore does not have retained earnings or profit for the year.

F-38 PRO FORMA CONSOLIDATED CASH FLOW STATEMENT (Using the indirect method)

EUR 1,000 2004 ––––––––––––––––––––––– Operating result ...... 117,221

Depreciation and amortisation ...... 15,195 Movement in receivables ...... (31,612) Movement current liabilities ...... 61,485 Financial expenses ...... (2,407) Dividend received ...... 601 Taxes paid ...... (37,057) Other movements ...... (29,763) –––––––––– (23,558) –––––––––– Cash Flow from Operating Activities ...... 93,662

Acquisitions ...... (21,582) Investment in tangibles ...... (10,692) Investment in intangibles ...... (3,158) –––––––––– Cash Flow from Investing Activities ...... (35,432)

Dividends paid ...... – Movement in long-term bank loans ...... (490) –––––––––– Cash Flow from Financing Activities ...... (490)

Net Cash Flow ...... 57,740 –––––––––– Cash and cash equivalents at the beginning of the financial period ...... (69,169)

Cash and cash equivalents at the end of the financial period ...... (11,429) –––––––––– Movement in cash and cash equivalents (debit) ...... 10,651 Movement in short-term borrowings (cash and cash equivalents credit) ...... 47,089 –––––––––– Net Cash Flow ...... 57,740 ––––––––––

F-39 NOTES TO THE PRO FORMA CONSOLIDATED FINANCIAL INFORMATION 1 General Information

Company Overview

Endemol is a global leader in television and other audiovisual entertainment. Endemol creates premium entertainment ideas and sells them to the world’s leading broadcasters. Endemol then produces shows based on such ideas to high standards, creating hits with strong brand value. Subsequently, Endemol exploits the value of its brands across other media and communication platforms, including, for example, mobile phones and the Internet.

We exploit our programmes through our network of companies in 22 countries on five continents. Telefónica, S.A. (“Telefónica”) indirectly holds 99.7% of our shares.

Products

Our products are the content that we create for several media and communication platforms, primarily television, but also for the Internet, mobile phones and other platforms. We believe we are a leading developer and producer of formats. A format is typically a programme structure and content based on an idea.

Main Business Areas

We have three principal types of products:

Scripted television – Consists of scripted programmes with actors or comedians and includes subgenres such as drama and soap operas.

Digital media – Consists of content created to be exploited on digital platforms (mainly mobile phones and the Internet), leveraging our television and other non-television brands.

Pro Forma Consolidated Financial Information

The 2004 IFRS pro forma consolidated financial information of Endemol N.V. represents the 2004 IFRS pro forma consolidated financial information of the Endemol group, prepared on an IFRS basis, excluding the (deconsolidated) financials of Endemol Holding N.V., Endemol Investment B.V. (previously named Endemol B.V.) and Endemol France Holding S.A.S. and its subsidiaries (consolidated) and including a number of adjustments for holding cost allocation. Endemol N.V. is wholly owned by Endemol Holding N.V. through Endemol Investment B.V. (previously named Endemol B.V.). Endemol N.V. is hereafter referred to as “Endemol” or the “Company”.

This pro forma consolidated financial information has been prepared as part of the prospectus relating to the initial offering of ordinary shares of Endemol.

The pro forma consolidated financial information included in this report is referred to as the 2004 pro forma consolidated financial information. This pro forma consolidated financial information has been prepared for

F-40 illustrative purposes only, to provide information about how the adjustments relating to the Reorganisation (as defined below) could have affected the consolidated financial statements for the year 2004 on the basis of IFRS. Because of their nature, this pro forma consolidated financial information addresses a hypothetical situation and, therefore, does not necessarily represent the actual financial position or results of operations for the year 2004 of the Endemol group (after the Reorganisation, as defined below).

F-41 2 Reorganisation

Reasons for the Reorganisation

In preparation for the initial offering and for various other corporate purposes, we have restructured our corporate structure (the “Reorganisation”) as follows.

Our reason for isolating the French Endemol business from the rest of the Endemol group was to eliminate an element of uncertainty in the valuation of our business.

The graphs below set forth the main companies of the pre-Reorganisation Endemol group and the post- Reorganisation Endemol group:

Pre-Reorganisation Post-Reorganisation

Endemol Holding NV

Endemol Investment Endemol Endemol BV(1) Holding NV International BV Issuer Group Endemol France Holding SAS Endemol BV Endemol NV

Endemol France

Endemol Endemol Endemol Endemol Endemol Holding BV France Netherlands Italy Finance BV

Other Operating Endemol Endemol Endemol Companies Netherlands Finance BV International BV

Other Operating Companies (including Endemol Italy

(1) Prior to the consummation of the Offering, Endemol B.V. was renamed Endemol Investment B.V.

F-42 In addition to the steps discussed above, we have taken the following actions in order to complete the Reorganisation as of 14 September 2005:

• Endemol International B.V. sold all its shares in Big Brother Selections and Participations B.V. to Endemol B.V. at a nominal value of EUR 20,000.

• Endemol B.V. contributed the shares in Endemol Nederland Holding B.V. by way of share premium to Big Brother Selections and Participations B.V.

• Endemol Holding N.V. contributed the shares in Endemol International B.V. as share premium to Endemol B.V.

• Endemol B.V. contributed the shares in Endemol International B.V. as share premium to Big Brother Selections and Participations B.V.

• Endemol B.V. contributed the shares in Endemol Finance B.V. as share premium to Big Brother Selections and Participations B.V.

• Big Brother Selections and Participations B.V. was renamed Endemol Holding B.V.

Prior to the consummation of the Offering the name of Endemol B.V. was changed to Endemol Investment B.V.

On 30 September 2005 as part of the Reorganisation, Endemol Holding B.V. entered into a business purchase agreement with Endemol Investment B.V. (previously named Endemol B.V.) and Endemol Holding N.V. Under this agreement, the following has been transferred to Endemol Holding B.V.: the employees, assets, certain liabilities and contracts (including secondment agreements between Endemol UK Plc, Endemol Investment B.V. and Endemol Holding N.V. for the secondment of Mr. Bazalgette and Mr. Barnicoat).

The transfers discussed above excluded the French Endemol business in its entirety, which is discussed in greater detail below. The price paid for the assets and liabilities transferred amounts to EUR 9.0 million, which price has been mainly calculated on the basis of book value. The price of the tangible assets equals the valuation made by an independent valuer and has resulted in an income relative to the book value of EUR 0.5 million. All receivables and liabilities have been valued at their nominal value. The contracts for the supply of goods and services have been valued at zero. In addition, Endemol will acquire from Endemol Investment B.V. (previously named Endemol B.V.) for no consideration an exclusive license to use the tradename and trademark “Endemol” in all countries in the world, except France and certain French overseas territories for a period of five years with an option for extension for another five years.

On 15 June 2005, via two transactions, we moved the entire share capital of our Italian operations to Endemol Italia Holding e Servizi S.p.A., a wholly-owned subsidiary of Endemol Finance B.V. Firstly, Endemol Investment B.V. (previously named Endemol B.V.) transferred all of its shares in Endemol Italia Holding S.p.A. (representing 42.22% of the company’s issued share capital) to Endemol Italia Holding e Servizi S.p.A., a company wholly owned by Endemol Finance B.V. Secondly, Endemol Finance B.V. transferred all of its shares in Endemol Italia Holding S.p.A. (representing 57.78% of the company’s issued share capital) to Endemol Italia Holding e Servizi S.p.A.

On 8 December 2003, Endemol Finance B.V. acquired 42,022 shares in the capital of Endemol España Holding S.L. by way of a capital contribution in kind by its then-shareholder, Endemol Investment B.V. (previously named Endemol B.V.). As a result, Endemol Finance B.V. holds all shares in the capital of Endemol España Holding S.L.

F-43 The French Endemol Business

We have agreed with Endemol Investment B.V. (previously named Endemol B.V.) to provide the French Endemol business, for and on behalf of Endemol Investment B.V., with certain consultancy services regarding, among other things, legal, tax, mergers and acquisitions, controlling and administrative support at actual cost, as long as the companies belonging to the French Endemol business are subsidiaries of Endemol Investment B.V. (previously named Endemol B.V.) In addition, Endemol Finance B.V. will for an as-yet undetermined period of time render certain treasury and financing services, including the granting of loans, to the French Endemol business, such as accepting deposits of excess cash at an interest rate equal to the interest rate paid to our group companies for similar deposits. In line with this, Endemol Finance B.V. has assigned a receivable of EUR 83.9 million owed by Endemol France Holding S.A.S. to Endemol Investment B.V. (previously named Endemol B.V.), by way of a distribution from the freely distributable reserves.

The terms of these distribution, license and compensation arrangements are generally equivalent to the terms that apply to similar agreements between Endemol International B.V. and other Endemol group companies. Under the existing distribution and license arrangements with the French Endemol business, Endemol International B.V. claims as per 30 September 2005 an amount of approximately EUR 5.0 million, which claim is disputed by the French Endemol business.

Furthermore, representatives of the French Endemol business are allowed to participate in intra-group creative and other initiatives, from which both the French Endemol business and we can benefit.

Preparation of Pro Forma Financial Information

The starting point for the preparation of the 2004 pro forma consolidated financial information for the Company on the basis of IFRS is the 2004 Dutch GAAP consolidated financial statements of Endemol Holding N.V.

The consolidated 2004 IFRS financial figures of the following companies have been adjusted to reflect the historical financial information of the Company (deconsolidated):

1 Endemol Holding N.V.

2 Endemol Investment B.V. (previously named Endemol B.V.)

3 Endemol France Holding S.A.S. (Consolidated)

All shares of Endemol France Holding S.A.S. and its subsidiaries (“Endemol France”) are held by Endemol Investment B.V (previously named Endemol B.V.). Endemol France is not included in the pro forma

F-44 consolidated financial information of the Company. All outstanding receivable and payable amounts between the Company and Endemol France at the balance sheet date are presented as amounts receivable from/payable to affiliated related companies. The results from transactions between the Company and Endemol France have been included in the pro forma consolidated income statement as if they had been made with third parties.

Financing

F-45 3 Acquisitions, Divestments and Consolidation

Acquisitions

In September 2004, Endemol incorporated its fourth subsidiary in the Latin American market, Endemol Chile, which is 65% owned by Endemol and fully consolidated with a minority interest.

In August 2004, Endemol acquired an additional 17.5% share in Palomar bringing Endemol’s ownership to 68.5%. The financials of Palomar are fully consolidated in the group accounts, taking into account a minority interest. The step acquisition of 17.5% was accounted for in accordance with the accounting policies as described in Note 6.6, Intangible Assets.

In November 2004, Endemol increased its interest in 625 TV Produkties by 10% to 100%. The results of 625 TV Produkties were already fully consolidated with a minority interest.

In 2004, Endemol paid a total amount of EUR 18.5 million for earn-out arrangements with respect to prior year acquisitions in the United Kingdom.

Divestments

Both the divestment and the discontinued operations are not material and no disclosure has been made regarding the discontinued operations.

Consolidation of Special Purpose Entity

In 2004, a special purpose entity was incorporated solely for the use of distribution of the Telefónica welcome bonus to employees. The need for such a special purpose entity arose because of the departure of Mr. de Mol in April 2004. In accordance with the terms of the bonus agreement Mr. de Mol would have to decide on the distribution of the remainder of the bonus to the Endemol employees. Therefore the transfer of the funds and the responsibility for distribution to the special purpose entity was agreed upon between Mr. de Mol and Endemol. Endemol has consolidated this special purpose entity in its annual accounts for 2004.

F-46 4 Statement of Compliance

This pro forma consolidated IFRS 2004 financial information has been prepared on the basis of IFRS as published by the IASB.

The first full consolidated IFRS financial statements of the Company, for the year ending 31 December 2005, will be prepared in accordance with accounting standards as adopted for use in the European Union (EU) further to the IAS Regulation (EC 1606/2002) (“accounting standards adopted by the EU”). The accounting standards adopted by the EU that will be effective (or available for early adoption) in the annual financial statements for the year ending 31 December 2005 are still subject to change and to additional interpretations and therefore cannot be determined with certainty. Accordingly, the accounting policies for that annual period will be finally determined when the annual financial statements are prepared for the year ending 31 December 2005.

F-47 5 Basis of Preparation

The pro forma consolidated financial information is presented in Euro, the Company’s functional and reporting currency, rounded to the nearest thousand. The pro forma consolidated financial information is prepared on an historical cost basis, except that the following assets and liabilities are stated at their fair value: derivative financial instruments, financial instruments held for trading and financial instruments classified as available-for-sale.

Non-current assets and disposal groups held for sale are stated at the lower of carrying amount and fair value less costs to sell.

The preparation of pro forma consolidated financial information in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. These estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Estimates and assumptions used in this pro forma consolidated financial information do not take into account any changes that may or may not occur as a result of the public offering of part of the shares of the Company by its shareholder (refer to Note 7, Subsequent Events).

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.

The accounting policies set out below have been applied consistently in this pro forma consolidated financial information and in preparing the IFRS opening balance sheet as of 1 January 2004 for the purpose of the transition to IFRS, taking into account the first time adoption elections described in Note 31, Explanation of Transition from Dutch GAAP to IFRS.

The accounting policies have been applied consistently by group entities.

F-48 6 Summary of Significant Accounting Policies

The principal accounting policies adopted in the preparation of this pro forma consolidated financial information are set forth below.

6.1 Early Adoption of Revised International Accounting Standards

In 2004, the Company early adopted the International Financial Reporting Standards (IFRS) stated below that are relevant to the Company’s operations.

• IAS 32 Financial Instruments: Disclosure and Presentation

• IAS 39 Financial Instruments: Recognition and Measurement

6.2 Basis of Consolidation

Subsidiaries

Subsidiaries are entities where the Company exercises a controlling influence. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the pro forma consolidated financial information from the date that control commences until the date that control ceases.

Associates and Joint Ventures

Associates are those entities in which the Company has significant influence, but not control, over the financial and operating policies. The pro forma consolidated financial information includes the Company’s share of the total recognised gains and losses of associates on an equity accounted basis, from the date that significant influence commences until the date that significant influence ceases.

Joint ventures are those entities or joint operations where the Company has joint control over the activities, established by a contractual agreement. The pro forma consolidated financial information includes the Company’s share of the total recognised gains and losses of joint ventures on a proportional consolidated basis, from the date that joint control commences until the date that joint control ceases.

When the Company’s share of losses exceeds its interest in an associate or joint venture, the Company’s carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of an associate or joint venture.

Special Purpose Entities

Special purpose entities (“SPE”), which are entities created to accomplish a narrow and well-defined objective, are consolidated when the substance of the relationship between the Company and the SPE indicates that the SPE is controlled by the Company.

Transactions Eliminated on Consolidation

Intra-group balances and any unrealised gains and losses or income and expenses arising from intra-group transactions, are eliminated in preparing the pro forma consolidated financial information.

Unrealised gains arising from transactions with associates and joint ventures are eliminated to the extent of the Company’s interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

F-49 6.3 Foreign Currency Translation

Foreign Currency Transactions

Transactions enacted in foreign currencies are translated at the foreign exchange rate in effect at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to euro at the foreign exchange rate in effect at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities that are stated at fair value are translated to euro at foreign exchange rates in effect at the dates the fair value was determined.

Financial Statements of Foreign Operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to euro at foreign exchange rates in effect at the balance sheet date. The revenues and expenses of foreign operations are translated to euro at rates approximating the foreign exchange rates in effect at the dates of the transactions.

Net Investment in Foreign Operations

Foreign exchange rate differences arising from the translation of net investments in foreign operations, and if applicable of related hedges, are taken to the cumulative currency translation differences reserve within equity. They are released to the income statement upon the disposal of the foreign operation.

6.4 Financial Instruments

Derivative Financial Instruments and Hedging Activities

The Company uses derivative financial instruments principally in the management of its foreign currency and interest rate risks. The Company measures all derivative financial instruments based on fair values, derived from market prices or a valuation model. Gains or losses arising from changes in the fair value of the instruments are recognised in the income statement during the period in which they arise, to the extent that the derivatives have been designated as a fair value or cash-flow hedge, or to the extent that the derivatives have no hedging designation or are ineffective. The gains and losses on the designated derivatives substantially offset the changes in the values of the recognised hedged items, which are also recognised as gains and losses in the income statement.

This process includes linking all derivatives that are designated as fair-value-, cash flow- or foreign- currency hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions.

Changes in the fair value of a derivative that is highly effective and that is designated and qualifies as a cash-flow hedge are recognised directly in equity until income is affected by the variability in cash flows or forecasted transactions of the designated hedged item. Changes in the fair value of derivatives that are highly effective as hedges and that are designated and qualify as foreign-currency hedges are recorded in either the income statement or recognised directly in equity, depending on whether the hedge transaction is a fair-value hedge or a cash-flow hedge.

If derivatives qualify and are designated as a hedge, the Company formally assesses, both at the hedge’s inception and on an ongoing basis, whether these derivatives are highly effective in offsetting changes in fair values or cash flows of the hedged items. When it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, the Company discontinues hedge accounting prospectively. When hedge accounting is discontinued because it is determined that the derivative no longer qualifies as an effective fair-value hedge, the Company continues to carry the derivative on the balance sheet at its fair value, and no longer adjusts the hedged asset or liability for changes in fair value. When hedge accounting is discontinued because it is probable that a forecasted transaction will not occur within a period of two months from the originally forecasted transaction date, the Company continues to carry the derivative on the balance sheet at its fair value, and gains and losses that were recognised directly in equity are recognised immediately in the income statement. In all other situations in which hedge accounting is discontinued, the Company continues

F-50 to carry the derivative at its fair value on the balance sheet, and recognises any changes in fair value in the income statement.

For interest rate swaps that are unwound, the gain or loss upon unwinding is released over the remaining life of the underlying financial instrument, based on its internal rate of return.

Call and Put Options Relating to Acquisition Contracts (Embedded Derivatives)

Endemol has entered into various call and put options in the past in connection with some of its acquisitions. Call options are valued at fair value and recognised in the balance sheet when the option price (exercise price) is lower than the underlying fair value of the potential future investee. Put options (held by other parties) are valued at fair value and recognised when the option price (exercise price) is higher than the underlying fair value of the entity involved. The fair value of the options is re-measured at each reporting date. All changes in fair values are accounted for in the income statement, as a result on financial instruments (financial income or expense).

6.5 Property, Plant and Equipment

Items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation and impairment losses (see Note 6.7, Impairment of Assets). Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate components of property, plant and equipment.

Borrowing costs that are directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to get ready for its intended use or sale will be capitalised as part of the cost of that asset.

Depreciation

Depreciation is charged to the income statement on a straight-line basis over the estimated useful life of each part of an item of property, plant and equipment. Land is not depreciated.

Based on the estimated remaining useful life of the underlying assets, the following depreciation rates apply:

• Buildings 3% - 7.5% • Plant and equipment 7.5% - 12.5% • Other 20% - 33%

The residual value, if not insignificant, is reassessed annually.

Leased Assets

Leased property, plant and equipment, for which the Company substantially assumes all of the benefits and risks of ownership, are classified as finance leases. Finance leases are capitalised at their fair value of the leased asset or at the estimated net present value of the underlying lease payments. The corresponding current and long- term rental obligations, net of finance charges, are included in the balance sheet as current and long-term payables, respectively. Finance costs are charged to the income statement over the life of each respective lease.

Payments made under operating leases are charged to the income statement in equal installments over the life of the leases, except where an alternative method is more representative of the time pattern from which benefits are derived.

Subsequent Costs

The Company recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when the cost is incurred, if it is probable that the future economic benefit associated with the item will flow to the Company and the cost of the item can be measured reliably. All other costs are recognised in the income statement as an expense as incurred.

F-51 6.6 Intangible Assets

The intangible assets relate to goodwill, format rights, (TV) movie rights and other.

Accounting for Business Combinations and Goodwill

All business combinations are accounted for under IFRS 3 by applying the purchase method. Goodwill represents amounts arising on acquisitions of subsidiaries, associates and joint ventures. With respect to business acquisitions that have occurred since 1 January 2004, goodwill represents the difference between the cost of the acquisition and the fair value of the net identifiable assets and (contingent) liabilities acquired. Excess of acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost is recognised directly in the income statement.

With respect to acquisitions prior to 1 January 2004, goodwill is included on the basis of its deemed cost, which represents the carrying amount recorded under Dutch GAAP as per 31 December 2003. The classification and accounting treatment of business combinations that occurred prior to 1 January 2004 has not been reconsidered in preparing the Company’s opening IFRS balance sheet as of 1 January 2004 (see Note 31 Explanation of Transition from Dutch GAAP to IFRS).

The Company typically acquires its subsidiaries at a purchase price that consists of (an) initial cash payment(s) and estimated future earn-out obligations, based on (or related to) estimates of future results. Earn- out obligations are recalculated at least annually on the basis of the expected future results of the respective company after the business plan cycle or earlier when updated forecasts warrant a recalculation. An adjustment in the earn-out obligation has a corresponding effect on the goodwill.

The Company regularly acquires business combinations in stages, with or without the use of call and put options. For each so-called “step acquisition”, the fair value of the acquired business is determined in accordance with IFRS 3. Intangible assets (especially television formats) are identified and recognised once the recognition criteria are met and recognized if the asset’s fair value can be measured reliably. The remaining effects are accounted for as goodwill. The main factor contributing to the goodwill as a result of business combinations and the acquisition of minority interest is the existence of intangible assets, such as employees, that do not meet the criteria of recognition under IFRS. If a step acquisition results in a situation where the Company gains control over an entity, the other intangible assets identified are fully recognised in the balance sheet of the Company against their fair value. A minority interest is recognised for the non-owned share, as well as a revaluation reserve related to the share owned by the Company before the step acquisition. The minority interest and the revaluation reserve are released in the income statement over a time period that is equal to the amortisation period of the capitalised intangible assets, taking into account income tax effects.

Impairments

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to the smallest identifiable group of assets or cash-generating units and is tested annually for impairment. With respect to associates, the carrying amount of goodwill is included in the carrying amount of the investment in the associate or joint venture.

Format Rights

Acquired production rights and similar rights are stated at historic cost, which is the purchase cost plus all normal ancillary costs. The rights acquired from third parties are depreciated as from the time that the format is taken into production and in proportion to the number of episodes produced.

For step acquisitions the Company identifies format rights as an asset as is required under IFRS 3. These assets are valued, using valuation models generally used in circumstances like this. The amortisation period for the format rights is based on the expected cash flows for a period of 10 years.

(TV) Movie Rights and Other

(TV) movie rights acquired from third parties are depreciated to the extent to which the revenue, generated in the period under review, contributes to the expected total revenue, calculated over a maximum 10-year period.

F-52 Patents, franchises and other intellectual property rights purchased from third parties, are capitalised and amortised over the periods the Company is expected to benefit from their use. Information systems purchased from other companies, that are not an integral part of the hardware, are capitalised and amortised over a three- year period. Software that is an integral part of the hardware is included under the tangible assets.

The development costs of corporate websites of group companies are expensed as future economic benefits are uncertain and cannot be measured reliably.

6.7 Impairment of Assets

The carrying amounts of the Company’s assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.

For goodwill that has an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is estimated at least once a year, regardless of whether indicators of impairment exist.

An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the income statement.

A cash-generating unit is the smallest identifiable group of assets, that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

Impairment losses, recognised in respect of cash-generating units, are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units (group of units) and then, to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

Goodwill was tested for impairment as of 1 January 2004 and as of 31 December 2004, the date of transition to IFRS, even though no indication of impairment existed.

When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is objective evidence that the asset is impaired, the cumulative loss, that had been recognised directly in equity, is recognised in the income statement, even though the financial asset has not been derecognised. The amount of the cumulative loss, that is recognised in the income statement, is the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset, previously recognised in the income statement.

Calculation of Recoverable Amount

The recoverable amount of the Company’s investments in held-to-maturity securities and receivables carried at amortised cost, is calculated as the present value of estimated future cash flows, discounted at the original effective interest rate (i.e., the effective interest rate computed at initial recognition of these financial assets). Receivables with a short duration are not discounted.

The recoverable amount of other assets is the greater of their fair value, less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value, using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

Reversals of Impairment

An impairment loss in respect of a held-to-maturity security or receivable, carried at amortised cost, is reversed if a subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised.

F-53 recognised in the income statement, the impairment loss shall be reversed, with the amount of the reversal recognised in the income statement.

An impairment loss in respect of goodwill is not reversed.

In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

6.8 Investments

The non-consolidated associates in which Endemol exerts a significant influence over business and financial policy, but does not control, are valued at equity value in accordance with the equity method, determined in accordance with IFRS.

After initial recognition, investments, which are classified as available-for-sale, are stated at fair value, with any resulting gain or loss being recognised directly in equity, except for impairment losses. In the case of monetary items such as debt securities, any resulting gain or loss is recognised as foreign exchange gains and losses. When these investments are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in the income statement. Where these investments are interest-bearing, interest calculated using the effective interest method is recognised in the income statement.

Non-derivative financial assets with fixed or determinable payments and fixed maturity, are classified as held-to-maturity when the Company has the positive intention and ability to hold such assets to maturity. Investments intended to be held for an undefined period are not included in this classification.

All regular purchases and sales of financial assets are recognised on the trade date i.e. the date that the Company commits to purchase the asset. Regular purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame generally established by regulation or convention in the marketplace.

The de-recognition of a financial instrument takes place when the Company no longer controls the contractual rights that comprise the financial instrument. This is normally the case when the instrument is sold, or all the cash flows attributable to the instrument are passed through to an independent third party.

6.9 Inventories

Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. The cost of inventories is based on the first-in first-out principle.

6.10 Deferred Tax Asset

Deferred tax is accounted for using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: goodwill, which is not deductible for tax purposes, the initial recognition of assets or liabilities that affect both accounting and taxable profit, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

F-54 6.11 Other Financial Assets

Other financial assets are stated at amortised cost, with any difference between cost and redemption value being in the income statement on an effective interest basis.

6.12 Trade and Other Receivables

Trade Receivables

Trade receivables, which generally have a 30-90 day term, are recognised and carried at original invoice amount, less an allowance for bad debts. Such allowance is made when collection of the full amount is no longer probable.

Amounts Due from/ Due to Customers in Relation to Productions in Progress

All revenues and expenditures for unfinished productions are capitalised as amounts due from/ due to customers in relation to productions in progress. For each production the net amount of the sum of work in progress and uninvoiced turnover less the sum of deferred revenues and accrued production costs is calculated. If the sum of work in progress and uninvoiced turnover exceeds the sum of deferred revenues and accrued production costs, this amount is presented as amount due from customers in relation to productions in progress (asset). In case the sum of deferred revenues and accrued production costs exceeds the sum of work in progress and uninvoiced turnover, this amount is presented as amount due to customers in relation to productions in progress (liability).

6.13 Cash and Cash Equivalents

Cash and cash equivalents comprise cash balances and (call) deposits.

6.14 Minority Interest

Minority interests are that part of the profit and loss and the assets and liabilities of a subsidiary attributable to equity interests that are not directly or indirectly (through subsidiaries) owned by the Company.

6.15 Provisions

A provision is recognised in the balance sheet when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate, that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Recoveries from third parties, which are likely to be realised, are separately recorded, and are not offset against the related liability.

A provision for restructuring is recognised when the Company has approved a detailed and formal restructuring plan and the restructuring has either commenced or has been announced publicly. Future operating costs are not provided for.

A provision for onerous contracts is recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract and when such provision can be reasonably estimated.

6.16 Interest Bearing Loans and Borrowings

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the period of the borrowings on an effective interest basis.

F-55 6.17 Earn-out Obligations

Earn-out obligations are measured at their fair value at the moment they are incurred, based on (or related to) estimates of future results that determine the future cash outflows. The net present value of this fair value, using effective interest rates, is initially included in the balance sheet. The difference between this value and the ultimate redemption value is accounted for through straight-line interest accretions over the redemption period in the income statement as financial expense. Earn-out obligations are contingent considerations with respect to acquisitions of businesses.

Earn-out obligations are recalculated at least annually on the basis of the expected future results of the respective company, after the business planning cycle or earlier when updated forecasts warrant a recalculation. Any adjustment of the earn-out obligations, resulting from these recalculations, is accounted for against goodwill.

6.18 Employee Benefits

Defined Contribution Plans

Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement as incurred.

Defined Benefit Plans

The Company’s net obligation in respect of defined benefit pension plans is calculated separately for each plan, by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value, and the fair value of any plan assets is deducted. The discount rate is the yield at the balance sheet date on AAA credit rated bonds that have maturity dates approximating to the terms of the Company’s obligations. The calculation is performed by a qualified actuary using the projected unit credit method.

When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognised as an expense in the income statement on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognised immediately in the income statement.

All actuarial gains and losses as of 1 January 2004, the date of transition to IFRS, were recognised. In respect of actuarial gains and losses that arise subsequent to 1 January 2004 in calculating the Company’s obligation in respect of a plan, to the extent that any cumulative unrecognised actuarial gain or loss exceeds 10 per cent of the greater of the present value of the defined benefit obligation and the fair value of plan assets, that portion is recognised in the income statement over the expected average remaining working lives of the employees participating in the plan. Otherwise, the actuarial gain or loss is not recognised.

Where the calculation results in a benefit to the Company, the recognised asset is limited to the net total of any unrecognised actuarial losses and past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan.

If the Company is a participant in a multi-employer defined benefit pension plan, the Company accounts for these plans as defined contribution plans if sufficient information is not available to use defined benefit accounting.

Long-term Service Benefits

The Company’s net obligation in respect of long-term service benefits, other than pension plans, is the amount of future benefit that employees have earned in return for their service in the current and prior periods. The obligation is calculated using the projected unit credit method and is discounted to its present value and the fair value of any related assets is deducted. The discount rate is the yield at the balance sheet date on AAA credit rated bonds that have maturity dates approximating to the terms of the Company’s obligations.

F-56 6.19 Deferred Tax Liability

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: goodwill, which is not deductible for tax purposes, the initial recognition of assets or liabilities that affect both accounting and taxable profit, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.

6.20 Share-based Payments

Share options granted to employees are measured at fair value at the end of each reporting period. Compensation expense is recognised in the income statement over the vesting period of the share options. The fair value of the share options is calculated using the market price of the underlying shares and an option valuation model (being the Black-Scholes model). Changes in the fair value of the share options are accounted for in the income statement as personnel expenses.

Endemol accounts for the Telefónica stock option schemes as cash-settled share-based payment transactions in accordance with IFRS 2, and uses a vesting period of 3 years (50% of the options) and 4 years (the remaining 50%).

6.21 Turnover

Turnover from non-scripted television productions (i.e. entertainment and infotainment) is recognised in the income statement in proportion to the stage of completion of the production at the balance sheet date. The stage of completion is assessed by reference to surveys of work performed.

Income recognition of scripted television productions (i.e. drama productions or soaps) is based on the deliverables in the production, for example partial completion of the production. The remaining part of the costs and possible advance receipts will be capitalised as amounts due from customers and amounts due to customers, respectively.

Income recognition of other television productions is based on the income and production costs of the completed episodes. Income from merchandising, music and other sources is recognised at the time of delivery.

Turnover from the sale of licensing rights on intellectual property formats is recognised in the income statement when the significant risks and rewards of ownership have been transferred to the buyer and the turnover can be reliably estimated.

Turnover in the digital media business is recognised on the basis of the number of calls or minutes spent on calls, the number of SMS messages received or the number of Internet hits made. In addition, turnover is recognised for digital media business, based on the number of games sold and / or subscriptions sold in relation to the platforms provided.

6.22 Expenses

Expenses are recognised in the income statement on the basis of a direct association between the costs incurred and the earning of specific items of income (matching).

Operating Lease Payments

The Company has outstanding operating leases, whereby the lessor retains substantially all the risks and benefits of ownership of the asset. Operating lease payments are recognised as an expense in the income statement as incurred.

F-57 Net Financing Costs

Net financing costs comprise interest payable on borrowings calculated using the effective interest rate method, interest receivable on funds invested, effective interest on earn-out obligations, foreign exchange gains and losses and gains and losses on derivative financial instruments (including call and put options) that are recognised in the income statement.

Interest income is recognised in the income statement as it accrues, using the effective interest method.

Income Tax

Income tax in the income statement for the year comprises current and deferred taxes. Income tax is recognised in the income statement, except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, taking into account exempted profit constituents and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Additional income taxes that arise from the distribution of dividends are recognised at the moment the liability arises to pay the related dividend.

6.23 EBITDA

The Company uses the EBITDA heading in the income statement. We define EBITDA to mean operating result before depreciation and amortisation. EBITDA is not a measurement under IFRS and the reader should not consider EBITDA as an alternative to (a) net income, (b) cash flows from operating, investing or financing activities, or as a measure of our ability to meet cash needs or (c) any other measures or performance under IFRS. EBITDA is not a direct measure of our liquidity, which is shown by the Company’s cash flow statement and needs to be considered in the context of our financial commitments. EBITDA may not be indicative of our historical operating results, and may not be predictive of our potential future results. Because all companies do not calculate EBITDA identically, the presentation of EBITDA may not be comparable to similarly entitled measures of other companies.

6.24 Segment Reporting

A segment is a distinguishable component of the Company that is engaged either in providing services within a particular economic environment (geographical segment) or in providing certain types of services (business segment) and that is subject to risks and rewards that are different from those of other segments.

6.25 Compilation of Cash Flow Statement

In the statement of cash flows, cash flows from operating activities are presented using the indirect method. The net result for the period is adjusted for the effects of non-cash transactions, accruals and items of income or expense associated with investing or financing cash flows. Cash and cash equivalents comprise cash at the bank (both debit and credit) and (call) deposits.

F-58 7 Subsequent Events

Initial Public Offering

This pro forma consolidated financial information has been prepared as part of the prospectus relating to the initial offering of ordinary shares of Endemol. Reference is made to Note 1, General Information.

Acquisitions in the Nine Months Ended 30 September 2005

As of 1 January 2005, Endemol exercised a call option to acquire 30% of the shares of the Dutch company TVBV B.V., bringing Endemol’s ownership to 70%. As Endemol did not obtain control, the share in TVBV B.V. is proportionally consolidated as of the date of exercise of the option. Endemol reported its share in TVBV B.V. until 2004 as “interest in associates”.

The acquisition of a further stake in Stokvis & Niehe Producties in April 2005 increased our stake from 80% to 85%. The results of Stokvis & Niehe Producties were already being consolidated in our accounts prior to that date.

As of 1 May 2005, Endemol USA exercised a call option to acquire an additional 16% of the shares of True Entertainment, bringing Endemol’s ownership to 67%. True Entertainment was already fully consolidated with a minority interest.

As of 1 July 2005, Endemol UK acquired 75% of the shares of Showrunner, a start-up scripted company in the United Kingdom. Its results have been fully consolidated with a minority interest since that time.

The effects of the aforementioned acquisitions are reflected in the Company’s interim IFRS pro forma consolidated financial information for the nine months ended 30 September 2005.

F-59 8 Segment Reporting

Primary Segmentation

Endemol’s primary segmentation is based on type of product (genre). Endemol’s genres are non-scripted, scripted and digital media.

Non- Digital Total EUR 1,000 Scripted Scripted Media Unallocated group ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Turnover ...... 669,632 104,320 76,991 - 850,943 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Operating result ...... 95,871 10,145 17,202 (5,997) 117,221 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Other information Segment assets ...... 323,761 45,408 21,274 288,809 679,252 Investment in associates ...... 6,266 8,786 - - 15,052 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Consolidated assets...... 330,027 54,194 21,274 288,809 694,304 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Consolidated liabilities...... 216,630 36,904 41,581 163,825 458,940 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Depreciation and amortisation ...... 216 833 281 13,865 15,195 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Expenditure on PPE (capex) ...... – – – 15,195 15,195 ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––

In establishing the operating result per type of product, assumptions were used to make a reasonable allocation of costs to the different types of product, this especially relates to general costs. Where appropriate, turnover was used as an allocation basis.

Secondary Segmentation

The secondary segmentation is based on geographical areas.

Capital expenditure 3,266 1,464 4,882 292 3,646 113 1,376 15,039 Unallocated expenditure 156 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Expenditure on PPE (capex) 15,195 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––

Inter-segment turnover is realised on an at arm’s length basis.

F-60 9 Employee Benefit Expense

EUR 1,000 2004 ––––––––––––––––––––––– Wages and salaries ...... 101,407 Compulsory social security contributions...... 12,745 Pension and early retirement costs ...... 3,504 Cash settled Telefónica stock option plans ...... 7,404 Other personnel costs ...... 12,037 ––––––––––––––––––––––– Total employee benefit expense ...... 137,097 –––––––––––––––––––––––

With respect to the Telefónica stock option plans we refer to Note 27, Share-based Payments.

The number of full time equivalents at year-end 2004, including both workers on temporary contracts and workers on contracts for an indefinite term, amounted to 3,249, compared to 2,964 at year-end 2003. This represents an increase of 9.6%, primarily as a result of the 100% consolidation of Palomar (compared to 51% in 2003) and higher volume in Endemol Italia. At year-end 2004 the number of workers on contracts for an indefinite term amounted to 1,217 and the number of workers on temporary contracts amounted to 2,032.

The geographical breakdown of full time equivalents is as follows:

2004 2003 ––––––––––––––––––––––– ––––––––––––––––––––––– The Netherlands (incl. holding entities) ...... 943 1,065 Spain ...... 642 540 Italy...... 544 373 UK ...... 500 442 Germany ...... 287 279 USA ...... 34 27 Other countries ...... 299 238 ––––––––––––––––––––––– ––––––––––––––––––––––– Total number of full time equivalents...... 3,249 2,964 ––––––––––––––––––––––– –––––––––––––––––––––––

R&D

The aggregate amount of the research and development expenditure recognised as an expense in 2004 amounts to approximately EUR 8 million. As the R&D expenditures did not meet the recognition criteria, no R&D expenditures were capitalised. R&D expenditure mainly consists of personnel expenses.

F-61 10 Other Operating Expense

EUR 1,000 2004 ––––––––––––––––––––––– Building expenses ...... 15,399 Representation and selling expenses...... 15,481 Other operating expense ...... 36,106 Restructuring costs ...... 5,482 ––––––––––––––––––––––– Total other operating expense ...... 72,468 –––––––––––––––––––––––

Restructuring costs primarily relate to the restructuring of the operating companies in the Netherlands.

F-62 11 Financial Income and Expense

EUR 1,000 2004 ––––––––––––––––––––––– Interest income ...... 6,825 Interest expense...... (7,202) Net result on fair value adjustments of financial instruments...... (2,839) Interest expense on earn-out obligations...... (2,490) Net foreign currency exchange results ...... (1,418) Other financial result...... (612) ––––––––––––––––––––––– Total financial income and expense...... (7,736) –––––––––––––––––––––––

Net result on fair value adjustments of financial instruments are related to changes in fair value of the interest rate swaps, call and put options and other financial instruments.

Earn-out obligations are stated at amortised cost. Interest expenses are included in the income statements at an amount of EUR 2.5 million.

F-63 12 Income Tax Expense

Endemol’s operations are subject to income taxes in various jurisdictions. For 2004 the effective tax rate amounted to 37.3%. Excluding non-deductible items such as impairment of goodwill, results on fair value adjustment, interest expense on earn-out obligations and income from participating interests, the effective tax rate would be 36.0% for 2004. Our gain in result before taxation has especially been realised in countries under “high tax” jurisdictions such as the United States, Italy and Germany, and revaluing the deferred tax asset in the Netherlands based on lower future tax rates.

Reconciliation of Tax Expense

EUR 1,000 31 December 2004 ––––––––––––––––––––––– Current tax expense Current year ...... 41,030 Adjustments for prior years ...... (338) ––––––––––––––––––––––– 40,692 Deferred tax expense Origination and reversal of temporary differences ...... (885) Reduction in tax rate ...... 1,644 ––––––––––––––––––––––– 759 ––––––––––––––––––––––– Total income tax expense in income statement...... 41,451 –––––––––––––––––––––––

Reconciliation of Effective Tax Rate

EUR 1,000 31 December 2004 ––––––––––––––––––––––– Profit before tax ...... 111,224 Local corporate tax rate ...... 17% - 40% Income tax based on local corporate tax rate ...... 41,729 Non-deductable expenses ...... (277) Effective tax ...... 41,451 Effective tax rate ...... 37.3%

Deferred Tax Assets and Liabilities

Deferred tax assets mainly consist of tax losses carried forward and temporary differences in revenue and cost recognition.

Deferred tax liabilities mainly consist of deferred tax liabilities arising from step acquisitions and temporary differences in revenue and cost recognition.

F-64 13 Property, Plant and Equipment

Land and Plant and EUR 1,000 buildings equipment Other Total ––––––––––– ––––––––––– ––––––––––– ––––––––––– Balance as of 1 January 2004 Cost (gross carrying amount) ...... 34,738 20,091 50,813 105,642 Accumulated depreciation and impairment ...... (14,365) (10,785) (35,876) (61,026) ––––––––––– ––––––––––– ––––––––––– ––––––––––– Net carrying amount ...... 20,373 9,306 14,937 44,616 ––––––––––– ––––––––––– ––––––––––– –––––––––––

Cost Balance as of 1 January 2004 ...... 34,738 20,091 50,813 105,642 Additions ...... 3,967 4,133 7,095 15,195 Additions through business combinations ...... - 91 163 254 Exclusion of companies ...... (1,498) - (68) (1,566) Disposals, reclassifications and other movements ...... (4,849) 1,687 (6,524) (9,686) Exchange effects...... 17 (15) (136) (134) ––––––––––– ––––––––––– ––––––––––– ––––––––––– Balance as of 31 December 2004 ...... 32,375 25,987 51,343 109,705 ––––––––––– ––––––––––– ––––––––––– –––––––––––

Depreciation and impairment losses Balance as of 1 January 2004 ...... (14,365) (10,785) (35,876) (61,026) Depreciation ...... (4,423) (2,015) (6,890) (13,328) Additions through business combinations ...... - (64) (147) (211) Exclusion of companies ...... 257 - 21 278 Disposals, reclassifications and other movements ...... 3,833 (3,341) 5,399 5,891 Exchange effects...... 18 15 84 117 ––––––––––– ––––––––––– ––––––––––– ––––––––––– Balance as of 31 December 2004 ...... (14,680) (16,190) (37,409) (68,279) ––––––––––– ––––––––––– ––––––––––– –––––––––––

Balance as of 31 December 2004 Cost (gross carrying amount) ...... 32,375 25,987 51,343 109,705 Accumulated depreciation and impairment ...... (14,680) (16,190) (37,409) (68,279) ––––––––––– ––––––––––– ––––––––––– ––––––––––– Net carrying amount ...... 17,695 9,797 13,934 41,426 ––––––––––– ––––––––––– ––––––––––– –––––––––––

F-65 14 Goodwill and Other Intangible Assets

Format Other EUR 1,000 Goodwill rights rights Total ––––––––––– ––––––––––– ––––––––––– ––––––––––– Balance as of 1 January 2004 Cost (gross carrying amount) ...... 135,719 3,807 11,729 151,255 Accumulated amortisation/depreciation ...... (3,176) (8,786) (11,962) ––––––––––– ––––––––––– ––––––––––– ––––––––––– Net carrying amount ...... 135,719 631 2,943 139,293 ––––––––––– ––––––––––– ––––––––––– –––––––––––

Cost Balance as of 1 January 2004 ...... 135,719 3,807 11,729 151,255 Additions ...... 283 243 526 Additions through business combinations and minority interest . . . 2,811 5,712 2,247 10,770 Impairment ...... (495) - - (495) Earn-out adjustments ...... 2,571 - - 2,571 Reclassifications and other movements ...... - (2,093) (2,085) (4,178) Exchange effects...... 452 - (5) 447 ––––––––––– ––––––––––– ––––––––––– ––––––––––– Balance as of 31 December 2004 ...... 141,341 7,426 12,129 160,896 ––––––––––– ––––––––––– ––––––––––– –––––––––––

Depreciation and impairment losses Balance as of 1 January 2004 ...... - (3,176) (8,786) (11,962) Amortisation / depreciation ...... - (1,070) (302) (1,372) Additions through business combinations ...... - - (702) (702) Impairment ...... - - - - Reclassifications and other movements ...... - 1,931 (314) 1,617 Exchange effects...... - - 3 3 ––––––––––– ––––––––––– ––––––––––– ––––––––––– Balance as of 31 December 2004 ...... - (2,315) (10,101) (12,416) ––––––––––– ––––––––––– ––––––––––– –––––––––––

Balance as of 31 December 2004 Cost (gross carrying amount) ...... 141,341 7,426 12,129 160,896 Accumulated amortisation/depreciation ...... - (2,315) (10,101) (12,416) ––––––––––– ––––––––––– ––––––––––– ––––––––––– Net carrying amount ...... 141,341 5,111 2,028 148,480 ––––––––––– ––––––––––– ––––––––––– –––––––––––

We refer to Note 6.6, Intangible Assets, for the accounting policies regarding intangible assets.

Goodwill

As a result of the recalculation of the earn-out obligations, goodwill was increased by EUR 2.6 million in the year ended 31 December 2004.

The goodwill positions have undergone an impairment test in accordance with IAS 36, which has not led to any impairment costs, except for some smaller write-offs in the amount of EUR 0.5 million. If the earn-out obligations increase, this may lead to an impairment loss in the coming years.

F-66 Impairment Testing of Goodwill

Goodwill acquired through business combinations and acquired businesses after 1 August 2000, has been allocated to individual cash generating units (geographical) for impairment tests as follows:

EUR 1,000 2004 ––––––––––––––––––––––– United Kingdom ...... 65,624 Spain ...... 52,604 USA...... 3,620 Argentina...... 6,768 Netherlands ...... 10,718 Italy ...... 2,007 ––––––––––––––––––––––– Balance as of 31 December 2004 ...... 141,341 –––––––––––––––––––––––

Under previous GAAP, goodwill acquired through business combinations with an acquisition date before 1 August, 2000 was deducted from equity.

The recoverable amounts of the cash generating units have been determined based on a value-in-use calculation. To determine the value-in-use, cash flow projections are based on financial budgets, approved by senior management covering a five-year period. The discount rates, applied to the cash flow projections, vary between 10% and 12% per cent. This rate has been calculated using the weighted average cost of capital methodology. The main parameters are the targeted debt to equity ratio, the risk free interest rate based on government bonds and a risk premium of 45 basis points. The cash flows beyond the budget horizon are based on the last budget period and an assumed growth rate, which is considered to be the best available projection of the business cycle. To test the current asset base, a normalised cash flow is calculated by adjusting incidental cash flow impacts and cash flow impacts of strategic projects.

Format Rights and Other Rights

As part of the acquisitions, as set out in Note 15, Investments in Subsidiaries and Joint Ventures, EUR 5.7 million of format rights has been recognised and EUR 2.2 million of other rights has been recognised.

F-67 15 Investments in Subsidiaries and Joint Ventures

In August 2004, Endemol acquired an additional 17.5% share in Palomar, bringing Endemol’s ownership to 68.5%. The financials of Palomar are fully consolidated in the group accounts taking into account a minority interest.

At the end of November 2004, Endemol increased its interest in 625 TV Produkties to 100%. Endemol already had the legal ownership of 90% of the shares with an economic profit right of 72%. By acquiring the 10% legal interest in 625 TV Produkties Endemol acquired an additional 28% profit right, bringing the profit right to 100%.

Net assets at acquisition date of the acquired subsidiaries, joint ventures and minority interests:

Adjustment in Carrying accordance Recognised EUR 1,000 amounts with IFRS 3 amounts ––––––––––– ––––––––––– –––––––––––

Property, plant and equipment ...... 89 – 89 Other intangible assets ...... 3,153 5,712 8,865 Trade and other receivables ...... 7,452 – 7,452 Receivables from tax authorities...... 64 – 64 Cash and cash equivalents...... 36 – 36 Long-term interest bearing loans and borrowings ...... (13) – (13) Pensions and similar obligations...... (54) – (54) Deferred tax liability...... – (2,555) (2,555) Short term interest bearing loans and borrowings ...... (3,981) – (3,981) Trade and other payables ...... (1,953) – (1,953) Current tax payable...... (1,887) – (1,887) ––––––––––– ––––––––––– ––––––––––– Net identifiable assets and liabilities ...... 2,906 3,157 6,063 ––––––––––– ––––––––––– ––––––––––– Portion acquired in % ...... 10% - 17.5% –––––––––––– Portion of net identifiable assets and liabilities ...... 1,158 –––––––––––– Consideration paid in cash ...... 3,049 Earn-out obligation ...... 1,335 Value of options exercised ...... (416) –––––––––––– Total consideration ...... 3,968 –––––––––––– Goodwill...... 2,811 ––––––––––––

(*) The portion acquired of 625TV is economically 28%, legally 10%

As part of the acquisitions, Endemol separately valued the format rights of the acquired subsidiaries, resulting in an increase of the other intangible assets of EUR 5.7 million.

As a result of the step acquisition of Palomar, Endemol gained control. The other intangible assets identified are therefore fully recognised against their fair value. A minority interest is recognised for the non-owned share in the amount of EUR 1.0 million, as well as a revaluation reserve related to the share owned by the Company before the step acquisition in the amount of EUR 1.6 million.

Based on IFRS 3, Endemol has accounted for these transactions as step acquisitions.

F-68 16 Investments in Associates

The movements in investments in associates are as follows:

Share in Total EUR 1,000 net equity Goodwill investment ––––––––––– ––––––––––– ––––––––––– Balance as of 1 January 2004 ...... 6,964 7,176 14,140 Share in net results...... 1,739 1,739 Dividends ...... (601) (601) Divestments ...... (131) (131) Additions and other movements ...... (89) (89) Exchange effects ...... (6) (6) ––––––––––– ––––––––––– ––––––––––– Balance as of 31 December 2004 ...... 7,965 7,087 15,052 ––––––––––– ––––––––––– –––––––––––

The additions and other movements relate to adjustments as a result of the revaluation of the earn-out obligations.

Investments in associates mainly include investments in NL TV, Metronome and Meta.

F-69 A summarised unaudited statement of assets and liabilities and a summarised unaudited income statement of the associated companies accounted for under the equity method of accounting, and the Company’s share thereof, is set out below:

Balance sheet 31 December 2004 * 1 January 2004 * –––––––––––––––––––––––– ––––––––––––––––––––––––– EUR 1,000 Associates Associates assets and Company assets and Company liabilities share liabilities share ––––––––––– ––––––––––– ––––––––––– ––––––––––– Ownership in % ...... 35% - 40% 35% - 40%

Fixed assets...... 13,715 4,931 14,260 5,158 Current assets ...... 31,883 11,664 29,784 10,756 ––––––––––– ––––––––––– ––––––––––– ––––––––––– Total assets ...... 45,598 16,595 44,044 15,914 Current liabilities ...... 16,469 5,968 19,434 6,883 Non-current liabilities...... 6,949 2,662 5,398 2,067 ––––––––––– ––––––––––– ––––––––––– ––––––––––– Net assets ...... 22,180 7,965 19,212 6,964 ––––––––––– ––––––––––– ––––––––––– ––––––––––

Profit & loss 31 December 2004 * –––––––––––––––––––––––– EUR 1,000 Associates’ Company results share ––––––––––– ––––––––––– Turnover ...... 105,656 38,080 Other income ...... 3,566 1,430 Net operating expense...... (102,519) (36,930) ––––––––––– ––––––––––– Profit before tax ...... 6,702 2,580 Income taxes ...... (2,160) (841) ––––––––––– ––––––––––– Net profit for the period ...... 4,542 1,739 ––––––––––– –––––––––––

(*) Unaudited

F-70 17 Other Financial Assets

Loans Trust Long term EUR 1,000 receivable accounts call options Total ––––––––––– ––––––––––– ––––––––––– ––––––––––– Balance as of 1 January 2004...... 39,457 6,114 8,101 53,672 Additions ...... 41,600 41,600 Sale/ redemption...... (162) (3,012) (3,174) Transfer to current assets ...... (5,268) (5,268) Revaluation ...... (88) (88) ––––––––––– ––––––––––– ––––––––––– ––––––––––– Balance as of 31 December 2004 ...... 80,895 3,102 2,745 86,742 ––––––––––– ––––––––––– ––––––––––– –––––––––––

Loans

As of 31 December 2004, the loans receivable amounted to EUR 80.9 million. Of this amount, EUR 80.0 million relates to the loan receivable from Endemol France Holding S.A.S. In September 2005 Endemol Finance B.V. has assigned the loan receivable, including the interest accrued of EUR 3.9 million, from Endemol France Holding S.A.S. to Endemol Investment B.V. (previously named Endemol B.V.) by way of a distribution in kind from the share premium reserve, for a total assignment of EUR 83.9 million.

Trust Accounts

The Company receives cash in production trust accounts from customers in order to finance the productions made for these customers. Due to the nature of the restrictions on the use of these cash items, the trust accounts are qualified as long-term deposits and guarantees. The Company receives a market-based interest on the deposits.

Long-term Call Options

Call options are valued at fair value and recognised in the balance sheet when the option price (exercise price) is lower than the underlying fair value of the potential future investee.

Following IAS 32.4, these call and put options are within the scope of IAS 32/39.

Reference is made to Note 28, Financial Instruments.

F-71 18 Deferred Tax Assets and Liabilities

In assessing the recoverability of deferred tax assets, management considers whether it is probable that some portion or all of the deferred tax assets will be realised. The ultimate realisation of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the net operating losses can be utilised or the temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax strategies in making this assessment. In order to fully realise the deferred tax asset related to the net operating losses, Endemol will need to generate sufficient future taxable income in the countries where these net operating losses exist. Based upon projections for future taxable income over the periods in which the net operating losses can be utilised or the temporary differences become deductible, management believes it is probable that Endemol will realise the deferred tax assets as of 31 December 2004.

F-72 19 Trade and Other Receivables

EUR 1,000 31 December 2004 1 January 2004 ––––––––––––––––––––––– ––––––––––––––––––––––– Trade receivables ...... 110,510 125,706 Amounts due from customers...... 72,152 47,779 Amounts receivable from affiliated companiesrelated companies . . - Telefónica group companies...... 11,863 3,878 - Associated companies ...... 269 279 - Other relatedAffiliated companies ...... 6,210 4,096 Financial assets...... 2,453 1,355 Other receivables ...... 38,506 27,258 ––––––––––––––––––––––– ––––––––––––––––––––––– Total trade and other receivables ...... 241,963 210,351 ––––––––––––––––––––––– –––––––––––––––––––––––

Trade Receivables

Trade receivables as of 31 December 2004 amounted to EUR 120.4 million. Allowances for doubtful debts as of 31 December 2004 are deducted from trade receivables and amounted to EUR 9.9 million, resulting in a net receivable of EUR 110.5 million.

Amounts Due from Customers in Relation to the Productions in Progress

The gross amounts due from customers as of 31 December 2004 relate to capitalised expenses (work in progress) and turnover that has not yet been invoiced to customers.

EUR 1,000 31 December 2004 1 January 2004 ––––––––––––––––––––––– ––––––––––––––––––––––– Work in progress...... 19,765 18,394 Uninvoiced turnover ...... 87,517 61,400 Deferred revenues...... (56,311) (35,757) Accrued production costs ...... (83,442) (63,096) ––––––––––––––––––––––– ––––––––––––––––––––––– Net amount ...... (32,471) (19,059) ––––––––––––––––––––––– –––––––––––––––––––––––

Separation determined on a project-by-project basis:

Amounts due from customers ...... 72,152 47,779 Amounts due to customers ...... (104,623) (66,838) ––––––––––––––––––––––– ––––––––––––––––––––––– Net amount ...... (32,471) (19,059) ––––––––––––––––––––––– –––––––––––––––––––––––

Financial Assets

The financial assets relate primarily to the short-term call options and accrued interest receivable. We refer to Note 28, Financial Instruments for more information.

Other Receivables

Other receivables mainly relate to prepayments and advances of other operating expense and accruals.

F-73 20 Cash and Cash Equivalents

EUR 1,000 31 December 2004 1 January 2004 ––––––––––––––––––––––– ––––––––––––––––––––––– Cash at bank and in hand ...... 97,561 96,506 Short-term deposits...... 20,263 10,667 ––––––––––––––––––––––– ––––––––––––––––––––––– Total cash and cash equivalents...... 117,824 107,173 ––––––––––––––––––––––– –––––––––––––––––––––––

Notional Cash Pool

Positive and negative bank balances of a legal entity with one bank are not offset, even though these balances are part of a notional cash pool, unless there is a legally enforceable right to set of the recognised amounts and the entity intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. Notional cash pools form an integral part of the Company’s cash management. Based on the above Endemol is required to report the cash balances and the bank overdrafts on a gross basis. The effect amounts to EUR 114.8 million as of 31 December 2004. For interest calculation purposes these amounts are netted.

All cash is at the free disposal of the company, except for EUR 11.7 million, which is cash held on a special deposit for the purpose of making payments in relation to the Telefónica welcome bonus. Of this amount, EUR 11.0 million is included as accrued bonus payable. In 2004, a special purpose entity was incorporated solely for the use of distribution of the Telefónica welcome bonus to employees. Endemol has consolidated this special purpose entity in its annual accounts for 2004.

Short-term Deposits

Short-term deposits in the amount of EUR 20.3 million were placed for periods less than one month.

F-74 21 Issued Capital and Reserves

To the equity holders of the parent the following elements of equity are attributable: issued share capital, legal reserve, translation reserve, hedge reserve, revaluation reserve, retained earnings and result of the year.

We refer to the pro forma consolidated statement of changes in equity.

Legal Reserve

The legal reserve was formed for the retained profits from participations, which was not paid in the form of dividends and payment of which cannot be realised by the Company itself.

Translation Reserve

The translation reserve comprises of all foreign exchange differences arising from the translation of the financial statements of foreign operations.

Hedge Reserve

The hedge reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedge instruments, related to hedged transactions that have not yet occurred.

Revaluation Reserve

The revaluation reserve relates to the re-valued intangible assets arising from step acquisitions.

F-75 22 Interest-bearing Loans and Borrowings

EUR 1,000 31 December 1 January 2004 2004 –––––––––– –––––––––– Non-current liabilities Other bank debt...... 364 854 –––––––––– –––––––––– 364 854 Current liabilities Other bank debt...... 129,253 176,342 –––––––––– –––––––––– 129,253 176,342 –––––––––– –––––––––– Total interest-bearing loans and borrowings ...... 129,617 177,196 –––––––––– ––––––––––

Credit Facilities

In September 2002, Endemol entered into a multicurrency revolving credit facility for EUR 250.0 million with a syndicate of five banks. As of 31 December 2004, Endemol does not record any amounts drawn under this facility. In 2004 the short-term, 364-day part of this facility was extended for another 364 days. In addition Endemol has a total of EUR 16.0 million outstanding under other non-committed overdraft lines. The Company and some of its group companies have accepted joint and several liability for the credit facilities and are subject to restrictions on the transfer of format rights (in general Endemol does not capitalize own-developed format rights). Negative pledge clauses have been agreed for the debts to credit institutions, which are payable on demand in the event of certain ratios not being achieved.

On 29 September 2005 Endemol entered into a term sheet in respect of a EUR 250.0 million multicurrency revolving credit facility Endemol intends to enter into before the consummation of the Offering. This facility is to replace a previous facility that expired in September 2005. Currently we have been granted a temporary overdraft facility in an amount of EUR 150.0 million, which will be repaid once the new multicurrency revolving credit facility is in place. The new EUR 250.0 million facility will have a three-year term (with an option to extend to a maximum of 5 years) and will be a multicurrency revolving credit facility with a number of banks, which will be available to fund our working capital, acquisition and other cash needs. Loans under the facility will be guaranteed by several of our operating subsidiaries.

The interest rate on the amounts due to credit institutions is variable and based on Euribor plus a company specific mark-up. The temporary overdraft facility and multicurrency revolving credit facility include interest charges at Euribor + 45bp. We have at present six interest rate swaps in place that maximise the interest percentage to be paid for the first EUR 120 million of financing to 3.95%.

In addition we maintain a number of bilateral facilities in Italy, Argentina, USA and Spain having other interest rates than the temporary overdraft facility that is currently in place. Based on the facilities in place, the weighted average interest rate over the period is estimated as approximately 5.25% per annum.

Other Non-current Bank Debt

Long-term balances with credit institutions decreased since 31 December 2003 by EUR 0.5 million mainly a result of repayment of a government subsidized loan by Endemol Italia and a decrease of an external loan at Gestmusic Endemol.

F-76 The amount of the current bank accounts (bank overdrafts) is mainly influenced by the gross reporting of the notional cash pool. The effect amounts to EUR 114.8 million as of 31 December 2004.

Based on IAS 32.42, positive and negative bank balances of a legal entity with a bank are no longer offset, even though these balances are part of a notional cash pool, unless there is a legally enforceable right to set off the recognised amounts and the entity intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. Notional cash pools form an integral part of the Company’s cash management. Based on the above, Endemol is required to report the cash balances and the bank overdrafts on a gross basis. For interest calculation purposes these amounts are netted.

F-77 23 Pensions and Similar Obligations

The provision for pensions and similar obligations amounts to:

EUR 1,000 31 December 1 January 2004 2004 –––––––––– –––––––––– Pensions ...... - - Other post-retirement benefits ...... - - Severance liabilities ...... 431 431 –––––––––– –––––––––– Total pensions and similar obligations ...... 431 431 –––––––––– ––––––––––

Except for the Dutch group companies, all of Endemol’s employees are covered under several defined contribution plans. For substantially all of the employees in the Netherlands, a defined benefit plan exists at Pensioenfonds PNO Media. This plan is a multi-employer defined benefit pension plan, which is accounted for as a defined contribution plan because sufficient information is not available for defined benefit accounting.

PNO Media is a multi-employer pension fund and for that reason PNO Media is not able to provide Endemol with sufficient information in relation to the present fair value of the benefit obligations, the fair value of plan assets and the funded status of Endemol. Therefore, no obligation is included in this financial information.

The Annual Accounts 2004 of Pensioenfonds PNO Media show a deficit of EUR 5.0 million and a reserve position of EUR 387.6 million negative as of 31 December 2004. Endemol is a participant in this pension fund (for approximately 3%). As of 31 December 2004, Endemol estimates, based on the information available, that the exposure amounts to approximately EUR 3.0 million. If in the future a deficit in this multi-employer defined benefit pension plan remains, Endemol may become liable for its share in these deficits.

In Italy, employees are covered by a severance plan (post-employment benefit plan) provided for in accordance with local legislation. Severance pay is considered normal remuneration, that has been deferred and approximates one month’s pay for each year of service, valued each year on a basis linked to cost-of-living indices. The severance liability as of 31 December, 2004, of EUR 0.4 million, represents the accumulated amount due to employees upon termination based on service to date.

F-78 24 Earn-out Obligations

The liabilities with respect to acquisitions (earn-out obligations) are estimated on the basis of the expected future results of the respective companies (performance related criteria). Earn-out obligations are recognised at the net present value of management’s best estimate of the expected future cash flows. The net present value is calculated using the applicable historical interest rate including a mark-up reflecting the risks of the market in which the Company operates. Discount rates used vary between 4.1% and 5.6%. The main liabilities relate to the companies acquired in Spain and the United Kingdom.

EUR 1,000

Balance as of 1 January 2004...... 59,881 Additions as a result of recalculations ...... 2,865 Additions through business combinations ...... 1,335 Payments...... (18,509) Interest accretions ...... 2,490 Currency exchange effects ...... 692 –––––––––– Balance as of 31 December 2004 ...... 48,754 –––––––––– Reported on the balance sheet as of 31 December 2004 ...... Long-term earn-out obligations ...... 33,680 Short-term earn-out obligations ...... 15,074

The changes as a result of the recalculation of the earn-out obligations in 2004 have been accounted for against goodwill. The earn-out obligations outstanding as of 31 December 2004 are all due in 2005 and 2006.

F-79 25 Provisions

EUR 1,000 Restructuring Other Total –––––––––– –––––––––– –––––––––– Balance as of 1 January 2004...... 417 2,150 2,567 Additions ...... 5,482 14,718 20,200 Utilisation ...... (143) - (143) Reversal ...... (417) (258) (675) –––––––––– –––––––––– –––––––––– Balance as of 31 December 2004 ...... 5,339 16,610 21,949 –––––––––– –––––––––– ––––––––––

Restructuring

The restructuring provision primarily relates to the restructuring of the operating companies in the Netherlands that will be affected in 2005.

Other Provisions

In the other provisions an amount of EUR 7.0 million is recognised for an onerous contract. The remaining amount relates to legal and tax disputes.

F-80 26 Trade and Other Payables

EUR 1,000 31 December 1 January 2004 2004 –––––––––– –––––––––– Trade payables ...... 26,730 23,927 Amounts due to customers ...... 104,623 66,838 Financial payables...... 411 2,562 Affiliated Related companies ...... 10,794 4,971 Other liabilities ...... 26,471 33,282 Accruals and accrued bonus allowances employees...... 53,646 48,992 –––––––––– –––––––––– Total trade and other payables ...... 222,675 180,572 –––––––––– ––––––––––

Amounts Due to Customers in Relation to Productions in Progress

We refer to Note 19, Trade and Other Receivables, for the amounts due to customers in relation to the productions in progress.

Accruals and Accrued Bonus Allowances Employees

In the accruals an amount of EUR 11.0 million is included, corresponding to Telefónica welcome bonuses payable to Endemol employees in 2005 and 2006. Reference is made to the disclosure on Cash.

F-81 27 Share-based Payments

EN-SOP

Employees within the Endemol group participate in the Telefónica share option plans (“EN-SOP”).

EN-SOP consists of grants to the beneficiaries (all the Endemol group’s permanent employees who are not participating in another similar stock option plan), effective 1 January, 2001, 2002, 2003 and 2004, of a variable number (based on the various wage and functional categories) of purchase options on Telefónica, S.A. shares. The duration of the options is four years from the grant date and the options may be exercised at a rate of 50% in each of years three and four after the related grant date.

The option exercise price will be the related annual reference value, and the exercise terms will be the customary terms in programmes of this nature. The beneficiaries must remain uninterruptedly permanent employees of Endemol, until the options are exercised, without prejudice to the regulation of cases of early settlement of the options in certain cases in which the employment relationship is interrupted prior to the exercise of the options.

The options may be settled through the acquisition by the beneficiary of the underlying shares or, alternatively, by receiving a net amount in cash. Endemol accounts for the option scheme as a cash-settled share- based payment transaction in accordance with IFRS 2 and uses vesting periods of 3 (50% of the options) and 4 years (the remaining 50%).

All share options are measured at fair value at the reporting date, taking into consideration the extent to which employees have rendered service to that date. In accordance with paragraphs 32 and 33 of IFRS 2, the expenses related to the option schemes are accounted for in the income statement over the vesting period. Changes in the fair value of the share options are accounted for in the income statement as employee benefit expenses.

Telefónica has committed itself to reimburse Endemol for the costs of the share options granted. In the pro forma consolidated financial information as of 1 January, 2004 and 31 December, 2004, a receivable from Telefónica and a capital contribution equal to that amount have therefore been included in the balance sheet.

The total number of granted and non-cancelled share options as of 31 December, 2004 was 5,586,775. The following table shows the movements in the outstanding options:

Weighted Number of average share exercise options price (EUR) ––––––––––– –––––––––– Granted options outstanding on 1 January 2004 (*) ...... 4,777,537 11.81 Granted in 2004...... 2,052,286 12.24 Expired/Forfeited in 2004...... (640,520) 17.82 Cancelled in 2004 ...... (602,528) 10.06 ––––––––––– –––––––––– Granted options outstanding and exercisable on 31 December 2004...... 5,586,775 10.87 ––––––––––– ––––––––––

(*) Before grant and before exercise/forfeiture, both effective as of 1 January

F-82 The recognised fair value of the share options outstanding as of 31 December 2004 amounts to EUR 11.0 million and is included in the accrued bonuses.

EUR 1,000 2004 –––––––––– Share options granted in 2002 – total fair value ...... 3,226 Share options granted in 2003 – total fair value ...... 11,433 Share options granted in 2004 – total fair value ...... 6,078 –––––––––– Total fair value of granted and non-cancelled share options ...... 20,737 –––––––––– Accrued personnel related expense re. EN-SOP as of 1 January 2004...... 3,613

Expense arising from share options granted in 2004 ...... 1,746 Expense arising from increase of accrued liability for options granted prior to 2004 . . . . . 3,084 Effect of changes in the fair value of share options ...... 2,574 –––––––––– Total expense recognised as costs in 2004 ...... 7,404 –––––––––– Accrued bonus EN-SOP as of 31 December 2004 ...... 11,017 ––––––––––

Total fair value represents the full fair value of the options outstanding as if they were completely vested, i.e. without considering the extent to which the employees have rendered service to date.

On 1 January 2005 the options granted on 1 January 2001 expired without being exercised. The difference between the total fair value of granted and non-cancelled share options and the accrued personnel related expenses as of 31 December 2004, corrected for future fair value adjustments, will be accounted for in the income statement as personnel expenses in future years, during the vesting period.

The weighted average exercise price as of 31 December 2004 of the outstanding options (in the range of EUR 8.85 - EUR 12.24) is EUR 10.87. The weighted average remaining vesting period of these options is 1.67 years.

The fair value of the share options granted in the period until 31 December 2004 is determined using the Black-Scholes model. The fair value of the liability is re-measured at each balance sheet date and at the settlement date.

We obtain the expected volatility from a report published by a financial institution regarding options on shares of Telefónica, S.A. Therefore, no historical volatility is considered.

The fair value of the options granted in 2004, and the fair value of all options outstanding as of 31 December 2004 and the model inputs that were used in their measurement as of 31 December 2004, are the following:

Fair value of share options and Outstanding options as of assumptions as of 31 December 2004 Options granted in 2004 31 December 2004 ––––––––––––––––––––––––––––––––––––––––––––––––– –––––––––––––––––––––––– –––––––––––––––––––––––––––––––– Weighted average fair value at measurement date (EUR per option) . . . . . 2.96 3.71 Share price (EUR) ...... 13.86 13.86 Weighted average exercise price (EUR). . . 12.24 10.87 Expected volatility ...... 17.80% 17.70% - 17.80% Weighted average option life (years) . . . . . 2.50 1.67 Expected dividend yield ...... 2.88% 2.88% Range of Risk-free interest rate ...... 2.72% - 2.92% 2.21% - 2.92%

F-83 28 Financial Instruments

Exposure to credit, interest rate and currency risks arises in the course of the Company’s business. Derivative financial instruments are used to hedge exposure to fluctuations in foreign exchange rates and interest rates.

Foreign Currency Risk

Endemol assesses foreign currency risk by identifying and monitoring changes in exchange rate exposures that may adversely impact the income statement. Endemol maintains risk management control systems to monitor foreign currency risk attributable to both Endemol’s outstanding foreign currency positions and commitments, as well as Endemol’s offsetting hedge positions. The risk management control systems involve the centralisation of Endemol’s foreign currency exposure management, the netting of offsetting exposures from different group companies and the use of analytical techniques, including sensitivity analysis, to estimate the expected impact of changes in foreign currency rates on Endemol’s income statement.

Endemol group companies enter into transactions denominated in currencies other than the functional currency of the affected group company. These transactions expose Endemol to foreign currency results due to changes in foreign currency rates. Endemol enters into foreign currency forward contracts to minimise exchange results due to the foreign currency risk on receivables, payables and expected future cash-flows denominated in currencies other than the functional currency.

Although foreign currency forward contracts are used to economically hedge the net exchange results due to changes in foreign currency rates, Endemol does not apply hedge accounting under IAS 39 for these contracts. Changes in the fair value of foreign currency forward contracts are reported in the income statement as fair value adjustments on derivative financial instruments and (partially) offset the exchange results recognised as foreign exchange results on the assets and liabilities denominated in foreign currencies.

Credit Risk

The Company trades only with recognised, creditworthy third parties. It is the Company’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Company’s exposure to bad debts is not significant.

Liquidity Risk

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans and the multi currency facility.

Interest Rate Risk / Interest Rate Swaps

In September 2002 Endemol entered into a multicurrency revolving credit facility for EUR 250.0 million with an interest rate based on EURIBOR and includes a company specific mark up. To mitigate the impact of adverse interest rate movements on Endemol’s interest expenses, the Company entered into a series of interest rate swaps in 2002 for a nominal amount of EUR 120.0 million. These swaps, with durations of 3 and 5 years, were entered into to economically hedge adverse interest movements. At the date of transition to IAS 32/39, 1 January 2004, all derivative financial instruments are recognised at fair market value. As Endemol chooses not to apply hedge accounting, the fair value changes are recognised in the income statement resulting in a negative effect on the financial expenses of EUR 0.6 million in 2004.

By the end of 2004, due to Endemol’s strong free cash flow performance and its acquisition policy, the drawings under the multicurrency revolving credit facility had been fully repaid.

Call and Put Options Relating to Acquisition Contracts

Endemol has entered into various call and put options in connection with some of its acquisitions. The consideration to be paid for the interest to be acquired is based on the performance of the respective company. Under IAS 39 Endemol values these derivatives at fair value using a valuation model. The fair value of the call

F-84 options as of 31 December 2004 was EUR 4.9 million (1 January 2004: EUR 9.5 million). The fair value of the put options as of 31 December 2004 was EUR 2.0 million (1 January 2004: EUR 3.8 million).

EUR 1,000 Call options Put options –––––––––– –––––––––– Balance as of 1 January 2004...... 9,455 (3,786) Exercised...... (1,375) 1,791 Revaluation ...... (3,185) (42) –––––––––– –––––––––– Balance as of 31 December 2004 ...... 4,895 (2,037) –––––––––– –––––––––– Balance as of 31 December 2004 Long-term options...... 2,745 (2,037) Short-term options ...... 2,150 -

The call options have exercise terms that range from 2005 to 2011. The put option is exercisable in 2008. The changes in the fair value of the call and put options for the year 2004 amounted to EUR 3.2 million. This has been included in the income statement as a financial expense.

Effective Interest Rates and Re-pricing Analysis

In respect of income-earning financial assets and interest-bearing financial liabilities, the following table indicates their effective interest rates at the balance sheet date and the periods in which they re-price.

EUR 1,000 Effective 6 months 6-12 More than interest rate Total or less months 1-2 years 2-5 years 5 years –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– As of 31 December 2004

Cash and cash equivalents 1.5%- 4% 117,824 117,824 –––– Loans to affiliated related companies...... 1.5%- 4% 80,000 80,000 –––– Trust accounts...... 1.5%- 4% 3,102 3,102 –––– Other bank debt long-term 1.5%- 4% (364) (364) –––– Other bank debt short-term 1.5%- 4% (129,253) (129,253) –––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– Total ...... 71,309 71,309 - - - - –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––

Fair Values

Financial instruments in the consolidated balance sheet, other than the derivative instruments, include cash, cash equivalents, shares held for option plans, accounts receivable, accounts payable and accrued liabilities and short-term and long-term debt.

The estimated fair values approximate their carrying amounts because of the short-term maturity of these financial instruments. Some of these instruments are already recorded at fair values and other financial instruments bear interest at variable rates that are repriced frequently.

Estimation of Fair Values

In estimating the fair values of financial instruments the following methods are applicable.

The forward exchange and interest rate swap contracts are valued using bank quotes. The call and put options relating to acquisitions are valued using a valuation model.

F-85 For interest-bearing loans and borrowings the fair value is calculated based on discounted expected future principal and interest cash flows using applicable interest rates.

For earn-out obligations the fair value is calculated based on discounted expected future principal and interest cash flows using applicable interest rates.

For trade receivables and trade payables with a remaining life of less than one year, the notional amount is deemed to reflect the fair value. All other receivables and payables are discounted to determine the fair value.

F-86 29 Commitments, Litigation and Other Matters

Endemol is involved in several legal disputes and claim procedures. If considered necessary, provisions are recognised to cover the possible financial liability.

Endemol participates in a number of partnerships where Endemol is jointly liable for debts incurred in these partnerships. The external financial exposure from these liabilities is limited.

Contingent Liabilities

EUR 1,000 31 December 2004 –––––––––––– Trading guarantees (e.g. bank/production guarantees)...... 967 ––––––––––––

Maturity of Commitments and Contingent Liabilities

EUR 1,000 31 December 2004 –––––––––––––––––––––––––––––– Land and Other buildings assets –––––––––––– –––––––––––– Expiring within one year ...... 12,807 3,931 Expiring in years two to five...... 34,504 4,295 Expiring thereafter ...... 5,626 –––––––––––– –––––––––––– Total commitments and contingent liabilities ...... 52,937 8,226 –––––––––––– ––––––––––––

Guarantees

On 31 December 2004, Endemol had outstanding guarantees to commercial banks for a total of EUR 1.0 million for bank loans to group companies.

Litigation and Other Matters

Endemol group companies are involved in various legal proceedings and other claims considered typical to its businesses. In the judgement of management, no losses in excess of provisions made or covered by insurance programmes, which would be material in relation to Endemol’s financial position, are likely to arise in respect of these matters, although their occurrence may have a significant effect on periodic results.

Lease Commitments and Other Contingent Liabilities

Endemol leases office facilities, vehicles, computers, and other equipment under long-term operating leases. Some leases contain renewal provisions, purchase options and escalation clauses. The aggregate future minimum lease payments under non-cancellable operating leases are included in the table entitled “Maturity of Commitments and Contingent Liabilities”.

Call and Put Options

Endemol has entered into various call and put options in connection with some of its acquisitions. The consideration to be paid for the interest to be acquired is based on the performance of the respective company. The estimated cash payment related to the call options as of 31 December 2004 was EUR 33.1 million (2003: EUR 28.8 million). The estimated cash payment related to the put options as per 31 December 2004 was EUR 13.2 million (2003: EUR 18.0 million).

F-87 Multi Employer Defined Benefit Pension Plan in The Netherlands

For substantially all of the employees in the Netherlands, a defined benefit pension plans exists at Pensioenfonds PNO Media. This plan is a multi-employer defined benefit pension plan, which is accounted for as a defined contribution plan because sufficient information is not available to use defined benefit accounting.

F-88 30 Related Party Transactions

The sales to related parties are made on at arm’s length basis.

Endemol France

Turnover with Endemol France amounted to EUR 3.2 million.

Following balances are outstanding with Endemol France:

EUR 1,000 31 December 2004 –––––––––– Loans receivable on related companies...... 80,000 Receivable on related companies ...... 6,210 Payable to related companies ...... 10,794

Other Related Party Transactions

The former wife and the former sister-in-law of Mr. Cruz, a managing director of Endemol Spain, were employed by Endemol Spain until October 2004 and July 2005 respectively. Mr. Cruz is director and shareholder of 3A Management, his personal holding company. Several formats (including Operación Triunfo and Crónicas Marcianas) are co-owned by 3A Management and TV Flash Producciones and licensed to Endemol. Under this licence, 3A Management and TV Flash Producciones are jointly entitled to up to 50% of profits related to these formats. Endemol has paid to 3A Management under the licence agreement an amount of approximately EUR 1.2 million in 2004. On 8 April 2005 we entered into a new agreement with Mr. Cruz regarding the transfer of new format rights by 3A Management and Mr. Cruz to Endemol for a fixed annual fee of EUR 177,000 plus a share of the profits related to these formats. Also in 2005, the agreement under which Endemol acquired Gestmusic Endemol from Mr. Cruz, among others, has been amended further stipulating the earn out arrangement to which Mr. Cruz is entitled. Mr. Cruz is board member and shareholder of Portalmix, a digital media company that from time to time renders services to Endemol. The purchase of Mr. Cruz’ shares in Portalmix by Endemol is currently being negotiated.

F-89 Telefónica

Employees within the Endemol group participate in the Telefónica share option plans (EN-SOP). We refer to Note 27, Share-based Payments. Telefónica has committed itself to reimburse Endemol for the costs of the share options granted. In the pro forma consolidated financial information as of 31 December 2004, a receivable from Telefónica and a capital contribution equal to that amount have therefore been included in the balance sheet.

EUR 1,000 31 December 2004 –––––––––– Receivable EN-SOP ...... 11,863

We have entered into a secondment agreement with Telefónica on the services rendered to us by Mr. Agut, the Chairman of the Management Board and Chief Executive Officer.

Most of our insurance policies are taken out by Telefónica on a group basis. Some insurance policies are taken out by Endemol Investment B.V. (previously named Endemol B.V.).

In the ordinary course of business, from time to time, we do business with parties that are or were related to Telefónica, including Antena 3 TV in 2002 and 2003 (the amounts invoiced by Endemol were EUR 13.8 million and EUR 10.4 million, respectively), Sogecable in 2004 (the amount invoiced by Endemol was EUR 0.6 million and Telefe in 2002, 2003 and 2004 (the amounts invoiced by Endemol were EUR 0.4 million, 1.1 million and 1.1 million respectively).

F-90 31 Explanation of Transition from Dutch GAAP to IFRS

Endemol has prepared pro forma consolidated financial information under Generally Accepted Accounting Principles in the Netherlands (Dutch GAAP) for the years 2002, 2003 and 2004.

As of 1 January 2004 (the transition date), Endemol has decided to adopt International Financial Reporting Standards (IFRS) as its basis of accounting. As a consequence, for the year 2004, financial information has been prepared under both Dutch GAAP and IFRS.

The Company is fulfilling the criteria of a first-time adopter stated in IFRS 1 by an explicit and unreserved statement of compliance with IFRS. To create a starting point for its later accounting under IFRS, Endemol N.V. has decided to issue its first IFRS financial information for the year ending 31 December 2004, and to prepare an IFRS Opening Balance Sheet at the date of transition, 1 January 2004, as well as financial information for 2004, in compliance with IFRS.

The basic transition rule requires a full retrospective application of all IFRS principles in effect at the transition date with all adjustments in the opening balance sheet to assets and liabilities as stated under Dutch GAAP taken to retained earnings. In compliance with IFRS 1, Endemol has, if applicable:

- de-recognised existing assets and liabilities if they do not qualify for recognition under IFRS;

- recognised new assets and liabilities that were not recognised under Dutch GAAP, and should be recognised under IFRS, and;

- re-classified assets and liabilities if required under IFRS.

In preparing its opening IFRS balance sheet, Endemol has adjusted the amounts reported previously in the pro forma financial information prepared in accordance with its former basis of accounting (Dutch GAAP). The reconciliations to IFRS of the balance sheet information, the income statement and the cash flow statement, as included in the preliminary consolidated IFRS 2004 pro forma financial information, has been prepared based on the Dutch GAAP pro forma financial information.

First Time Adoption Elections

IFRS 1 (First-time adoption of IFRS) provides certain exception options from the basic transition principle of full retrospective application, which can be elected when preparing an IFRS opening balance sheet. The impact, if any, of these elections on the IFRS opening balance sheet as of 1 January 2004 is recognised through retained earnings under IFRS. Endemol has selected the following significant options under IFRS 1.

Business Combinations (IFRS 3)

Endemol has elected the option not to restate business combinations that took place prior to the transition date 1 January 2004.

Fair Value or Revaluation as Deemed Cost (IAS 36, 38 and 40)

Endemol has elected the option to use the values of fixed assets (Property, Plant and Equipment) as accounted for under Dutch GAAP as deemed cost under IFRS.

Employee Benefits (IAS 19)

Endemol has elected the option to recognise all (previously unrecognised) cumulative actuarial gains and losses in relation to pension schemes accounted for as defined benefit schemes in retained earnings as of 1 January 2004.

F-91 Cumulative Translation Differences (IAS 21)

Endemol has elected to set the cumulative translation differences at nil as of 1 January 2004. As a result, the gain or loss on a subsequent disposal of any foreign operation will exclude translation differences that arose before 1 January 2004, and will include translation differences that arose subsequent to this date.

Designation of Previously Recognised Financial Instruments (IAS 32/39)

Endemol has elected to apply IAS 32/39 as of 1 January 2004, and not to change any designation of financial instruments at transition to IFRS.

Date of Adoption of IFRS for Associates and Joint Ventures

Endemol has requested its associates and joint ventures to adopt IFRS compliant financial statement information using the Endemol IFRS accounting policies and elections made by Endemol under IFRS 1.

Non-current Assets Held for Sale and Discontinued Operations (IFRS 5)

IFRS 5 is applied as of transition date of January 1, 2004.

F-92 32 Reconciliation between IFRS and Dutch GAAP 2004

The IFRS accounting policies used in the opening balance sheet 2004 and for the pro forma consolidated financial information of 2004 differ from the Dutch GAAP accounting policies. The transition from Dutch GAAP to IFRS has affected Endemol’s balance sheet positions, its equity, the results and cash flows.

Reconciliation of Pro Forma Consolidated Balance Sheet as of 1 January 2004

EUR 1,000 Dutch Transition Note GAAP Re-classes effect IFRS –––––– –––––––––– –––––––––– –––––––––– ––––––––––

Assets Property, plant and equipment ...... 44,616 - - 44,616 Goodwill ...... a, e 141,595 (7,176) 1,300 135,719 Other intangible assets ...... b, e 3,745 - (171) 3,574 Investments in associates ...... a 6,964 7,176 - 14,140 Other financial assets ...... c, d 39,458 6,113 8,101 53,672 Deferred tax assets ...... l - 28,953 403 29,356 Total non-current assets ...... 236,378 35,066 9,633 281,077 Trade and other receivables ...... d, f, g, h 237,247 (32,015) 5,119 210,351 Receivables from tax authorities ...... l 47,643 (28,953) (1,100) 17,590 Cash and cash equivalents ...... c, i 19,959 87,214 - 107,173 Total current assets ...... 304,849 26,246 4,019 335,114 Total assets ...... 541,227 61,312 13,652 616,191

Equity Share capital / share premium ...... g, n 137,619 - 9,289 146,908 Legal reserve ...... 11,741 - - 11,741 Translation reserve ...... m - - - - Hedging reserve ...... h - - (1,422)(1,422) Revaluation reserve ...... e - - - - Retained earnings ...... - - - - Profit for the year ...... - - - - Issued capital and reserves ...... 149,360 - 7,867 157,227

Minority interests ...... e 5,291 - - 5,291

Liabilities Interest bearing loans and borrowings . . . . . 854 - - 854 Pensions and similar obligations ...... j - 431 - 431 Deferred tax liabilities ...... l - - - - Long-term earn out obligations ...... k 43,823 - (3,641)40,182 Other non-current Liabilities ...... d 3,095 - 1,804 4,899 Total non-current liabilities ...... 47,772 431 (1,837) 46,366

Short-term loans and borrowings ...... i 83,013 93,329 - 176,342 Short-term earn-out obligations ...... k 20,441 - (742)19,699 Trade and other payables ...... d, f, g, h, j 207,223 (32,448) 8,364 183,139 Current tax payable ...... 28,127 - - 28,127 Total current liabilities ...... 338,804 60,881 7,622 407,307 Total liabilities ...... 386,576 61,312 5,785 453,673 Total equity and liabilities ...... 541,227 61,312 13,652 616,191

F-93 Reconciliation of Pro Forma Consolidated Balance Sheet as of 31 December 2004

EUR 1,000 Dutch Transition Note GAAP Re-classes effect IFRS –––––– –––––––––– –––––––––– –––––––––– –––––––––– Assets Property, plant and equipment ...... 41,426 - - 41,426 Goodwill ...... a, e 140,297 (7,087) 8,131 141,341 Other intangible assets ...... b, e 2,418 - 4,721 7,139 Investments in associates ...... a 7,965 7,087 - 15,052 Other financial assets ...... c, d 80,894 3,101 2,747 86,742 Deferred tax assets ...... l 22,483 - 1,432 23,915 Total non-current assets ...... 295,483 3,101 17,031 315,615 Trade and other receivables ...... d, f, g, h 261,798 (35,130) 15,295 241,963 Receivables from tax authorities ...... l 20,002 - (1,100)18,902 Cash and cash equivalents ...... c, i 6,077 111,747 - 117,824 Total current assets ...... 287,877 76,617 14,195 378,689 Total assets ...... 583,360 79,718 31,226 694,304

Equity Share capital / share premium ...... g, n 196,510 - 19,892 216,402 Legal reserve ...... 14,778 - - 14,778 Translation reserve ...... m (2,039) - - (2,039) Hedging reserve ...... h - - (948) (948) Revaluation reserve ...... e - - 1,337 1,337 Retained earnings ...... - - - - Profit for the year ...... - - - - Issued capital and reserves ...... 209,249 - 20,281 229,530

Minority interests ...... e 5,008 - 826 5,834

Liabilities Interest bearing loans and borrowings . . . . . 364 - - 364 Pensions and similar obligations ...... j - 431 - 431 Deferred tax liabilities ...... l 2,374 - 2,332 4,706 Long-term earn out obligations ...... k 35,130 - (1,450)33,680 Other non-current Liabilities ...... d 5,085 - 2,037 7,122 Total non-current liabilities ...... 42,953 431 2,919 46,303

Short-term loans and borrowings ...... i 14,404 114,849 - 129,253 Short-term earn-out obligations ...... k 15,639 - (565)15,074 Trade and other payables ...... d, f, g, h, j 270,122 (35,562) 10,064 244,624 Current tax payable ...... 25,985 - (2,299) 23,686 Total current liabilities ...... 326,150 79,287 7,200 412,637 Total liabilities ...... 369,103 79,718 10,119 458,940 Total equity and liabilities ...... 583,360 79,718 31,226 694,304

F-94 Reconciliation of Pro Forma Consolidated Income Statement 2004

EUR 1,000 Dutch Transition Note GAAP effect IFRS –––––– –––––––––– –––––––––– ––––––––––

Turnover ...... 850,943 - 850,943

Costs of outsourced work and other external costs ...... o (505,962) (3,000) (508,962) Employee benefit expense ...... g (129,693) (7,404) (137,097) Depreciation and amortization expense ...... a, e (22,155) 7,455 (14,700) Impairment of goodwill ...... (495) - (495) Other operating expense ...... o (76,179) 3,711 (72,468)

Operating result ...... 116,459 762 117,221

Financial income and expenses ...... d, h, k (5,712) (2,024) (7,736) Share in profit of associates ...... 1,739 - 1,739

Net income before tax...... 112,486 (1,262) 111,224

Income tax expense...... l (45,097) 3,646 (41,451)

Net income...... 67,389 2,384 69,773

Minority interests ...... e (5,459) 144 (5,315) –––––––––– –––––––––– –––––––––– Net income attributable to shareholders ...... 61,930 2,528 64,458 –––––––––– –––––––––– ––––––––––

F-95 Reconciliation of the Pro Forma Consolidated Cash Flow Statement 2004

Based on IAS 32.42, positive and negative bank balances of a legal entity with one bank are not offset, even though these balances are part of a notional cash pool, unless there is a legally enforceable right to set off the recognised amounts and the entity intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. For interest calculation purposes these amounts are netted.

Based on the above Endemol is required to report the cash balances and the bank overdrafts on a gross basis. The effect is that the cash balance and the bank overdraft are increased as of 1 January 2004 with EUR 93.3 million. As of 31 December 2004 the increase of cash and bank balances and bank overdrafts amounts to EUR 114.8 million.

Under IFRS the trust accounts, which is restricted cash in production trust accounts, are reported as other financial asset. Under Dutch GAAP these accounts were reported as cash and cash equivalents. As a result of this reclassification, cash flow from both operating activities (other movements) and financing activities are influenced.

F-96 Notes to the Reconciliations

The description below of the reconciling differences has been prepared based on the pro forma Dutch GAAP 2004 pro forma consolidated financial information. a) Goodwill

In line with IFRS 1 and IAS 28, Endemol uses the option to reclassify the goodwill paid for an acquisition retrospectively to investments in associates. As a result, EUR 7.2 million is re-classed from goodwill to investments in associates and joint ventures.

Under Dutch GAAP Endemol used estimates to determine the goodwill that arose in business combinations. In 2005 the estimates were recalculated. As a result, EUR 1.3 million was adjusted against equity based on IFRS 1 in the balance as of 1 January 2004 and 31 December 2004.

Goodwill was amortised under Dutch GAAP. Under IFRS goodwill amortisation is not allowed. As a result, in 2004, EUR 8.2 million of goodwill amortisation was reversed. b) Incorporation Costs

As of 1 January 2004, Endemol derecognises incorporation cost against equity in the opening balance sheet for a total net amount of EUR 0.2 million. The incorporation costs were capitalised as intangible assets in accordance with the previous accounting policies. The net amount consists of the original amount capitalised less accumulated depreciation. c) Restricted Cash

Endemol receives cash in production trust accounts from customers in order to finance the productions made for these clients. Under the previous GAAP, this cash was treated as cash and cash equivalents. However, under IAS 1, due to the long-term and restricted nature of these trust accounts, these accounts should be qualified as long-term deposits and guarantees under IFRS. Endemol receives a market-based interest on the deposits. The impact of the reclassification from cash and cash equivalents to other financial assets is EUR 6.1 million as of 1 January 2004 and EUR 3.1 million as of 31 December 2004. d) Call and Put Options

In accordance with IAS 39.43, financial assets and liabilities should initially be measured at fair market value at the date of acquiring the instrument. The recognition of the asset or liability should be adjusted to goodwill.

As IFRS 1 (first time adoption) does not exclude the retrospective measurement for financial instruments, Endemol has valued these instruments at fair market value at the date of the transition and, consequently, adjusted the equity accordingly. The valuation has been based on the future expected and discounted cash flows of the companies involved.

Financial assets (long-term call options) increase by EUR 8.1 million as of 1 January 2004. The other receivables (short-term call options) increase by EUR 1.4 million, the long-term liabilities (long-term put options) increase by EUR 1.8 million and the short-term liabilities (short-term put options) by EUR 2.0 million. Retained earnings are increased accordingly by EUR 5.7 million, as a result of the inclusion of the fair values.

As of 31 December 2004, the financial assets (long-term call options) decreased to EUR 2.7 million, the other receivables (short-term call options) increased to EUR 2.1 million and the long-term liabilities increased (long-term put options) to EUR 2.0 million. In addition, as the fair value of the options changed in 2004, Endemol recognised a fair value adjustment loss in 2004 of EUR 3.2 million. Due to the fact that two options were exercised in 2004, goodwill as reported under Dutch GAAP decreased by EUR 0.4 million.

F-97 e) Business Combinations

In 2004 the Company increased its interest in several associates or group companies. These step acquisitions were accounted for in accordance with IFRS 3 (Business combinations) and resulted in an increase of capitalised format rights of EUR 5.7 million in 2004. These format rights were depreciated in 2004 for an amount of EUR 0.8 million, resulting in capitalised format rights of EUR 4.9 million as of 31 December 2004. As a result of the purchase price allocation, the goodwill on the acquired business combinations decreased with EUR 1.0 million. In addition, a revaluation reserve of EUR 1.3 million was recognised as of 31 December 2004.

As Endemol did not obtain all the shares of the business combination, the business combination and the purchase price allocation based on IFRS 3 also had an impact on the minority interests as of 31 December 2004 of EUR 0.8 million. f) Amounts Due to/ Due from Customers in Relation to Productions in Progress

In accordance with IAS 11, work in progress, uninvoiced turnover, accrued production costs and deferred revenues are netted and accounted for in either gross amounts due from customers (other receivables) or gross amounts due to customers (other liabilities). As of 1 January 2004 the netting effect amounted to EUR 32.0 million. The netting effect amounted to EUR 35.1 million as of 31 December 2004. g) Share-based Payments

Under IFRS 2, the recognition of expenses related to share based payments is required.

Employees within the Endemol group participate in the Telefónica share option plans (EN-SOP). Although EN-SOP is an option plan issued by Telefónica, Endemol is required to account for EN-SOP based on IFRS 2. Endemol has chosen to adopt IFRS 2 as of 1 January 2004 for all plans that vest on or after 1 January 2004.

As a consequence of the above the retained earnings are decreased with EUR 2.3 million, as a large part of the EN-SOP should have been included in the personnel costs in the past under IFRS. In addition a liability towards employees of EUR 3.6 million is recognised. Both amounts are included in the balance sheet of 1 January 2004.

Telefónica has committed itself to reimburse Endemol for the costs of the share options granted. In the pro forma financial information as of 1 January 2004 a receivable on Telefónica of EUR 3.9 million and a capital contribution equal to that amount has been included in the balance sheet.

In 2004, employee benefit expense for the EN-SOP amounted to EUR 7.4 million, resulting in a liability towards employees of EUR 11.0 million as of 31 December 2004.

In the pro forma financial information as of 31 December 2004 a receivable on Telefónica of EUR 11.9 million and a capital contribution equal to that amount has been included in the balance sheet. h) Derivative Financial Instruments

In accordance with IAS 32/39, Endemol values its derivative financial instruments on the balance date at market value (fair value). As the valuation of derivative financial instruments under the previous GAAP, as of 1 January 2004, differs from IAS 32/39, Endemol accounted for the differences in the equity of the opening balance sheet (IFRS 1 first-time adoption). Endemol accounted for IFRS adjustments relating to interest rate swaps and foreign exchange contracts (swaps and forwards).

Interest Rate Swaps

In 2004, under the previous GAAP, Endemol valued its over-hedged part of the interest rate swap portfolio at market value. The other part of the interest swap portfolio was valued based on synthetic accounting, resulting in a carrying value of the interest accruals.

As Endemol elected not to apply hedge accounting under IAS 32/39 for the interest rate swaps, the difference in valuation compared to the previous GAAP in the opening balance sheet was charged to equity as of

F-98 1 January 2004. The fair value portion relating to the hedge relation under the previous GAAP is accounted for in the hedge reserve as part of equity and the other portion is accounted for in the retained earnings. As of 31 December 2004, the fair value changes as well as the amortisation of the hedge reserve, are accounted for in the income statement.

Foreign Exchange Contracts

In 2004 under the previous GAAP, Endemol applied for hedge accounting for its foreign exchange contracts resulting in the valuation of these contracts based on synthetic accounting. Endemol revaluated each period the nominal amount of the derivative contract in foreign currency to the new spot price and amortised the forward points over the duration of the contract as interest received or paid.

As Endemol elected not to apply hedge accounting under IAS 32/39 for the foreign exchange contracts, the difference in valuation compared to the previous GAAP was charged to equity as of 1 January 2004. The fair value changes are accounted for in the income statement. Endemol accounted for the changes taking into consideration a deferred tax position. i) Cash and Cash Equivalents

In Italy, employees are covered by a severance plan provided for in accordance with local legislation. Severance pay is considered normal remuneration that has been deferred and approximates one month’s pay for each year of services, valued each year on a basis linked to cost-of-living indices. The severance liability as of 31 December 2004, of EUR 0.4 million, represents the accumulated amount due to employees upon termination of employment based on service to date. In accordance with IAS 19, this liability is presented as a non-current employee benefit, which requires a reclassification of EUR 0.4 million compared to the previous GAAP. k) Earn-out Obligations

Both long-term and short-term earn-out obligations (contingent considerations under IFRS 3) meet the criteria to be recognised as a provision, as set out in IAS 37. An adjustment is made on the Dutch GAAP valuation to account for the interest component relating to these obligations (discounted value) against retained earnings in accordance with IFRS 1. In addition, in the 2004financial expense, an interest expense of EUR 2.4 million relates to the interest on the earn-out obligations. l) Taxation

Under the previous accounting principles, Endemol presented the deferred tax assets and liabilities as current. Under IAS 1, deferred tax positions should be classified as non-current.

Most differences resulting from the conversion of the 2004 opening balance sheet to IFRS affected the income tax accounting and accordingly changed the deferred income tax position as previously reported under Dutch GAAP.

F-99 m) Cumulative Currency Translation Differences

Endemol has elected the exemption available in IFRS 1 whereby the cumulative currency translation differences (CCTD) for all foreign entities are deemed to be nil at the date of transition to IFRS. n) Share Premium

The effect of the above adjustments on share premium is as follows:

EUR 1,000 31 December 1 January Note 2004 2004 –––––– –––––––––– –––––––––– Share capital / share premium Dutch GAAP ...... 196,510 137,619

Reconciling differences: Capitalised incorporation costs, net of amortisation ...... b (171) (171) Call and put options ...... d 5,669 5,669 Share based payments - share premium ...... g 11,863 3,878 Fair value financial instruments ...... h (948) (1,022) Hedge reserve ...... h 235 - Earn out obligations at amortised cost ...... k 4,165 4,384 Employee benefits (EN-SOP)...... j (2,349) (2,349) Changes in estimates based on IAS 10...... o (1,100) (1,100) IFRS impact on 2004 income ...... 2,528 - –––––––––– –––––––––– Share capital / share premium IFRS...... 216,402 146,908 –––––––––– –––––––––– o) Changes In Estimations

Under Dutch GAAP, Endemol used estimates and judgments to assess the balance sheet positions. In 2005 until September, some of these estimates and judgements were altered as result of new insight and subsequent events. As a result, the operating profit increased by EUR 0.7 million based on IAS 10.

F-100 OTHER INFORMATION – AUDITORS’ ASSURANCE REPORT ON THE PRO FORMA CONSOLIDATED FINANCIAL INFORMATION OF ENDEMOL N.V. FOR THE YEAR ENDED 31 DECEMBER 2004 ON THE BASIS OF IFRS

Introduction

In accordance with the instructions of Endemol N.V. we report on the pro forma consolidated financial information of the Endemol group (after the Reorganisation) for the year 2004 on the basis of IFRS (hereinafter pro forma consolidated financial information IFRS 2004) representing the IFRS pro forma financial information, after the adjustments related to the Reorganisation, as disclosed on Note 2 of the financial information, on the figures of Endemol Holding N.V. have been made.

This pro forma consolidated financial information IFRS 2004 has been prepared for illustrative purposes only to provide information about how the adjustments related to the Reorganisation could have affected the consolidated financial statements for the year 2004 of Endemol Holding N.V. On the basis of IFRS. Because of their nature, the pro forma consolidated financial information addresses a hypothetical situation and, therefore, does not necessarily represent the actual financial position or result for the year 2004 of the Endemol group (after Reorganisation).

In their auditors’ report on the underlying financial statements for the year 2004 of Endemol Holding N.V. on the basis of Dutch GAAP, on which the financial data included in the pro forma consolidated financial information IFRS 2004 are based, KPMG Accountants N.V. expressed an unqualified audit opinion on 19 April 2005. This audit was conducted in accordance with auditing standards generally accepted in the Netherlands (Dutch GAAS).

It is management’s responsibility to prepare the pro forma consolidated financial information IFRS 2004 in accordance with the requirements of EU Regulation 2004-809. It is our responsibility to provide the conclusion required by Annex II item 7 of EU Regulation 2004-809. We are not responsible for expressing any other conclusion on the pro forma consolidated financial information or on any of its constituent elements.

Scope

We performed our work in accordance with the Dutch Standard “Assurance Engagements other than Audits or Reviews of Historical Financial Information” and, accordingly, including such procedures as we considered necessary in the circumstances. We planned and performed our work so as to obtain all the information and explanations we considered necessary in order to provide us with reasonable assurance that the pro forma consolidated financial information IFRS 2004 is free of material mistatement. Our work included examining, on a test basis, evidence supporting the amounts and disclosures in the pro forma consolidated financial information IFRS 2004.Our work also included assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the pro forma consolidated financial information IFRS 2004.

As to the adjustments related to the Reorganisation, we planned and performed our work so as to obtain all the information and explanations we considered necessary in order to provide us with reasonable assurance that the pro forma consolidated financial information has been properly compiled on the basis stated.

We believe that our work provides a reasonable basis for our conclusion.

Conclusion

In our opinion, the pro forma consolidated financial information IFRS 2004 has been prepared, in all material respects, in accordance with the basis set out on Note 31 of the financial information, which describes how IFRS have been applied under IFRS 1 (“First Time Adoption of IFRS”).

In our opinion, the pro forma consolidated financial information IFRS 2004 has been properly compiled on the basis stated in the introduction paragraph and provide a reasonable basis for presenting the significant effects directly attributable to the adjustments related to the Reorganisation described in Note 2 of the financial information.

F-101 Emphasis of Matter

Without qualifying our opinion, we draw attention to the fact that Note 4 of the financial information explains why there is a possibility that the provisional IFRS pro forma financial information may require adjustment before constituting the final IFRS financial statements. Moreover, we draw attention to the fact that, under IFRS only a complete set of financial statements comprising a balance sheet, income statement, statement of changes in equity, and cash flow statement, together with comparative financial information and explanatory notes, can provide a fair presentation of the Company’s financial position, results of operations and cash flows in accordance with IFRS.

Utrecht, 10 November 2005

Ernst & Young Accountants

F-102 ENDEMOL N.V.

PRO FORMA CONSOLIDATED IFRS INTERIM FINANCIAL INFORMATION

FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2005

10 NOVEMBER 2005 CONTENTS

PRO FORMA CONSOLIDATED BALANCE SHEET AS OF 30 SEPTEMBER 2005...... F-106 PRO FORMA CONSOLIDATED INCOME STATEMENT FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2005 ...... F-107 PRO FORMA CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ...... F-108 PRO FORMA CONSOLIDATED CASH FLOW STATEMENT ...... F-110 NOTES TO THE PRO FORMA CONSOLIDATED FINANCIAL INFORMATION...... F-111 1 GENERAL INFORMATION ...... F-111 2 REORGANISATION ...... F-113 3 ACQUISITIONS, DIVESTMENTS AND CONSOLIDATION...... F-117 4 STATEMENT OF COMPLIANCE...... F-118 5 BASIS OF PREPARATION ...... F-119 6 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES...... F-120 6.1 BASIS OF CONSOLIDATION ...... F-120 6.2 FOREIGN CURRENCY TRANSLATION...... F-120 6.3 FINANCIAL INSTRUMENTS ...... F-121 6.4 PROPERTY, PLANT AND EQUIPMENT ...... F-122 6.5 INTANGIBLE ASSETS...... F-122 6.6 IMPAIRMENT OF ASSETS ...... F-123 6.7 INVESTMENTS ...... F-124 6.8 INVENTORIES ...... F-125 6.9 DEFERRED TAX ASSET ...... F-125 6.10 OTHER FINANCIAL ASSETS...... F-125 6.11 TRADE AND OTHER RECEIVABLES...... F-125 6.12 CASH AND CASH EQUIVALENTS ...... F-126 6.13 MINORITY INTEREST ...... F-126 6.14 PROVISIONS...... F-126 6.15 INTEREST BEARING LOANS AND BORROWINGS...... F-126 6.16 EARN-OUT OBLIGATIONS ...... F-126 6.17 EMPLOYEE BENEFITS...... F-127 6.18 DEFERRED TAX LIABILITY ...... F-127 6.19 SHARE-BASED PAYMENTS...... F-127 6.20 TURNOVER ...... F-128 6.21 EXPENSES ...... F-128 6.22 EBITDA ...... F-129 6.23 SEGMENT REPORTING ...... F-129 6.24 COMPILATION OF CASH FLOW STATEMENT...... F-129 7 SUBSEQUENT EVENTS...... F-130 8 SEGMENT REPORTING...... F-131 9 EMPLOYEE BENEFIT EXPENSE ...... F-132 10 OTHER OPERATING EXPENSE ...... F-133 11 FINANCIAL INCOME AND EXPENSE...... F-134 12 INCOME TAX EXPENSE ...... F-135 13 PROPERTY, PLANT AND EQUIPMENT ...... F-136 14 GOODWILL AND OTHER INTANGIBLE ASSETS ...... F-137 15 INVESTMENTS IN SUBSIDIARIES AND JOINT VENTURES...... F-138 16 INVESTMENTS IN ASSOCIATES ...... F-139 17 OTHER FINANCIAL ASSETS ...... F-141 18 DEFERRED TAX ASSETS AND LIABILITIES ...... F-142 19 TRADE AND OTHER RECEIVABLES...... F-143 20 CASH AND CASH EQUIVALENTS...... F-144 21 ISSUED CAPITAL AND RESERVES ...... F-145 22 INTEREST BEARING LOANS AND BORROWINGS ...... F-146 23 PENSIONS AND SIMILAR OBLIGATIONS ...... F-148 24 EARN-OUT OBLIGATIONS...... F-149 25 PROVISIONS ...... F-150 26 TRADE AND OTHER PAYABLES ...... F-151 27 SHARE-BASED PAYMENTS ...... F-152

F-104 28 FINANCIAL INSTRUMENTS...... F-154 29 COMMITMENTS, LITIGATION AND OTHER MATTERS ...... F-156 30 RELATED PARTY TRANSACTIONS...... F-158

OTHER INFORMATION – AUDITORS’ ASSURANCE REPORT ON THE PRO FORMA CONSOLIDATED FINANCIAL INFORMATION OF ENDEMOL N.V. FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2005 ON THE BASIS OF IFRS ...... F-160

F-105 PRO FORMA CONSOLIDATED BALANCE SHEET AS OF 30 SEPTEMBER 2005

EUR 1,000 Note 30 September 2005 31 December 2004 30 September 2004 * –––––– ––––––––––––––––––––––– ––––––––––––––––––––––– ––––––––––––––––––––––– Non-current assets Property, plant and equipment...... 13 40,004 41,426 44,608 Goodwill...... 14, 15 148,002 141,341 141,821 Other intangible assets ...... 14 7,976 7,139 9,243 Investments in associates...... 16 14,919 15,052 15,451 Other financial assets...... 17 11,234 86,742 92,770 Deferred tax assets...... 18 869 23,915 23,272 223,004 315,615 327,165

Current assets Trade and other receivables...... 19 250,050 241,963 190,443 Receivables from tax authorities .. 31,897 18,902 17,954 Cash and cash equivalents ...... 20 102,907 117,824 143,871 384,854 378,689 352,268 –––––––––– –––––––––– –––––––––– Total assets ...... 607,858 694,304 679,433 –––––––––– –––––––––– ––––––––––

Equity attributable to equity holders of the parent Share capital / share premium ...... 21 99,939 216,402 200,573 Legal reserve ...... 14,778 14,778 11,741 Translation reserve ...... 2,382 (2,039) 204 Hedge reserve...... (592) (948) (1,066) Revaluation reserve ...... 1,505 1,337 1,477 Retained earnings ...... – – – Profit for the year ...... – – – 118,012 229,530 212,929

Minority interests ...... 7,267 5,834 5,905 –––––––––– –––––––––– –––––––––– Total equity...... 125,279 235,364 218,834

Non-current liabilities Long-term loans and borrowings . 22 2,251 364 862 Pensions and similar obligations .. 23 527 431 431 Deferred tax liability ...... 18 5,019 4,706 8,424 Long-term earn-out obligations.... 24 – 33,680 40,295 Other non-current liabilities ...... 1,715 7,122 7,509 9,512 46,303 57,521

Current liabilities Short-term interest loans and borrowings ...... 22 184,438 129,253 128,737 Short-term provisions...... 25 22,496 21,949 2,493 Short-term earn-out obligations.... 24 23,916 15,074 11,457 Trade and other payables...... 26 204,916 222,675 229,197 Current tax payable ...... 37,301 23,686 31,194 473,067 412,637 403,078 –––––––––– –––––––––– –––––––––– Total liabilities...... 482,579 458,940 460,599 –––––––––– –––––––––– –––––––––– Total equity and liabilities...... 607,858 694,304 679,433 –––––––––– –––––––––– –––––––––– * Unaudited

F-106 PRO FORMA CONSOLIDATED INCOME STATEMENT FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2005

EUR 1,000 Note 30 September 2005 30 September 2004 * –––––– ––––––––––––––––––––––– ––––––––––––––––––––––– Turnover ...... 8 615,820 585,787

Costs of outsourced work and other external costs . . . . . (367,922) (349,231) Employee benefit expense ...... 9 (96,823) (92,763) Other operating expense ...... 10 (39,731) (41,669) (504,476) (483,663) –––––––––– –––––––––– EBITDA ...... 111,344 102,124

Depreciation and amortisation expense...... (11,439) (8,837) Impairment of goodwill and intangible assets...... (77) (499) (11,516) (9,336) –––––––––– –––––––––– Operating result...... 99,828 92,788

Financial income and expenses ...... 11 155 (6,898) Share of profit of associates...... 902 1,427 1,057 (5,471) –––––––––– –––––––––– Income before tax...... 100,885 87,317

Income tax expense ...... 12 (37,044) (31,577) –––––––––– –––––––––– Net income ...... 63,841 55,740

Minority interest ...... (4,043) (3,737) –––––––––– –––––––––– Net income attributable to the shareholders ...... 59,798 52,003 –––––––––– ––––––––––

Net income attributable to minority interest ...... 4,043 3,737 Net income attributable to the shareholders ...... 59,798 52,003 –––––––––– –––––––––– Net income ...... 63,841 55,740 –––––––––– ––––––––––

Basic earnings per share (EUR) ...... 0.48 0.42

* Unaudited

F-107 PRO FORMA CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Equity attributable to equity holders of the parent –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– Share capital / share Legal Translation Hedge Revaluation Minority Total EUR 1,000 premium reserve reserve reserve reserve Total interest equity ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––

Balance as of 31 December 2004 ...... 216,402 14,778 (2,039) (948) 1,337 229,530 5,834 235,364 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Currency translation . . . . . – – 4,421 – – 4,421 178 4,599

Business combinations resulting from step acquisitions ...... ––––660660 979 1,639

Reclassification amortisation revalued assets 492–––(492) – – –

Amortisation hedge reserve – – – 356 – 356 – 356

Dividend paid ...... (90,000) ––––(90,000) – (90,000)

Dividend of subsidiaries . . –––––– (3,744) (3,744)

Contribution Telefónica for option plan (Note 27). . 488––––488 – 488

Assignment loan and distribution in kind ...... (83,927) ––––(83,927) – (83,927)

Other movements ...... (3,314) ––––(3,314) (23) (3,337) ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Net result recognized directly in equity ...... (176,261) – 4,421 356 168 (171,316) (2,610) (173,926)

Net income for the period. . 59,798––––59,798 4,043 63,841 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Total recognized income for the period ended 30 September 2005 . . . . . (116,463) – 4,421 356 168 (111,518) 1,433 (110,085) ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Balance as of 30 September 2005 . . . . . 99,939 14,778 2,382 (592) 1,505 118,012 7,267 125,279 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––

Endemol N.V. was incorporated on 28 October 2005 with an issued share capital of EUR 12,500,000 consisting of 125,000,000 ordinary shares with a nominal value of EUR 0.10. Pursuant to the Reorganisation of the Company, Endemol Investment B.V. (previously named Endemol B.V.) and Endemol Holding N.V. (the top company of the Endemol group before the Reorganisation, as defined below) contributed the major part of the Endemol businesses, excluding the French Endemol business in its entirety, to Endemol Holding B.V. Subsequently, after the incorporation of Endemol N.V. by Endemol Investment B.V. (previously named Endemol B.V.), the latter contributed to the former the shares in Endemol Holding B.V. by way of share capital and share premium contribution. Endemol N.V. therefore does not have retained earnings or profit for the year.

F-108 In September 2005, the contribution of the major part of the Endemol businesses to Endemol Holding B.V. was effectuated based on the net equity value of the business as per 31 August 2005. The other movements include the pro forma allocation to Endemol N.V. as per 31 December 2004 of the results of Endemol Investment B.V. (previously named Endemol B.V.) as well as equity components related to dividends received in the past from subsidiaries with the Endemol group. These components of equity cannot be contributed to Endemol Holding B.V., therefore these other movements in the statement of changes in equity represent the reconciliation of the pro forma equity as per the end of December 2004 with the actual equity of Endemol N.V. as of 30 September 2005.

Equity attributable to equity holders of the parent * –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– Share capital / share Legal Translation Hedge Revaluation Minority Total EUR 1,000 premium reserve reserve reserve reserve Total interest equity ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––

Balance as of 1 January 2004 ...... 146,908 11,741 - (1,422) - 157,227 5,291 162,518 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Currency translation . . . . . – – 204 – – 204 (307) (103)

Business combinations resulting from step acquisitions ...... ––––1,571 1,571 970 2,541

Inclusion/exclusion of companies ...... –––––– 1,063 1,063

Reclassification of amortisation on re-valued assets 94–––(94) – – –

Amortisation hedge reserve – – – 356 – 356 – 356

Dividend paid ...... –––––– (4,832) (4,832)

Contribution Telefónica for share option plans (Note 27) 1,568––––1,568 – 1,568

Other movements ...... –––––– (17) (17) ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Net result recognised directly in equity ...... 1,662 – 204 356 1,477 3,699 (3,123) 576

Net income for the period ended 30 September 2004 . . 52,003––––52,003 3,737 55,740 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Total recognised income for the period ended 30 September 2004 . . . . . 52,003––––52,003 3,737 55,740 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– Balance as of 30 September 2004 . . . . . 200,573 11,741 204 (1,066) 1,477 212,929 5,905 218,834 ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––

* Unaudited

F-109 PRO FORMA CONSOLIDATED CASH FLOW STATEMENT (Using the indirect method)

EUR 1,000 30 September 2005 30 September 2004 * ––––––––––––––––––––––– ––––––––––––––––––––––– Operating result ...... 99,828 92,788

Depreciation and amortisation ...... 11,516 9,336 Movement in receivables ...... (8,087) 19,908 Movement current liabilities...... (17,212) 36,720 Financial expenses ...... (2,851) (2,354) Dividend received ...... 920 77 Taxes paid ...... (13,065) (14,366) Other movements ...... (12,156) (28,893) –––––––––– –––––––––– (40,935) 20,428 –––––––––– –––––––––– Cash Flow from Operating Activities ...... 58,893 113,216

Acquisitions ...... (28,978) (14,418) Investment in tangibles ...... (8,207) (8,343) Investment in intangibles ...... (3,697) (6,155) –––––––––– –––––––––– Cash Flow from Investing Activities ...... (40,882) (28,916)

Dividends paid ...... (90,000) – Movement in long-term bank loans ...... 1,887 3 –––––––––– –––––––––– Cash Flow from Financing Activities ...... (88,113) 3 –––––––––– –––––––––– Net Cash Flow ...... (70,102) 84,303 –––––––––– –––––––––– Cash and cash equivalents at the beginning of the financial period . (11,429) (69,169) –––––––––– –––––––––– Cash and cash equivalents at the end of the financial period. . . (81,531) 15,134 –––––––––– –––––––––– Movement in cash and cash equivalents (debit) (14,917) 36,698 Movement in short-term borrowings (cash and cash equivalents credit) ...... (55,185) 47,605 –––––––––– –––––––––– Net Cash Flow ...... (70,102) 84,303 –––––––––– ––––––––––

* Unaudited

F-110 NOTES TO THE PRO FORMA CONSOLIDATED FINANCIAL INFORMATION 1 General Information

Company Overview

We exploit our programmes through our network of companies in 22 countries on five continents. Telefónica, S.A. (“Telefónica”) indirectly holds 99.7% of our shares.

Products

Main Business Areas

We have three principal types of products:

Scripted television – Consists of scripted programmes with actors or comedians and includes subgenres such as drama and soap operas.

Digital media – Consists of content created to be exploited on digital platforms (mainly mobile phones and the Internet), leveraging our television and other non-television brands.

Pro Forma Consolidated Interim Financial Information

The pro forma consolidated interim financial information for the nine months ended 30 September 2005 of Endemol N.V. represents the pro forma consolidated interim financial information for the nine months ended 30 September 2005 of the Endemol group, prepared on an IFRS basis, excluding the (deconsolidated) financials of Endemol Holding N.V., Endemol Investment B.V. (previously named Endemol B.V.) and Endemol France Holding S.A.S. and its subsidiaries (consolidated) and including a number of adjustments for holding cost allocation. Endemol N.V. is wholly owned by Endemol Holding N.V. through Endemol Investment B.V. (previously named Endemol B.V.). Endemol N.V. is hereafter referred to as “Endemol” or the “Company”.

This pro forma consolidated interim financial information has been prepared as part of the prospectus relating to the initial offering of ordinary shares of Endemol. Following the Offering we intent to report our results on a semi-annual basis.

F-111 The pro forma consolidated interim financial information included in this report is referred to as the pro forma consolidated interim financial information. This pro forma consolidated interim financial information has been prepared for illustrative purposes only, to provide information about how the adjustments relating to the Reorganisation (as defined below) could have affected the consolidated interim financial statements for the period ended 30 September 2005 on the basis of IFRS. Because of their nature, this pro forma consolidated interim financial information addresses a hypothetical situation and, therefore, does not necessarily represent the actual financial position or results of operations for the period ended 30 September 2005 of the Endemol group (after Reorganisation).

We refer to the pro forma consolidated IFRS 2004 Financial Information for further information on the transition to IFRS. The pro forma consolidated interim financial information for the nine months ended 30 September 2004 is unaudited.

F-112 2 Reorganisation

Reasons for the Reorganisation

In preparation for the initial offering and for various other corporate purposes, we have restructured our corporate structure (the “Reorganisation”) as follows.

Our reason for isolating the French Endemol business from the rest of the Endemol group was to eliminate an element of uncertainty in the valuation of our business.

The graphs below set forth the main companies of the pre-Reorganisation Endemol group and the post- Reorganisation Endemol group:

Pre-Reorganisation Post-Reorganisation

Endemol Holding NV

Endemol Investment Endemol Endemol BV(1) Holding NV International BV Issuer Group Endemol France Holding SAS Endemol BV Endemol NV

Endemol France

Endemol Endemol Endemol Endemol Endemol Holding BV France Netherlands Italy Finance BV

Other Operating Endemol Endemol Endemol Companies Netherlands Finance BV International BV

Other Operating Companies (including Endemol Italy

(1) Prior to the consummation of the Offering, Endemol B.V. was renamed Endemol Investment B.V.

F-113 In addition to the steps discussed above, we have taken the following actions in order to complete the Reorganisation as of 14 September 2005: