GRUPO CLARIN S.A. Offering of 50,000,000 Class B Common Shares in the Form of Class B Shares and Global Depository Shares

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GRUPO CLARIN S.A. Offering of 50,000,000 Class B Common Shares in the form of Class B Shares and Global Depository Shares

This offering circular (the “Offering Circular”) relates to a global offering (the “Offering”) by Grupo Clarín S.A. (“Grupo Clarín” or the “Company”), a sociedad anónima organised under the laws of Argentina, and the selling shareholders named in this Offering Circular (the “Selling Shareholders”) of 50,000,000 class B common shares of the Company, with nominal value of one (1) Peso (as defined herein) and one vote per share, and with rights to dividends equal to those of the other outstanding shares of the Company. Of the class B common shares being offered, the Company is selling 15,000,000 class B common shares (the “New Shares”) and the Selling Shareholders are selling 35,000,000 class B common shares (the “Selling Shareholder Shares” and together with the New Shares, the “Class B Shares”). The Company will not receive any proceeds from the sale of the Selling Shareholder Shares. As part of the Offering, the Company and the Selling Shareholders are offering Class B Shares, in the form of global depositary shares (“GDSs” and, together with the Class B Shares, the “Securities”) evidenced by global depositary receipts (“GDRs”) in the United States of America (the “United States”) and other countries outside Argentina through the international underwriters named in this Offering Circular. Each GDS represents two Class B Shares. The Company is offering 3,500,000 New Shares in the form of 1,750,000 GDSs in the United States and other countries outside Argentina through the international underwriters named in this Offering Circular. The Company is concurrently offering 11,500,000 New Shares in Argentina through the Argentine placement agents named in this Offering Circular under a Spanish language prospectus. The Selling Shareholders are offering 35,000,000 Selling Shareholder Shares, in the form of 17,500,000 GDSs in the United States and other countries outside Argentina through the international underwriters named in this Offering Circular. The total number of Class B Shares in the international tranche of the Offering and the Argentine tranche of the Offering is subject to reallocation between these tranches. The closings of the international tranche of the Offering and the Argentine tranche of the Offering will be conditioned upon each other. AN INVESTMENT IN THE CLASS B SHARES OR GDSs INVOLVES A HIGH DEGREE OF RISK. PROSPECTIVE INVESTORS SHOULD CAREFULLY READ THIS OFFERING CIRCULAR WITH SPECIAL ATTENTION TO “RISK FACTORS”.

Offer Price: Ps.29.14 per Class B Common Share and U.S.$18.50 per Global Depository Share

The Offering does not constitute an offer to sell, or the solicitation of an offer to buy, securities in any jurisdiction in which such offer or solicitation would be unlawful. The Offering consists of (a) an offering of GDSs in the United States to qualified institutional buyers (each a “QIB”) as defined in Rule 144A (“Rule 144A”) under the United States Securities Act of 1933, as amended (the “Securities Act”) in reliance on Rule 144A (the “Rule 144A GDSs”), (b) an offering of GDSs outside the United States and Argentina (the “Regulation S GDSs”) in reliance on Regulation S under the Securities Act (“Regulation S”) and (c) an offering of Class B Shares to investors in Argentina in reliance on Regulation S. The Class B Shares and the GDSs have not been, and will not be, registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. The Class B Shares and the GDSs are subject to selling and transfer restrictions in certain jurisdictions. Prospective subscribers of the Class B Shares and GDSs should read the restrictions described under “Selling and Transfer Restrictions”.

Joint Global Coordinators and International Bookrunners Goldman Sachs International Credit Suisse International Lead Manager JPMorgan International Co-Managers Merrill Lynch International Itaú Securities

Offering Circular dated 19 October 2007 (continued on next page) The shareholders meeting of the Company held on 20 July 2007 approved a capital increase of up to Ps.30,000,000 to permit the issuance of the New Shares and the additional class B common shares corresponding to the Over-allotment Option (as defined herein) and established the minimum Offer Price (as defined herein) of the New Shares to be issued. The Company is offering 15,000,000 New Shares and up to 2,250,000 additional class B common shares pursuant to the Over-allotment Option. The Company’s existing shareholders have pre-emptive rights to subscribe New Shares in a number sufficient to maintain their proportionate holdings in the Company’s total capital stock. In addition, the Company’s existing shareholders have accretion rights, which permit them to subscribe New Shares and additional class B common shares corresponding to the Over-allotment Option that are not subscribed by other existing shareholders in proportion with the percentage of shares for which the subscribing existing shareholder has exercised its pre-emptive rights. In order to permit the Offering, the Company’s existing shareholders, including the Selling Shareholders, have waived the exercise of their pre-emptive and accretion rights in connection with the offering of the New Shares and additional class B common shares corresponding to the Over-allotment Option, representing 100% of the pre-emptive and accretion rights in respect of the Company’s capital increase. New shareholders of the Company will not have such preemptive and accretion rights in respect of this capital increase. The Company will cancel the portion of the capital increase not sold in the Offering or the Over-allotment Option. The Company and certain Selling Shareholders have granted Credit Suisse Securities (Europe) Limited an option (the “Over-allotment Option”), exercisable for 30 days following the announcement of the definitive Offer Price for the GDSs, to purchase additional class B shares in the form of GDSs amounting to up to 15% of the total number of Class B Shares sold in the Offering solely to cover over-allotments, if any. See “Subscription and Sale”. All information contained in this Offering Circular (including Annex A) other than the section “Unaudited Pro Forma Consolidated Statement of Income” and all references to that section contained elsewhere in this Offering Circular (the “Prospectus”) constitute a prospectus relating to the Company prepared in accordance with the prospectus rules (the “Prospectus Rules”) of the U.K. Financial Services Authority (the “Financial Services Authority”) made under Section 73A of the Financial Services and Markets Act 2000 (the “FSMA”). See “Subscription and Sale — European Economic Area”. This Offering Circular will be made available to the public in accordance with the Prospectus Rules. Prior to the Offering there has been no market for the GDSs or the Class B Shares. Applications have been made (i) to the Financial Services Authority, in its capacity as competent authority under the FSMA, for a listing of up to 25,000,000 GDSs to be issued on the GDS Closing Date (as defined below), up to 3,750,000 additional GDSs to be issued pursuant to the Over-allotment Option, as described herein, and up to 77,015,610 additional GDSs to be issued from time to time against the deposit of Class B Shares with JPMorgan Chase Bank, N.A. as depositary (the “Depositary”), to be admitted to the official list of the Financial Services Authority (the “Official List”), and (ii) to the London Stock Exchange plc (the “London Stock Exchange”) for such GDSs to be admitted to trading on the London Stock Exchange’s EEA Regulated Market (as defined in the Investment Services Directive 93/22/EC) (the “Regulated Market”). Admission of the GDSs to the Official List and to trading on the Regulated Market is expected to take place on 25 October 2007, following closing and settlement therefor on or around 24 October 2007 (the “GDS Closing Date”). Conditional trading in the GDSs and the class B common shares on the London Stock Exchange and on the Mercado de Valores de Buenos Aires, (the “MERVAL”) is expected to commence on a when-and-if-issued basis on 19 October 2007. All dealings in the GDSs prior to the commencement of unconditional dealings will be of no effect if admission does not take place and will be at the sole risk of the parties concerned. We have obtained authorisation to have our class B common shares (including the Class B Shares) and our class C common shares listed on the Bolsa de Comercio de Buenos Aires, the Buenos Aires Stock Exchange (the “BCBA”) and to have our class B common shares (including the Class B Shares) admitted to trading on the BCBA under the symbol “GCLA”. The Securities offered hereby are being offered by Goldman Sachs International and Credit Suisse Securities (Europe) Limited (the “Joint Global Coordinators and International Bookrunners”), J.P.Morgan Securities Inc. (the “International Lead Manager”) and Itaú Securities, Inc. and Merrill Lynch International (the “International Co-Managers,” and together with the Joint Global Coordinators and International Bookrunners and the International Lead Manager, the “International Underwriters”) or through their selling agents, when, as and if delivered to and accepted by them and subject to their right to reject any order in whole or in part. The Euroclear System (“Euroclear”) and Clearstream Banking société anonyme (“Clearstream”) are expected to accept the GDSs for settlement in their respective book-entry settlement systems. The Regulation S GDSs and the Rule 144A GDSs will be evidenced by a Master Regulation S Global Depository Receipt (the “Master Regulation S GDR”) and a Master Rule 144A Global Depositary Receipt (the “Master Rule 144A GDR” and, together with the Master Regulation S GDR, the “Master GDRs”) each registered in the name of Cede & Co., as nominee for The Depository Trust Company (“DTC”) in New York. Except as set forth herein, investors may hold beneficial interests in and transfer the GDSs only through DTC, Euroclear or Clearstream and their direct and indirect participants, as applicable. Transfers within Euroclear and Clearstream, or within DTC, will be in accordance with the usual rules and operating procedures of the relevant system. This Offering Circular and the financial statements referred herein are available for prospective investors at the legal domicile of the Company at Piedras 1743, (C1140 ABK) City of Buenos Aires, Argentina, at the domicile of the BCBA at Sarmiento 229 (C1041AAE), City of Buenos Aires, Argentina, and through the Company’s website at www.grupoclarin.com, and the Spanish language prospectus used in connection with the Argentine tranche of the Offering is also available through the website of the Comisión Nacional de Valores, the Argentine Securities Commission (the “CNV”) at www.cnv.gov.ar. The Company expects that delivery of the GDSs will be made through DTC on or about the GDS Closing Date and that delivery of the Class B Shares will be made on or about 24 October 2007 (the “Class B Share Closing Date”). IMPORTANT INFORMATION ABOUT THIS OFFERING CIRCULAR This Offering Circular is issued in compliance with the Prospectus Rules of the FSMA (the “Listing Rules”), which are compliant with the provisions of the Prospectus Directive. The Company accepts responsibility for the information provided in this Offering Circular and, having taken all reasonable care to ensure that such is the case, the Company declares that the information contained in this Offering Circular is, to the best of the Company’s knowledge, in accordance with the facts and contains no omission likely to affect its import. None of the International Underwriters or Selling Shareholders makes any representation or warranty, express or implied, as to the accuracy or completeness of information set forth in this Offering Circular. None of the International Underwriters or the Selling Shareholders assumes any responsibility for the accuracy or completeness of the information set forth in this Offering Circular. Each person contemplating making an investment in the Securities must make its own investigation and analysis of Grupo Clarín and its own determination of the suitability of any such investment, with particular reference to its own investment objectives and experience, and any other factors that may be relevant to such person in connection with such investment. The Company has applied to have all of its class B common shares (including the Class B Shares) and its class C common shares listed on the BCBA and to have all of its class B common shares (including the Class B Shares) admitted to trading on the BCBA. It has also applied for admission of all its share capital to the public offering regime and registration of the issuance of the New Shares with the CNV. The Company expects trading of the Class B Shares to commence on October 2007. No prospective investor should consider any information in this Offering Circular to be investment, legal, tax or other advice. Each prospective investor should consult its own counsel, accountant and other advisers for such advice. None of the Company, the Selling Shareholders or any of the International Underwriters makes any representation to any offeree or purchaser of the Securities regarding the legality of an investment in such Securities by such offeree or purchaser. The contents of the Company’s website do not form any part of this Offering Circular.

Market and other Statistical Data This Offering Circular is based on information provided by the Company and other sources that the Company believes to be reliable. The Company has included its own estimates, assessments, adjustments and judgements in preparing some market information, which has not been verified by an independent third party. Market information included herein is, therefore, unless otherwise attributed exclusively to a third party source, to a certain degree subjective. While the Company believes that its own estimates, assessments, adjustments and judgements are reasonable and that the market information prepared by the Company appropriately reflects the industry and the markets in which it operates, there is no assurance that the Company’s own estimates, assessments, adjustments and judgements are the most appropriate for making determinations relating to market information or that market information prepared by other sources will not differ materially from the market information included herein. Market data used in this Offering Circular, including without limitation under the captions “Summary”, “Business Description”, “Operating and Financial Review” and “Industry Regulation”, have been extracted from publicly available information, including industry publications, market research, press releases, filings under various securities laws and official data published by certain government and international agencies. Such sources include Convergencia Research, the Instituto Verificador de Circulaciones, the newspaper and magazine circulation verification institute (“IVC”), IBOPE Argentina S.A. (“IBOPE”), the Instituto Nacional de Estadísticas y Censos, the Argentine statistical institute (“INDEC”) and the survey of the Banco Central de la República Argentina, the Argentine Central Bank (the “Central Bank”) of independent forecasting firms (“REM”). The Company has relied on the

i accuracy of such information without carrying out an independent verification thereof. Accordingly, the Company accepts responsibility only for accurately reproducing such information and disclaims responsibility for the accuracy thereof. As far as the Company is aware and is able to ascertain from information published by the aforementioned sources, no facts have been omitted which would render the reproduced information, data and statistics inaccurate or misleading.

Stabilisation In connection with the Offering, Credit Suisse Securities (Europe) Limited (or persons acting on its behalf) may over-allot GDSs or effect transactions with a view to supporting the market price of the GDSs at a level higher than that which might otherwise prevail. However, there is no assurance that Credit Suisse Securities (Europe) Limited (or persons acting on its behalf) will undertake stabilisation action. Any stabilisation action may begin on or after the date of adequate public disclosure of the final price of the Securities and, if begun, may be ended at any time, but it must end no later than 30 days after that date. The International Underwriters also may impose a penalty bid. This occurs when a particular International Underwriter repays to the International Underwriters a portion of the discount received by it because Credit Suisse Securities (Europe) Limited or its affiliates have repurchased Class B Shares or GDSs sold by or for the account of such International Underwriter in stabilising or short covering transactions.

Notice to United Kingdom Investors This Offering Circular is only being distributed to and is only directed at (i) persons who are outside the United Kingdom, (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) and (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “Relevant Persons”). The Securities are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such Securities will be engaged in only with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this Offering Circular or any of its contents.

Notice to European Economic Area Investors In any European Economic Area (“EEA”) Member State that has implemented the Prospectus Directive, this communication is only addressed to, and is only directed at, qualified investors in that Member State within the meaning of the Prospectus Directive. This Offering Circular has been prepared on the basis that all offers of Securities will be made pursuant to an exemption under the Prospectus Directive, as implemented in member states of the EEA, from the requirement to produce a prospectus for offers of Securities. Accordingly any person making or intending to make any offer within the EEA of Securities which are the subject of the placement contemplated in this Offering Circular should only do so in circumstances in which no obligation arises for the Company, any of the Selling Shareholders or any of the International Underwriters to produce a prospectus for such offer. Each person in a Member State of the European Economic Area that has implemented the Prospectus Directive (each, a “Relevant Member State”) who receives any communication in respect of, or who acquires any of the Securities under, the offers contemplated in this offering memorandum will be deemed to have represented, warranted and agreed to and with us and the initial purchaser that it is a qualified investor within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive.

ii None of the Company, any of the Selling Shareholders or any of the International Underwriters has authorised, nor do they authorise the making of any offer of Securities through any financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, on their behalf, other than offers made by the International Underwriters which constitute the final placement of Securities contemplated in this Offering Circular. Accordingly, no purchaser of the Securities, other than the International Underwriters, is authorised to make any further offer of the Securities on behalf of the International Underwriters. For the purposes of this representation, the expression an “offer” in relation to any Securities 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 any Securities to be offered so as to enable an investor to decide to purchase or subscribe for the Securities, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State.

NOTICE TO NEW HAMPSHIRE RESIDENTS NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENCE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES (“RSA 421-B”) 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 AVAIL- ABLE FOR A SECURITY OR A TRANSACTION, MEANS THAT THE SECRETARY OF STATE OF NEW HAMPSHIRE 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, CUS- TOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

iii TABLE OF CONTENTS

Page Cautionary Note Regarding Forward-Looking Statements ...... v Available Information ...... vi Limitation on Service of Process and Enforcement of Civil Liabilities...... vii Presentation of Financial and Other Information ...... viii Exchange Rate Information ...... xi Summary...... 1 Risk Factors ...... 8 Summary Consolidated Financial And Other Information...... 24 TheOffering...... 30 Use of Proceeds...... 38 Business Description ...... 39 The Argentine Media Industry ...... 71 Industry Regulation...... 78 Market Information ...... 90 Unaudited Pro Forma Consolidated Statement of Income ...... 92 Selected Consolidated Financial Information ...... 96 Operating and Financial Review ...... 103 Dividend Policy ...... 136 Dilution ...... 138 Capitalisation ...... 139 Related Party Transactions ...... 141 Principal and Selling Shareholders ...... 143 Management ...... 149 Description of Share Capital and Applicable Argentine Legislation ...... 162 Terms and Conditions of the Global Depositary Shares ...... 169 Taxation ...... 189 Subscription and Sale...... 196 Selling and Transfer Restrictions...... 199 Settlement and Transfer ...... 206 Information Relating to the Depositary ...... 209 General Information ...... 210 Glossary of Selected Terms ...... 216 Index to Financial Statements...... F-1

iv CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Offering Circular contains “forward-looking statements” regarding our financial condition, results of operations and business. All statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or that include the words “target”, “believe”, “expect”, “aim”, “intend”, “plan”, “will”, “may”, “anticipate”, “would”, “could” or similar expressions or the negative thereof are, or may be considered, forward looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond our control that could cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements and, thus, an investment decision shall not be based on such forward- looking statements. Such forward-looking statements are based on numerous assumptions regarding our present and future business strategies and the environment in which we will operate in the future. Among the important factors that could cause our actual results, performance or achievements to differ materially from those expressed in such forward-looking statements are those under the headings “Summary”, “Risk Factors”, “Operating and Financial Review”, “Business Description” and elsewhere in this Offering Circular, including, without limitation, (i) economic, political and social conditions prevailing in Argentina and other countries in which we operate; (ii) reliance on content produced by third parties; (iii) difficulties arising in our relationship with significant minority investors in the Company and certain of its subsidiaries; (iv) increasing cost of our supplies; (v) inability to finance on reasonable terms capital expenditures required to remain competitive; (vi) fluctuations, whether seasonal or in response to adverse macro-economic developments, in the demand for advertising; (vii) changes in the regulatory environment in which we operate; (viii) our capacity to compete and develop our business in the future; and (ix) changes in our business. This list of factors is not exhaustive. When relying on forward-looking statements, each prospective investor should carefully consider the foregoing factors and other uncertainties and events, especially in light of the political, economic, social and legal environment in which the Company operates. We make no representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved, and such forward-looking statements represent, in each case, only one of many possible scenarios and should not be viewed as the most likely or standard scenario. These forward-looking statements speak only as at the date of this Offering Circular. We expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any of such statements are based unless required to do so by the Listing Rules of the U.K. Listing Authority (the “UKLA”), the Prospectus Rules, the Disclosure and Transparency Rules and other applicable laws.

v AVAILABLE INFORMATION For so long as any Class B Shares or GDSs representing such Class B Shares are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, we will, during any period in which we are neither subject to Section 13 or Section 15(d) of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), 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 or subscriber of such restricted securities designated by such holder or beneficial owner upon the request of such holder, beneficial owner or prospective purchaser or subscriber, the information required to be delivered to such persons pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto).

vi LIMITATION ON SERVICE OF PROCESS AND ENFORCEMENT OF CIVIL LIABILITIES The Company is incorporated in Argentina. All of the Company’s directors and executive officers named in this Offering Circular reside outside the United Kingdom and the United States except for Messrs. Muneer Satter, David Castelblanco and Ralph H. Booth II, who reside in the United States. All or a substantial portion of their and the Company’s assets and the assets of certain Selling Shareholders are located outside the United Kingdom and the United States, principally in Argentina. As a result, it may not be possible for you to: • effect service of process within the United Kingdom or the United States upon most of the Company’s directors and executive officers named in this Offering Circular; or • enforce, in the United Kingdom or the United States, court judgements obtained in courts of the United Kingdom or the United States, as the case may be, against the Company or most of the Company’s directors and executive officers named in this Offering Circular in any action. In addition, it may be difficult for you to enforce, in original actions brought in courts in jurisdictions located outside the United Kingdom and the United States, liabilities predicated upon U.K. or U.S. securities laws, as the case may be. The Company and the Local Selling Shareholders (as defined herein) have been advised by their Argentine counsel, Estudio Sáenz Valiente & Asociados, that judgements of United States courts for civil liabilities based upon the federal securities laws of the United States may be enforced in Argentina, provided that the requirements of any applicable treaty for the enforcement of foreign judgements, or, in the absence of such treaty, Article 517 of the Federal Civil and Commercial Procedure Code (if enforcement is sought before federal courts) are met. Under Article 517 for a foreign judgement to be enforced in Argentina in the absence of a treaty, (i) the judgement, which must be final in the jurisdiction where it was rendered, must have been issued by a competent court in accordance with the Argentine principles regarding international jurisdiction and resulted from a personal action, or an in rem action with respect to personal property if such property was transferred to Argentine territory during or after the foreign proceeding, (ii) the defendant against whom enforcement of the judgement is sought must have been personally served with the summons and, in accordance with due process of law, must have been given an opportunity to defend itself against foreign action, (iii) the judgement must be valid in the jurisdiction where it was rendered and its authenticity must be established in accordance with the requirements of Argentine law, (iv) the judgement must not violate the principles of public policy of Argentine law, and (v) the judgement must not be contrary to a prior or simultaneous judgement of an Argentine court. There are currently no treaties for the enforcement of foreign judgements between Argentina and the United Kingdom or the United States. Subject to compliance with Article 517 of the Federal Civil and Commercial Procedure Code described above, a judgement against us, any of the Local Selling Shareholders or the persons described above obtained outside Argentina would be enforceable in Argentina without reconsideration of the merits. The Company and the Local Selling Shareholders have been further advised by their Argentine counsel that: • original actions based on the federal securities laws of the United States may be brought in Argentine courts and that, subject to applicable law, Argentine courts may enforce liabilities in such actions against the Company, the Company’s directors, the Company’s executive officers, the Selling Shareholders and the advisors named in this Offering Circular; and • the ability of a judgement creditor or the other persons named above to satisfy a judgement by attaching certain assets of ours or any of the Selling Shareholders, respectively, is limited by provisions of Argentine law. A plaintiff (whether Argentine or non-Argentine) residing outside Argentina during the course of litigation in Argentina must provide a bond to guarantee court costs and legal fees if the plaintiff owns no real property in Argentina that could secure such payment. The bond must have a value sufficient to satisfy the payment of court fees and defendant’s attorney fees, as determined by the Argentine judge. This requirement does not apply to the enforcement of foreign judgements.

vii PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Presentation of Financial Information The Company maintains its financial books and records and publishes its financial statements in Pesos. The Company’s audited consolidated financial statements as of and for the years ended 31 December 2006, 2005 and 2004 (the “audited consolidated financial statements”) included in this Offering Circular have been prepared in accordance with accounting principles generally accepted in the City of Buenos Aires, Argentina (“Argentine GAAP”) and CNV regulations, which differ in certain significant respects from the accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s unaudited interim consolidated financial statements as of 30 June 2007 and 2006 and for the six month periods ended 30 June 2007 and 2006 (the “unaudited interim financial statements”) included in this Offering Circular have been prepared on the basis substantially consistent with the annual financial statements. In the opinion of the Company’s management, the unaudited interim financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim period. The financial results for the six month period ended 30 June 2007 are not necessarily indicative of the results for the full year ending 31 December 2007 or for any other interim period or financial year. Our independent accountants, Price Waterhouse & Co. S.R.L., Buenos Aires, Argentina (a member firm of PricewaterhouseCoopers), independent accountants (the “Independent Accountants”), have issued an opinion over the audited consolidated financial statements that includes the description of an uncertainty that results from pending regulatory approvals relating to the sale by the Company of its indirect participation in Primera Red Interactiva de Medios Argentinos (Prima) S.A. (“Prima”) to Multicanal S.A. (“Multicanal”), the sale of its direct and indirect participation in Multicanal to Cable- visión S.A. (“Cablevisión”) and the indirect acquisition by the Company of additional shares of Cablevisión necessary to increase its participation in that company to 60% of its outstanding capital stock and votes. Additionally, in connection with the unaudited interim financial statements of the Company, the Independent Accountants have issued a limited review report with an observation relating to the uncertainty mentioned above. The Company’s audited consolidated financial statements as of and for the years ended 31 December 2006, 2005 and 2004 included in Annex A to this Offering Circular have been prepared in accordance with U.S. GAAP (the “U.S. GAAP audited consolidated financial statements”). The Company’s unaudited interim consolidated financial statements as of 30 June 2007 and 2006 and for the six months ended 30 June 2007 and 2006 included in Annex A (the “U.S. GAAP unaudited interim financial statements” and, together with the U.S. GAAP audited consolidated financial statements, the “U.S. GAAP Financial Statements”) to this Offering Circular have been prepared on the basis substantially consistent with the annual financial statements. In the opinion of the Company’s management, the U.S. GAAP unaudited interim financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim period. The financial results for the six months ended 30 June 2007 are not necessarily indicative of the results for the full year ending 31 December 2007 or for any other interim period or financial year. On 26 September 2006, the Company increased its interest in Cablevisión to 60% of Cable- visión’s outstanding shares and Cablevisión acquired, directly and indirectly, 100% of the outstanding shares of Holding Teledigital Cable S.A. (“Holding Teledigital”), 98.5% of the outstanding shares of Multicanal and, through Multicanal, 100% of the outstanding shares of Prima, 3% of which were subsequently transferred to Univent’s S.A. (“Univent’s”) and later to Cablevisión. See “Business Description — Cable Television and Internet Access — Summary of Ownership Changes and Recent Acquisitions.” This Offering Circular also contains audited consolidated financial statements of Cablevisión as of and for each of the fiscal years ended 31 December 2006 and 2005 prepared in accordance with Argentine GAAP and CNV regulations (the “Cablevisión Financial Statements”). The Independent Accountants have issued an opinion over the Cablevisión Financial Statements that includes the

viii description of an uncertainty that results from pending regulatory approvals relating to the acquisition of Multicanal by Cablevisión and Prima by Multicanal. In addition, this Offering Circular contains an unaudited pro forma consolidated statement of income of the Company for the year ended 31 December 2006 prepared in accordance with Argentine GAAP and CNV regulations, giving effect to (i) the decrease in our ownership interest in Multicanal to 65% as a result of the restructuring of Multicanal’s financial debt through an acuerdo preventivo extrajudicial (the “Multicanal APE”) in July 2006 and (ii) the increase in the Company’s interest in Cablevisión to 60% which, in turn, acquired 100% of the outstanding shares of Holding Teledigital from one of the former shareholders of Cablevisión and 98.5% of the outstanding shares of Multicanal from the Company, Arte Gráfico Editorial Argentino S.A. (“AGEA”) and Fintech Energy LLC, an affiliate of Fintech Advisory, Inc. (together with all of its affiliates, “Fintech”), and the acquisition by Multicanal of 100% of the outstanding shares of Prima from Primera Red Interactiva de Medios Americanos (Prima) Internacional S.A. (since 26 September 2007, denominated Compañía de Medios Digitales (CMD) S.A., hereinafter “Prima Internacional”) in September 2006, as if such transactions had occurred on 1 January 2006 (the “Unaudited Pro Forma Consolidated Statement of Income”). The Unaudited Pro Forma Consolidated Statement of Income is presented for informational purposes only and does not purport to represent what the Company’s results of operations actually would have been if these acquisitions in fact had occurred on 1 January 2006, or to project the Company’s consolidated results of operations for any future period. The Argentine GAAP financial statements of the Company and Cablevisión were prepared in constant units of currency, reflecting the overall effects of inflation, through 31 August 1995. Argentine law provided that financial statements were not required to be restated to reflect inflation from 1 September 1995 through 31 December 2001, a period characterised by very low rates of inflation and, in certain years, deflation. Between 1 January 2002 and 28 February 2003, Argentine law was amended to require the restatement of financial statements to reflect the effects of inflation, in recognition of the high rates of inflation that followed the end of the Peso/U.S. dollar parity maintained under Argentine Law No. 23,928 (as amended), (the “Convertibility Law”). Pursuant to Decree No. 664/03 of the Argentine executive branch and Resolution No. 441/03 issued by the CNV, the restatement of financial statements to reflect inflation was discontinued again effective 1 March 2003, although under Argentine GAAP financial statements would have been required to be restated through 30 September 2003. Accordingly, the Company and Cablevisión are not required to restate and have not restated their financial statements for inflation after 28 February 2003. As a result, the results of operations and financial position of the Company and Cablevisión may not be directly comparable from period to period. The Company cannot assure you that in the future it will not be again required to record the effects of inflation in its financial statements (including those covered by the financial statements included in this Offering Circular) in constant Pesos, which may affect the comparability of its results of operations and financial position to those recorded in prior periods. See Note 2.1 to the parent company only financial statements that form part of the audited consolidated financial statements and Note 3.3 of the Cablevisión Financial Statements included in this Offering Circular. In November 2001, the Federación Argentina de Consejos Profesionales de Ciencias Econó- micas, the Argentine Federation of Professional Councils in Economic Sciences (“FACPCE”) adopted Technical Resolution No. 18 which for reporting purposes requires public companies to include segment reporting information, grouping activities relating to products and services that are subject to similar risks and profitability. We grouped our operations into four business segments: Cable television and Internet access, publishing and printing, broadcasting and programming, and other. See Note 3 to our audited consolidated financial statements. The segment data set forth in this Offering Circular do not reflect the elimination of intersegment sales and corporate expenses. Currency conversions, including conversions of Pesos into U.S. dollars, are included for the convenience of the reader only and should not be construed as a representation that the amounts in question have been, could have been or could be converted into any particular denomination, at any particular rate or at all.

ix Presentation of Certain Terminology In this Offering Circular, all references to: • “Argentina” are to the Republic of Argentina; • “Ps.” or “Pesos” are to the lawful currency of Argentina; • “U.K.” and “United Kingdom” are to the United Kingdom of Great Britain and Northern Ireland; • “U.S. dollar” and “U.S.$” are to the lawful currency of the United States of America; • “U.S.” and “United States” are to the United States of America; Definitions of certain terminology associated with the Company’s business and industry are set forth under “Glossary of Selected Terms”. In this Offering Circular, except where the context otherwise requires or implies, we use the words “Grupo Clarín”, “the Company”, “we”, “us”, and “our” to refer to Grupo Clarín S.A. and, when the context otherwise requires, its consolidated subsidiaries.

Rounding Certain figures included in this Offering Circular have been subject to rounding adjustments; accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

x EXCHANGE RATE INFORMATION

Exchange Rates On 7 January 2002, the Argentine congress enacted Law No. 25,561, abandoning the currency board in place for over ten years which set forth Peso-U.S. dollar parity at Ps.1.00 per U.S.$1.00. After devaluing the Peso and setting the official exchange rate at Ps.1.40 per U.S.$1.00, on 11 February 2002, the government allowed the Peso to float. The Central Bank, however, continues to intervene in the foreign exchange market by buying and selling U.S. dollars for its own account on a regular basis. The shortage of U.S. dollars and their heightened demand caused the Peso to further devalue significantly in the first half of 2002. After reaching its lowest value of Ps.3.87 per U.S.$1.00 in June 2002, the Peso appreciated versus the U.S. dollar to an exchange rate of Ps.2.93 per U.S.$1.00 as of 31 December 2003. Since then, the peso has gradually depreciated in nominal terms to an exchange rate of Ps.3.15 per U.S.$1.00 on 30 September 2007. See “Risk Factors — Risks Related to Argentina”. The table below sets forth, for the periods and dates indicated, certain information regarding the exchange rate between the Peso and the U.S. dollar, based on the official exchange rate quoted by the Central Bank. Fluctuations in the exchange rate between the Argentine Peso and the U.S. dollar in the past are not necessarily indicative of fluctuations that may occur in the future. These rates may also differ from the actual rates used in the preparation of the Company’s financial statements and other information presented in this Offering Circular. Ps. per U.S.$1.00(1) Period High Low Average(2) End Year ended 2001 ...... 1.00 1.00 1.00 1.00 2002 ...... 3.87 1.00 3.16 3.36 2003 ...... 3.36 2.75 2.95 2.93 2004 ...... 3.07 2.80 2.95 2.97 2005 ...... 3.05 2.86 2.92 3.03 2006 ...... 3.11 3.03 3.07 3.07 Month ended 31 January 2007 ...... 3.11 3.06 3.09 3.11 28 February 2007 ...... 3.11 3.10 3.10 3.10 31 March 2007 ...... 3.11 3.10 3.10 3.10 30 April 2007 ...... 3.10 3.08 3.09 3.09 31 May 2007...... 3.09 3.07 3.08 3.08 30 June 2007 ...... 3.09 3.07 3.08 3.09 31 July 2007 ...... 3.17 3.09 3.11 3.12 31 August 2007...... 3.17 3.13 3.15 3.16 30 September 2007 ...... 3.17 3.13 3.15 3.15

(1) Until June 2002, asked closing quotations as quoted by Banco Nación (as defined herein). Since July 2002, the reference exchange rate as published by the Central Bank. (2) In the case of exchange rate averages for a year, represents the average of the exchange rates on the last day of each month during the year. In the case of exchange rate averages for a period shorter than a year, represents the average of the lowest and highest daily exchange rates in the month or period. This Offering Circular contains translations of certain amounts into U.S. dollars or Pesos at specified rates solely for the purpose of presentation. These translations should not be construed as representations that the amounts actually represent such equivalent U.S. dollar or Peso amounts or could be, or could have been, converted into U.S. dollars or Pesos at the rate indicated as of the dates mentioned herein or at all.

xi Exchange Controls

In 2001, due to the deterioration of the economic and financial conditions in Argentina, the government’s difficulties in dealing with the service of its public foreign debt and the decrease in the level of deposits in the financial system, the government established a number of monetary and currency exchange control measures. These included restrictions on the free disposition of funds deposited in banks and restrictions on the transfer of foreign currency abroad without prior Central Bank approval. Since 2003, the government has eased these restrictions substantially.

After the repeal of the Convertibility Law and following a brief experience that combined an official exchange rate with a free rate, in February 2002 the government established a single free exchange market. The exchange rate of foreign currencies is determined by market forces, but the Central Bank has the power to intervene by buying and selling foreign currency for its own account, a practice in which it engages on a regular basis.

The reestablishment of foreign exchange controls in Argentina affected the ability of Argentine residents and non-residents to purchase foreign currency in the Argentine market and transfer it abroad, provided for the mandatory repatriation of the foreign currency proceeds of exports of products and services, as well as foreign debt, and imposed restrictions on payments of profits and dividends to foreign shareholders of local companies.

On 6 September 2002, the Central Bank imposed limitations on the amount of foreign currency that Argentine residents and local legal entities could purchase in the foreign exchange market and transfer abroad to make investments outside of Argentina, such as real estate investments, direct investments, portfolio investments and other investments made abroad by Argentine residents, without requiring prior Central Bank approval. The limits have been raised progressively since 2002 and are currently at U.S.$2 million per month.

Repatriation of funds by non-Argentine residents was also made subject to certain limitations which the Central Bank eased in July 2007.

Since 2003 Argentine companies may purchase foreign currency in the foreign exchange market to pay dividends abroad only to foreign shareholders and to the Depositary for the benefit of the foreign holders of GDSs, provided that such dividends correspond to periods covered by approved audited annual financial statements. Argentine companies may also make payments of dividends to foreign shareholders and to the Depositary for the benefit of the foreign holders of GDSs in Pesos in Argentina. The repatriation of such proceeds by foreign shareholders and the Depositary for the benefit of the foreign holders of GDSs will be subject to the limitations described below.

On 26 June 2003, the government set restrictions on capital flows into and out of Argentina, which mainly consisted of a prohibition to transfer any funds out of Argentina until 180 days after their entry into the country. Portfolio investments, financial loans and repatriation of capital, among others, were subject to the restriction. Decree 285/03 exempted from this requirement foreign trade transfers (i.e., repatriation of export proceeds or export financings) and direct investments made in Argentine companies.

On 10 June 2005, the government issued Decree 616/05 (as implemented by Central Bank regulations), imposing additional restrictions on certain capital flows into and out of Argentina. These restrictions include increasing from 180 to 365 days the period that incoming funds of all new foreign indebtedness of Argentine residents, any refinancing of existing foreign debt, portfolio investments by non-Argentine residents and capital contributions must remain in Argentina. The Decree exempted certain transactions from this requirement such as import and export transactions and capital inflows to acquire debt in the context of their initial public offering. However, pursuant to Central Bank regulations, the 365-day period is still applicable to the repatriation by non-Argentine residents of certain portfolio investments (including the purchase of the Class B Shares) made and collected in Argentina, income from such investments or any gains from the sale of such investments, even if the purchase was made in the context of a public offering.

xii Decree 616/05 and its implementing regulations also require that 30% of incoming funds be deposited with a bank in Argentina in a non-interest bearing account for 365 calendar days. The transactions subject to this requirement include, among others, the incurrence of certain foreign indebtedness by Argentine residents (unless the debt qualifies for an exemption) and portfolio investments by non-Argentine residents (except for the initial subscription of debt securities and shares of local companies which are publicly offered and are listed on self-regulated markets, provided, however, that initial public offerings of debt securities of financial trusts are subject to the 30% mandatory reserve if an investment in the underlying assets would be subject to such restriction). These restrictions do not apply to incoming funds of foreign investors to purchase our New Shares in Argentina in the Offering but do apply to those incoming funds to purchase Selling Shareholder Shares in Argentina. Sales of New Shares, Selling Shareholder Shares or GDSs outside Argentina by the International Underwriters, if deposited outside of Argentina, will not involve capital inflows into Argentina and will therefore not be subject to these restrictions.

Repatriation of funds by Argentine residents is also subject to the mandatory 30% deposit for the amounts exceeding U.S.$2 million per month. Also, as from July 2007, the Central Bank imposed additional restrictions aimed at identifying the origin of the funds that are being repatriated. According to these new rules, unless the transaction falls under one of the specific cases set forth therein, the Argentine resident must provide the financial entity executing the foreign exchange transaction with evidence of the funds being maintained abroad for at least 20 business days prior to the execution of such transaction.

Payments upon redemption of shares by Argentine companies to foreign shareholders may be made in Pesos in Argentina without restrictions. However, remittance of the proceeds by foreign shareholders will be subject to the following limitations. As a general rule, purchases of foreign currency by non-Argentine residents in excess of U.S.$5,000 for their transfer abroad require prior Central Bank approval, unless the trade qualifies for an exemption. The U.S.$5,000 limit was increased to U.S.$500,000 per month in the case of repatriation of portfolio investments and their proceeds, and to U.S.$2 million per month in the case of proceeds of the sale of direct investments. In both cases, the investments must have remained in Argentina for a mandatory waiting period (365 days for investments made after June 2005). In 2007 the Central Bank eased certain restrictions on the repatriation of capital held by non-Argentine residents. Although the general limit of U.S.$5,000 per month was maintained, the Central Bank created additional exemptions including, among others, the repatriation of capital contributions and results from capital reductions by direct investors in Argentine companies (investors holding 10% or more of the outstanding capital stock or votes) subject to compliance with certain requirements. The U.S.$500,000 repatriation limit for portfolio investments (which include investments in shares of Argentine companies below 10% of the outstanding capital stock or votes) was maintained. These restrictions would apply to the repatriation of funds collected in Pesos in Argentina by non-Argentine residents as a result of the sale of the Class B Shares, and may also apply to the repatriation of dividend payments if collected in Pesos in Argentina.

Moreover, Argentine companies can access the foreign exchange market to make payment upon redemption of shares to foreign shareholders that qualify as direct investors (10% or more of capital or votes). Access to the foreign exchange market by Argentine companies to make payment upon redemption of shares to portfolio investors is restricted and, therefore, payments should be made in Pesos in Argentina or with freely available funds held by the Argentine company abroad.

From 21 May 2007 to 31 December 2007, Argentine residents may purchase foreign currency in the foreign exchange market for investment purposes in excess of the U.S.$2 million limit, provided that the funds are applied within 360 days to make payments to non-Argentine residents of profits and dividends (subject to certain caps) and imports, or to make direct investments abroad.

xiii SUMMARY This summary must be read as an introduction to this Offering Circular. Any decision to invest in the Securities should be based on consideration of this Offering Circular as a whole including the documents incorporated by reference. Following the implementation of the relevant provisions of the Prospectus Directive in each member state of the EEA, no civil liability will attach to the Company in any such member state solely on the basis of this summary, including any translations thereof, unless it is misleading, inaccurate or inconsistent when read together with the other parts of this Offering Circular. Where a claim relating to the information contained in this Offering Circular is brought before a court in a member state of the EEA, the claimant may, under the national legislation of that member state where the claim is brought, be required to bear the costs of translating this Offering Circular before the legal proceedings are initiated. Definitions of certain terms related to the Company’s business and industry are set forth under “Glossary of Selected Terms”. Certain statements in this Offering Circular include forward-looking statements that also involve risks and uncertainties as described under “Cautionary Note Regarding Forward-Looking Statements”.

Our Company We are Argentina’s largest and most prominent media company, and the market leader in cable television and Internet access, printing and publishing, and broadcasting and programming segments. Our cable television network is the largest in Latin America, we have the largest broadband subscriber base in Argentina and our flagship newspaper has the highest circulation in Latin America and is the second-highest circulation Spanish-language newspaper in the world. We are the largest producer of media content in Argentina. Our content, including news, sports and entertainment, reaches substantially all segments of the Argentine population in terms of wealth, geography and age. In 2006 and for the six month period ended 30 June 2007, our net sales were Ps.2.8 billion and Ps.2.0 billion, respectively, our Adjusted EBITDA (as defined herein) was Ps.709.7 million and Ps.616.6 million, respectively, and our net income was Ps.869.7 million and Ps.103.5 million, respectively. In 2006, on a pro-forma basis after giving effect to the Cablevisión Acquisition (as defined herein), our net sales were Ps.3.6 billion, our Adjusted EBITDA was Ps.1.0 billion and our net income was Ps.593.6 million.

Our Business Segments Through companies we control and joint ventures, we are engaged primarily in cable television and Internet access, printing and publishing, broadcasting and programming and other related activities. The chart below illustrates the main companies in which we participate, directly or indirectly, organised by business segment as of the date of this Offering Circular.

1 The Company

Cable TV and Internet Broadcasting & Printing & Publishing Other Access ProgrammingPr

Cable TV Publishing Broadcast TV Channels Digital Content • Cablevisión • AGEA • Artear C13 • Clarín Global • Prima Internacional • Multicanal • Tinta Fresca • Telecor C12 • Telba C7 Other • Holding Teledigital • Cimeco – La Voz/Los Andes • GC Gestión Compartida Broadband Printing • Bariloche TV C6 • Cablevisión • AGR TV Content Producers • Pol-Ka • Prima • Impripost Ideas del Sur Paper Mill • • IESA • Papel Prensa • TRISA Other • TSC • Oportunidades • Canal Rural Satelital • Ferias y Exposiciones Film Producer • Unir • Patagonik Film Group Radio Broadcasting • Radio Mitre

Our Strengths We believe we have the following strengths: 1. We are the Largest and Most Prominent Media Company in Argentina. We are market leader in Argentina in most of the media segments in which we operate. • Largest Cable TV Network in Latin America. We operate the largest cable TV network in Latin America in terms of subscribers, with approximately 2.9 million as of 30 June 2007. • Largest Broadband Internet Access Provider in Argentina. We provide broadband Internet access to approximately 614,800 subscribers in Argentina as of 30 June 2007. • Largest Newspaper in Latin America. Our flagship newspaper has the highest circulation in Latin America and is the leading Argentine newspaper in terms of advertising revenues. • Largest Television Broadcaster in Argentina. We broadcast the leading TV channel in Argentina in terms of advertising revenues and prime time audience. • Largest Network of Argentine Internet Portals. We operate the largest network of Argen- tine-based Internet portals, receiving approximately 298 million page views per month. 2. We Own a Large, High-Quality, High-Capacity Cable Network. Through our high- capacity cable network we can offer basic pay TV, broadband Internet, premium video, telephony and value added data services to our residential and business customers. 42% of our cable network is bidirectional. Our cable modem technology competes favourably with ADSL in the provision of broadband Internet access. The size of our cable TV business allows us to achieve significant economies of scale, mainly through cost savings and efficient planning of our capital expenditures, in a largely fixed cost industry. 3. We are the Leading Producer of Media Content in Argentina. We believe that our longstanding leadership in the media business in Argentina gives us a unique ability to identify audiences’ tastes and interests and produce content tailored for the Argentine population, such as the broadcasting of local soccer championships. Our broad content distribution capabilities and critical mass reinforce our ability to generate high-quality content. 4. We are a Central Point of Reference for Advertisers in Argentina. We have the largest market share in most segments of the Argentine advertising market. Our leadership position across

2 most content production and distribution platforms allows us to capture a significant share of the Argentine advertising market.

5. We have Proven Capable of Adapting Our Business Model Over Time. We can anticipate market trends and changes in our industry, effectively adapt our business models, and take full advantage of the resulting opportunities. Originally created as a local newspaper, we first became an integrated player in the printing and publishing business and then successfully expanded into the broadcast television and radio business. Throughout the last decade, we created the largest cable television network in Latin America, and most recently we created the most visited network of Argentine Internet portals. Moreover, we continue to develop new business concepts and technologies.

6. Our Solid Financial Position. Our strong cash flow generation, supported by the cost savings we can derive from our economies of scale, as well as our operating margins and limited capital expenditure needs, provides us financial resources in amounts sufficient to operate our business efficiently and pursue attractive growth opportunities.

7. Our Proven Management Team and the Commitment of Our Controlling Shareholders. Our management team has extensive experience in the media industry in Argentina. Its clear vision prevailed throughout changing environments as we developed into the most prominent and largest media group in Argentina. Our Controlling Shareholders have been actively involved in the day-to-day operation of the Company for the past thirty years. Many of our key officers have been with us for more than a decade.

Our Strategy

We seek to use our leading position and our access to growth opportunities in the media industry in Argentina and Latin America to create value for our shareholders. We intend to develop further our cable television business, including digital and premium offerings, and expand our broadband and advertising business. We expect to strengthen our content production capabilities, expand our footprint in Argentina and abroad in our core and related businesses, and take advantage of digital convergence.

We intend to pursue the following strategic initiatives:

• Consolidate Our Cable TV Network. By integrating Cablevisión and Multicanal, we intend to create value for our shareholders by building on the combined power of the two brands and reducing costs and capital expenditures through the elimination of overlapping operating structures and physical networks.

• Expand Our Broadband Internet Access Business. We will seek to expand our broadband Internet access and gain market share in this growing market through our competitive advantages over competing ADSL technologies. We intend to rely on the footprint of our bidirectional network and our cable TV subscriber base to do so.

• Develop High-Growth, High-Margin Businesses. We intend to focus our resources and capital on high-growth, high-margin businesses and opportunities. We will seek to further expand our digital subscriber base and premium cable television services, including pay-per-view programming services. We believe that our state-of-the-art network infrastructure and broad cable television and Internet customer base can also be leveraged to develop our IP telephony business.

• Take Full advantage of the Growth of the Argentine Advertising Market. We will seek to take advantage of the growth of the Argentine economy to increase our advertising revenues. We intend to use our expertise and current platforms to increase our share of the advertising market.

3 • Expand Our Footprint in the Interior of Argentina and Pursue Selected Acquisitions Internationally. We seek to further expand our operations in the interior of the country through organic growth and opportunistic acquisitions. We will also consider acquisition opportunities outside Argentina that are consistent with our business strategy. As part of our ongoing effort to evaluate potential opportunities, we may consider strategic partnerships with leading international media companies. • Continue Producing High-Quality Multimedia Content. The production of high-quality content is one of the cornerstones of our business. We remain committed to investing in the development of talent and leveraging our knowledge of audiences’ tastes and interests to continue producing high quality content for distribution through our various platforms. We expect to further increase our content sales outside of Argentina. • Take Advantage of Trends and Changes in the Industry to Expand into Related Businesses. We intend to maintain our leadership in the media industry in Argentina by capitalising on our ability to identify trends in the industry and to develop new businesses.

Summary Risk Factors An investment in the Securities involves substantial risks and uncertainties. These risks and uncertainties include, among others, those listed below:

Risks Related to Our Business • Uncertainty as to the application of the current legal and regulatory environment that governs our cable television, telecommunications and Internet and digital content segments and the adoption of new regulations may be disadvantageous to us or may limit our ability to operate our business • Our acquisition of a controlling interest in Cablevisión and its acquisition of Multicanal, Holding Teledigital and Prima are subject to regulatory approval, which may not be granted • Our ability to operate effectively depends on maintaining our licenses • We may not receive all necessary regulatory approvals relating to previous acquisitions • We are required to divest overlapping broadcasting licenses • We may not be able to renew some leases of the facilities for the installation of our cable system • We may become subject to burdensome government regulations and legal uncertainties affecting our business segments which could adversely affect our operations • We cannot assure you that we will be able to maintain certain of our subsidiaries’ telecommunications licenses • Broadcasting and telecommunications regulations and criteria for their enforcement have changed over time • We may fail to realise the anticipated benefits of Cablevisión’s operational consolidation with Multicanal and Teledigital, and the integration of Multicanal and Teledigital with Cablevisión’s operations will present significant challenges • We operate in a highly competitive environment and competition may have a material adverse effect on our operations • Our revenues are cyclical and depend upon the condition of the Argentine economy • The Argentine media industry is a dynamic and evolving industry, and if it does not develop and expand as we currently expect our business may suffer

4 • The loss of key personnel could disrupt our business and adversely affect our results of operations • Our revenues may be adversely affected by subscriber termination • We may not be able to renew our rights to certain programming • Investors who purchase shares in this Offering will not be able to exercise control over us since the Controlling Shareholders will continue to have the power to control us • Certain of our existing shareholders have approval rights and their interests may be contrary to yours

Risks Related to Investment in a Foreign Corporation • Social and political conditions in Latin America may cause volatility in our operations and materially adversely affect our business • Fluctuations in exchange rates may adversely affect our business and revenues • Participation of foreign individuals and entities in media companies is limited by Argentine law • Non-Argentine companies that own Class B Shares directly and not through GDSs may not be able to exercise their rights as shareholders unless they are registered in Argentina • It may be difficult for you to enforce any judgement obtained in the United States or elsewhere outside Argentina against us or our affiliates

Risks Related to Argentina • Our financial condition and results of operations depend to a significant extent on macroeconomic and political conditions prevailing in Argentina • Argentina’s current economic growth and stability may not be sustainable • Restrictions on the supply of energy could negatively affect Argentina’s economic growth and negatively impact the Company’s results of operations • Inflation may continue to increase, causing adverse effects on the Argentine long-term credit markets as well as the Argentine economy generally • Argentina’s ability to obtain financing from international markets is limited, which may impair its ability to implement reforms and foster economic growth • Significant devaluation of the Peso against the U.S. dollar may adversely affect the Argentine economy as well as our financial performance • Significant appreciation of the Peso against the U.S. dollar may adversely affect the Argentine economy • Government measures to pre-empt or in response to social unrest may adversely affect the Argentine economy • Exchange controls and restrictions on capital inflows and outflows have limited and could be expected to continue to limit the availability of international credit and the liquidity of the market for securities of Argentine issuers • Recurrent shocks to Argentina’s financial sector could threaten the financial system and lead to renewed political and social tensions, adversely affecting the Argentine economy • The Argentine economy could be adversely affected by economic developments in other markets

5 Risks Related to Our Securities • Restrictions on transfers of foreign exchange and the repatriation of capital from Argentina may impair your ability to receive dividends and distributions on, and the proceeds of any sale of, the Class B Shares underlying the GDSs • Our shareholders’ ability to receive cash dividends may be limited • Under Argentine law, shareholder rights may be fewer or less well defined than in other jurisdictions • Pre-emptive rights may be unavailable to holders of our GDSs • Your ability to participate in any rights offering of our Company is limited • Your voting rights with respect to the GDSs are limited by the terms of the Deposit Agreement • The Offering may not result in an active or liquid market for the GDSs or class B common shares • Future sales of securities by our Company or existing shareholders may hurt the price of the Securities • Our shareholders may be subject to liability for certain votes of their securities • Holders of the GDSs will not be able to benefit from certain UK anti-takeover protections • You will experience immediate and substantial dilution in the book value of the Class B Shares or the GDSs you purchase in this Offering

6 Corporate Structure We are a sociedad anónima, a corporation with limited liability, organised, existing and incorporated under the laws of Argentina. We are a holding company and derive our operating income and cash flow from the operations of our direct and indirect subsidiaries. The chart below illustrates our organisational structure as of the date of this Offering Circular.

100% Grupo Clarín 100% GC Gestión Services LLC Grupo Clarín S.A. Compartida S.A.

100% Cablevisión S.A. 60% Arte Gráfico Editorial 100% Arte Radiotelevisivo 99.2% Inversora de 100% Radio Mitre S.A. Primera Red 100% Argentino S.A. Argentino S.A. Eventos S.A. Interactiva de (AGEA) (IESA) Medios Americanos (Prima) Internacional S.A. Holding 100% Artes Gráficas 100% TELECOR S.A.C.I. 85.2% Teledigital Cable Rioplatense S.A. Televisión Satelital 50% S.A. (AGR) Codificada S.A. (TSC) Unir S.A. 100% Teledifusora Bahiense 100% 99.98% S.A. Teledigital Cable S.A. Tele Red Imagen 50% Impripost S.A. 50% S.A. (TRISA) Bariloche TV S.A. 100%

Multicanal S.A. 98.5% Ferias y Exposiciones 100% S.A. Pol-ka Producciones 30% S.A.

97% Oportunidades S.A. 100% Primera Red Interactiva de Medios Ideas del Sur S.A. 30% 3% Argentinos (Prima) S.A. Tinta Fresca Ediciones 100% S.A. Patagonik Films Group 33.3% S.A. Clarín Global S.A. 100% S.A. Canal Rural Satelital 15% Compañía Inversora 50% S.A. en Medios de Comunicación (CIMECO) S.A.

Diario Los Andes 80% Hermanos Calle S.A.

La Voz del Interior 81.3% S.A.

12% Papel Prensa SAICF y 37% de M

Because Law No. 19,550 (as amended, the “Argentine Corporate Law”) requires that companies have at least two shareholders, some shares of certain of our subsidiaries are held by GC Minor S.A., a company owned by Grupo Clarín (95.3%) and GC Dominio S.A. (“Dominio”) (4.7%). This chart does not include certain intermediate holding vehicles and subsidiaries that do not have significant assets or businesses. On 26 September 2007, the shareholders of Prima Internacional approved the change of that company’s name to Compañía de Medios Digitales (CMD) S.A. The change in denomination was registered with the Inspección General de Justicia, the Argentine superintendency of legal entities (“IGJ”) on 10 October 2007.

7 RISK FACTORS An investment in the Securities involves a high degree of risk. Investors should carefully consider the following information about these risks, together with the information contained elsewhere in this Offering Circular, before they decide to buy any Class B Share or GDS. Each of these risks could have a material adverse effect on the Company’s business, financial condition, results of operations or the trading price of the Securities, and investors could lose all or part of their investment. The Company has described the risks and uncertainties that the Company believes are material, but these risks and uncertainties may not be the only ones the Company faces. Additional risks and uncertainties relating to the Company that are not currently known to the Company, or that it currently deems immaterial, may also have an adverse effect on the Company’s business, financial condition and operating results. If this occurs, the price of the Securities may decline, and investors could lose all or part of their investment. The order in which the risks are presented does not necessarily reflect the likelihood of their occurrence or the magnitude of their potential impact on the Company’s business, financial condition, results of operations or the trading price of the Securities. Investors should consider carefully whether an investment in the Company’s Securities is suitable for them in light of the information included in this Offering Circular and their personal circumstances.

Risks Related to Our Business Uncertainty as to the Application of the Current Legal and Regulatory Environment that Governs Our Cable Television, Telecommunications and Internet and Digital Content Segments and the Adoption of new Regulations may be Disadvantageous to us or May Limit Our Ability to Operate Our Business Our Acquisition of a Controlling Interest in Cablevisión and its Acquisition of Multicanal, Holding Teledigital and Prima are Subject to Regulatory Approval, Which May not be Granted. On 26 September 2006, the Company, Fintech, Cablevisión and Multicanal entered into a series of transactions as a result of which (i) the Company holds indirectly approximately 60% of the capital stock of Cablevisión, (ii) Fintech holds, directly and indirectly, approximately 40% of the capital stock of Cablevisión, (iii) Cablevisión, directly or indirectly, owns 98.5% of the capital stock of Multicanal, 100% of the capital stock of Holding Teledigital and 3% of Prima and (iv) Multicanal owns 97% of the capital stock of Prima. Pursuant to Argentine Law No. 25,156, as amended (the “Argentine Antitrust Law”) and Law No. 22,285, as amended, and related regulations (the “Broadcasting Law”), these transactions require authorisation of the Comisión Nacional de Defensa de la Competencia, the National Antitrust Commission (the “CNDC”) (validated by the Argentine Secretary of Domestic Trade (the “SDT”)), the Comité Federal de Radiodifusión, the Federal Broadcasting Committee (“Comfer”) and the Secretaría de Comunicaciones, the Argentine Secretariat of Communications (the “Secom”). On 4 October 2006, the Company, Vistone LLC, Fintech, VLG Argentina LLC and Cablevisión as buyers and AMI CV Holdings LLC, AMI Cable Holdings Ltd., and HMTF-LA Teledigital Cable Partners LP, as sellers, filed for the CNDC’s approval of the acquisitions. The CNDC has a waiting period of 45 business days from the date of filing to authorise the transaction, condition its approval or deny authorisation. The 45-day period is suspended each time the CNDC requests additional information from the parties, until such additional information is furnished. On 6 November 2006, the CNDC notified the Company of its first request for additional information, which was submitted on 26 February 2007. On 22 May 2007, the CNDC made a second request for additional information, which was submitted on 2 July 2007. On 30 July 2007, the CNDC notified us that the first stage of the procedure (Form F-1) had been completed and requested that the filing parties submit Form F-2, providing additional information regarding the impact of the transactions on competition in the relevant markets. The Form F-2 was filed on 28 August 2007. On 7 September 2007, the CNDC made a second request for additional information. Until Form F-2 has been completed to the CNDC’s satisfaction, the

8 45-day waiting period remains suspended. Although we believe that the transactions that have been filed for CNDC approval meet the standards for such approval under the Argentine Antitrust Law, we cannot assure you that the CNDC will approve the acquisitions or will not impose conditions to their approval, which could include disposal of a part of our cable operations or not approve one or more of the transactions. In addition, we can neither exclude that third parties will not challenge the CNDC’s decision or aspects related to any conditions that the CNDC may impose, which (as a decision not to approve the transactions) could have a material adverse impact on the Company, nor that the competitive dynamics of the cable business will not be affected as a consequence of the above- mentioned transactions and/or their approval process. Our Independent Accountants, Price Waterhouse & Co. S.R.L., Buenos Aires, Argentina (a member firm of PricewaterhouseCoopers), have issued an opinion over the audited consolidated financial statements of the Company that includes the description of an uncertainty that results from pending regulatory approvals for the sale by the Company of its indirect participation in Prima to Multicanal, the sale of its direct and indirect participation in Multicanal to Cablevisión, and the indirect acquisition by the Company of additional shares in Cablevisión necessary to increase its participation in that company to 60% of its outstanding capital stock and votes. Additionally, in connection with the unaudited interim financial statements of the Company, the Independent Accountants have issued a limited review report with an observation relating to the uncertainty mentioned above. In addition, in January 2007, Cablevisión and Multicanal were served with an injunction issued by a provincial court in the province of San Luis at the request of Grupo Radio Noticias S.R.L. (“Grupo Radio Noticias”), a company alleging to own a broadcast radio station that would arguably be harmed by the transactions involving Cablevisión, Multicanal, Holding Teledigital and Prima that we consummated in September 2006. Among other measures, the injunction directed Cablevisión, Multicanal and its controlling shareholders and subsidiaries to refrain from a number of transactions, including mergers, acquisitions and the issuance of securities. The injunction was inconsistent with an order issued by a Federal Court in the City of Buenos Aires in 2005, to the effect that the CNDC had jurisdiction to determine the legality of our acquisition of an ownership interest in Cablevisión without prior judicial intervention. Accordingly, we took action to have the case initiated by Grupo Radio Noticias removed from the San Luis court and transferred to the Federal Court in Buenos Aires. The Supreme Court of Argentina resolved our petition in our favour in June 2007. The Federal Court of Buenos Aires has been adjudicated jurisdiction to decide the substance of the matter. On 11 September 2007, the Federal Court of Buenos Aires issued a ruling reversing the injunction and leaving it without effect. On 5 October 2007, the Company was notified of an appeal to such ruling filed by Grupo Radio Noticias on 24 September 2007. While we can give no assurance that we will prevail against Grupo Radio Noticias, we believe that their claims are unfounded. Our Ability to Operate Effectively Depends on Maintaining Our Licenses. Our broadcast and cable television and radio operators are under the supervision of Comfer and are subject to the Broadcasting Law and its implementing regulations. The broadcasting regime requires the approval of share transfers and other transactions, and imposes obligations on licensee companies and their shareholders. We have applied to Comfer for approval of transactions involving broadcast licenses, and in many instances action by Comfer is pending. In addition, our subsidiaries have failed in certain cases to comply, or may be deemed to have failed to comply, with certain regulations of the Broadcasting Law. Among other things, our subsidiaries Cablevisión and Multicanal hold cable television licenses that overlap geographically, in possible violation of the Broadcasting Law; we did not meet the deadline for applying for extension of 46 broadcasting licenses, which may result in Comfer not granting the extension, and we have received multiple fines for the distribution of inappropriate content. As a consequence of having failed to comply, or being deemed to have failed to comply with the Broadcasting Law, we may be subject to sanctions ranging from llamados de atención (reprimands) to the revocation of our broadcasting licenses and invalidation of certain corporate actions. We May not Receive all Necessary Regulatory Approvals Relating to Previous Acquisitions. Under Argentine law, any acquisition of shares in a company that holds a broadcasting license is subject

9 to Comfer approval. If Comfer does not approve the transfers of shares of our licensee subsidiaries, among other matters, • we may not be able to maintain ownership interests we acquired through those subsidiaries without prior approval; and • any resolutions adopted by shareholders or partners of our subsidiaries that Comfer disap- proves will be void under the applicable law. We cannot guarantee that Comfer will grant any or all of the approvals we have applied for or that our subsidiaries’ title to ownership in licensed companies and our results of operations will not be affected if Comfer denies these approvals. We are Required to Divest Overlapping Broadcasting Licenses. A cable television company in Argentina may not hold more than one broadcasting license for a particular service in any given area. As a result of our acquisitions, we hold broadcasting licenses in overlapping territories. All cable operators that hold licenses in overlapping territories must forfeit one of the licenses. If cable operators do not comply with this requirement, Comfer may terminate one or more of our licenses and/or restrict our ability to obtain another license for a period of five to 30 years. If Comfer terminates one of our overlapping licenses, we cannot assure you that we will be able to retain the license that is more desirable, for example, in terms of duration. We May not be Able to Renew Some Leases of the Facilities for the Installation of Our Cable System. As a condition to obtaining a broadcasting license to provide services in a given location, our cable operators must demonstrate that they have received permission from the municipality to use its airspace or right of way and that they have obtained rights to install their wire distribution network. Some of our cable operators’ programming is distributed through wire networks installed in facilities leased from third parties, either through the lease of space on roofs or on utility poles. Our cable operators are currently renegotiating the renewal of several lease contracts for the use of poles in different areas of the country. If they are not able to renew some of those lease contracts, their operations in that area may be suspended if alternative third party facilities, either spaces on utility poles or underground ducts, are not promptly obtained on a cost-efficient basis. The underground distribution of their wire network would require the granting of additional governmental authorisations and significant capital expenditures that they may not be able to afford or they may be restricted from making such expenditures pursuant to the terms and conditions of their indebtedness and their existing covenants. We cannot assure you that such renewals of lease contracts will be granted. We May Become Subject to Burdensome Government Regulations and Legal Uncertainties Affecting Our Business Segments Which Could Adversely Affect Our Operations. Since the deregulation of the telecommunications and media industries in 1990, the Broadcasting Law, the Telecommunications Law and their implementing regulations have been amended on a number of occasions, reducing or increasing requirements to hold or transfer broadcasting licenses, to occupy positions on the boards of directors of broadcasting licensees, and regulating content, advertising and other aspects of the industry. New regulations may permit other participants, such as providers of public telecommunications services, to enter the broadcasting or cable television industry. We cannot Assure You that We will be Able to Maintain Certain of Our Subsidiaries’ Telecommunications Licenses. Cablevisión, Fibertel S.A. (“Fibertel”, now merged into Cable- visión), Multicanal and Prima are telecommunication services licensees. Section 10.1 of the Rules for Telecommunication Service Licenses (Annex 1 of Decree No. 764/00) provides, among other obligations, that transfers of shares of telecommunications licensees that result in changes of control under the Argentine Corporate Law must be approved by the Secom, prior to the transfer that results in such change of control. The change of control in Cablevisión and Fibertel that resulted from the series of related transactions whereby the Company and Fintech increased their holdings of Cable- visión’s share capital to approximately 60% and 40%, respectively, and Cablevisión acquired 98.5% of

10 Multicanal, was not approved by Secom prior to the share transfer. Failure to receive Secom approval could result in the revocation of the telecommunications licenses held by Cablevisión and Fibertel, and the disqualification for the holder of the license and its affiliates to sustain telecommunication licenses for the term of five years. We cannot assure you that Secom will approve such changes of control or that the telecommunications licenses of Cablevisión or Fibertel will not be revoked. Broadcasting and Telecommunications Regulations and Criteria for their Enforcement have Changed Over Time. New regulations and uncertainty as to the application of current regulation could increase our costs of doing business and prevent us from developing our products and services.

We May Fail to Realise the Anticipated Benefits of Cablevisión’s Operational Consolidation with Multicanal and Teledigital, and the Integration of Multicanal and Teledigital with Cablevisión’s Operations will Present Significant Challenges On 26 September 2006, Cablevisión acquired 98.5% of the capital stock of Multicanal. The success of the acquisition will depend, in part, on our ability to realise the anticipated growth opportunities and cost savings from combining Cablevisión’s business with the businesses of Multicanal, Prima and Teledigital. We face significant challenges in consolidating functions, integrating organisation, procedures and operations in a timely and efficient manner and retaining key personnel of each of the companies. The integration of Multicanal, Prima and Teledigital is costly, complex and time-consuming and management teams have to devote substantial effort to it. The integration process and other disruptions from the transaction could be more costly than we expect or result in the loss of key employees, the reduction of profitability, the disruption of our ongoing businesses or inconsistencies in standards, controls, forms to compile and present information, procedures and policies that adversely affect our ability to maintain relationships with customers, suppliers, employees and others who have business dealings with our cable operators, or to achieve the anticipated benefits of the acquisition or to manage Multicanal’s business with levels of profitability equivalent to those existing prior to the acquisition. Some financing and commercial practices used by Multicanal, Prima and Teledigital are different from the practices used by Cablevisión, and it will be necessary to apply the practices Cablevisión has been using historically in the operation of Multicanal and Teledigital. The lack of a successful integration of the operations of Multicanal (including Prima) and Teledigital with those of Cablevisión could curtail our growth and adversely affect our operations and results.

We Operate in a Highly Competitive Environment and Competition May have a Material Adverse Effect on Our Operations We face competition in all segments in which we operate. Our cable television and Internet access operations are dependent on the continued deployment of technological improvements. Our ability to compete depends on many factors, many of which are beyond our control. These factors include: • timing and market acceptance of new and enhanced products and services; • sales, marketing and distribution efforts; and • access to technological and financial resources. We may face competitors in our different businesses, including most significantly in our cable television and Internet access operations, that have greater name recognition, larger customer bases, and significant financial, technical and marketing resources. This may allow them to devote greater resources than us to the development and promotion of their business. These competitors may also engage in more extensive research and development, adopt more aggressive pricing policies and make more attractive offers to advertisers. Competitors may develop products and services that are equal or superior to those we offer or that achieve greater market acceptance. As a result, we may be

11 required to dedicate additional resources to remain competitive and our results of operations may be adversely affected.

Our Revenues are Cyclical and Depend Upon the Condition of the Argentine Economy

Revenues generated by our publishing, broadcast television, radio, cable television and Internet access operations have proven cyclical and dependent upon general economic conditions. A general economic downturn in the Argentine economy has had in the past and would be expected to have in the future a negative effect on our revenues and a material adverse effect on our results of operations. Historically, increases in advertising revenues have corresponded with economic recoveries while decreases of advertising revenues generally, as well as changes in the mix of advertising revenues and increases in churn of cable television subscribers, have corresponded with general economic downturns and regional and local economic recessions. In particular, the 2001/2002 Argentine economic crisis had a material adverse effect on our advertising revenues as well as on our cable television revenues.

The Argentine Media Industry is a Dynamic and Evolving Industry, and if it does not Develop and Expand as We Currently Expect, Our Business May Suffer

We expect to derive an increasing amount of revenues from our cable television and Internet operations, but we may not do so if these non-traditional media operations do not develop and expand as we currently expect. The Argentine media industry has traditionally been centred on newspaper and magazine publishing as well as broadcast television and radio. The role of cable television became increasingly important in the last fifteen years. More recently, non-traditional technologies and industries in an earlier stage of development, such as pay-per-view services, satellite television, the Internet and cellular telephony have come to play a growing role in the Argentine media and telecommunications industry. We have operations in most of these areas. However, as certain of these areas are in an early stage of development, we cannot anticipate their prospects or long-term market acceptance as compared with the traditional Argentine media. Growth in these areas may be inhibited for a number of reasons, including:

• the cost of connectivity;

• concerns about security, reliability, and privacy;

• unexpected changes in the regulatory framework;

• technological innovations to which we may not access readily;

• ease of use; and

• quality of service.

Our business, financial condition and results of operations will be materially and adversely affected if these markets do not continue to grow or grow more slowly than we anticipate.

In addition, unlike the Argentine publishing and cable television industries, which have traditionally been dominated by companies located in Argentina, our competitors in these new technologies and industries may be based outside of Argentina and enjoy certain competitive advantages such as scale and access to financial resources on better terms than ours.

The Loss of Key Personnel could Disrupt Our Business and Adversely Affect Our Results of Operations

Our business depends on the continued efforts, abilities and expertise of our senior officers, senior management and key personnel. The loss of our key personnel could have a material adverse

12 effect on our operations. Competition for qualified management and personnel is intense. We believe that our future success will depend on our ability: • to attract and retain highly skilled and qualified management personnel; • to expand, train and manage our employee base; and • to develop, attract and retain key personnel.

Our Revenues May be Adversely Affected by Subscriber Termination Our revenues depend heavily on our ability to retain customers by limiting our churn rates. We determine our churn rate by calculating the total number of disconnected cable television customers over a given period as a percentage of the initial number of cable television customers for the same period. To minimise our annual gross churn rate and to address associated risks, such as the difficulty in collecting receivables, we pursue a vigorous customer service and retention policy. Cablevisión and Multicanal had churn rates of approximately 9.8% and 13.8% with respect to each of their cable television subscriber bases in 2005 and approximately 12.2% and 14.4% in 2006. During 2006, Cablevisión and Multicanal had churn rates of approximately 33.9% and 29.0% of their respective broadband subscriber bases. During the six-month period ended 30 June 2007, Cablevisión and Multicanal had churn rates of approximately 8.0% and 16.2% of their respective cable television subscriber bases and approximately 26.9% and 40.5% of their respective broadband subscriber bases. Economic conditions in Argentina affect our subscribers’ purchasing power and have led to and may in the future lead to a loss of subscribers. Between 1998 and 2002, Cablevisión and Multicanal collectively lost approximately 835,000 Argentine subscribers (approximately 30% of their combined Argentine subscriber base in 1998). While the recovery of the Argentine economy since 2003 has resulted in a rapid recovery of our subscriber base, if economic conditions in Argentina deteriorate, our annual gross churn rates would increase rapidly. The continued loss of customers for any reason, including a deterioration of the current economic conditions or a change in current legislation allowing telephone companies to offer broadcasting services, would have a direct material adverse effect on our revenues and results of operations.

We May not be Able to Renew Our Right to Certain Programming The renewal of our right to transmit soccer/football matches after 2014 is subject to renegotiation with the Argentine Football Association (“AFA”). The revenues of our broadcasting and programming segment are largely dependent on sports programming, most importantly soccer/football matches. Even though Televisión Satelital Codificada S.A. (“TSC”) and Tele Red Imagen S.A. (“TRISA”) have renewed their agreements with AFA stipulating new economic conditions that will remain in force until 2014, we cannot ensure that TSC and TRISA will be able to renew such rights upon expiration, or do so on the terms we consider consistent with past experience. Similarly, from time to time we enter into agreements with producers of other programming that are key to the success of our broadcasting and programming operations. A failure to renew such rights and agreements would adversely affect the results of operations of our broadcasting and programming segment. It could also impact adversely on the results of operations of our cable television and Internet access segment.

Investors who Purchase Shares in this Offering will not be Able to Exercise Control Over us Since the Controlling Shareholders will Continue to have the Power to Control us All of our outstanding class A common shares are beneficially owned, directly or indirectly, by the Controlling Shareholders (as defined herein). Our class A common shares have five votes per share. As a result, the Controlling Shareholders are entitled to elect a majority of our directors and can exercise control over other general corporate matters. The interests of these shareholders may differ from your interests. So long as the Controlling Shareholders hold the class A common shares, they

13 will be able to exercise control over our business through their power to elect a majority of our board of directors, as well as to determine, subject to certain approval rights granted to the GS Investors (as defined herein) under the terms of the shareholders agreement relating to the Company described under “Principal and Selling Shareholders”, the outcome of almost all actions that require shareholder approval. For example, the Controlling Shareholders have the ability to cause us to declare dividends, subject to the limitations described under “Dividend Policy”, and to control our access to capital. This concentration of ownership might also prevent or delay a change in control.

Certain of Our Existing Shareholders have Approval Rights and their Interests May be Contrary to Yours In December 1999, a group of investors, including four affiliates of The Goldman Sachs Group Inc. (the “GS Investors”), as well as certain other persons not affiliated with such group, acquired 18% of our total outstanding shares. The interests of GS Investors may differ from your interests. Under the shareholders agreement relating to the Company, described under “Principal and Selling Share- holders”, and our Bylaws, the GS Investors have the right to elect two out of our ten board members and two alternates, so long as they comply with certain conditions and hold class C common shares representing at least 5% of our total capital and one director and one alternate, so long as they hold class C common shares representing at least 2% of our total capital. Messrs. Satter and Castelblanco, members of our board elected by the holders of class C common shares, are employees of affiliates of the Goldman Sachs Group Inc. and to that extent may have interests that conflict with those of the Company. After the Offering, the GS Investors will hold class C common shares representing 8.71% of our total capital and no class B common shares (assuming the Over-allotment Option is exercised in full). Under our Bylaws, the shareholders agreement relating to the Company and the share syndication agreement relating to the Company described under “Description of Share Capital and Applicable Argentine Legislation”, subject to compliance with certain other conditions, the holders of class C common shares have approval rights relating to certain corporate transactions. The Company is not a party to the shareholders agreement or the share syndication agreement. These agreements are not binding on the Company or on any shareholder that is not a party thereto.

Risks Related to Investment in a Foreign Corporation Social and Political Conditions in Latin America May Cause Volatility in Our Operations and Materially Adversely Affect Our Business Social and political conditions in Latin America are volatile and may cause our operations to fluctuate. This volatility could make it difficult for us to sustain our expected growth in revenues and earnings, which could have an adverse effect on our stock price. We have and expect to continue to derive substantially all of our revenues from Argentina and other Latin American markets. Historically, volatility has been caused by: • significant governmental influence over many aspects of local economies; • political instability; • unexpected changes in regulatory requirements; • social unrest; • economic growth or contraction; • imposition of trade barriers; and • wage and price controls. We have no control over these matters. Volatility resulting from these matters may decrease the availability of materials and infrastructures which are material to our operations, create uncertainty

14 regarding our operating climate and adversely affect our customers’ advertising budgets, all of which may materially adversely affect our operations.

Fluctuations in Exchange Rates May Adversely Affect Our Business and Revenues

While most of our debt and a substantial portion of our operating costs and expenses are denominated in U.S. dollars, our revenues are generated primarily in Pesos. Therefore we are and will continue to be exposed to several related risks including, but not limited to, the following:

• Our businesses and revenues are exposed to the risk of harm from currency exchange rate fluctuations. With the exception of two agreements providing for the swap of certain Peso- denominated negotiable obligations of one of our subsidiaries into U.S. dollars, we do not currently engage in currency hedging to offset any risk of currency fluctuations. Although we may enter into transactions to hedge the risk of exchange rate fluctuations, we cannot assure you that we will engage in these transactions, or that these transactions would be successful in shielding our financial condition from detrimental exchange rate fluctuations.

• Fluctuations in the exchange rate between the U.S. dollar and the Peso will affect the U.S. dollar value of our Class B Shares and GDSs, and the value of any cash dividends if expressed in U.S. dollars.

• The Argentine government may institute more restrictive exchange control practices.

Participation of Foreign Individuals and Entities in Media Companies is Limited by Argentine Law

Sections 45 and 46 of the Broadcasting Law establish, among other things, that licensed companies must be organised and existing under the laws of Argentina and may not be affiliates, subsidiaries or under the control of foreign persons. Law No. 25,750, passed on 18 June 2003, requires that corporations in media-related businesses belong to Argentine persons and limits foreign ownership except in the case of transfers of shares executed before the issuance of Law No. 25,750 with the approval of the CNDC. Foreign persons may not own more than 30% of the outstanding capital stock representing not more than 30% of the voting rights of any media-related company. The law defines foreign persons as foreign nationals or corporations organised under Argentine or foreign law that are under direct or indirect control of foreign individuals. The foreign ownership cap may be raised when the law of, or a treaty with, a foreign jurisdiction grants reciprocal, non-discriminatory treatment. A treaty between Argentina and the United States grants residents of, or corporations domiciled in, the United States, Argentine resident status for purposes of such requirement. Even though we have been advised by our Argentine counsel that there are reasonable grounds to conclude that the Class B Shares would not count towards the 30% ownership cap set forth under Law No. 25,750 and that the 30% ownership cap would not be applicable to the Company which, according to Law No. 25,750, qualifies as a national Argentine company shareholder of media companies, we cannot assure you that holders of Class B Shares will not be limited in their possibility to increase their participation in the Company if foreign persons, in the aggregate, would own shares exceeding the legal threshold.

Non-Argentine Companies that Own Class B Shares Directly and not Through GDSs May not be Able to Exercise their Rights as Shareholders Unless they are Registered in Argentina

Under Argentine law, foreign companies that own shares in an Argentine corporation are required to register with the IGJ, in order to exercise certain shareholder rights, including voting rights. If you own Class B Shares directly (rather than in the form of GDSs) and you are a non-Argentine company and you fail to register with the IGJ, your ability to exercise your rights as a holder of our Class B Shares may be limited.

15 It May be Difficult for you to Enforce any Judgement Obtained in the United States or Elsewhere Outside Argentina Against us or Our Affiliates We are incorporated under the laws of Argentina. Most of our directors and executive officers reside outside the United States or elsewhere outside Argentina. In addition, virtually all of our assets and the assets of those persons are located outside the United States. As a result, it may be difficult for you to enforce in or out of the United States any judgement obtained in the United States against us or any of these persons, including judgements based upon the civil liability provisions of the United States securities laws. In addition, in original actions brought in courts in jurisdictions located outside the United States, it may be difficult for you to enforce liabilities based upon United States securities laws. We have been advised by Sáenz Valiente & Asociados, our Argentine legal counsel, that judgements of U.S. courts based on the civil liability provisions of the federal securities laws of the United States may not be enforceable in Argentine courts if the judgement does not satisfy the requirements of Article 517 of the Federal Civil and Commercial Procedure Code. Sáenz Valiente & Asociados has also advised us that there is doubt as to whether Argentine courts will enter judgements in original actions brought in Argentine courts based solely upon the civil liability provisions of the federal securities laws of the United States or other foreign securities laws.

Risks Related to Argentina

Our Financial Condition and Results of Operations Depend to a Significant Extent on Macroeconomic and Political Conditions Prevailing in Argentina We are a corporation (sociedad anónima) incorporated under the laws of Argentina and substantially all of our revenues are earned in Argentina and substantially all of our operations, facilities, and customers are located in Argentina. Accordingly, our financial condition and results of operations depend to a significant extent on macroeconomic and political conditions prevailing in Argentina. For example, lower economic growth or economic recession have led in the past and could again lead to a decline in purchasing power of our customers, which, in turn, could lead to lower collections from our clients. Argentine government actions concerning the economy, including decisions with respect to inflation, interest rates, price controls, foreign exchange controls and taxes, have had and could continue to have a material adverse effect on private sector entities, including us. During Argentina’s 2001/2002 economic crisis, for example, the Argentine government took measures to address the crisis, which had a severe effect on our financial condition and led certain of our subsidiaries to suspend payments on financial debt. We cannot provide any assurance that future economic, social and political developments in Argentina, over which we have no control, will not impair our business, financial condition, or results of operations.

Argentina’s Current Economic Growth and Stability May not be Sustainable During 2001 and 2002, Argentina went through a period of severe political, economic and social crisis. Although the economy has recovered significantly since 2002, uncertainty remains as to whether the current growth and relative stability is sustainable. The Argentine economy remains fragile, including for the following reasons: • the recovery has depended to some extent on: • high commodity prices, which are volatile and outside the control of the country, and • excess capacity, which has been reduced considerably; • inflation has risen recently and threatens to accelerate; • the regulatory environment continues to be uncertain; • the availability of long-term fixed rate credit is scarce;

16 • investment as a percentage of Gross Domestic Product (“GDP”) remains too low to sustain current growth rates; • the current fiscal surplus has been decreasing as a percentage of GDP and could reverse into a fiscal deficit; and • the country’s public debt remains high and international financing is limited. Substantially all our operations, properties and customers are located in Argentina. As a result, our business is to a very large extent dependent upon the economic conditions prevailing in Argentina.

Restrictions on the Supply of Energy could Negatively Affect Argentina’s Economic Growth and Negatively Impact the Company’s Results of Operations As a result of several years of recession, the forced conversion into Argentine pesos at the one- to-one exchange rate and the subsequent freeze of gas and electricity tariffs and the significant devaluation of the Peso, there has been a lack of investment in gas and electricity supply and transport capacity in Argentina in recent years. Over the course of the last several years, demand for natural gas and electricity has increased substantially, driven by a recovery in economic conditions and low prices in comparison with alternative fuel sources. Although the Argentine government is taking a number of measures to alleviate the short-term impact of supply restrictions on residential and industrial users (including measures to limit the growth of residential consumption, to increase the price of compressed natural gas and to import natural gas from Bolivia, electricity from Brazil and Uruguay and fuel oil from Venezuela) and has announced several measures intended to address the situation in the medium- and long-term (including creating a new state-owned energy company to fund, or otherwise promote, investments in expanding existing pipeline transportation capacity and building new pipelines and additional power generation capacity and entering into negotiations with electricity and gas producers) supply restrictions and shortages are likely to continue. If the measures that the Argentine government is taking to alleviate the short-term impact of the crisis prove to be insufficient, or if the investment that is required to increase natural gas production and transportation capacity and energy generation and transportation capacity over the medium- and long-term fails to materialise on a timely basis, economic activity in Argentina could be curtailed and we could see our sales and revenues decline and our operations adversely affected.

Inflation May Continue to Increase, Causing Adverse Effects on the Argentine Long-Term Credit Markets as well as the Argentine Economy Generally After several years of price stability, the devaluation of the Peso in January 2002 created pressures on the domestic price system that generated high inflation in 2002 before substantially stabilizing in 2003. However, consumer prices increased by 6.1% during 2004, by 12.3% in 2005 and by 9.8% in 2006. Moreover, uncertainty surrounding future inflation could affect adversely the economic rebound. In the past, inflation has materially undermined the Argentine economy and the government’s ability to create conditions that would permit growth. A return to a high inflation environment would also undermine Argentina’s foreign competitiveness by diluting the effects of the Peso devaluation, with the same negative effects on the level of economic activity and employment.

Argentina’s Ability to Obtain Financing from International Markets is Limited, Which May Impair its Ability to Implement Reforms and Foster Economic Growth In the first half of 2005, Argentina restructured part of its sovereign debt that had been in default since the end of 2001. As of 30 June 2007, Argentina had approximately U.S.$136.3 billion in total

17 outstanding debt remaining. In addition, creditors that did not participate in the restructuring hold approximately U.S.$26.5 billion defaulted bonds. Some bondholders in the United States, Italy and Germany have filed legal actions against Argentina and have filed claims before the International Center for the Settlement of Investment Disputes, (“ICSID”), and holdout creditors may initiate new suits in the future. Additionally, foreign shareholders of certain Argentine companies have filed claims in excess of U.S.$17 billion before the ICSID, alleging that certain government measures are inconsistent with the fair and equitable treatment standards set forth in various bilateral treaties to which Argentina is a party. To date, the ICSID has rendered decisions adverse to Argentina in several cases. Argentina’s past default and its failure to restructure completely its remaining sovereign debt and fully negotiate with the holdout creditors may prevent Argentina from re-entering the international capital markets. Litigation initiated by holdout creditors as well as ICSID claims may result in material judgements against the Argentine government and could result in attachments of or injunctions relating to assets of Argentina that the government intended for other uses. As a result, the government may not have the financial resources necessary to implement reforms and foster growth, which could have a material adverse effect on the country’s economy and, consequently, our business.

Significant Devaluation of the Peso Against the U.S. Dollar May Adversely Affect the Argentine Economy as well as Our Financial Performance The real depreciation of the Peso in 2002 had positive effects on the competitiveness of certain sectors of the Argentine economy, but it has also had a far-reaching negative impact on the Argentine economy and on the financial condition of businesses and individuals. The devaluation of the Peso had a negative impact on the ability of Argentine businesses to honour their foreign currency- denominated debt, led to very high inflation initially, significantly reduced real wages, had a negative impact on businesses whose success is dependent on domestic market demand, such as utilities, the financial industry and other industries such as the media industry, and adversely affected the government’s ability to honour its foreign debt obligations. If the Peso devalues significantly, all of the negative effects on the Argentine economy related to such devaluation could recur, with adverse consequences to our business. Moreover, it would likely result in a decline in the value of our Class B Shares and the GDSs as measured in U.S. dollars. Furthermore, substantially all of our liabilities are denominated in U.S. dollars and a substantially devaluation of the Peso will result in losses for us.

Significant Appreciation of the Peso Against the U.S. Dollar May Adversely Affect the Argen- tine Economy A substantial increase in the value of the Peso against the U.S. dollar also presents risks for the Argentine economy. In the short term, a significant real appreciation of the Peso would adversely affect exports. This could have a negative effect on GDP growth and employment as well as reduce the Argentine public sector’s revenues by reducing tax collection in real terms, given its current heavy reliance on taxes on exports.

Government Measures to Pre-Empt or in Response to Social Unrest May Adversely Affect the Argentine Economy During its crisis in 2001 and 2002, Argentina experienced social and political turmoil, including civil unrest, riots, looting, nationwide protests, strikes and street demonstrations. Despite Argentina’s ongoing economic recovery and relative stabilisation, the social and political tensions and high levels of poverty and unemployment continue. Future government policies to pre-empt or in response to social unrest may include expropriation, nationalisation, forced renegotiation or modification of existing contracts, suspension of the enforcement of creditors’ rights, new taxation policies, including royalty

18 and tax increases and retroactive tax claims, and changes in laws and policies affecting foreign trade and investment. Such policies could destabilise the country and adversely and materially affect the economy, and thereby our business.

Exchange Controls and Restrictions on Capital Inflows and Outflows have Limited and could be Expected to Continue to Limit the Availability of International Credit and the Liquidity of the Market for Securities of Argentine issuers In 2001, due to the deterioration of the economic and financial conditions in Argentina, the government’s difficulties in dealing with the service of its public foreign debt and the decrease in the level of deposits in the financial system, the government established a number of monetary and currency exchange control measures. These included restrictions on the free disposition of funds deposited in banks and restrictions on the transfer of foreign currency abroad without prior Central Bank approval. Since 2003, the government has eased these restrictions substantially. However, Argentina may tighten exchange control or transfer restrictions in the future, among other things, in response to capital flight or a significant depreciation of the Peso. In addition, the government issued a decree in June 2005 that established new controls on capital inflows that could result in less availability of international credit. These restrictions would not affect incoming funds of foreign investors to purchase the New Shares but may have an impact on (i) incoming funds of foreign investors to purchase Selling Shareholder Shares and (ii) repatriation of funds by Argentine investors to purchase New Shares and Selling Shareholder Shares. Exchange controls could have a negative effect on the economy and our business if imposed in an economic environment where access to local capital is substantially constrained. In addition, restrictions on the transfers of funds abroad may affect your ability to receive dividend payments as a holder of GDSs.

Recurrent Shocks to Argentina’s Financial Sector could Threaten the Financial System and Lead to Renewed Political and Social Tensions, Adversely Affecting the Argentine Economy In 2001 and the first half of 2002, Argentina experienced a massive withdrawal of deposits from the Argentine financial system in a short period of time, as depositors lost confidence in the Argentine government’s ability to repay its foreign debt and maintain the Convertibility regime. This precipitated a liquidity crisis within the Argentine financial system, which prompted the Argentine government to impose exchange controls and restrictions on the ability of depositors to withdraw their deposits. In the event of a future shock, such as the failure of one or more banks or a crisis in depositor confidence, the Argentine government could impose further exchange controls or transfer restrictions and take other measures that could lead to renewed political and social tensions and undermine the Argentine government’s public finances, which could adversely affect Argentina’s economy and prospects for economic growth.

The Argentine Economy could be Adversely Affected by Economic Developments in Other Markets Financial and securities markets in Argentina are influenced, to varying degrees, by economic and market conditions in other markets. Although economic conditions vary from country to country, investors’ perception of the events occurring in one country may substantially affect capital flows into and securities from issuers in other countries, including Argentina. The Argentine economy was adversely impacted by the political and economic events that occurred in several emerging economies in the 1990s, including Mexico in 1994, the collapse of several Asian economies between 1997 and 1998, the economic crisis in Russia in 1998 and the Brazilian devaluation in January 1999. In addition, Argentina continues to be affected by events in the economies of its major regional partners. Furthermore, the Argentine economy may be affected by events in developed economies which are trading partners or that impact the global economy. Shocks of a similar magnitude to the international markets in the future can be expected to affect adversely the Argentine economy and the financial system and therefore us.

19 Risks Related to Our Securities Restrictions on Transfers of Foreign Exchange and the Repatriation of Capital from Argentina May Impair Your Ability to Receive Dividends and Distributions on, and the Proceeds of any Sale of, the Class B Shares Underlying the GDSs Argentine law currently permits the government to impose restrictions on the conversion of Argentine currency into foreign currencies and on the remittance to foreign investors of proceeds from their investments in Argentina (including dividend payments) in circumstances where a serious imbalance develops in Argentina’s balance of payments or where there are reasons to foresee such an imbalance. Beginning in December 2001, the Argentine government implemented a number of monetary and foreign exchange control measures that included restrictions on the free disposition of funds deposited with banks and on the transfer of funds abroad, including dividends, without prior approval by the Central Bank, some of which are still in effect. Among the restrictions that are still in effect are those relating to the payment prior to maturity of the principal amount of loans, bonds or other securities owed to non-Argentine residents, the requirement for Central Bank approval prior to acquiring foreign currency for certain types of investments, the payment abroad of advanced dividends and the repatriation of funds collected in Argentina by non-Argentine residents. In addition, the government requires that 30% of certain types of capital inflows into Argentina be deposited in a non- interest-bearing account in an Argentine bank for a period of one year. Although the transfer of funds abroad in order to pay annual dividends only to foreign shareholders and the Depositary for the benefit of the GDS holders based on approved audited annual financial statements no longer requires Central Bank approval, other exchange controls could impair or prevent the conversion of anticipated dividends, distributions, or the proceeds from any sale of Class B Shares, as the case may be, from Pesos into U.S. dollars and the remittance of the U.S. dollars abroad. We cannot assure you that the Argentine government will not take further restrictive measures in the future. In such a case, the Depositary for the GDSs may be prevented from converting Pesos it receives in Argentina for the account of the GDS holders.

Our Shareholders’ Ability to Receive Cash Dividends May be Limited Our shareholders’ ability to receive cash dividends may be limited by the ability of the Depositary to convert cash dividends paid in Pesos into U.S. dollars. Under the terms of our Deposit Agreement with the Depositary for the GDSs, the Depositary will convert any cash dividend or other cash distribution we pay on the Class B Shares into U.S. dollars, if it can do so on a reasonable basis and can transfer the U.S. dollars to the United States. If this conversion is not possible or if any governmental approval is needed and cannot be obtained, the Deposit Agreement allows the Depositary to distribute the foreign currency only to those GDS holders to whom it is possible to do so. If the exchange rate fluctuates significantly during a time when the Depositary cannot convert the foreign currency, you may lose some or all of the value of the dividend distribution. Also, if payments cannot be made in U.S. dollars abroad, the repatriation of any funds collected by foreign investors in Pesos in Argentina may be subject to restrictions. We are a holding company and our ability to pay dividends depends on the cash flow and distributable income of our operating subsidiaries, several of which are subject to contractual limitations on their ability to pay dividends.

Under Argentine Law, Shareholder Rights May be Fewer or Less well Defined than in Other Jurisdictions Our corporate affairs are governed by our Bylaws and by the Argentine Corporate Law, which differ from the legal principles that would apply if we were incorporated in a jurisdiction in the United States (such as the States of Delaware or New York), in England or in other jurisdictions outside Argentina. We do not apply or explain against the Combined Code for Corporate Governance of the United Kingdom, or other corporate governance rules applicable to companies in Western European countries. Thus, your

20 rights or the rights of holders of our common shares under the Argentine Corporate Law to protect your or their interests relative to actions by our board of directors may be fewer and less well defined than under the laws of those other jurisdictions. Although insider trading and price manipulation are illegal under Argentine law, the Argentine securities markets are not as highly regulated or supervised as the U.S. securities markets or markets in some other jurisdictions. In addition, rules and policies against self- dealing and regarding the preservation of shareholder interests may be less well defined and enforced in Argentina that in the United States, England or other jurisdictions outside Argentina, putting holders of our common shares and GDSs at a potential disadvantage.

Pre-emptive Rights May be Unavailable to Holders of Our GDSs Under Argentine law, our shareholders have pre-emptive rights. This means that in the event that we issue new shares for cash, our shareholders will have the right to purchase the number of shares necessary to maintain their existing ownership percentage. U.S. holders of our GDSs cannot exercise their pre-emptive rights unless we register any newly issued shares under the Securities Act or qualify for an exemption from registration. If you are a U.S. holder of GDSs who cannot exercise your pre- emptive rights, your interests would be diluted if we issue new shares. We intend to evaluate at the time of any offering of pre-emptive rights the costs and potential liabilities associated with registering any additional shares. We cannot assure you that we will register any new shares that we issue. In addition, although the Deposit Agreement provides that the Depositary may, after consultation with us, sell pre-emptive rights in Argentina or elsewhere outside the United States and distribute the proceeds to holders of GDSs, under current Argentine law these sales are not possible.

Your Ability to Participate in any Rights Offering of Our Company is Limited We may, from time to time, distribute rights to our shareholders, including rights to acquire securities under the Deposit Agreement. The Depositary will not offer rights to holders of GDSs or Class B Shares unless both the rights and the securities to which such rights relate are either exempt from registration under the Securities Act or are registered under provisions of the Securities Act. However, we are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavour to cause such a registration statement to be declared effective. Accordingly, holders of our GDSs or Class B Shares may be unable to participate in rights offerings by us and may experience dilution of their holdings as a result.

Your Voting Rights with Respect to the GDSs are Limited by the Terms of the Deposit Agreement Holders may exercise voting rights with respect to the class B common shares in the form of GDSs represented by GDRs only in accordance with the provisions of the Deposit Agreement. There are no provisions under Argentine law or under our Bylaws that limit GDS holders’ ability to exercise their voting rights through the Depositary with respect to the underlying class B common shares, except if the Depositary is a foreign entity and it is not registered with the IGJ. The Depositary is registered with the IGJ. However, there are practical limitations upon the ability of GDS holders to exercise their voting rights due to the additional procedural steps involved in communicating with such holders. For example, Decree No. 677/01 requires us to notify our shareholders by publications in certain official and private newspapers at least 20 and no more than 45 days in advance of any shareholders’ meeting. GDS holders will not receive any notice of a shareholders’ meeting directly from us. In accordance with the Deposit Agreement, we will provide the notice to the Depositary, which will in turn, as soon as practicable thereafter, provide to each GDS holder: • the notice of such meeting; • voting instruction forms; and • a statement as to the manner in which instructions may be given by holders.

21 To exercise their voting rights, GDS holders must then provide instructions to the Depositary how to vote the shares in the form of GDSs represented by GDRs. Because of this additional procedural step involving the Depositary, the process for exercising voting rights will take longer for GDS holders than for holders of class B common shares. GDSs for which the Depositary does not receive timely voting instructions may be voted at any meeting by a person designated by the Company. Except as described in this Offering Circular, holders will not be able to exercise voting rights attaching to the GDSs.

The Offering May not Result in an Active or Liquid Market for the GDSs or Class B Common Shares Prior to the Offering, there has not been a public market for our GDSs or class B common shares. We have applied for approval of the GDSs for quotation on the Regulated Market of the London Stock Exchange and of the class B common shares for quotation on the BCBA. However, we cannot assure you that an active, liquid public market will develop or be sustained after the Offering. Active, liquid trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors. Liquidity of a securities market is often a function of the volume of the underlying shares that are publicly held by unrelated parties. The initial public offering price for the Class B Shares and the GDSs has been determined by negotiations between us and the representatives of the Joint Global Coordinators and International Bookrunners and may not be indicative of prices that will prevail in the trading market. Investors may not be able to resell their Class B Shares or GDSs at or above the initial public offering price. The financial markets in Argentina, England and other countries have experienced significant price and volume fluctuations. Volatility in the price of our class B common shares and GDSs may be caused by factors outside of our control and may be unrelated or disproportionate to our operating results. In the past, following periods of volatility in the market price of a public company’s securities, securities class action litigation has often been instituted against that company. Such litigation could result in substantial costs and a diversion of our management’s attention and resources.

Future Sales of Securities by Our Company or Existing Shareholders May Hurt the Price of the Securities The market price of our GDSs could decline as a result of sales of a large number of class B common shares or GDSs after the Offering or the perception that such sales could occur. Such sales also might make it more difficult for us to sell class B common shares or GDSs in the future at a time and at a price that we deem appropriate. Upon completion of the Offering (without exercise of the Over-allotment Option), we will have an aggregate of 181,782,671 class B common shares issued and outstanding (including class B common shares in the form of GDSs). The Controlling Shareholders, the GS Investors, Tinicum (as defined herein) and Farallon (as defined herein) will own, directly and indirectly, 131,782,671 class B common shares constituting approximately 72.49% of the outstanding class B common shares. The 50,000,000 Class B Shares sold (without exercise of the Over-allotment Option) in the Offering (including Class B Shares in the form of GDSs) will be freely tradable. Pursuant to a registration rights agreement among, inter alia, the Company and the GS Investors, the GS Investors may require the Company to undertake underwritten offerings of such shareholders’ shares. We, the Selling Shareholders and other shareholders of the Company have agreed not to offer, sell or agree to sell, directly or indirectly, or otherwise dispose of any class B common shares or GDSs without the prior written consent of the Joint Global Coordinators and International Bookrunners for a period commencing on 4 October 2007 and ending 180 days from the date of the Purchase Agreement, subject to certain exceptions.

Our Shareholders May be Subject to Liability for Certain Votes of their Securities Because we are an Argentine corporation, our shareholders have limited liability. Shareholders are generally liable only for the payment of the shares they subscribe. However, shareholders may be

22 liable under certain circumstances, for example, if they have a conflict of interest with us and do not abstain from voting at the respective shareholders’ meeting, but only if the transaction would not have been approved without such shareholders’ votes. Furthermore, shareholders who wilfully or negligently vote in favour of a resolution that is subsequently declared void by a court as contrary to the law or our Bylaws may be held jointly and severally liable for damages to us or to other third parties, including other shareholders.

Holders of the GDSs will not be Able to Benefit from Certain UK Anti-Takeover Protections Because the Company is incorporated and its management and centre of operations are based outside the United Kingdom, the Channel Islands and the Isle of Man, the City Code on Takeovers and Mergers will not apply to the Company, including in the case of a mandatory tender offer upon a change of control of the Company.

You will Experience Immediate and Substantial Dilution in the Book Value of the Class B Shares or the GDSs You Purchase in this Offering Because the Offer Price of the Class B Shares and the GDSs being sold in this Offering will be substantially higher than the net tangible book value per share, you will experience immediate and substantial dilution in the book value of these shares. Net tangible book value represents the amount of our total assets less intangible assets and goodwill, minus our total liabilities and minority interest. As a result, at the Offer Price of U.S.$18.50 per GDS, you will incur immediate dilution of U.S.$21.57 per GDS you purchase in this Offering.

23 SUMMARY CONSOLIDATED FINANCIAL AND OTHER INFORMATION

The following tables set forth summary consolidated financial and other operating information of the Company as of and for the years ended 31 December 2006, 2005 and 2004, as of and for the six months ended 30 June 2007 and 2006.

The summary financial information as of and for the years ended 31 December 2006, 2005 and 2004 was extracted from, and should be read in conjunction with, the Company’s audited consolidated financial statements and related notes, and the information under “Presentation of Financial and Other Information”, “Selected Consolidated Financial Information” and “Operating and Financial Review” included elsewhere in this Offering Circular. The summary financial information as of 30 June 2007 and for the six month periods ended 30 June 2007 and 2006 was extracted from, and should be read in conjunction with, the unaudited interim financial statements and related notes, and the information under “Presentation of Financial and other Information”, “Selected Consolidated Financial Information” and “Operating and Financial Review” included elsewhere in this Offering Circular. The financial information as of 30 June 2006 was extracted from the unaudited interim financial statements as of 30 June 2006, which are not included in this Offering Circular. Results of operations for the six month period ended 30 June 2007 are not indicative of results for the full year ending 31 December 2007 or for any other interim period or for any future financial year. In the opinion of the Company’s management, the interim financial data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim period.

Our Independent Accountants, Price Waterhouse & Co. S.R.L., Buenos Aires, Argentina (a member firm of PricewaterhouseCoopers), have issued an opinion over the audited consolidated financial statements of the Company that includes the description of an uncertainty that results from pending regulatory approvals relating to the sale by the Company of its indirect participation in Prima to Multicanal, the sale of its direct and indirect participation in Multicanal to Cablevisión, and the indirect acquisition by the Company of additional shares in Cablevisión necessary to increase its participation in Cablevisión to 60% of the outstanding capital stock and votes. Additionally, in connection with the unaudited interim financial statements of the Company, the Independent Accoun- tants have issued a limited review report with an observation relating to the uncertainty mentioned above.

Our audited consolidated financial statements have been prepared in accordance with Argentine GAAP and CNV regulations, which differ in certain significant respects from U.S. GAAP. Our U.S. GAAP Financial Statements are set forth in Annex A.

Solely for the convenience of the reader, Peso amounts as of and for the year ended 31 Decem- ber 2006 and as of and for the six months ended 30 June 2007 have been translated into U.S. dollars at the selling rate for U.S. dollars quoted by Banco de la Nación Argentina (“Banco Nación”) on 31 December 2006 of Ps.3.06 to U.S.$1.00 and on 30 June 2007 of Ps.3.09 to U.S.$1.00, respectively. The selling rate for U.S. dollars quoted by Banco Nación on 20 September 2007 was Ps.3.13 to U.S.$1.00. The U.S. dollar equivalent information should not be construed to imply that the Peso amounts represent, or could have been or could be converted into, U.S. dollars at such rates or any other rate. See “Exchange Rate Information.”

In accordance with the Argentine Corporate Law, we may pay dividends in Pesos out of retained earnings, if any, as set forth in our audited unconsolidated financial statements prepared in accordance with Argentine GAAP and CNV regulations. However, we conduct our operations through our subsidiaries and our ability to pay dividends depends on us receiving dividends from our subsidiaries. The terms of the financial debt of certain of our subsidiaries restrict their ability to declare or pay dividends. See “Operating and Financial Review — Liquidity and Capital Resources — Indebtedness”.

24 Argentine GAAP Six Months Ended Year Ended 31 December 30 June 2004 2005 2006 2006 2006 2007 2007 Ps. Ps. Ps. U.S.$ Ps. Ps. U.S.$ (Unaudited) (Millions) (Millions) Statement of Operations Data Net sales ...... 1,667.3 1,988.4 2,811.8 918.9 1,141.5 1,993.3 645.1 Cost of sales — excluding depreciation and amortisation . . . . . (842.2) (1,088.5) (1,491.6) (487.5) (638.5) (963.4) (311.8) Subtotal ...... 825.1 900.0 1,320.2 431.4 503.0 1,029.9 333.3 Selling expenses — excluding depreciation and amortisation . . . . . (192.0) (227.5) (290.0) (94.8) (116.9) (203.3) (65.8) Administrative expenses — excluding depreciation and amortisation . . . . . (174.2) (215.7) (320.5) (104.7) (117.2) (209.9) (67.9) Depreciation of property, plant and equipment ...... (183.9) (142.7) (169.3) (55.3) (66.5) (138.2) (44.7) Amortisation of intangible assets. . . . . (12.0) (8.7) (38.9) (12.7) (5.1) (57.8) (18.7) Depreciation of other investments . . . . (0.3) (0.3) (0.3) (0.1) (0.2) (0.1) 0.0 Financing and holding results, net Generated by assets ...... (2.8) 13.1 (4.7) (1.5) 22.2 (9.3) (3.0) Generated by liabilities ...... (300.7) (354.3) 924.7 302.2 (259.6) (183.8) (59.5) Equity in earnings (losses) from unconsolidated affiliates and gain on sale of subsidiaries, net ...... 31.4 15.2 224.7 73.4 16.0 4.6 1.5 Other income (expense), net...... (10.1) 0.3 17.5 5.7 (1.5) (10.3) (3.3) Income/(loss) for the year/period before income tax, tax on assets and minority interest ...... (19.5) (20.7) 1,663.3 543.6 (25.7) 221.7 71.7 Income tax and tax on assets ...... 15.3 36.0 (490.7) (160.4) 10.6 (85.5) (27.7) Minority interest ...... 2.3 (1.7) (302.9) (99.0) (3.0) (32.7) (10.6) Net income/(loss) for the year/period ...... (1.9) 13.6 869.7 284.2 (18.1) 103.5 33.5 Adjusted EBITDA1(1) ...... 458.9 456.7 709.7 231.9 269.0 616.6 199.5 Pro Forma Adjusted EBITDA(2) . . . . . N.A. N.A. 1,036.6 338.8 N.A. N.A. N.A.

25 As of 31 December As of 30 June 2004 2005 2006 2006 2006 2007 2007 Ps. Ps. Ps. U.S.$ Ps. Ps. U.S.$ (Unaudited) (Millions) (Millions) Balance Sheet Data Total current assets ...... 849.2 1,033.1 1,208.0 394.8 1,272.7 1,287.4 416.6 Total non-current assets ...... 3,209.3 3,536.4 5,178.7 1,692.4 3,616.2 5,201.5 1,683.3 Total assets ...... 4,058.5 4,569.5 6,386.7 2,087.2 4,888.9 6,488.9 2,100.0 Total current liabilities ...... 2,712.2 3,345.0 1,290.2 421.6 3,589.1 1,328.1 429.8 Long-term debt ...... 550.2 427.8 2,057.9 672.5 510.6 1,961.5 634.8 Total non-current liabilities ...... 657.8 528.6 3,206.9 1,048.0 618.2 3,135.3 1,014.7 Total liabilities ...... 3,370.0 3,873.6 4,497.1 1,469.7 4,207.3 4,463.4 1,444.5 Minority interest ...... 40.3 32.7 354.4 115.8 35.5 386.1 124.9 Shareholders’ equity ...... 648.2 663.3 1,535.2 501.7 646.1 1,639.5 530.6 Total liabilities, minority interest and shareholders’ equity ...... 4,058.5 4,569.5 6,386.7 2,087.2 4,888.9 6,488.9 2,100.0

U.S. GAAP(3) Six Months Ended Year Ended 31 December 30 June 2004 2005 2006 2006 2006 2007 2007 Ps. Ps. Ps. U.S.$ Ps. Ps. U.S.$ (Unaudited) (Millions) (Millions) Statement of Operations Data Net sales ...... 1,571.2 1,847.6 2,560.5 836.8 1,058.2 1,895.5 613.4 Cost of sales — excluding depreciation and amortisation . . . . . (796.1) (1,002.1) (1,309.6) (428.0) (589.4) (917.2) (296.8) Selling and administrative expenses — excluding depreciation and amortisation ...... (349.6) (414.6) (569.5) (186.1) (221.1) (398.7) (129.0) Depreciation and amortisation...... (93.8) (76.4) (136.8) (44.7) (43.2) (150.1) (48.6) Operating income ...... 331.7 354.5 544.7 178.0 204.5 429.5 139.0 Financial results, net...... 284.1 (305.3) 939.1 306.9 (200.7) (174.0) (56.3) Equity in earnings from unconsolidated affiliates ...... 48.3 51.9 32.0 10.5 20.1 20.4 6.6 Gain on sale of subsidiaries, net . . . . . — — 6.0 2.0 — — — Income before income tax, tax on assets and minority interest...... 664.1 101.2 1,521.8 497.3 23.9 275.9 89.3 Income tax and tax on assets — (expense)/benefit...... 98.2 (28.1) (174.6) (57.1) 205.8 (80.2) (26.0) Minority interest ...... (2.2) (3.1) (38.4) (12.6) (4.0) (44.3) (14.3) Net income ...... 760.2 70.0 1,308.7 427.7 225.7 151.4 49.0 Adjusted EBITDA(4) ...... 425.5 430.9 681.5 222.7 247.7 579.6 187.6

26 As of 31 December As of 30 June Balance sheet data 2004 2005 2006 2006 2006 2007 2007 Ps. Ps. Ps. U.S.$ Ps. Ps. U.S.$ (Millions) (Unaudited) (Millions) ASSETS Current assets Cash and cash equivalents ...... 381.4 449.4 326.9 106.8 483.0 404.0 130.8 Trade receivables, net ...... 234.6 242.0 410.6 134.2 332.6 442.9 143.3 Other receivables, net ...... 160.6 393.7 321.6 105.1 667.1 263.8 85.4 Inventories...... 80.9 123.4 126.0 41.2 168.6 154.3 50.0 Other assets ...... 0.9 2.0 2.6 0.9 2.3 4.7 1.5 Total current assets...... 858.4 1,210.5 1,187.7 388.1 1,653.7 1,269.9 411.0 Trade receivables, net ...... 0.2 0.4 0.3 0.1 0.4 0.0 0.0 Other receivables, net ...... 370.8 203.1 280.6 91.7 198.3 284.0 91.9 Inventories...... 17.2 21.3 19.7 6.4 23.1 19.7 6.4 Investments in unconsolidated affiliates ...... 174.0 387.6 235.7 77.0 465.2 244.1 79.0 Other long-term investments ...... 9.4 47.0 3.3 1.1 17.9 3.2 1.0 Property, plant and equipment, net . . 398.9 416.9 1,025.3 335.1 461.7 1,107.3 358.4 Intangible assets, net...... 12.6 17.7 577.6 188.8 16.1 543.4 175.9 Goodwill ...... 1,147.4 1,156.6 2,909.0 950.7 1,155.6 2,905.3 940.2 Total assets ...... 2,988.8 3,461.0 6,239.3 2,039.0 3,992.2 6,376.9 2,063.7

LIABILITIES Current Liabilities Accounts payable ...... 270.3 264.4 404.9 132.3 332.5 436.6 141.3 Short-term debt and current portion of long-term debt ...... 2,283.0 2,783.6 432.3 141.3 2,965.5 464.8 150.4 Salaries and social security payable ...... 55.3 74.2 110.3 36.1 69.5 107.5 34.8 Taxes payable ...... 57.3 112.3 168.9 55.2 79.2 179.6 58.1 Other liabilities...... 65.4 77.2 120.6 39.4 108.6 112.5 36.4 Total current liabilities...... 2,731.3 3,311.7 1,237.0 404.2 3,555.3 1,301.0 421.0 Accounts payable ...... 19.9 6.6 10.6 3.5 9.7 13.2 4.3 Long-term debt ...... 638.6 473.2 2,360.0 771.2 529.9 2,248.4 727.6 Taxes payable ...... 2.0 5.6 14.5 4.7 4.7 17.8 5.8 Other liabilities...... 31.0 17.1 988.4 323.0 23.7 982.6 318.0 Provisions ...... 40.5 49.6 99.4 32.5 46.4 100.7 32.6 Minority interest ...... 34.1 28.2 669.5 218.8 32.0 711.9 230.4 Total Shareholders’ Equity (Deficit) ...... (508.5) (431.1) 860.0 281.1 (209.5) 1,001.4 324.1 Total liabilities and Shareholders’ Equity (Deficit) ...... 2,988.8 3,461.0 6,239.3 2,039.0 3,992.2 6,376.9 2,063.7

(1) We define Adjusted EBITDA as net sales minus cost of sales (excluding depreciation and amortisation) and selling and administrative expenses (excluding depreciation and amortisation). We believe that Adjusted EBITDA is a meaningful measure of our performance because it is commonly used in the industry to analyze and compare media companies. Nonetheless, Adjusted EBITDA is not a measure of net income or cash flow from operations and should not be considered as an alternative to net income, an indication of our financial performance, an alternative to cash flow from operating activities or a measure of liquidity. Because Adjusted EBITDA is not an

27 Argentine GAAP nor U.S. GAAP measure, other companies may compute Adjusted EBITDA in a different manner. Therefore, Adjusted EBITDA as reported by other companies may not be comparable to Adjusted EBITDA as we report it. 2004 = Net sales Ps.1,667.3 million; Minus: Cost of sales (excluding depreciation and amortisation) Ps.842.2 million; Minus: Selling and administrative expenses (excluding depreciation and amortisation) Ps. 366.2 million. 2005 = Net sales Ps.1,988.4 million; Minus: Cost of sales (excluding depreciation and amortisation) Ps.1,088.5 million; Minus Selling and administrative expenses (excluding depreciation and amortisation) Ps. 443.2 million. 2006 = Net sales Ps.2,811.8 million; Minus: Cost of sales (excluding depreciation and amortisation) Ps.1,491.6 million; Minus: Selling and administrative expenses (excluding depreciation and amortisation) Ps. 610.5 million. June 2006 = Net sales Ps.1,141.5 million; Minus: Cost of sales (excluding depreciation and amortisation) Ps.638.5 million; Minus: Selling and administrative expenses (excluding depreciation and amortisation) Ps.234.0 million. June 2007 = Net sales Ps.1,993.3 million; Minus: Cost of sales (excluding depreciation and amortisation) Ps.963.4 million; Minus: Selling and administrative expenses (excluding depreciation and amortisation) Ps.413.3 million. (2) See “Unaudited Consolidated Pro Forma Statement of Income”. (3) The summary data presented under U.S. GAAP was derived from and should be read in conjunction with the U.S. GAAP Financial Statements set forth in Annex A. (4) We define Adjusted EBITDA as sales minus cost of sales and selling and administrative expenses (excluding depreciation and amortisation). We believe that Adjusted EBITDA is a meaningful measure of our performance because it is commonly used in the industry to analyze and compare media companies. Nonetheless, Adjusted EBITDA is not a measure of net income or cash flow from operations and should not be considered as an alternative to net income, an indication of our financial performance, an alternative to cash flow from operating activities or a measure of liquidity. Because Adjusted EBITDA is not a U.S. GAAP measure, other companies may compute Adjusted EBITDA in a different manner. Therefore, Adjusted EBITDA as reported by other companies may not be comparable to Adjusted EBITDA as we report it. 2004 = Net sales Ps.1,571.2 million; Minus: Cost of sales (excluding depreciation and amortisation) Ps.796.1 million; Minus: Selling and administrative expenses (excluding depreciation and amortisation) Ps.349.6 million. 2005 = Net sales Ps.1,847.6 million; Minus: Cost of sales (excluding depreciation and amortisation) Ps.1,002.1 million; Minus Selling and administrative expenses (excluding depreciation and amortisation) Ps.414.6 million. 2006 = Net sales Ps.2,560.5 million; Minus: Cost of sales (excluding depreciation and amortisation) Ps.1,309.6 million; Minus: Selling and administrative expenses (excluding depreciation and amortisation) Ps.569.5 million. June 2006 = Net sales Ps.1,058.2 million; Minus: Cost of sales (excluding depreciation and amortisation) Ps.589.4 million; Minus: Selling and administrative expenses (excluding depreciation and amortisation) Ps.221.1 million. June 2007 = Net sales Ps.1,895.5 million; Minus: Cost of sales (excluding depreciation and amortisation) Ps.917.2 million; Minus: Selling and administrative expenses (excluding depreciation and amortisation) Ps.398.7 million.

28 Operating Metrics As of 31 December As of 30 June 2004 2005 2006 2006 2007 Cable TV Subscribers(1),(2) ...... 1,057,900 1,145,200 2,837,500 1,218,900 2,903,800 Cable TV Homes passed(1) Cablevisión ...... n/a n/a 3,767,800 n/a 3,767,800 Multicanal ...... 4,074,300 4,286,600 4,381,700 4,381,700 4,381,700 Cable TV churn rate Cablevisión ...... n/a n/a 12.2% n/a 13.1% Multicanal ...... 16.1% 13.8% 14.4% 14.4% 16.4% Internet Access Subscribers(1),(3) . . 162,500 229,000 587,700 259,200 657,200 Newspaper circulation(4) ...... 463,987 468,433 464,180 475,210 451,182 Canal 13 — Audience Share Prime time(5) ...... 28.2% 27.1% 39.4% 37.6% 39.5% Total time(5) ...... 27.2% 24.9% 30.3% 28.3% 32.7%

(1) Numbers rounded to nearest hundred. The total homes passed as of 30 June 2007 is 6,753,600 if overlap among Cablevisión and its subsidiaries (including Multicanal and Teledigital) is eliminated. (2) Includes Uruguay and Paraguay. Numbers rounded to nearest hundred. (3) Includes Paraguay. Numbers rounded to nearest hundred. (4) Average number of copies according to IVC (including Diario Clarín and Olé). (5) Share of free TV audience according to IBOPE for AMBA (as defined herein). Prime time is defined as Monday through Friday from 8pm to 12am. Total time is defined as Monday through Sunday from 12 pm to 12 am.

29 THE OFFERING The Company Grupo Clarín S.A, a sociedad anónima existing and organised under the laws of Argentina. Selling Shareholders Mrs. Ernestina L. Herrera de Noble; Aranlú S.A.; Corbery S.A.; GS Unidos, LLC; GS Private Equity Partners II — Direct Investment Fund, LP; GS Capital Partners III, LP; GS Private Equity Partners 1999 — Direct Investment Fund, LP; Tinicum GC Investors, LLC; and Farallon GC Investors, LLC. Joint Global Coordinators and Goldman Sachs International and Credit Suisse Securities International Bookrunners (Europe) Limited. International Lead Manager J.P. Morgan Securities Inc. International Co-Managers Merrill Lynch International and Itaú Securities, Inc. The Offering The Offering consists of an offering of 38,500,000 Class B Shares in the form of 19,250,000 GDSs in the United States and other countries outside of Argentina through the Interna- tional Underwriters and 11,500,000 Class B Shares in Argen- tina through the Argentine Placement Agents (as defined herein). International Tranche of the 38,500,000 Class B Shares in the form of 19,250,000 GDSs Offering are being offered to QIBs in the United States under Rule 144A and to institutional investors outside the United States under Regulation S. The GDSs will be issued by JP Morgan Chase Bank, N.A., as Depositary. The international tranche of the Offering of Class B Shares in the form of GDSs is made in the United States and elsewhere outside Argentina solely on the basis of the information contained in this Offering Circular. Investors should take this into account when making an investment decision. Argentine Tranche of the Offering The concurrent offering of 11,500,000 Class B Shares in Argentina is being made on the basis of a Spanish-language prospectus dated as of 11 October 2007. The Argentine prospectus, which has been filed with the CNV, is in a format different from that of this Offering Circular, consistent with CNV regulations, but contains substantially the same information as this Offering Circular, other than certain U.S. GAAP information, information relating to the GDSs, U.S. and U.K. taxation matters and information required under the FSMA. Preemptive and Accretion Rights The Company’s existing shareholders have pre-emptive rights to subscribe New Shares and additional class B common shares corresponding to the Over-allotment Option in a number sufficient to maintain their proportionate holdings in the

30 Company’s total capital stock. In addition the Company’s shareholders have accretion rights, which permit them to subscribe New Shares and additional class B common shares corresponding to the Over-allotment Option that are not subscribed by other shareholders in proportion with the percentage of shares for which the subscribing shareholder has exercised its pre-emptive rights. In order to permit the Offer- ing, the Company’s existing shareholders, including the Selling Shareholders, have waived the exercise of their pre-emptive and accretion rights in connection with the offering of the New Shares and the additional class B common shares corresponding to the Over-allotment Option, representing 100% of the pre-emptive and accretion rights in respect of the Compa- ny’s capital increase. New shareholders of the Company will not have such preemptive and accretion rights in respect of the class B common shares offered in the Offering or the Over-allotment Option. The Company will cancel the portion of the capital increase not sold in the Offering or the Over- allotment Option. Over-allotment Option The Company and certain Selling Shareholders have granted Credit Suisse Securities (Europe) Limited an Over-allotment Option to acquire, in the aggregate, up to 7,500,000 additional class B common shares (15% of the Offering) in the form of GDSs at the Offer Price for the purposes of meeting over- allotments in connection with the Offering. The Over-allotment Option is exercisable upon written notice by Credit Suisse Securities (Europe) Limited to the Company and such certain Selling Shareholders at any time during the Stabilisation Period. If Credit Suisse Securities (Europe) Limited exercises this option, the Company and such certain Selling Sharehold- ers will be obligated to sell, and Credit Suisse Securities (Europe) Limited will be obligated, subject to the conditions contained in the Purchase Agreement, to purchase or procure purchases for additional class B common shares in the form of GDSs. Stabilisation Period The period commencing on the date of adequate public disclosure of the Offer Price of the GDSs and ending no later than 30 calendar days thereafter. Offer Price Ps.29.14 per Class B Share and U.S.$18.50 per GDS. GDS Closing Date On or about 24 October 2007. Class B Share Closing Date On or about 24 October 2007. Class B Shares Shares of class B common stock of the Company, to be issued in book entry form with a nominal value of one (1) Peso per share and one vote per share, and with rights to dividends equal to those of the outstanding shares of the Company. GDSs Each GDS will represent two class B common shares. The GDSs will be issued and delivered by the Depositary pursuant to the Deposit Agreement (as defined herein). The Rule 144A GDSs will be evidenced by the Master Rule 144A GDR, and

31 the Regulation S GDSs will be evidenced by the Master Regu- lation S GDR. See “Terms and Conditions of the Global Depositary Shares”. GDSs representing up to 28,750,000 Class B Shares will initially be created for the purpose of the Offering. Pursuant to the Deposit Agreement, the class B common shares in the form of the GDSs will be held by Banco Santander Río S.A., as Custodian, for the account of the Depositary and for the benefit of holders and beneficial owners of GDSs. Except in limited circumstances, definitive GDS certificates will not be issued to holders in exchange for interests in the GDSs represented by the Master GDRs. Subject to the terms of the Deposit Agreement, interests in GDSs represented by the Master Regulation S GDR may be exchanged for interests in the corresponding number of GDSs represented by the Mas- ter Rule 144A GDR and vice versa. See “Terms and Condi- tions of the Global Depositary Shares”. Depositary JPMorgan Chase Bank N.A. Lock-up The Company, the Selling Shareholders and certain other shareholders of the Company have agreed, subject to certain exceptions, not to issue, offer, sell, contract to sell, pledge, grant options over or otherwise dispose of any class B common shares of the Company, GDSs or any securities convertible into, or exchangeable or exercisable for, any class B common shares or GDSs for a period commencing on 4 Octo- ber 2007 and ending 180 days from the date of the Underwrit- ing Agreement, without the prior written consent of the Joint Global Coordinators and International Bookrunners. Use of Proceeds The gross proceeds to the Company from the Offering will be U.S.$159.6 million (assuming the total placement of the Secu- rities and that the Over-allotment Option is exercised in full). The net proceeds to the Company from the Offering will be U.S.$150.9 million (assuming the total placement of the Secu- rities and that the Over-allotment Option is exercised in full) after deduction of the estimated underwriting commissions and other fees and expenses payable by the Company. The Company intends to use the net proceeds of the Offering primarily in the following ways: • up to U.S.$80 million, to prepay indebtedness of one of its subsidiaries; and • the remainder of the net proceeds it receives from the Offer- ing, to invest in the development of its business, including through acquisitions of participations in the capital stock of other companies if and when opportunities arise, and for general corporate purposes. The Company will not receive any of the proceeds from the sale of the Selling Shareholder Shares. Voting Rights The Class B Shares are subject to applicable provisions of Argentine Corporate Law and the Bylaws. The exercise of

32 votes by the holders of GDSs will be effected through the Depositary pursuant to the terms of the Deposit Agreement.

Existing Shareholders The following table summarises the percentage of our outstanding class B common shares that will be held by our existing shareholders after giving effect to the Offering:

Over-Allotment Option is not Exercised Exercised in Full (Percentage of Class) Mrs. Ernestina L. Herrera de Noble 1.44% 0.00% The 1999 Ernestina Laura Herrera de Noble New York Trust 41.66% 40.62% HHM Media New York Trust 18.29% 17.83% José Antonio Aranda 4.51% 4.40% The LRP New York Trust 5.19% 5.06% Aranlú S.A. 0.73% 0.72% Corbery S.A. 0.00% 0.00% GS Unidos, LLC 0.00% 0.00% GS Private Equity Partners 0.00% 0.00% II — Direct Investment Fund, LP GS Capital Partners III, LP 0.00% 0.00% GS Private Equity Partners 1999 — Direct Investment Fund, LP 0.00% 0.00% Tinicum GC Investors, LLC 0.36% 0.30% Farallon GC Investors, LLC 0.31% 0.26%

In addition, the following table summarises the percentage of our class A common shares and class C common shares that will be held by our existing shareholders after giving effect to the Offering.

Over-allotment Option is not Exercised Exercised in Full (Percentage of Class) Class A common shares GC Dominio S.A. 100% 100% Class C common shares GS Unidos, L.L.C. 54.71% 54.35% GS Private Equity Partners II Direct Investment Fund L.P. 1.03% 1.04% GS Capital Partners III, L.P. 43.42% 43.76% GS Private Equity Partners 1999 Direct Investment Fund, L.P. 0.84% 0.85%

Dividend Policy The Company does not have, and has no current plan to establish, a formal dividend policy governing the amount and payment of dividends or other distributions. According to its Bylaws and the Argentine Corporate Law, the Company may make one or more declarations of dividends with respect to

33 each fiscal year, including advance dividend payments under Article 224, second paragraph of the Argentine Corporate Law, only out of the Company’s retained earnings for such fiscal year, stated in the Company’s interim or annual financial statements prepared in accordance with Argentine GAAP and CNV regulations and approved by the board of directors or the annual ordinary shareholders’ meeting, as the case may be. Dividends must be payable rateably to all holders of the Company’s shares of common stock as of the relevant record date. Pursuant to foreign exchange regulations, an Argentine company may purchase foreign currency in the foreign exchange market only to pay dividends abroad to foreign shareholders and to the Depositary for the benefit of the foreign holders of GDSs, provided that such dividends correspond to periods covered by approved audited annual financial statements. See “Dividend Policy” and “Exchange Rate Information — Exchange Controls”. Share Capital Immediately Prior to Immediately prior to the completion of the Offering after giving and Following the Offering effect to the conversion of our series A preferred shares and series B preferred shares into 22,693,904 class B common shares and 18,567,740 class C common shares and the conversion of 16,181,880 class C common shares into class B common shares, the Company’s authorised and issued share capital is Ps.270,261,524, and will consist of 75,980,304 class A common shares, 166,782,671 class B common shares and 27,498,549 class C common shares. After giving effect to the Offering, (and without giving effect to the Over-allotment Option) the Company’s authorised and issued share capital will be Ps.285,261,524, and will consist of 75,980,304 class A common shares entitled to five votes per share, 181,782,671 class B common shares entitled to one vote per share and 27,498,549 class C common shares entitled to one vote per share. Taxation For a discussion of certain U.S. federal income tax, U.K. tax and Argentine tax consequences of purchasing and holding the Class B Shares or GDSs, see “Taxation”. Listing and Trading Application has been made (i) to the Financial Services Authority for a block listing of up to 105,765,610 GDSs, consisting of up to 25,000,000 GDSs to be issued on or about the GDS Closing Date, up to 3,750,000 additional GDSs to be issued pursuant to the Over-allotment Option, if exercised, and up to 77,015,610 additional GDSs which may be issued from time to time against the deposit of class B common shares with the Depositary, to be admitted to the Official List, (ii) to the London Stock Exchange for such GDSs to be admitted to trading on the Regulated Market of the London Stock Exchange through the regulated market segment of the International Order Book (the “IOB”) and (iii) to the BCBA for the listing of all class B and class C common shares of the Company with an authorisation to trade class B common shares of the Company (including the Class B Shares).

34 Application has also been made to have the Rule 144A GDSs designated eligible for trading in PORTAL. The Company expects that conditional trading through (i) the IOB will commence on a “when and if issued” basis on or about 19 October 2007 and (ii) MERVAL will commence on a “when and if issued” basis on or about 19 October 2007. The Company expects that unconditional trading through the BCBA will commence on or about 24 October 2007 and unconditional trading through the IOB will commence on or about 25 October 2007. All dealings in the GDSs and Class B common shares prior to the commencement of unconditional trading will be of no effect if Admission or the BCBA authorisation do not take place and will be at the sole risk of the parties concerned. The Offering is conditional upon all listings becoming effective.

Payment and Settlement Application will be made to have the Rule 144A GDSs, evidenced by the Master Rule 144A GDR, accepted for clearance through DTC and the Regulation S GDSs, evidenced by a Master Regulation S GDR, accepted for clearance through DTC and the book-entry settlement systems of Euroclear and Clearstream. The Company expects that payment and delivery of the GDSs will be made through the facilities of DTC on or about 24 October 2007. Upon acceptance by DTC, a single Master Rule 144A GDR and a single Master Regulation S GDR will be issued to DTC and registered in the name of Cede & Co., as nominee for DTC. Euroclear and Clearstream are expected to accept the Regulation S GDSs for settlement in their respective book-entry settlement systems. Except in limited circumstances described herein, investors may hold beneficial interests in the GDSs evidenced by the corresponding Master GDR only through DTC, Euroclear or Clearstream, as applicable.

Clearance and Security Numbers The security identification numbers for the GDSs are as follows:

Rule 144A GDSs: ISIN: US40052A1007 CUSIP: 40052A 100 Common Code: 032322441

Regulation S GDSs: ISIN: US40052A2096 CUSIP: 40052A 209 Common Code: 032363881 LSE trading symbol: “GCLA”

The security identification numbers for the class B common shares of the Company (including the Class B Shares) are as follows: BCBA trading symbol: “GCLA”

35 Transfer Restrictions See “Selling and Transfer Restrictions” for a detailed description of the restrictions on transfers of the GDSs and the Class B Shares.

Risk Factors Prospective investors should consider carefully certain risks discussed under “Risk Factors”.

Mandatory tender offer regime Mandatory Tender Offer in the Case of Acquisition of More than 50% of the Capital Stock or Votes of the Com- pany. We have opted out of the mandatory tender offer rules set forth in Decree No. 677/01. However, pursuant to our Bylaws, if a person or a group of persons acting in concert not owning shares of the Company that represent, in the aggregate, 50% or more of the Company’s total capital or total votes (the “Future Holder”) intend to acquire, in a transaction or a series of related transactions (including by way of merger or exchange) occurring within a period of 90 days, direct or indirect title to, or control of, shares of the Company or other securities convertible into shares of the Company that, when added to the securities held by the Future Holder prior to the acquisition, would result in such Future Holder holding or controlling more than 50% of the capital stock or votes of the Company, then the Future Holder will be required to launch a mandatory tender offer for all outstanding shares of the Com- pany and all other securities convertible into shares of the Company. This mandatory tender offer provision does not apply to acquisitions by Ernestina L. Herrera de Noble, Héctor Horacio Magnetto, José Antonio Aranda, Lucio Rafael Pagliaro, certain authorised assignees of the foregoing and certain of their designated relatives, heirs and successors (collectively, the “Permitted Shareholders”), as well as corporations controlled by any of them or trusts established for the benefit of any of the Permitted Shareholders. The Future Holder may set the price payable to accepting holders of shares or convertible securities, with the following limitations: (a) if the Future Holder acquired any shares of the Company or securities convertible into shares of the Company within the 90 days immediately preceding the notice by the Future Holder launching the tender offer, the price per share in the mandatory tender offer may not be lower than the highest price paid in such acquisitions, and (b) if the Future Holder has obtained firm sale commitments or has made firm commitments for the direct or indirect purchase of shares of the Company or securities convertible into shares of the Company within the 90 days immediately preceding the notice by the Future Holder launching the tender offer, the price per share in the mandatory offer or convertible security may not be lower than the highest price agreed under such commitments.

Mandatory Tender Offer in the Case of a Voluntary With- drawal from the Public Offering and Listing System. CNV regulations require publicly traded Argentine companies that intend to delist or withdraw from Argentina’s public offering and listing system to first undertake a mandatory tender

36 offer (“OPA”) for all of their shares or other rights or securities convertible into shares. However, such companies are not required to initiate an OPA for shares held by the shareholders who voted for such delisting or withdrawal. The price offered should be a fair price, following the criteria set forth in Decree No. 677/01, and may differ from the price that would result from the exercise of appraisal rights by a shareholder under the Argentine Corporate Law. Mandatory or Voluntary Tender Offer in the Case of Near- Total Control. If a person holds, directly or indirectly, 95% or more of the outstanding capital stock of a publicly traded Argentine company, any minority shareholder may request that the controlling shareholder launch an OPA for all outstanding shares of such company. In addition, a person that holds, directly or indirectly, 95% or more of the outstanding capital stock of a publicly traded Argentine company may issue a unilateral declaration of its intention to purchase all outstanding shares of such company within six months following the date of acquisition of near-total control and withdraw the Company from public offering and its shares from listing and trading. The price offered should be a fair price, following the criteria set forth in Decree No. 677/01. Jurisdiction and Arbitration Pursuant to article 38 of Decree No. 677/01, companies whose shares are listed on the BCBA, such as the Company, are subject to the jurisdiction of the BCBA arbitration court for all matters concerning such companies’ relationship with shareholders and investors, without prejudice to the right of shareholders and investors to submit their claims to the courts of the City of Buenos Aires.

37 USE OF PROCEEDS At an Offer Price of U.S.$9.25 per Class B Share (at an exchange rate of Ps. 3.15 per U.S.$1.00), the gross proceeds to the Company from the Offering will be U.S.$159.6 million (assuming the total placement of the Securities and that the Over-allotment Option is exercised in full). The net proceeds to the Company from the Offering will be approximately U.S.$150.9 million (assuming the total placement of the Securities and that the Over-allotment Option is exercised in full) after deduction of the estimated underwriting commissions and other fees and expenses payable by the Company. The Company will not receive any of the proceeds from the sale of Securities by the Selling Shareholders in the Offering, or any proceeds from the sale of additional Securities by certain Selling Shareholders pursuant to the exercise of the Over-allotment Option. The Company intends to use the net proceeds of the Offering primarily as follows: • up to U.S.$80 million, to make a capital contribution to its subsidiary, Vistone LLC, for the total prepayment of all outstanding amounts (including interest accrued through the date of prepayment) under Vistone LLC’s outstanding U.S.$100 million Demand Grid Note, dated as of 15 March 2005, as amended on 16 September 2005. The Demand Grid Note accrues interest at a rate of 90-day LIBOR plus 0.75%, is secured by term deposit pledges and standby letters of credit and is payable on demand; and • the balance of the net proceeds it receives from the Offering, to develop its business, including through acquisitions of participations in the capital stock of other companies if and when opportunities arise, and for general corporate purposes. Except for the use of up to U.S.$80 million to prepay indebtedness of Vistone LLC, the Company has not yet determined the amount of net proceeds to be used specifically for the other purposes specified above. Accordingly, management will have significant flexibility in applying the net proceeds of the Offering.

38 BUSINESS DESCRIPTION

Our Company We are the largest and most prominent media company in Argentina, and are the market leader in the cable television industry and Internet access, printing and publishing, and broadcasting and programming segments. Our cable television network is the largest in Latin America, we have the largest broadband subscriber base in Argentina and our flagship newspaper — Diario Clarín — has the highest circulation in Latin America and is the second-highest circulation Spanish-language newspaper in the world. We are the largest producer of media content in Argentina. Our content, including news, sports and entertainment, reaches substantially all segments of the Argentine population in terms of wealth, geography and age. Our leading position in various media market segments is a unique competitive advantage that allows us to generate significant synergies and cost savings. Our daily reach to substantially all segments of the Argentine population provides us with a unique knowledge and understanding of the Argentine media consumer. In 2006, and for the six-month period ended 30 June 2007, our net sales were Ps.2.8 billion and Ps.2.0 billion, respectively, our Adjusted EBITDA was Ps.709.7 million and Ps.616.6 million, respectively, and our net income was Ps.869.7 million and Ps.103.5 million, respectively. In 2006, on a pro- forma basis after giving effect to the Cablevisión Acquisition (as defined herein), our net sales were Ps.3.6 billion, our Adjusted EBITDA was Ps.1.0 billion and our net income was Ps.593.6 million. We are a sociedad anónima, a corporation with limited liability, organised, existing and incorporated under the laws of Argentina. As a holding company, we derive our operating income and cash flow from the operations of our direct and indirect subsidiaries.

Our Strengths We believe we have the following strengths: 1. We are the Largest and Most Prominent Media Company in Argentina. We are the market leader in Argentina in most of the media segments in which we operate. We reach substantially all segments of the Argentine population in terms of wealth, geography and age on a daily basis, with a particularly strong franchise in the largest and most affluent urban areas of the country. • Largest Cable TV Network in Latin America. We operate the largest cable TV network in Argentina and Latin America in terms of subscribers, with approximately 2.9 million as of 30 June 2007. • Largest Broadband Internet Access Provider in Argentina. We provide broadband Inter- net access to approximately 614,800 cable modem and ADSL subscribers in Argentina as of 30 June 2007, the largest broadband subscriber base in the country. • Largest Newspaper in Latin America. Our flagship newspaper has the highest circulation in Latin America and is also the leading Argentine newspaper in terms of advertising revenues. • Largest Television Broadcaster in Argentina. We broadcast the leading TV channel in Argentina in terms of advertising revenues and prime time audience, and two leading radio stations in Argentina. • Largest Network of Argentine Internet Portals. We operate the largest network of Argen- tine-based Internet portals receiving approximately 298 million page views and 7.7 million unique visitors per month. 2. We Own a Large, High-Quality, High-Capacity Cable Network. Through our high- capacity cable network we can offer basic pay TV, broadband Internet, premium video, telephony

39 and value added data services to our residential and business customers. 42% of our cable network is bidirectional. Our cable modem technology competes favourably with ADSL in the provision of broadband Internet access, as the speed and quality of our service are not affected by the distance of the subscriber from our headend location. In addition, the size of our cable TV business allows us to achieve significant economies of scale, mainly through cost savings and efficient planning of our capital expenditures, in a largely fixed cost industry. 3. We are the Leading Producer of Media Content in Argentina. We believe that our longstanding leadership in the media business in Argentina gives us a unique ability to identify audiences’ tastes and interests and produce content tailored for the Argentine population, such as the broadcasting of local soccer championships. Our broad content distribution capabilities and critical mass, in turn, reinforce our ability to generate high-quality content, a key competitive advantage. 4. We are a Central Point of Reference for Advertisers in Argentina. We have the largest market share in most segments of the Argentine advertising market. Our leadership position across most content production and distribution platforms allows us to capture a significant share of the Argentine advertising market. We have a unique ability to position new brands and products, both for our advertising customers and our own products. 5. We Have Proven Capable of Adapting Our Business Model Over Time. We can anticipate market trends and changes in our industry, effectively adapt our business models, and take full advantage of the resulting opportunities. Originally created as a local newspaper, we developed with the industry. We first became an integrated player in the printing and publishing business and then successfully expanded into the broadcast television and radio business. Throughout the last decade, we have created the largest cable television network in Latin America, and most recently we created the most visited network of Argentine Internet portals. Moreover, we continue to develop new business concepts and technologies such as e-commerce platforms, mobile content and web 2.0 capability. 6. Our Solid Financial Position. Our strong cash flow generation, supported by the cost savings we can derive from our economies of scale, as well as our operating margins and limited capital expenditure needs, provides us financial resources in amounts sufficient to operate our business efficiently and pursue attractive growth opportunities. 7. Our Proven Management Team and the Commitment of Our Controlling Share- holders. Our management team has extensive experience in the media industry in Argentina. Its clear vision prevailed throughout changing environments as we developed into the most prominent and largest media group in Argentina. Our Controlling Shareholders have been actively involved in the day-to-day operation of the Company for the past thirty years. Many of our key officers have been with us for more than a decade.

Our Strategy We seek to use our leading position and our access to growth opportunities in the media industry in Argentina and Latin America to create value for our shareholders. We intend to develop further our cable television business, including digital and premium offerings, and expand our broadband and advertising businesses. We expect to strengthen our content production capabilities, expand our footprint in Argentina and abroad in our core and related businesses and take advantage of digital convergence. We intend to pursue the following strategic initiatives: • Consolidate Our Cable TV Network. By integrating Cablevisión and Multicanal, we intend to create value for our shareholders by building on the combined power of the two brands and reducing costs and capital expenditures through the elimination of overlapping operating structures and physical networks.

40 • Expand Our Broadband Internet Access Business. We will seek to expand our broadband Internet access and gain market share in this rapidly growing market through our competitive advantages over competing ADSL technologies. We intend to rely on the footprint of our bidirectional network and our cable TV subscriber base to do so. • Develop High-Growth, High-Margin Businesses. We intend to continue focusing our resources and capital on high-growth, high-margin businesses and opportunities. In particular, we will seek to expand our broadband Internet access business and gain market share in a rapidly expanding market through our competitive advantages against competing ADSL technologies. The high quality of our network and our ability to use bandwidth capacity provide us with a significant advantage with respect to competitors that can only offer ADSL technology. We will seek to further expand our digital subscriber base and our premium cable television services, including pay-per-view programming services. We believe that our state-of- the-art network infrastructure and broad cable television and Internet customer base can also be leveraged to develop our IP telephony business through an integrated offering of video, Internet and telephony services (triple play). • Take Full Advantage of the Growth of the Argentine Advertising Market. By leveraging our leadership position in content production and distribution, and selectively adding new publications to our printed media portfolio, we will seek to take advantage of the growth of the Argentine economy to increase our advertising revenues. We intend to use our expertise and current platforms to increase our share of the advertising market. • Expand Our Footprint in the Interior of Argentina and Pursue Selected Acquisitions Internationally. We will seek to further expand our operations in the interior of the country, where our presence is more limited than in Buenos Aires and other large urban areas, through organic growth and opportunistic acquisitions. We may consider expanding our printing and publishing and broadcasting activities through the acquisition of regional newspapers, broadcast television stations and cable signals. We will also consider acquisition opportunities outside Argentina that may offer incremental value to our shareholders and are consistent with our business strategy. As part of our ongoing effort to evaluate potential opportunities, we may consider strategic partnerships with leading international media companies. • Continue Producing High-Quality Multimedia Content. The production of high-quality content is one of the cornerstones of our business. We remain committed to investing in the development of talent and leveraging our knowledge of audiences’ tastes and interests to continue producing high quality content for distribution through our various platforms. We seek to use our production capabilities across the different media segments and present a consistent multimedia product to our target audience. We expect to further increase our content sales outside of Argentina. • Take Advantage of Trends and Changes in the Industry to Expand into Related Business. We intend to maintain our leadership in the media industry in Argentina by capitalising on our ability to identify trends in the industry and to develop new businesses. We intend to do so by leveraging the cash flow generation from our existing business as well as our ability to position new brands and products.

Our History In 1945, Mr. Roberto Noble launched Diario Clarín, a new morning daily newspaper. By the mid- 1960s Diario Clarín had become the newspaper with the highest circulation in the City of Buenos Aires. Mrs. Ernestina L. Herrera de Noble, wife of Mr. Noble, succeeded him in the editorship of Diario Clarín in 1969. Between 1971 and 1974, Messrs. Magnetto, Aranda and Pagliaro, the current members of our executive committee, became managers of AGEA. In 1976, AGR began its operations to meet Diario Clarín’s growing printing and production needs, marking the beginning of our commercial printing operations. Two years later, in 1978, in a joint venture involving AGEA and other

41 newspapers, Papel Prensa S.A.I.C.F. y de M. (“Papel Prensa”) began production as the first Argentine newsprint producer. By the mid 1980s, Diario Clarín had become the newspaper with the highest circulation in the Spanish-speaking world. Today, Diario Clarín has the second highest circulation, after Spanish newspaper El País. After the Argentine government deregulated the broadcasting industry in 1989, the Controlling Shareholders began to expand their business into other media platforms. In 1990, they created Arte Radiotelevisivo Argentino S.A. (“ARTEAR”) and acquired the broadcasting license to operate Canal 13, one of the five broadcast television stations in Buenos Aires. In 1991 they acquired Radio Mitre S.A. (“Radio Mitre”), founded in 1921. In 1992, they acquired Multicanal, a cable television operator and entered into a joint venture with Torneos y Competencias S.A. (“TyC”), a producer of sports programming, expanding into the broadcasting and distribution of sports events. In the mid-1990s the Controlling Shareholders continued to expand their business by launching cable television signals, such as TN Todo Noticias, the cable signal with the highest number of viewers in Argentina today, measured over 24 hours. They also continued to reinforce historically core business in the printing and publishing sector, launching Viva Magazine, Olé and Genios. In 1996, Clarín Digital, the first digital edition of Diario Clarín, was published on the Internet. In 1996 and 1997, Multicanal acquired cable operations in Paraguay and Uruguay, respectively, and in 2000, the Controlling Shareholders launched Prima, to provide Internet services and digital content. In 1999, the Controlling Shareholders established the Company and through a series of transactions contributed their interests in each of the media businesses to the Company, and the GS Investors, Tinicum and Farallon acquired an 18% interest in the Company. In 2001, we acquired 75% of the capital of Editorial La Razón S.A. (“La Razón”) publisher of Diario La Razón, an evening newspaper published in the City of Buenos Aires and its surrounding areas, which we refer to as the “AMBA Region” and the first free distribution newspaper in Argentina. After 2000, the Company continued to expand the range of its media-related business. In spite of the 2002 crisis, the Company was able to continue its operations in all business segments and to benefit from Argentina’s economic recovery and growth. In 2002, AGEA established Ferias y Exposiciones S.A. (“Ferias y Exposiciones”), a company created to organise trade fairs and exhibitions. In 2004, AGEA entered the text book publishing industry through Tinta Fresca Ediciones S.A. (“Tinta Fresca”), which in 2007 launched Contenidos Estudiantiles Mexicanos, S.A. in Mexico, together with Mexican publishing group, Grupo Milenio. In 2005, the Company acquired an indirect minority interest in Cablevisión, Argentina’s largest cable television operator and high-speed Internet access provider. In 2006, it increased its indirect participation in Cablevisión to 60% and began the integration of Cablevisión’s operations with those of Multicanal.

Our Business Segments We have grouped our business into four core segments: cable television and Internet access, printing and publishing, broadcasting and programming and other related activities. We create media content, build brand names around the content, and manage the outlets distributing the content. We deliver the content in various forms and through multiple outlets, including broadcast and cable television, Internet services, newspapers, magazines and educational books. Substantially all of our businesses hold leading market positions, and we capitalise on these strong positions when expanding into new markets. Our most significant operations are located in Argentina, where we generate substantially all our revenues. We also have operations in Paraguay and Uruguay. Through companies we control and joint ventures, we are engaged primarily in cable television and Internet access, printing and publishing, broadcasting and programming and other related activities. The chart below illustrates the main companies in which we participate, directly or indirectly, organised by business segment as of the date of this Offering Circular.

42 The Company

Cable TV and Internet Broadcasting & Printing & Publishing Other Access ProgrammingPr

Cable TV Publishing Broadcast TV Channels Digital Content Cablevisión AGEA Artear C13 Clarín Global Prima Internacional Multicanal Tinta Fresca Telecor C12 Telba C7 Other Holding Teledigital Cimeco – La Voz/Los Andes GC Gestión Compartida Broadband Printing Bariloche TV C6 Cablevisión AGR TV Content Producers Pol-Ka Prima Impripost Ideas del Sur Paper Mill IESA Papel Prensa TRISA Other TSC Oportunidades Canal Rural Satelital Ferias y Exposiciones Film Producer Unir Patagonik Film Group Radio Broadcasting Radio Mitre

Cable Television and Internet Access Out of our total sales of Ps.2.0 billion in the first six months of 2007, our cable television and Internet access segment accounted for Ps.1.2 billion, or 61.1% of total sales. This segment derives revenues primarily from monthly subscription fees for basic cable service and high speed Internet access. Other sources of revenue include connection fees, advertising and fees for premium and pay-per-view programming services. Through our 60% participation in Cablevisión and its subsidiaries (including Multicanal and Holding Teledigital), we operate the largest network of cable television systems in Argentina and in Latin America in terms of subscribers. As of 30 June 2007, our cable systems served approximately 2.7 million subscribers in Argentina and 157,900 subscribers in Paraguay and Uruguay. Our cable television and Internet broadband services businesses include the operations of Cablevisión, as well as its subsidiaries Multicanal, Teledigital and Prima. The following table shows subscriber and related data in Argentina as of 30 June 2007, and is based on information published by third parties and our internally generated market information: Total(1) Cablevisión Multicanal Teledigital Prima Homes Passed(2),(3) ...... 6,548,400 3,767,800 4,176,500 460,500 — Cable Television Subscribers(2) . . 2,746,00 1,423,500 1,146,800 175,700 — Cable Television Penetration(4) . . 41.9% 37.8% 27.5 38.2 — Internet Subscribers(2) ...... 653,700 344,800 182,000 4,700 122,200(6) Internet penetration(5) ...... 23.8% 24.2% 15.9% 2.7% —

(1) Eliminates overlaps. (2) Numbers rounded to nearest hundred. (3) Homes passed by cable networks. (4) Subscribers as a percentage of total homes passed. (5) Subscribers as a percentage of total cable subscribers. (6) Dial-up, ADSL and corporate clients.

43 Our Networks and Operating Regions

Cablevisión’s principal activity is the operation of cable networks in the AMBA Region, as well as the city of La Plata and other large, medium-sized and small cities in the provinces of Buenos Aires, Santa Fé, Entre Ríos, Córdoba, Corrientes, Misiones, Salta and Chaco. As of 30 June 2007, Cablevisión (excluding Multicanal and its subsidiaries) served approximately 1.4 million cable television subscribers and 344,800 Internet subscribers and was organised into five operational regions: the AMBA Region, the Buenos Aires Province Region, the Central Region, the Litoral Region and the Southern Region.

Multicanal, Cablevisión’s largest subsidiary acquired by Cablevisión in September 2006, has operations in Argentina, Paraguay and Uruguay. Multicanal operates cable networks in several regions of Argentina. As of 30 June 2007, Multicanal served approximately 1.3 million subscribers, of which approximately 1.1 million reside in Argentina and the balance in Uruguay and Paraguay. Multicanal has organised its networks into five operational regions: the AMBA Region, the Buenos Aires Province Region, the Central Region, the Litoral Region and the Southern Region.

The AMBA Region is the region with the highest purchasing power in Argentina and is also the most densely populated. There are approximately 12 million inhabitants in the region, representing approximately 33% of the total population of Argentina. Cablevisión has built a fibre optic cable ring around the City of Buenos Aires that provides network redundancy and improves network reliability. Multicanal has consolidated the City of Buenos Aires with the surrounding areas using fibre optic loops. Multicanal’s cable networks in the AMBA Region overlap to a significant extent with Cable- visión’s network in those areas.

Cablevisión’s Buenos Aires Province Region consists of six sub-regions: Lincoln, Azul, Perga- mino, Lobos, Tandil and San Nicolás, which include 41 municipalities. Multicanal’s Buenos Aires Province Region comprises cable systems in Junín, Chivilcoy, San Pedro and Baradero.

Cablevisión’s Central Region includes cable systems located in the provinces of Córdoba and Salta, including the cities of Córdoba, Río Cuarto, Salta and San Francisco. Multicanal’s Central Region comprises cable systems in seven of the largest cities in the province of Córdoba, the second largest province in Argentina in number of inhabitants, and two cities in the province of La Pampa.

Cablevisión’s Litoral Region includes cable systems located in Northeastern Argentina, including, among others, the cities of Rosario and Santa Fé, in the province of Santa Fé; Paraná, in the province of Entre Ríos; Posadas, in the province of Misiones; Resistencia, in the province of Chaco; their respective surrounding populations and other smaller population centres in the province of Corrientes. Multicanal’s Litoral Region comprises cable systems in five cities in the province of Santa Fé, the third largest province in Argentina in number of inhabitants, one city in the province of Entre Ríos, the city of Corrientes in the province of Corrientes, two cities in the province of Chaco and the city of Formosa in the province of Formosa.

Cablevisión’s Southern Region includes cable systems located mainly in the province of Buenos Aires, including the cities of Bahía Blanca, La Plata (the capital of the province of Buenos Aires) and surrounding areas. Multicanal’s Southern Region comprises cable systems in La Plata, Bahía Blanca, Mar del Plata and other cities on the Atlantic coast.

As of 30 June 2007, Cablevisión’s cable network passed approximately 3.8 million homes, of which more than 59% were passed by its two-way 750 MHz bandwidth network. In the AMBA Region, Cablevisión provides two-way 750 MHz bandwidth capacity to 67% of the homes passed by its cable network. Cablevisión’s two-way 750 MHz networks allow it to offer services and products that generate additional revenues, such as Internet access and access to premium television signals. As of 30 June 2007, Multicanal’s cable network passed approximately 4.4 million homes, including Uruguay and Paraguay of which more than 47% were passed by its two-way 750 MHz bandwidth network.

44 The following table shows subscriber and related data for Cablevisión’s five operating regions as of 30 June 2007, and is based on information published by third parties and our internally generated market information:

Buenos Aires Province Central Litoral Southern AMBA Region Region Region Region Region Total Homes Passed(1),(2) ...... 2,131,900 375,400 446,800 598,000 215,700 3,767,800 Cable Subscribers(1) ...... 712,600 257,200 163,800 226,600 63,300 1,423,500 Cable Penetration(3) ...... 33.4% 68.5% 36.7% 37.9% 29.3% 37.8% Internet Subscribers(1) . . . . 301,300 5,700 18,500 14,900 4,400 344,800 Internet Penetration(4) . . . . . 42.3% 2.2% 11.3% 6.6% 7.0% 24.0%

(1) Numbers rounded to the nearest hundred.

(2) Homes passed by cable networks.

(3) Cable subscribers as a percentage of total homes passed.

(4) Internet subscribers as a percentage of total cable subscribers.

The following table shows subscriber and related data for Multicanal’s five operating regions in Argentina as of 30 June 2007, and is based on information published by third parties and our internally generated market information:

Buenos Aires Province Central Litoral Southern AMBA Region Region Region Region Region Total Homes Passed(1),(2) ...... 2,719,300 70,900 342,500 442,700 601,100 4,176,500 Cable Subscribers(1) ...... 588,500 43,400 133,600 158,200 223,100 1,146,800 Cable Penetration(3) ...... 21.6% 61.2% 39.0% 35.7% 37.1% 27.5% Internet Subscribers(1),(4) . . 101,500 700 14,900 22,000 42,900 182,000 Internet Penetration(5) . . . . . 17.2% 1.6% 11.2% 13.9% 19.2% 15.9%

(1) Numbers provided to the nearest hundred.

(2) Homes passed by cable networks.

(3) Cable subscribers as a percentage of total homes passed.

(4) Does not include Prima.

(5) Internet subscribers as a percentage of total cable subscribers.

We acquired Holding Teledigital through Cablevisión on 26 September 2006. Holding Teledigital owns cable television systems in the provinces of La Pampa, Neuquén, Río Negro, Buenos Aires, Córdoba, Corrientes, Entre Ríos and Santa Fé.

As of 30 June 2007, Holding Teledigital’s networks passed approximately 460,500 homes and Teledigital served approximately 175,700 subscribers. Of all homes passed by Holding Teledigital’s network, 3% were passed by its two-way 750 MHz bandwidth network.

Prima became a subsidiary of Multicanal in September 2006, and provides primarily Internet connectivity through our cable network as well as those of third parties. In addition, Prima provides telephony services over the Internet (also known as “voice-over-Internet protocol” or “VoIP”) under the brand Vontel. As of 30 June 2007, Prima had 122,200 Internet subscribers and our brand Vontel had 7,200 telephony subscribers.

45 Summary of Ownership Changes and Recent Acquisitions

On 20 July 2006, our subsidiary Multicanal completed the restructuring of its financial indebtedness pursuant to the terms of the Multicanal APE. The Multicanal APE provided, among other things, for the exchange of approximately U.S.$182.0 million of outstanding debt for shares representing approximately 35% of Multicanal’s total capital and the discharge of approximately U.S.$125.0 million of outstanding debt for a cash payment of U.S.$37.5 million. After giving effect to the Multicanal APE, Multicanal’s outstanding financial debt decreased from U.S.$526.4 million to U.S.$223.3 million and the Company’s ownership interest in Multicanal was diluted to 65%. The consummation of Multicanal’s APE generated a non-recurrent gain before tax of Ps.1,493.3 million (including Ps.246.8 million attributable to the dilution for the benefit of existing shareholders — the Company and AGEA — resulting from the exchange of debt for shares described above).

On 26 September 2006, through a series of related transactions, the Company and Fintech increased their holdings of Cablevisión’s share of capital to approximately 60% and 40%, respectively. On the same date, Cablevisión acquired 100% of the capital stock of Holding Teledigital from one of the prior shareholders of Cablevisión, and 98.5% of the shares of common stock of Multicanal, from the Company and Fintech. Immediately prior to Cablevisión’s acquisition of Multicanal, Multicanal acquired 100% of the capital stock of Prima from Prima Internacional. On 22 December 2006, Multicanal transferred 3% of Prima to our subsidiary Univent’s. In March 2007, Cablevisión acquired this 3% stake in Prima from Univent’s. On 26 September 2006, Cablevisión paid approximately U.S.$70 million in cash for Holding Teledigital and agreed to pay Ps.824.8 million for the capital stock of Multicanal it acquired from the Company, AGEA and Fintech. Additionally, Cablevisión made irrevocable capital contributions to Holding Teledigital of approximately Ps.76.4 million to permit repayment of outstanding bank debt and seller financing debt of Holding Teledigital. On 26 September 2006, Multicanal agreed to pay Prima Internacional Ps.77.5 million for the capital stock of Prima. The chart set forth below reflects our ownership in Cablevisión as of the date of this Offering Circular:

GRUPO CLARÍN S.A.

100% 95,28%

Vistone LLC GC Minor S.A.

11% 95% 39% 100% 5%

VLG Argentina CVB Holding Compañía LLC LLC Latinoamericana de Cable S.A.

51,3% 3,99% Southel Holdings S.A.

28,69% 1,66% Cablevisión S.A.

46 The Cablevisión Shareholders Agreement

On 26 September 2006, the Company, Fintech, VLG Argentina LLC, Vistone LLC, CVB Holding LLC and Southtel Holdings S.A. entered into a shareholders agreement relating to Cablevisión (the “Cablevisión Shareholders Agreement”).

Under the Cablevisión Shareholders Agreement, each shareholder holding 10% or more of Cablevisión’s shares has the right to nominate one member for election to Cablevisión’s board of directors for every 10% of Cablevisión’s shares owned, provided that a shareholder holding more than 50% of Cablevisión’s shares shall nominate a majority of the members of the board of directors. The board of directors shall act by a majority of directors attending the meeting, except with regard to certain matters, which, unless Cablevisión’s executive committee has approved the action unani- mously, shall not be approved without the vote of one or more of the directors nominated by each of the Company, Fintech and any third party entitled to nominate a director following a transfer of shares in compliance with the agreement.

The Cablevisión Shareholders Agreement requires the shareholders of Cablevisión to cause the board of directors to establish an executive committee comprised of the chief executive officer of Cablevisión, a member of the board designated by Fintech and a member of the board designated by the Company. The executive committee must meet at least twice a month, and management is required to submit certain matters to the executive committee, including the strategic plan, the budget and contracts exceeding U.S.$2 million.

Each shareholder holding at least 20% of the shares of Cablevisión also has the right, at any time following the first anniversary of the agreement, to require Cablevisión, subject to certain conditions, to undertake a public offering in Argentina of such shareholder’s shares. In addition, each shareholder owning more than 20% of Cablevisión’s outstanding shares, until the five-year anniversary of the agreement, has customary piggyback rights with respect to any public offering of shares undertaken by Cablevisión in Argentina.

In addition, the Cablevisión Shareholders Agreement provides for certain tag-along rights and rights of first refusal, except for transfers of shares to affiliates and certain other permitted transferees.

The Cablevisión Shareholders Agreement requires that any contracts between Cablevisión and a shareholder of Cablevisión, or affiliates of such shareholder, must be conducted in terms no less favourable to Cablevisión than arms length terms.

Network Architecture

Cablevisión’s network’s backbone or “trunk” portion in the AMBA Region consists entirely of fibre optic cable. Video and data signals are transmitted from the main headend to the hubs that provide services to specific areas. Each hub concentrates and transmits the video and data signals it receives via fibre optic cable to optical nodes. At each node the signals are converted from optic to electric codes and are then re-transmitted via coaxial cable to a distribution node. From there, the signal is transmitted to the subscriber’s domicile along a coaxial or “drop” cable. Cablevisión has deployed a similar network architecture in Córdoba and Salta, in the Central Region and in the cities of Santa Fé, Paraná and Rosario in the Litoral Region.

Cablevisión’s cable networks outside of the areas mentioned above are constructed with coaxial cable architecture. Cablevisión intends to expand the fibre optic cables and other technological improvements that currently exist in the AMBA Region, into the other operational regions as part of our long-term plan to expand and improve our network capacity.

Multicanal has relied on a fibre to service area (“FSA”) design to upgrade or rebuild its network because it permits bi-directional transmission. FSA network architecture is a design of cable network

47 fibre trunks and coaxial cable extensions that connects programming headends to the distribution network and allows signals to flow both to and from headends and the distribution network. Multicanal’s FSA network architecture is designed to be used as a platform for additional services and products, including modems for Internet access and telephony services. It allows Multicanal to monitor its networks, offer approximately 80 analogue signals and approximately 100 digital signals (assuming an 8-to-1 compression ratio), and offer additional premium and pay-per-view services. As a result of improvements made in 2005, Multicanal increased network coverage in order to be in a position to provide high-speed Internet access to more than 670,000 households, and enhanced the reliability of the networks that will not be upgraded in the short- and medium- term to permit high-speed Internet access. As part of our efforts to integrate the operations of Cablevisión with those of Multicanal, Holding Teledigital and Prima, we intend to take steps to unify the cable network, eliminate overlaps and streamline technical support efforts.

Programming and Services Cablevisión and Multicanal apply significant resources to obtaining a wide variety of programming options in order to appeal to potential new subscribers and maintain existing subscribers. For this purpose, our cable operators purchase basic and premium programming from more than 25 programming providers, as well as all broadcast television channels of Buenos Aires. We have a controlling stake in ARTEAR and own a 50% interest in TRISA and TSC, all of which are important programming suppliers in Argentina, including to our cable operators. Several programming suppliers agreed to volume discount pricing structures because of the growth and market share of our cable operators. Following Argentina’s economic crisis in 2001/2002, Cablevisión and Multicanal renegotiated the terms of a majority of their programming contracts to provide for Peso-denominated pricing formulas generally linked to the number of subscribers and eliminating minimum fee requirements. However terms were generally shortened and price adjustment provisions intended to transfer to the programming companies the benefit of increases in the monthly fee for basic cable television services were included. The new contracts also provided for automatic termination upon the occurrence of major macroeconomic disruptions. Total programming costs are largely comprised of costs of programming in key categories such as sports and movie signals. Programming costs for sports signals (including payments made to TRISA and TSC) account for approximately 50% of total programming costs. Programming costs for movie signals account for approximately 30% of total programming costs. Basic Service. Cablevisión offers subscribers a basic service plan including between 32 and 90 basic programming signals, depending on the capacity of the local networks. As of 30 June 2007, Cablevisión’s basic service price was Ps.75.50 per month, including Value Added Tax (“VAT”). The amount charged varies according to the system to which each customer is subscribed, and depends mainly on the number of signals offered under each system. Similarly, as of 30 June 2007, Multicanal offers subscribers a basic service plan including between 32 and 90 programming signals depending on the capacity of the local networks. As of 30 June 2007, Multicanal charged a monthly fee ranging from Ps.37.50 to Ps.75.90 per month, including VAT. Premium Services. By paying an additional fee, Cablevisión subscribers may receive premium packages that include soccer/football broadcasts, additional movie signals, adult programming, additional sports broadcasting or a combination of the foregoing. The monthly rates for premium services depend on the package of choice and the operational region in which the subscriber is located. To receive the service, premium subscribers must rent an addressable set top unit from Cablevisión. As of 30 June 2007, approximately 132,000 subscribers in all of Cablevisión’s operational regions were subscribed to at least one of its premium services, resulting in a penetration rate of

48 approximately 9.3% of all subscribers to its basic cable service. Approximately half of its premium subscribers are located in the AMBA Region. To receive premium programming, Multicanal subscribers also pay an incremental monthly fee. Currently Multicanal offers premium services in all regions in which it operates. Its premium services include programming dedicated to live soccer/football, movies and adult programming. To receive the service, premium subscribers must either rent or purchase from Multicanal an addressable set top unit. Approximately 136,500 set tops are currently in use by Multicanal subscribers. As of 30 June 2007, the penetration rate of premium subscribers over Multicanal’s basic subscribers was approximately 11.9%. In April 2007, our cable operators began deploying digital boxes in the AMBA Region to increase our premium offerings and to limit programming piracy.

Interactive Services and Internet Access As of 30 June 2007 we had 657,200 Internet subscribers, of which 536,700 were Internet broadband subscribers relying on cable modem connectivity, 78,100 relied on ADSL connectivity and 39,700 on dial-up and 2,700 were served with other technologies. Cablevisión has offered high-speed cable modem access to the Internet through its 750 MHz networks under the FiberTel brand since September 1997. Cablevisión’s Internet connectivity products are specially designed for the needs of each residential or corporate user, with specific solutions such as virtual private network services, or “VPN”, traditional Internet protocol (“IP”) links and corporate products that include additional services. Internet access through high-speed cable modem is only available in bi-directional cable systems with 750 MHz bandwidth. In the AMBA Region, more than 67% of homes passed by Cablevisión and 55% of homes passed by Multicanal are “Internet ready”. As of 30 June 2007, Cablevisión had approximately 342,100 subscribers to its FiberTel high- speed Internet service and approximately 2,700 with other technologies. Cablevisión provides its FiberTel’s services primarily in the AMBA Region, where approximately 298,600 of its high-speed Internet subscribers are located. Through FiberTel, Cablevisión also provides high-speed Internet services in the cities of La Plata, Córdoba, Rosario, Campana, Río Cuarto, Posadas, Salta, Olavarría, Pergamino, Bahía Blanca and Santa Fé. Multicanal’s connectivity products comprise residential products under the brandname “Flash”, including telephony under the Vontel brand, through Prima. As of 30 June 2007 Multicanal had approximately 185,400 Internet subscribers. Multicanal offers broadband services in the AMBA Region, the cities of La Plata, Córdoba, Mar del Plata, Rosario, Santa Fé and in Paraguay. Holding Teledigital provided cable modem services to 4,700 subscribers as of 30 June 2007. Prima offers Internet connectivity through Multicanal’s cable networks as well as dial-up, ADSL and telephony. As of 30 June 2007, Prima provided connectivity relying on dial-up or ADSL systems to 117,800 subscribers including cable modem services to 4,400 corporate clients through its brand name “Datamarkets”.

International Operations Uruguay. Through Telemás S.A. (“Telemás”), a subsidiary of Multicanal, we provide programming and management services to ultra high frequency (“UHF”) systems and to seven cable operators in Uruguay for a fee relating to programming and management services. As of 30 June 2007, Multicanal offered services to approximately 80,000 subscribers in Uruguay and passed approximately 100,400 homes. In the cities of Montevideo and Canelones, Telemás offers fifteen signals and competes with other cable systems offering more than fifty signals. There is no exclusivity. We cannot

49 assure you that the UHF system will be able to compete with the cable systems successfully in the future. Paraguay. Through Multicanal, we own: • 62.93% of the capital stock of Cablevisión Comunicaciones S.A.E.C.A., which provides cable television services in Asunción and surrounding areas; • 62.73% of the capital stock of Televisión Dirigida S.A.E.C.A., which provides UHF services in Paraguay and, together with Cablevisión Comunicaciones S.A.E.C.A., served approximately 77,900 subscribers in the city of Asunción and surrounding areas as of 30 June 2007; and • 62.93% of the capital stock of Consorcio Multipunto Multicanal S.A, which provides Internet services to approximately 3,400 subscribers in the city of Asunción and surrounding areas. Since 1 September 2004, we have operated in Paraguay under the Multicanal brand name. The following table is based on information published by third parties and our internally generated market information and sets forth certain information relating to our cable television systems in Paraguay and Uruguay as of 30 June 2007: Paraguay Uruguay Homes Passed(1),(2) ...... 104,800 100,400 Cable Subscribers(1) ...... 77,900 80,000 Internet Subscribers(1)...... 3,400 —

(1) Numbers rounded to nearest hundred. (2) Homes passed by our cable networks. The number of homes passed is calculated based on figures generated internally, excluding UHF.

Printing and Publishing Out of our total sales of Ps.2.0 billion in the first six months of 2007, our printing and publishing segment accounted for Ps.524.4 million, or 26.3% of total sales. The principal sources of revenue for this segment are: • Advertising. We sell advertising spaces primarily in our two newspapers, Diario Clarín (including the magazine Viva) and Olé. Diario Clarín is the leading newspaper in terms of advertising of display and classified ads. Substantially all of our printed advertising revenues derive from advertising published in Diario Clarín. Diario Clarín’s advertising revenues peaked in 1997, at Ps.347.4 million and decreased during the 2001/2002 economic crisis and following the devaluation of the Argentine Peso, to Ps.196.3 million in 2002. Since then advertising revenues have increased steadily, reaching Ps.248.2 million in 2003, Ps.365.9 million in 2004, Ps.444.7 million in 2005 and Ps.532.0 million in 2006. Olé contributed advertising revenues of Ps.3.9 million in 2002, Ps.5.2 million in 2003, Ps.5.8 million in 2004, Ps.8.1 million in 2005 and Ps.10.8 million in 2006. Advertising is the main source of income of our printing and publishing segment, and represented 54% of the total sales of the segment in 2006. From 2002 to 2006, Diario Clarín’s share of total market spend in advertising in the printing and publishing segment remained almost constant at 58% to 61% in the AMBA Region. Our advertising strategy takes advantage of our diversified media portfolio and is based on integration of our brands and readership across segments, in particular through our paper- based media and our digital content. Our multi-media strategy and leadership position in both paper-based media and the Internet represent an advantage over our competitors in attracting advertisers. • Circulation Revenues. Diario Clarín is the leading newspaper in Argentina in terms of circulation. According to the statistics published by IVC (adjusted by AGEA in order to include

50 national newspapers that do not verify their circulation, based on figures collected by the Asociación Argentina de Agentes Distribuidores de Publicaciones, the Argentine Association of Publication Distributors (“AAADP”)) as of 31 December 2006, Diario Clarín and Olé had a market share of approximately 50% and 6% respectively in the AMBA Region. Revenues from circulation of newspapers and other publications dropped during the 2001/2002 economic crisis from approximately Ps.196.9 million in 2000 to Ps.192.5 million in 2002. Circulation revenues began to recover as the Argentine economy grew, totalling Ps.198.1 million in 2003, Ps.227.5 million in 2004, Ps.236.8 million in 2005 and Ps.266.8 million in 2006. Circulation accounted for 39% of our printing and publishing segment’s total net revenues in 2002, 36% in 2003, 31% in 2004, 29% in 2005 and 27% in 2006. The cover price of the Sunday edition of Diario Clarín (excluding optionals) has increased from Ps2.80 in January 2004 to Ps.4.00 in March 2007. The cover price of the Monday edition of Olé has increased from Ps.1.30 in January 2004 to Ps.1.70 in June 2007.

• Contract Printing Services. Artes Gráficas Rioplatense S.A. (“AGR”), our commercial printer, meets the printing needs of our other subsidiaries and produces inserts, leaflets and other printing contracts for third parties.

• Production and Sale of Paper. We also derive income from the production and sale of newsprint for newspapers, through our 43% indirect participation in Papel Prensa.

Diario Clarín

Diario Clarín is the leading newspaper in Argentina, and is the newspaper with the highest circulation in Latin America and the second largest circulation in the Spanish speaking world. Diario Clarín covers local, national and international events and includes daily sections on politics, the economy, national and international affairs, sports, arts and entertainment and social events, in addition to its special weekly sections.

The driving force of Diario Clarín’s editorial policy is to offer news and analysis through an easily accessible format that includes text, photographs and graphics (infographics). As of December 2006, Diario Clarín had 482 editors, reporters and photographers in its staff, (in addition to 125 interns and 620 freelancers). Diario Clarín covers international news with correspondents in London, Madrid, New York, Rome, Sao Paulo and Washington, among other cities. Diario Clarín also publishes international news syndicated by leading international news agencies and information provided by The New York Times, Le Monde, The Washington Post and Los Angeles Times.

Circulation and Market Share. According to IVC (as adjusted by AGEA to account for newspapers not covered by IVC and which could, therefore, distort market share), in 2006, Diario Clarín had a market share of approximately 51% in the AMBA Region and 31.1% nationwide. Our average daily circulation nationwide in 2006 was of approximately 409,000 copies Monday through Sunday and an average of approximately 799,000 copies each Sunday. For the same year, La Nación newspaper (“La Nación”), its closest competitor, had an average daily circulation nationwide of approximately 168,000 copies Monday through Sunday and an average of approximately 261,000 copies each Sunday.

One of Diario Clarín’s principal strengths is that its readership is distributed almost equally across all socio-economic levels. Approximately 27% of Diario Clarín’s readers belong to the ABC1/C2 (upper, upper-middle and middle) segment, 29% belong to the C3 (lower middle) segment, 27% belong to the D1 (upper lower) segment, and 17% belong to the D2/E (lower) segment. This sets Diario Clarín apart as a “multi-target” medium. La Nación, on the other hand, concentrates 49% of its readership in the ABC1/C2 segment, and Crónica and Diario Popular, the next two largest newspapers in the AMBA Region in terms of circulation (excluding our sports daily Olé) concentrate approximately 74% and 76% of their respective readerships in the D1 and D2/E segments.

51 Approximately 80% of all copies of Diario Clarín are sold in the AMBA Region, where Diario Clarín has a market share of 51%. Diario Clarín’s market share is of 20% in the Province of Buenos Aires, 16% in the northeastern part of the country (including Santa Fé), 11% in the central provinces of Córdoba and La Pampa, 7% in Patagonia, and 5% in each of the northwestern region and Cuyo.

Advertising. Diario Clarín’s position as a multi-target medium and its large circulation levels grant it a competitive advantage over other media in attracting advertising investors.

Historically, newspapers have had a significant participation in the total advertising revenues in Argentina. In 2006, newspapers and magazines received approximately 44% of total advertising spending, while television (broadcast and pay) received approximately 30%. These percentages have remained fairly stable since 2002. Our advertising strategy, however, takes advantage of our diversified media portfolio and is based on integration of our brands and readership across segments, in particular through our paper-based media and our digital content. Our products, such as specialised sections for specific audiences, are designed to target segments and cover the readers’ interests while at the same time addressing the specific objectives of our advertising clients.

Diario Clarín’s advertising is grouped into four main categories: display, classified, grouped ads and magazine advertising. Display ads are published in the newspaper’s body (excluding the classified advertising sections). Classified advertising is published daily in the classifieds supplement and is divided into various sections, notably: employment, automobiles, real estate and opportunities. Grouped advertising consists of display ads, mainly relating to employment searches and public auctions. Magazine advertisement includes display advertising in our Sunday magazine, Viva and, to a lesser extent, in our other magazines: Elle, Genios and Jardín de Genios.

Of Diario Clarín’s total advertising pages in 2006, 18,568 (46%) were classified ads; 17,513 (43%) were display ads; 4,054 (10%) were advertising in magazines and 418 (1%) were grouped ads.

Diario Clarín sells advertising directly to major companies and governmental agencies and indirectly to other clients through advertising agencies and through a network of independent points of sale (“receiver agencies”). Receiver agencies may be grouped in networks of several independent agencies each. Diario Clarín also offers an on-line service to place classified advertisements through 118 receiver agencies, 62 of which are located in the City of Buenos Aires, 53 distributed in the remainder of the AMBA Region and three in other parts of the country. These receiver agencies are linked to AGEA’s computer network, which permits advertisements sold to be processed immediately.

We give the receiver agencies discounts of up to 15% for ads sold through them, of up to 6% for the contracted advertising volume and up to an additional 4% bonus based on the image and productivity of the agency. Agencies receive a 15% discount and up to an additional 10% discount for volume. In addition, we offer advertising plans and programs designed to attract new advertisers to use graphics as a primary tool to reach consumers. These plans are designed as an incentive for specific advertisers to signal their ads through us and include additional specific discounts.

We are currently working on the development of a new platform for on-line classifieds to complement our paper-based classifieds advertising that will allow us to integrate and centralise in a single “hub” the reception of all classified advertisement for the Company (receiver agencies for newspaper classifieds, mobile, on-line and telephone access points), and their publication in all media platforms.

We operate under a strict credit policy with our advertisers, experiencing a low level of clients in arrears. We grant each advertiser credit to sell advertising in our print media up to certain amounts per month. Money collected by advertisers is paid to AGEA within 12 days of the issuance of the monthly invoice (14 days in the case of classified advertising). AGEA requires that all of its advertising agencies, receiver agencies and direct advertisers that are granted credit to sell advertisement, secure payment of at least 70% of the monthly credit cap, generally by means of a mortgage or bank guaranty.

52 Diario Clarín had an advertising market share in the AMBA Region of approximately 58% in 2002 and 2003, and 61% from 2004 to 2006. The advertising market share of its closest competitor, La Nación, fluctuated between 24% and 26% in the same periods. No single customer accounted for more than 3.7% of our total advertising sales in 2006. The 10 largest advertisers accounted for approximately 20% of our total 2006 advertising sales and the 20 largest advertisers accounted for approximately 28.2% of our total 2006 advertising sales. Distribution Network. Until 2000, the sale and distribution of newspapers and magazines was regulated by law, with special protections, territorial limitations and other rights for licensed distributors that restricted access to the distribution market. The share of revenues between publisher, distributor and final seller was also subject to regulation, with the publisher taking 50% of the cover price, the distributor 10% and the final seller 40%. Since the sale and distribution market was deregulated our revenue share has increased to 60% of the cover price, with distributors taking 8% and sellers the remaining 32%. We currently operate through a network of 32 independent distributors in the AMBA Region, who sell Diario Clarín through 6,000 points of sale. We invoice such distributors for all delivered copies and they, in turn, sell those copies to the final sellers. Distributors and sellers that existed prior to 2000 are registered with the Ministry of Labour and are entitled, among other things, to return all unsold copies to the publisher and receive the corresponding reimbursement. Additional Products and Supplements. Together with Diario Clarín, we offer special supplements and publications that help increase circulation and capture different reader and advertising niches. Some of these publications are distributed with the newspaper at no cost, while others may be purchased at the readers’ option for an additional price. Supplements are usually offered on a weekly basis, on different days of the week to promote circulation. Our children’s magazine, Genios, has become the magazine with the largest circulation in Argentina of its kind, growing from 75,960 copies per week sold in 2002 (the lowest level after the economic crisis) to 107,535 per week in 2006. In 2005, Genios had a 56% market share and its competitor, Billiken, a 44% market share. In 2006, Genios increased its market share to 64%, reducing the market share of its competitor to 36%. In the past, we have also sold collectible book series distributed with Diario Clarín bi-weekly. Collectible books generally covered topics in history, geography, the environment or consisted of illustrated dictionaries. Collectible literature books included Fernando Savater’s Siete Pecados Capitales, a book containing Cien Cartas Memorables, a collection of letters by various authors, and books by Julio Cortázar, Pablo Neruda and Gabriel García Márquez, the series Argentina Pueblo a Pueblo and Tango de Colección, a tango CD collection that sold approximately 900,000 copies, among others. We also publish district supplements with local news and information that target specific zones of the AMBA Region where the newspaper is distributed. Production. AGEA operates its own newspaper printing plant (the “Zepita plant”) in the City of Buenos Aires. Diario Clarín, Olé and Diario La Razón are printed in the Zepita plant. The printing facilities have an area of 34,520 square meters. The plant has six state-of-the-art “computer to plate” machines with a capacity to engrave up to 700 sheets per hour. Once the edited pages are engraved on the aluminium sheets, they are transmitted to six offset Goss Metrocolor rotary presses. Each rotary press is capable of producing 70,000 copies per hour of a 96-page newspaper in tabloid format, even though the plant generally operates to an average of 40,000-50,000 copies per hour and machine without interruptions. The black and white printing of Diario Clarín, Olé, classifieds and other newspaper supplements was replaced by colour printing and added to the production of colour printing of classifieds, six weekly district supplements, Diario La Razón, Pymes, Arq and Revista Ñ.

53 Olé In 1996 we launched Olé, the first sports daily of Argentina, to offer a wider and more complete coverage of all sports events, with a special focus on soccer/football. Olé appeals to a younger readership, with 63% of its readers between the ages of 15 and 29, compared to 55% of Diario Clarín’s readers between the ages of 30 and 59. The staff in the pressroom of Olé is completely independent from that of Diario Clarín and is organised with a multifunction criterion, team work and flexibility. As of 31 December 2006, Olé had 109 editors, journalists, photographers and designers, 39 interns and 11 freelancers. Although the press-room staff of Olé is highly independent from that of Diario Clarín, the two newspapers take advantage of economies of scale as they share the personnel and system of the commercial, marketing, production, distribution and management areas. Olé’s daily average circulation (Monday through Sunday) in 2003 was of approximately 47,000 copies, representing a 6.8% growth compared to the approximately 44,000 copies sold in 2002. In 2004, circulation grew by 8.5%, to approximately 51,000 copies. In 2005, circulation fell 2.0% to approximately 50,000, but increased again in 2006 by 12.0% to 56,000 copies. On days after special sports events (such as soccer/football cup finals or particularly eventful matches) circulation has reached 225,000 copies sold. Based on the information supplied by IVC (adjusted by AGEA in order to include national newspapers that do not verify their circulation, based on figures collected by the AAADP) Olé is the fifth newspaper in the AMBA Region, with a market participation of approximately 6.0% as of 31 December 2006. Olé’s advertising is heavily focused on products and services directly relating to sports, and more recently, automobiles, whose potential purchasers have demographic profiles that correspond with those of readers of Olé. Olé had a 3.1% share of the advertising spending in Buenos Aires in 2006 (in terms of advertising pages). Olé’s advertising revenues were approximately Ps.5.2 million in 2003, Ps.5.8 million in 2004, Ps.8.1 million in 2005 and Ps.10.8 million in 2006. Olé also offers additional products such as magazines, collectible series and other supplements.

Other Newspapers In 2001, we acquired 75% of the capital stock of La Razón, the publisher of Diario La Razón, an evening newspaper established in 1895. Commencing in 1999, Diario La Razón is distributed for free in subways, buses, bars, highway tollbooths, malls, supermarkets and other outlets. In 2005, AGEA acquired the remaining 25% of the capital stock of La Razón, and in December 2006, the shareholders of La Razón approved its merger with AGEA with effect as of 1 January 2007. This merger has not been registered with the IGJ to date. All our revenues from Diario La Razón, which has an average circulation of approximately 110,000 copies per day, Monday through Friday, and 50,000 copies on Saturdays, derive from advertising. Diario La Razón has 20 to 28 pages, depending on advertising sold. Diario La Razón Has Low Production Costs. A team of 18 journalists are responsible for the editorial content and page layout. Its news sources, as well as overhead expenses, are shared with Diario Clarín and Olé, although advertising sales is in the hands of an independent team of 14 people. Until 28 August 2007, we held 33.3% of the capital stock of Compañía Inversora en Medios de Comunicación (CIMECO) S.A. (“CIMECO”) through AGEA. On 28 August 2007, AGEA and AGR, on the one hand, and S.A. La Nación on the other each completed the acquisition from Corporación de Medios Internacionales de Prensa, S.A. (“COMIP”) of an additional 1/6 interest in CIMECO, bringing each of their total interest in CIMECO to 50%. As a result of COMIP’s sale of its equity interest in CIMECO, the Company, through AGEA and AGR, and S.A. La Nación remain the only shareholders of CIMECO, with a 50% interest each.

54 CIMECO currently owns 80.0% of Diario Los Andes — Hermanos Calle S.A. and 81.3% of La Voz del Interior S.A. Diario Los Andes is a 124 year-old newspaper published and distributed in the province of Mendoza. It is the fifth regional newspaper in terms of circulation. In 2004 and 2005 its daily average circulation (Monday through Sunday) was of 30,600 and 32,801 copies per day, respectively, with 79,200 and 81,939 copies sold on average on Sundays in each of those years. In 2006, Diario Los Andes had a daily average circulation of 32,965 copies (Monday through Sunday) and sold on average 84,298 copies on Sundays. In 2006, it had a market share of 57.1% in the province of Mendoza. La Voz del Interior is a 103 year-old newspaper published and distributed in the province of Córdoba. It is the largest regional newspaper in terms of circulation. In 2004 and 2005 its daily average circulation (Monday through Sunday) was of 59,151 and 59,873 copies per day, respectively, with 98,576 and 106,468 copies sold on average on Sundays in each of those years. In 2006, La Voz del Interior had a daily average circulation of 61,636 copies (Monday through Sunday) and sold on average 108,719 copies on Sundays. In 2006, it had a market share of 48.7% in the province of Córdoba. In 2004, La Voz del Interior S.A. launched “Día a Día”, a low-priced newspaper, to capture additional readers not reached by its main newspaper. In 2006 it was the second largest newspaper in the province of Córdoba and the tenth largest regional newspaper in terms of circulation, with an average daily circulation of 16,691 copies. On 28 August 2007, CIMECO acquired a 12% interest in Papel Prensa from S.A. La Nación (see “— Paper Mill”). AGEA and S.A. La Nación entered into certain arrangements regarding S.A. La Nación’s interest in CIMECO. Pursuant to these arrangements, AGEA may be required to make payments of approximately U.S.$64 million at any time between 1 January 2008 and 31 December 2009 to acquire S.A. La Nación’s 50% interest in CIMECO.

Book Publishing We also publish school textbooks through our publisher Tinta Fresca. According to data from the Ministry of Education, Science and Technology, approximately 9.4 million children were enrolled in regular educational institutions (kindergarten through high school) in 2003, with an average of 1.26 new books purchased per student, per year. According to estimates calculated by distributors, the current textbook market in Argentina, measured in number of copies sold, is of approximately 10.7 million copies. In 2007, Tinta Fresca and Mexican publishing group Grupo Milenio launched Contenidos Estudiantiles Mexicanos S.A., a company that will print and distribute school textbooks in Mexico. According to the Mexican National Chamber of the Publishing Industry (CANIEM), the current textbook market in Mexico, measured in number of copies sold, is of approximately 94 million copies, with an average of 4.7 new books purchased per student, per year. In 2005, Tinta Fresca published 27 different books in Spanish for grades 1 to 9, selling approximately 390,000 copies. In 2006, Tinta Fresca expanded the number of books published to 41, including books for the high school level and English language books. Tinta Fresca was the sixth largest player in the market in 2006, with approximately 500,000 copies sold and a 10% market share. In 2007, Tinta Fresca expanded its offer to 91 different titles, with a particular focus on expanding our high school level publications. In the first six months of 2007, Tinta Fresca sold 497,000 books. Tinta Fresca promotes its books through a sales force of 278 persons, including supervisors, temporary and permanent promoting staff and sales personnel hired by distributors outside of the AMBA Region. In 2006 there were 10 supervisors in the AMBA Region and 11 in the rest of the country, overseeing the work of 53 permanent and 129 temporary sales personnel. Tinta Fresca’s

55 sales force visit approximately 120,000 teachers during the school season. The books are sold out of 239 points of sale, including distributors, wholesalers and bookstores.

Printing

AGR, a subsidiary of AGEA, prints Viva Magazine, most of our collectible supplements, as well as supermarket leaflets, other magazines and books for third parties. AGR was created in 1974 as a back-up plant to meet the production needs of Diario Clarín and has progressively established itself as a printing company that provides services primarily to third parties. It has a 28% share in the internal market of commercial leaflets for supermarkets.

One of AGR’s objectives is to continue to increase the percentage of its sales to unrelated third- party purchasers. In 2002, approximately 40% of AGR’s total sales of Ps.67.1 million were to Grupo Clarín affiliates and 60% to unrelated parties. In 2006, sales were of Ps.148.6 million, with sales to Grupo Clarín affiliates representing approximately 34% of total sales while sales to unrelated parties represented approximately 66%.

Multi-listing

Through Oportunidades S.A., a wholly owned subsidiary of AGEA, we offer multi-listing services in the AMBA Region to a network of independent real estate agencies that account for approximately 80% of the real estate market. Relying on our software, real estate agencies have access to virtually all of the real estate offerings in the Greater AMBA Region, with details of location, size, special features, price, history and number of ads placed in all media with respect to any given property.

Although Oportunidades S.A.’s contribution to our revenues is not significant, it provides strategic information that complements our real estate classified advertising business.

Paper Mill

Through AGEA and CIMECO, we own 43% of the capital stock of Papel Prensa, a newsprint producer that in 2006 supplied approximately 90% of the newsprint needs of AGEA. The shareholders of Papel Prensa are AGEA (37%), the Argentine federal government (27.5%), S.A. La Nación (22.5%), CIMECO (12%) and others (1%). CIMECO acquired its 12% interest in Papel Prensa from S.A. La Nación on 28 August 2007. On 24 September 2007, the acquisition was approved by the remaining shareholders of Papel Prensa in accordance with Papel Prensa’s bylaws. Papel Prensa constitutes a key competitive advantage for our printing and publishing business in that it secures the supply of one of its main raw materials.

Papel Prensa’s plant, located in the Province of Buenos Aires, opened in 1978. It is the first company wholly owned by Argentine capital dedicated to the production of newsprint. It supplies approximately 70% of the paper demand of national newspapers, and its production in 2006 was approximately 167.5 million tons. The remaining 30% of the demand for newsprint paper is satisfied by imports from Chile (17%), Papelera de Tucumán, a national newsprint paper producer (6%), imports from Russia (4%), imports from the United States (2%) and other imports (1%).

The plant of Papel Prensa is currently operating at practically full capacity. In 2006 it closed for 10 days for major maintenance and upgrading that caused a production decline of 1.7% compared to 2005. An 18-day shutdown for major maintenance and upgrading is scheduled for 2008 as part of a medium-term plan to increase production levels by approximately 17% by 2010.

Approximately 30% of the wood needed for the production process of Papel Prensa is supplied by its own poplar and willow plantations. Out of Papel Prensa’s total sales, approximately 52% were to AGEA and AGR, 24% to S.A. La Nación, 3% to CIMECO and 21% to other customers.

56 Broadcasting and Programming In the first six months of 2007, our broadcasting and programming segment had revenues for Ps.354.9 million (including sales to our other business segments). The main sources of revenues for this segment are broadcast television advertising, sales of broadcast television programming and radio advertising, which accounted for approximately Ps.159.4 million, Ps.19.6 million and Ps.18.7 million, respectively.

Broadcast Television Our subsidiary ARTEAR holds the license to broadcast Canal 13, with nationwide coverage through other networks and cable stations. ARTEAR also holds controlling stakes in three broadcast television stations in Córdoba (Telecor), Bahía Blanca (Telba) and Bariloche (Bariloche TV Río Negro), which broadcast the Canal 13 signal and receive support from ARTEAR for local programming. ARTEAR also participates in a joint venture with the government of the province of Rio Negro for the administration of a state-owned television channel in that province. Each local network includes national and local advertising. Additionally, ARTEAR has programming arrangements with nine broadcast television stations in different cities of Argentina. These stations buy programming from ARTEAR in accordance with Decree No. 1771/91, sell their own advertising and pay variable fees per purchased program. Canal 13. Canal 13 is the leading broadcast television channel in Argentina in terms of advertising share, prime time audience share and overall audience share. The license to broadcast Canal 13 was first awarded in concession to ARTEAR in 1989 for a term of fifteen years, with an option to extend such concession for an additional 10-year period. Upon expiration of the extension period, the concession expires, and the license is renewed — or granted to a new licensee— after a bidding process in which the original licensee has priority in case of a tie. The expiration date of all broadcasting licenses existing as of 24 May 2005, including the license for Canal 13, was suspended for 10 years, subject to certain conditions. On 24 May 2015, license terms will resume without counting the 10-year suspension towards expiration, subject to certain conditions. See “Industry Regulation — Broadcast, Cable and Satellite Television and Broadcast Radio — Federal Broadcast Regulation”. In 2006, substantially all Argentine households had access to broadcast television. Approxi- mately 54% of those households had access to pay television. Canal 13 reaches an audience of approximately 5.4 million inhabitants in the AMBA Region every day. According to IBOPE, through the cable signal Canal 13 Satelital, Canal 13 is transmitted to approximately 5.2 million pay television subscribers within the AMBA Region as well as in other regions of the country as measured using Tele Report, an audience measurement software. Broadcast television is received free of charge in Argentina, pursuant to the Broadcasting Law. Broadcast television channels and networks derive their revenues mostly from advertising. From 2002 to 2006, Canal 13 ’s share of the free television advertising spend remained relatively stable, fluctuating from 45% in 2002 to 43% in 2003, 39% in 2004, 38% in 2005 and 44% in 2006. We sell advertising primarily through advertising agencies or networks of agencies with which we have standing agreements, or directly to major advertisers. Agreements include an advertising spending commitment from the client, expressed as a gross amount or net of commissions and applicable discounts (e.g. volume discounts), which is then allocated according to a price schedule per show (with different prices for each show) per second. In 2006, prices ranged from Ps.39 per second to Ps.237 per second, in each case net of discount advertising, depending on the time of day and the specific show in which the advertising time was purchased. There is a strong correlation between sale of broadcast television advertising and Argentina’s GDP. Canal 13 ’s advertising sales have increased steadily since 2003 in line with the country’s recovery from the 2001-2002 economic crisis.

57 Canal 13’s programming includes news, local and foreign comedy and drama, game shows, talk shows, sports and films. Its evening news program “Telenoche” is the most awarded and most viewed television news program in Argentina. Canal 13 produces its own programming content and purchases some programming content from affiliates and third parties. Canal 13’s most important provider of locally produced programming other than ARTEAR is Pol- ka Producciones S.A. (“Pol-ka”), in which, as of 30 June 2007, ARTEAR held a 30% interest. Mr. Adrián Suar, a major shareholder of Pol-ka is also programming manager of Canal 13. ARTEAR, as of 30 June 2007, held a 50% interest in Patagonik Film Group S.A. (“Patagonik”), an independent film production company. On 10 July 2007, ARTEAR entered into certain agreements incorporating a third shareholder to Patagonik and as a result ARTEAR’s ownership interest in that company decreased to 33.33%. ARTEAR also holds a 30% interest in Ideas del Sur S.A. (“Ideas del Sur”). Mr. Marcelo Tinelli, a major shareholder of Ideas del Sur is an exclusive artist of Canal 13. His television program ShowMatch is among the highest rated programs of Canal 13 and the Argentine market. ARTEAR supports Ideas del Sur in connection with international sales of television show formats and co- produces content. ARTEAR has executed shareholders agreements relating to Pol-ka and Ideas del Sur, respectively. Among other provisions, such shareholders agreements include share transfer restrictions, corporate governance provisions and a dividend policy. Pursuant to the dividend policy, Pol-ka and Ideas del Sur will only distribute to their shareholders (including ARTEAR) seventy per cent (70%) of the distributable income. Thirty per cent (30%) of the distributable income will be capitalised in the companies. ARTEAR has also executed a shareholders’ agreement relating to Patagonik that includes, among other provisions, share transfer restrictions and corporate governance provisions, such as special majorities in the board of directors meetings that approve dividend payments. ARTEAR owns seven television studios where it produces part of Canal 13’s programming, and a high-tech satellite link centre that broadcasts its signal to repeater stations throughout Argentina. We installed and own the first mobile ground satellite station in the country. We were the first to introduce simultaneous audio programming (SAP) and to convert our entire production library to digital. We were also the first to implement a ghost cancelling system and close captioning. In 1999 we made our first high-definition TV experimental broadcast and are now the first Argentine station to broadcast an entire show recorded with high-definition technology. In 2006, we introduced new technology to our news programming department that allows us to edit and broadcast both standard and high-definition content. We have made substantial investments in energy supplies to minimise risks of energy failures, purchasing an additional 688 KVA generator. We are also creating a fully integrated content network (“UNITY”) where digital content may be edited without physical support and be stored and transmitted to our various studios simultaneously. We continue to invest in high- definition technology.

Content and Programming In addition to Canal 13, ARTEAR produces its own cable television signals: TN Todo Noticias (news), Volver (retro Argentine film classics and shows), Magazine (general interest), Metro (general interest), Multideportes (sports), and represents Canal Rural Satelital S.A. (“Canal Rural”) (agriculture and livestock), which it sells to affiliated cable television companies. ARTEAR holds a 15% interest in Canal Rural. TN, our 24-hour news signal, is the cable signal with the highest audience (measured over 24 hours in residential households) and the most awarded in the market.

Sports Programming Soccer/football is the pre-eminent sport in Argentina. Soccer/football matches lead television ratings, and are broadcasted by substantially all AM radio stations.

58 The sports programming industry in Argentina began in the early 1980s when TyC purchased the rights to produce and distribute soccer/football matches of the leagues organised by the AFA. AFA represents all Argentine competitive soccer/football teams and the national team, and owns the rights to broadcast their respective matches. By 1990, TyC had become one of the largest regional producers of soccer/football programming.

In 1991 we created Inversora de Eventos S.A. (“IESA”), the controlling vehicle for our sports marketing operations. IESA operates its business directly or through joint ventures. IESA is a party to two joint ventures with TyC (50% held by each of IESA and TyC):

• TSC, created in 1991, holds exclusively all TV rights of AFA’s Premier League soccer/football matches for Argentina, and for the rest of the world with respect to certain matches. These rights include broadcast sounds and images of matches in Argentina and abroad, as well as all other rights of use, commercialization and distribution.

• TRISA, created in 1991, holds title to broadcast additional national and international soccer/ football tournaments (national team world cup qualifying matches and friendly matches) as well as other sports such as basketball, tennis, auto racing and boxing. As part of its broadcasting, production and marketing activities TRISA broadcasts sports events through its cable signal “TyC Sports” (which has the largest daily pay television audience between noon and midnight as measured by IBOPE) and “TyC Max” (the sports premium and pay-per-view cable signal of TRISA).

In June 2007, TSC, TRISA and AFA executed a series of related agreements with respect to the programming schedule setting a floor to the aggregate annual fees payable to AFA from August 2007 through August 2014 at Ps. 180 million. These agreements provide, in relation to the First Division “A” matches, that TSC shall pay annual fees to AFA equal to the greater of 50% of TSC’s total revenues for the 12-month period ending in August of each year and Ps.150 million (subject to certain adjustments).

TSC pays license fees directly to AFA, which then distributes the fees among the soccer/football clubs. Payments to AFA represent between 45% and 55% of TSC and TRISA’s combined costs.

As part of its broadcasting, production and marketing activities TRISA:

• sells soccer/football programming such as the weekly show Fútbol de Primera, coproduced by Canal 13 and TyC in the AMBA Region and by IESA and TyC in the rest of the country;

• broadcasts sports events through its cable signal “TyC Sports”, the first dedicated sports cable signal in Argentina. As measured by IBOPE, it is the pay television signal with the largest daily audience between noon and midnight. In 2006, TyC Sports had a cable penetration rate of 78% in Argentina (approximately 4.0 million pay television subscribers) and accounted for 18% of the entire pay television advertising spend;

• broadcasts live sports events through its premium or pay-per-view cable signal “TyC Max”;

• holds and exercises the commercial rights to certain non-AFA soccer/football games;

• co-produces motor racing events with Canal 13 for open-air broadcasting in the AMBA Region, and through TyC Max in the rest of Argentina;

• produces a weekly basketball game in the Argentine national “A” league, sold only to cable operators and broadcast through TyC Max; and

• produces a weekly boxing match sponsored by the Argentine Boxing Federation, sold only to cable operators and broadcast through TyC Max.

59 TRISA Shareholders Agreement IESA and TyC are party to a shareholders agreement relating to TRISA (the “TRISA Sharehold- ers Agreement”). Pursuant to the TRISA Shareholders Agreement, as amended, the board of directors of TRISA shall have six directors and six alternate directors. Each party has the right to appoint three directors and three alternate directors. The president of the board shall be appointed by IESA. The president shall not have a casting vote in case of deadlock. The vice-president of the board shall be appointed and removed by TyC. The directors to be appointed in TRISA’s subsidiaries shall be appointed by IESA and TyC in the same proportion as those appointed in TRISA. If the number of directors in a subsidiary of TRISA is one, such director shall be appointed by IESA and shall always adjust his or her action to the decisions taken by the board of directors of TRISA. If the number of directors is two, one will be appointed by IESA and the other one by TyC. The presence and favourable vote of at least four directors is needed to decide certain relevant matters. Each party shall have the right to submit any proposal to any relevant matter that has not been approved by the board due to the lack of quorum or majority, to an expert evaluation. If the expert’s evaluation is favourable to the proposal made by the proposing party, then the board of directors is entitled to approve such proposal. To approve certain relevant matters, shareholders meetings require the presence and favourable vote of holders of at least 70% of all outstanding capital stock in the case of ordinary meetings in first call and extraordinary meetings in first and second call, or the favourable vote (without minimum quorum requirements) of holders of at least 70% of all outstanding capital stock present at the meeting in the case of ordinary meetings in second call. The chief executive officer of TRISA and special officers subordinated to such chief executive officer are in charge of the management of TRISA and its subsidiaries. The chief executive officer is proposed by IESA and appointed by the board of directors. Pursuant to the TRISA Shareholders Agreement, IESA and TyC shall cause TRISA’s subsidiaries to declare and distribute annual dividends. In addition, IESA and TyC shall cause TRISA to declare and pay annual dividends, subject to compliance with certain indebtedness ratio, reflected in the financial statements of TRISA. In addition, the TRISA Shareholders Agreement provides for certain preferred negotiation rights, tag-along rights and rights of first refusal, except in the case of transfers of shares to subsidiaries under 99.9% ownership of the shareholders and other permitted transferees. Certain rights under the TRISA Shareholders Agreement may not be transferred, such as: (i) tag along rights, (ii) the right of IESA to propose a chief executive officer for TRISA and its subsidiaries, (iii) the rights of the parties to remove managers, (iv) the right of TyC to propose an internal auditor in TRISA, (v) the right of the parties to remove the internal auditor, and (vi) the right of both parties to request the replacement of the external auditor of TRISA and its subsidiaries. We cannot make partial transfers of our shares in TRISA. Under the TRISA Shareholders Agreement, transactions between TRISA and subsidiaries of the parties, companies that own 99.9% of the parties, companies of which the parties own 99.9% or companies under common control of the parties, shall have the approval of a special majority of directors and shall be conducted on an arms-length basis.

TSC Shareholders Agreement IESA and TyC are party to a shareholders agreement relating to TSC (the “TSC Shareholders Agreement”). Pursuant to the TSC Shareholders Agreement, as amended, the board of directors of TSC shall have six directors and six alternate directors. Each party has the right to appoint and remove three directors and three alternate directors. The president of the board shall be appointed and removed by TyC. The president shall not have a casting vote in case of deadlock. The vice- president of the board shall be appointed and removed by IESA. The directors appointed by TSC in

60 TSC’s subsidiaries shall be appointed by IESA and TyC in the same proportion as those appointed in TSC. If the number of directors in a subsidiary is an odd number higher than two, then the majority shall be appointed by TyC. If the number is one, the director shall be appointed by TyC and shall adjust his or her action to the decisions taken by TSC’s board of directors. Board approval is required to decide certain relevant matters. The parties have the right to submit any proposal relating to a relevant matter that has not been approved by the board due to the lack of quorum or majority, to an expert evaluation. If the expert’s evaluation is favourable to the proposal made by the relevant party, then the board of directors shall approve such proposal. The chief executive officer of TSC and special officers subordinated to such chief executive officer are in charge of the management of TSC and its subsidiaries. The chief executive officer is proposed by IESA and appointed by the board of directors. The chief financial officer is proposed by TyC and appointed by the board of directors. Pursuant to the TSC Shareholders Agreement, IESA and TyC shall cause TSC’s subsidiaries to declare and distribute annual dividends. In addition, IESA and TyC shall cause TSC to declare and pay annual dividends, subject to compliance with certain indebtedness ratio, reflected in the financial statements of TSC. In addition, the TSC Shareholders Agreement provides for certain preferred negotiation rights, tag-along rights and rights of first refusal, except in the case of transfers of shares to subsidiaries under 99.9% ownership of the shareholders and other permitted transferees. The shares of TSC can only be transferred as a block. No partial transfers are allowed. Certain rights under the TSC Shareholders Agreement may not be transferred, such as: (i) the right of IESA to propose a Chief Executive Officer for TSC and its subsidiaries, (ii) the right of TyC to propose a Chief Financial Officer for TSC and its subsidiaries (iii) the right of both parties to remove the Chief Financial Officer and the Chief Executive Officer, and (iv) the right of both parties to request the replacement of the external auditor of TSC and its subsidiaries. Under the TSC Shareholders Agreement, transactions between TSC and subsidiaries of the parties, companies that own 99.99% of the parties, companies of which the parties own 99.99% or companies under common control of the parties, shall be conducted on an arms-length basis. Other Sports-Related Operations. Through other subsidiaries of IESA, we participate in other sports-related operations, including the management of the rights to broadcast the games of the national Paraguayan soccer/football league until 2012 through our Paraguayan subsidiary, Tele- deportes Paraguay S.A. and the acquisition and commercialisation of national soccer/football television rights to international events.

Broadcast Radio As Argentina’s most prominent multi-media company, we have acquired interests in two leading broadcast radio stations. We own Radio Mitre, holder of the broadcast radio licenses of Mitre AM 790, a leading AM radio station in existence since 1925, and La 100 (99.9 FM), a leading FM radio station, both of them in Buenos Aires. In July 2006, Radio Mitre expanded its operations to Córdoba, where it launched Córdoba Mitre AM 810. Radio Mitre AM 790 had the second largest audience share in 2006, accounting for average AM radio audience shares of between 18.5% (Monday — Sunday) and 23.5% (Monday — Friday 6 AM to 9 AM). La 100 (99.9 FM) led the FM radio ratings during most of 2006, accounting for an average FM radio audience share of 12.1% in 2006. Córdoba Mitre AM 810, in its first year of life, climbed to second place in Córdoba, with an average audience share of between 22.3% and 30%. Our main source of revenue from broadcast radio is advertising. Radio Mitre AM 790 and La 100 (99.9 FM) accounted for 19% of total advertising spending in radio in 2006.

61 Other Digital Content Since 1996, we have been present in the on-line services and new media market in Argentina through Clarín Global S.A. (“Clarín Global”), a subsidiary of AGEA, and our subsidiary Prima Internacional (since 26 September 2007, denominated Compañía de Medios Digitales (CMD) S.A.), that produce digital content for the Internet and mobile digital platforms. The current network of portals and content of Grupo Clarín is the broadest in Argentina, covering news, entertainment, sports, classified advertisement, e-commerce, dating, digital photography, video, blogs, chatrooms, music, mobile content (ringtones, SMS and games) and a browser under an agreement with Google. The following table shows our available digital content products: Media Content Transactional Content Mobile Content Web 2.0 Clarin.com masoportunidades.com Ubbi SMS VXV.com Ciudad.com Ubbi Música Ubbi Tonos Ubbi Fotos TN.com www.inmuebles.clarin.com Ubbi Games ARTEAR 2.0 ARTEAR www.autos.clarin.com Clarin.com Mobile www.buscador.clarin.com.ar Radio Mitre www.empleos.clarin.com Clarin.com SMS Telenoche Blog La 100 FM buscainmueble.com(1) TN.com MMS Clarin.com Blogs La Razón argenprop.com(1) ciudad.com — Te Busco

(1) Content sites accounted directly by AGEA, in our printing and publishing segment. According to the Argentine Internet Advertising Bureau (“IAB”), as of 30 June 2007, Clarín Global’s and Prima Internacional’s websites received an average of 7.7 million monthly unique visits and 298 million monthly page visits. According to the IAB, five of the ten most visited websites in Argentina (Clarín, Olé, Ciudad, Ubbi and MasOportunidades) are part of our network. Our website, www.Clarín.com, leads the Argentine Internet news media market with an average of 611,000 unique visitors per day, representing a 54% share of all visits to news websites in Argentina in the first six months of 2007. It is the most visited local Argentine website, and the fourth most visited website in Argentina after MSN, Google and Yahoo! Olé.com.ar (average of 264,000 unique visitors per day), LaRazon.com.ar (average of 30,000 unique visitors per day) and Genios.com.ar (average of 30,000 unique visitors per day) complement their printed counterparts and strengthen the Clarín brands. The revenues for digital content are currently derived from three main sources: advertising, e-commerce and classified advertising and sale of mobile content (ringtones and SMS). In the short run we expect these sources to continue their growth trends, particularly due to the natural market expansion and the maintenance or growth of our market share. We expect the expansion of our network of portals and our mobile services will also create new market niches, such as mobile marketing, SEO/SEM or Blackberry mobile systems. In 2006, Clarín Global’s and Prima Internacional’s websites captured approximately 30% of the Internet advertising spending in Argentina, with sales of Ps.15.7 million. Ubbi Tones, a website that sells ringtones for mobile phones, had sales of approximately Ps.8.5 million in 2006 (22% of all estimated ringtone sales), and was second only to Toing.com, which accounted for an estimated 23% of all ringtone sales in 2006. We intend to expand our business in the digital content segment by investing in innovation, focusing on the development of new products and services, digital portfolios and calendars, video and photography platforms and the development of a “classifieds hub” that will centralise classified advertising in a single integrated digital platform that may be accessed from personal computers or

62 mobile technology, or that will serve as a source for the publication of classified advertisement in traditional media. We also intend to develop interactive community websites and new portals and content through partnerships with smaller companies and through a strategy of acquisition and investment throughout Latin America including by: • entering into partnerships with successful international platforms and customizing them for their implementation in Argentina and Latin America; and • developing a new platform for on-line classifieds that will allow us to integrate and centralise in a single “hub” the reception of all classified advertisement for Grupo Clarín (receiver agencies for newspaper classifieds, mobile, on-line and telephone access points), and their publication in all media platforms.

Employees and Labour Relations The following table sets forth the total number of employees and a breakdown of employees (in each case including senior management) by our core segments as of the following dates: 31 December 30 June 2004 2005 2006 2007 Cable Television and Internet Access ...... 3,172 3,582 7,721 7,226 Printing and Publishing ...... 3,700 3,813 3,892 3,872 Broadcasting and Programming ...... 1,242 1,397 1,537 1,572 Other ...... 373 451 529 561 Total number of employees ...... 8,487 9,243 13,679 13,231 Part of the employees of the Company and its subsidiaries are members of the following unions: • the Sindicato Argentino de la Televisión y Servicios Audiovisuales, Interactivos y de Datos, the Argentine Union of Television and Audiovisual, Interactive and Data Services (“SATSAID”) which represents employees of our various subsidiaries in the cable television and Internet access, and the broadcasting and programming segments; and • the Federación Gráfica Bonaerense, the Buenos Aires Graphic Federation, which represents employees of our various subsidiaries in the printing and publishing segment. Our contracts with employees in the cable television industry are generally subject to Collective Bargaining Agreement No. 223/75 with the SATSAID. Our contracts with employees in the broadcast television industry are generally subject to Collective Bargaining Agreement No. 131/75 with the SATSAID. Both agreements are applicable to all the activities of television companies nationwide. Multicanal entered into a separate collective bargaining agreement with SATSAID, amending the collective bargaining agreements described. The amendments to Collective Bargaining Agreement No. 223/75 relating to Multicanal have been approved by the Ministry of Labour. Broadcast television companies that broadcast news are subject to Law No. 12,908, also known as the Estatuto Profesional del Periodista, the Journalist’s Professional Statute, and to Collective Bargaining Agreement No. 124/75 of Broadcast Television Press. Radio announcers are subject to the Radio Announcers’ Collective Bargaining Agreement. The employees of AGEA and AGR are subject to Collective Bargaining Agreement No. 60/89 applicable to the print media industry. This agreement is limited to employees rendering services within the City of Buenos Aires because the union that negotiated the agreement only represented workers of that jurisdiction. In addition, AGEA is subject to Law No. 12,908 in its relations with professional journalists and Law No. 12,921 in its relations with administrative employees. This legislation is applicable nationwide and applies to all journalists and administrative employees of companies rendering news services.

63 Some provincial jurisdictions have local collective bargaining agreements applicable to journalists employed within such jurisdictions and local correspondents, although in most cases local agreements are outdated, no longer reflect current professional practices and are generally not applied. Even though we believe that we have good relations with our labour force and with the corresponding unions, we cannot assure you that such relations will remain on current terms.

Property, Plant and Equipment We are a holding company and substantially all of the property used in the operation of each of our business segments is owned by the subsidiaries acting in such segments. Substantially all of our subsidiaries’ property and equipment are located in Argentina. Cable Television and Internet Access. Our cable operators and Internet service providers own most of the principal fixed assets, which consist of: • cable television operating plants and equipment, including signal receiving devices, such as satellite and terrestrial antennae towers and related equipment; • headends, consisting of associated electronic equipment necessary for the reception and processing of signals; • distribution systems, consisting primarily of coaxial and fiber optic cable; and • customer home drop cables and equipment. Our cable operators’ cable distribution systems are generally attached to utility poles, which they either own or lease from public utilities. In addition some of their distribution systems are located on building rooftops under arrangements with the owners of the buildings, or are located in underground ducts under lease arrangements with local subway authorities. Cablevisión has entered into an agreement with a toll road operator, pursuant to which it has the ability to place distributions systems under certain highways serving Buenos Aires and can thereby avoid locating a significant portion of these systems in underground conducts, which are less readily accessible. The physical components of our cable operators’ systems require maintenance and periodic upgrading to keep pace with technological change. Our cable operators own their service vehicles, data processing facilities and test equipment and either own or lease their business offices and customer service centre locations. The management of our cable operators believes that its respective properties, both owned or leased, are in good operating condition and are suitable and adequate for its business purposes. Printing and Publishing. AGEA is the owner of most of its fixed assets including plants, its head office, deposits and other facilities. AGEA is the owner of its printing plant and the building where its headquarters are located. The physical components of AGEA’s systems require maintenance and periodic upgrading to keep pace with technological change. The management of AGEA considers that its properties, both owned and leased, are in good operating condition and are suitable and adequate for their business purposes. Broadcasting and Programming. ARTEAR is the owner of most of its physical assets, including seven television studios, a high-tech satellite link centre that broadcasts its signal, a 688 KVA energy generator, deposits and other facilities. The physical components of ARTEAR’s systems require maintenance and periodic upgrading to keep pace with technological change. The management of ARTEAR considers that its properties, both owned and leased, are in good operating condition and are suitable and adequate for their business purposes.

Insurance and Intellectual Property The Company and its subsidiaries carry or are entitled to the benefits of insurance with respect to their property and business against loss or damage of the kinds and in the amounts customarily

64 insured against by Argentine companies of established reputation engaged in the same or similar businesses and similarly situated. The Company and its subsidiaries own, possess or can acquire on reasonable terms, adequate trademarks, trade names and other rights to inventions, know-how, patents, copyrights, confidential information and other intellectual property necessary to conduct the business now operated by them, or presently employed by them, and have not received any notice of infringement of or conflict with asserted rights of others with respect to any material intellectual property rights that, if determined adversely to the Company or any of its subsidiaries, would have an adverse effect on our financial condition or results of operations.

Legal Proceedings The Company and its subsidiaries are a party to various legal and administrative proceedings arising in the ordinary course of their business. Although the outcome of pending actions cannot be accurately predicted, in our opinion, such proceedings are not reasonably likely to have a material adverse effect on our financial position or results of operations.

Claims Involving ARTEAR The Administración Federal de Ingresos Públicos (the Federal Public Revenue Administration or “AFIP”) has notified ARTEAR of differences between the amount of employer contributions due and the amount paid by ARTEAR in connection with 205 actors. ARTEAR considered actors to be independent contractors while according to AFIP they should have been treated as employees. The original claim of Ps.24 million has been gradually reduced in various administrative instances. As of 30 June 2007, the claim stood at approximately Ps.3.2 million and related to 47 actors of the original 205. The Administración Nacional de Aduanas, the national customs administration (“ANA”) has brought a claim against all holders of broadcast and cable television licenses for the payment of tariffs and customs taxes applicable to the importation of films. According to ANA, television licensees are liable for customs duties, VAT, and income taxes over the total Peso value of imports. The ANA alleges that the import value of films includes the value of the intellectual property rights related to such films. Following its own criterion, which we believe to be reasonably grounded, ARTEAR has paid other taxes that would not have been payable had ANA’s interpretation been applied. We understand that if ANA’s interpretation were to prevail, we would be entitled to recover taxes paid in error. Even though we believe ARTEAR’s interpretation of customs legislation has reasonable legal grounds, we cannot assure you that the matter will be resolved in our favour. We would not expect an adverse decision, however, to have a material adverse effect on our financial condition or the results of our operations.

Claims Involving AGEA Editorial Atlántida S.A. (“Editorial Atlántida”) has brought a claim against AGEA for plagiarism and unfair competition in connection with the Genios magazine. Editorial Atlántida alleges that Genios magazine corresponds to a project initiated by Editorial Atlántida, and claims damages of Ps.5 million, plus an undetermined amount. In addition to the civil suit for damages, Editorial Atlántida brought criminal charges against several managers of AGEA, which were dismissed by the criminal court. The claim for damages is currently at the evidentiary stage. Even though we believe that the evidence produced in the criminal case is sufficiently favourable to AGEA, we cannot assure that the civil suit will be resolved in favour of AGEA.

Claims Involving AGEA, ARTEAR and Radio Mitre AGEA, ARTEAR and Radio Mitre, among other companies in the media industry, relying on Decree No. 1387/01, which established the so-called “competitiveness regime”, and Decree No. 746/03,

65 credited towards VAT the social security contributions paid over their respective payrolls. This benefit remained in force from 1 April 2003 to 31 July 2003. Decree No. 746/03, which repealed the benefit, states that the executive branch will analyse carefully the specific problems of the media industry in order to find alternative measures that would replace the competitiveness regime.

Certain entities that represent Argentine publishers, such as the Asociación de Editores de Diarios de Buenos Aires (the Buenos Aires Publishers Association), the Asociación Argentina de Editores de Revistas (the Argentine Association of Magazine Publishers), the Asociación de Tele- difusoras Argentinas (the Argentine Association of Televisión Broadcasters), la Asociación de Radios Argentinas (the Association of Argentine Radios) and the Asociación de Diarios del Interior de la República Argentina (the Association of Regional Newspapers Publishers), initiated legal actions requesting that the competitiveness regime be extended beyond its expiration date and that the government create a special regime for the media industry.

Relying on an injunction granted by an Argentine court, AGEA and ARTEAR continued to consider social security contributions paid as VAT credits for each VAT return filed from 1 August 2003 to date.

AGEA, ARTEAR and Radio Mitre have recognised a total liability of approximately Ps.96.4 million in their financial statements for the amounts that, based on management estimates and the opinion of their legal advisors, they consider a probable payment due to the AFIP in relation to this circumstance.

ARTEAR, AGEA and Radio Mitre are also party to several libel proceedings initiated by third parties in connection with their respective activities. While claims under certain of these proceedings may be significant, we generally do not believe that these claims are founded or that they will be awarded in amounts that can have a material adverse effect on our financial condition or results of operations. Amounts claimed in libel suits are generally high, but the average judgements for libel that have been rendered against our subsidiaries is of approximately Ps.80,000.

Claims Involving Cablevisión and Multicanal

In January 2007, Cablevisión and Multicanal were served with an injunction issued by a provincial court in the province of San Luis at the request of Grupo Radio Noticias, a company alleging to own a broadcast radio station that would presumably be harmed by the transactions involving Cablevisión, Multicanal, Holding Teledigital and Prima that we consummated in September 2006. Among other measures, the injunction directed Cablevisión, Multicanal and its controlling shareholders and subsidiaries to refrain from a number of transactions, including mergers, acquisitions and the issuance of securities. The injunction was inconsistent with an order issued by a Federal Court in the City of Buenos Aires in 2005, to the effect that the CNDC had jurisdiction to determine the legality of our acquisition of an ownership interest in Cablevisión without prior judicial intervention. Accordingly, we took action to have the case initiated by Grupo Radio Noticias removed from the San Luis court and transferred to the Federal Court of the City of Buenos Aires. The Supreme Court of Argentina resolved our petition in our favour in June 2007. The Federal Court of the City of Buenos Aires has been adjudicated jurisdiction to decide the substance of the matter. On 11 September 2007 the Federal Court of Buenos Aires issued a ruling reversing the injunction and leaving it without effect. On 5 October 2007, the Company was notified of an appeal to such ruling filed by Grupo Radio Noticias on 24 September 2007. While we can give no assurance that we will prevail against Grupo Radio Noticias, we believe that their claims are unfounded.

In 2003, ELP Investments filed a criminal action in Argentina against certain individuals related to the Hicks Muse Tate & Furst Group (“HMTF”), one of the prior indirect shareholders of Cablevisión, including some who were directors of Cablevisión. The criminal complaint, which was filed by a party that was not a shareholder or creditor of Cablevisión, challenged certain operations undertaken by

66 Cablevisión. Although Cablevisión believes that there are no legitimate grounds to make the claim, and the allegations by ELP Investments were false or wrongly presented, the court handling the case ordered searches of Cablevisión’s offices, as well as the seizure of certain of Cablevisión’s corporate books. On 27 June 2003, the criminal court appointed an agent to gather information at Cablevisión’s offices regarding the case within a forty-five day period. On 16 September 2003, this period was extended for 45 additional days. Cablevisión and the named individuals have each denied the allegations and have offered supporting evidence and Cablevisión appealed the court’s appointment of the agent. While Cablevisión succeeded in having the appointment of the court-designated agent revoked, litigation has continued and several appeals have been filed with the Argentine Supreme Court. The Argentine Supreme Court has not decided to grant any of the appeals filed to date. However, on 1 November 2006, the Argentine Supreme Court instructed the Court of Appeals to make the file of the case available to the Argentine Supreme Court and the Argentine Attorney General. We can give you no assurance that the complainant will ultimately be defeated and that the criminal charges will be dropped. If the former directors of Cablevisión are ultimately indicted, they may seek reimbursement from Cablevisión for damages suffered.

In September 2003, several former sellers of 70% of the capital stock of Televisora La Plata S.A. brought a claim against Cablevisión asserting that, pursuant to a call option contemplated in the agreement under which their stock was sold, Cablevisión was obligated to purchase the remaining 30% of the capital stock of Televisora La Plata S.A. for U.S.$4.1 million. As of the date of this Offering Circular, Cablevisión is a party to arbitration proceedings before the Argentine Center for Mediation and Arbitration, and cannot guarantee that an arbitration decision will be rendered in its favour or that the amount that it may be required to pay pursuant to any such decision will not be material.

On 12 December 2001, Supercanal Holdings S.A. initiated a suit against Multicanal for damages in the amount of Ps.83 million as a result of the enforcement of a preliminary injunction brought by Multicanal against Supercanal. As of the date of this Offering Circular, the proceeding is at the discovery stage.

The AFIP has requested Cablevisión to provide information regarding the fulfillment by Cable- visión of the requirements under Argentine Law No. 23,576 (as amended, the “Negotiable Obligations Law”) for a withholding tax exemption with respect to each of the series of Cablevisión’s negotiable obligations issued under the Program authorised by the CNV in 1998. Among other requirements, AFIP has requested information related to the public offering and underwriting process of these notes. Cablevisión has timely answered each of AFIP’s information requests, and its management believes that it is in compliance with each of the requirements of the Negotiable Obligations Law. However, if it were determined by AFIP or the Argentine courts (if Cablevisión challenged AFIP’s determination) that Cablevisión is not in compliance with the Negotiable Obligations Law, in addition to the applicable sanctions contemplated under Law No. 11,683 of tax proceedings, the tax benefits may no longer be available with respect to notes the issued in exchange for such series, and Cablevisión would be liable for the payment of the relevant taxes.

In April 2005, Cablevisión received notice of a ruling by the Federal Tax Court (Tribunal Fiscal de la Nación) confirming a prior assessment by the AFIP in connection with the alleged failure to pay VAT related to advertising in Cablevisión’s magazine for certain periods during the years 1996 through 1998. The amounts claimed by the AFIP adjusted as of 31 December 2006, are estimated to be approximately Ps.13 million. Cablevisión appealed the Federal Tax Court’s decision before the Contentious and Administrative Matters Court of Appeals on 24 November 2006. On 6 June 2006, Cablevisión obtained an injunction whereby the AFIP was ordered to refrain from demanding payment of such VAT. Although Cablevisión’s management believes it has reasonable grounds to support its claim, we can give no assurance that the Court of Appeals will decide the substance of the matter in Cablevisión’s favour.

On 19 June 2007, Cablevisión was notified of an action brought by the Unión de Consumidores de Argentina, an Argentine consumer protection association, claiming a refund for the benefit of all

67 Cablevisión subscribers who have been charged additional fees for overdue payment. Cablevisión automatically charges an additional late payment fee to all subscribers whose payments are overdue. According to Unión de Consumidores, such late fees are not included in the form agreement subscribers execute upon subscription. The claim seeks restitution of all late fees collected by Cablevisión, plus interest. Cablevisión filed its response to the claim on 27 June 2007. In June 2006, Defensa de Usuarios y Consumidores, an Argentine consumer protection association, submitted a complaint to the Subsecretaría de Defensa al Consumidor, the Consumer Defense Undersecretariat, requesting that Multicanal be ordered to refund subscribers any payments made for that cable operator’s magazine, which was distributed for consideration without prior subscriber consent. The claim was submitted to a private mediator but the mediation closed without an agreement between the parties. No judicial claim has been brought against Multicanal to date. A minority shareholder of Televisora Privada del Oeste S.A. (“TPO”), a subsidiary of Multicanal having approximately 15,000 subscribers, has filed a claim before a national commercial court requesting that three members of the board of directors of TPO be removed from their positions because of alleged conflicts of interest with that company. On 2 July 2007, the commercial court appointed a supervisor to oversee TPO for sixty days. The supervisor’s powers are limited to oversight and control, without any say over the TPO’s administration or operations. He has been charged with presenting monthly reports and a final report at the end of the 60-day term, describing any facts in the administration of TPO that may relate to the claimant’s allegations. The court-appointed supervisor accepted his appointment on 7 September 2007. In addition, several administrative proceedings have been initiated by Comfer against Cablevisión and Multicanal for alleged violations of the Broadcasting Law. Each company has either paid or challenged the application of minor fines. We have contested or intend to contest all such claims vigorously. However, responding to the demands of litigation may divert significant management time, attention and financial resources. Additionally, we may suffer reputational damage from perceptions arising from the allegations set forth in the lawsuits.

Cablevisión’s APE On 7 October 2005, Cablevisión completed the restructuring of U.S.$754,618,951 aggregate principal amount of its financial debt, out of a total principal amount of debt subject to restructuring of U.S.$796,379,951, by paying approximately U.S.$142,800,000 in cash, issuing U.S.$150,077,436 aggregate principal amount of Notes due 2012 and U.S.$235,121,316 aggregate principal amount of Notes due 2015, authorising a capital increase of Ps.39,465,500 and issuing 39,465,500 new Class “B” shares of common stock of Cablevisión in consideration for the complete, total and final cancellation of any and all rights and claims of any nature against Cablevisión, its property or its assets, by creditors that participated in the restructuring. The terms of Cablevisión’s debt restructuring are set forth in the APE that was filed for judicial confirmation on 14 May 2004. The above mentioned creditors executed agreements accepting delivery of such consideration prior to judicial confirmation and irrespective of whether such judicial confirmation is finally obtained or not. Cablevisión also completed the restructuring of certain debt with local state-owned banks for an aggregate amount of approximately Ps.39 million. After 7 October 2005, creditors holding a principal amount of U.S.$20.9 million of Cablevisión’s financial debt subject to the terms of Cablevisión’s APE, also executed agreements accepting the terms of Cablevisión’s restructuring and received cash, new notes and/or Class “B” shares of Cablevisión in consideration for the complete, total and final cancellation of Cablevisión’s outstanding obligations to them prior to judicial confirmation of the APE and irrespective of whether such judicial confirmation is finally obtained or not. Cablevisión’s APE was consented by creditors holding 98.5% of its debt subject to restructuring and was confirmed by the court of first instance in July 2005. It was then appealed by holders of U.S.$30,000 in aggregate principal amount of our debt subject to the

68 APE. Cablevisión confronted significant delays and litigation in the final decision on such appeals which is still pending. On 27 April 2007, the representative of the Attorney General office submitted its brief in the appeal regarding our APE requesting that the decision of the court of first instance be repealed and that the confirmation of Cablevisión’s APE be denied. Since approximately 97% of Cablevisión creditors affected by the terms of its APE irrevocably accepted the terms of Cablevisión’s restructuring on a voluntary basis and irrespective of whether judicial confirmation is obtained or not, Cablevisión restructured the claims of those creditors even pending final judicial confirmation of its APE. Accordingly, even if Cablevisión’s APE is not finally judicially confirmed, only approximately U.S.$20.9 million aggregate principal amount of financial indebtedness subject to the APE would remain outstanding. If those claims, together with related accrued interest, are successfully enforced against Cablevisión in accordance with their original terms, it could require payments (net of amounts escrowed by Cablevisión in anticipation of a closing under its APE, if finally judicially confirmed) totalling approximately U.S.$19.5 million as of 30 June 2007. On 1 September 2004, Cablevisión initiated before the Bankruptcy Courts of the Southern District of New York (the “Bankruptcy Court”), a legal proceeding under Section 304 of Chapter 11 of the Federal Code of the United States of America, with the purpose of obtaining the judicial recognition of the APE and of the APE’s effects in the United States. On 9 November 2004, the Bankruptcy Court granted a temporary preliminary injunction order in favour of Cablevisión, suspend- ing the beginning or continuation of any claim against Cablevisión in the United States. The preliminary injunction order was granted for six months. However, since 5 May 2005, the Bankruptcy Court has granted successive six-month extensions to the preliminary injunction order. The preliminary injunction order has been extended until 14 December 2007 and will expire on that date. We cannot assure that further extensions of the preliminary injunction order will be granted.

Claims Involving CIMECO The AFIP challenged CIMECO’s income tax statements for the years 2000 to 2002. According to AFIP, CIMECO was not entitled to a deduction of interest paid and losses resulting from exchange rate fluctuation. If the AFIP’s position were to prevail, CIMECO’s tax losses for such periods would be reduced, resulting in a higher net income. CIMECO responded to the AFIP’s claim but its response was rejected and the AFIP issued a final tax assessment of income tax due for such periods, plus interest and fines. The overdue principal amount assessed by the AFIP for the relevant periods is of approximately Ps.12.3 million. Interest as of 30 June 2007 would be approximately Ps.5.6 million. In CIMECO’s opinion, its deduction of interest paid and exchange losses is reasonably grounded and intends to appeal the AFIP’s assessment before the Federal Administrative Tax Court. However, the Company cannot assure that the Federal Administrative Tax Court or judicial courts hearing the case in subsequent appeals, if any, will rule in CIMECO’s favour.

Claims Involving Papel Prensa On 2 November 1984, Papel Prensa brought a claim against the Argentine government, Agua y Energía Eléctrica (“AEE”), a public utility, and the Dirección de la Energía de la Provincia de Buenos Aires, the Energy Direction of the Province of Buenos Aires (“DEBA”) challenging an increase in the tariff applicable to the provision of electricity to Papel Prensa’s paper mill. The 115% increase was unilaterally decided by DEBA in breach of the contractual arrangement between Papel Prensa, the government of Argentina and AEE (the latter two assigned their rights under such contractual arrangement to DEBA). In the fourth quarter of 2005, the discovery stage was closed but a decision has not yet been rendered by the court. In connection with this claim, as of 30 June 2007, Papel Prensa has established provisions of approximately Ps.27.3 million.

Antitrust Our subsidiaries Cablevisión and Multicanal are parties to 13 administrative proceedings under the Argentine Antitrust Law. Both Cablevisión and Multicanal face charges of anticompetitive conduct,

69 including territorial division of markets, price discrimination, abuse of dominant position, refusal to deal and predatory pricing. See “Industry Regulation — Antitrust Law — Antitrust Legal Proceedings”.

Environmental Matters In their production processes, AGEA and AGR use inks, solvents (rubber cleaners), ink stained materials, mineral oils, hydrocarbons, paint thinner, polyethylene, aluminium, cleaning materials and other substances considered as hazardous disposals under Hazardous Waste Law No. 24,051. Both companies are registered with the Registro Nacional de Generadores y Operadores de Residuos Peligrosos, the National Registry of Producers and Operators of Hazardous Waste (the “National Registry”). They have both received their respective environmental certificates that approve AGEA and AGR as producers and manipulators of hazardous waste. On 17 January 2007, AGR requested the renewal of its environmental certificate, which had expired. Renewal is still pending. Both companies are required to file annual affidavits that include, among other information, a description of the processes that generate hazardous disposals, the list of substances used in such processes, the physical, chemical, biological and other characteristics of their hazardous waste disposals and the annual quantity of disposals. AGEA and AGR pay an annual fee that is calculated according to a formula that takes into account the quantity of their respective hazardous disposals and their dangerousness, measured by pre-established parameters. Fees may not exceed 1% of the average presumed revenues of the activity to which the hazardous waste relates. AGEA does not generate gaseous emissions or liquid effluents that are disposed of into public waters. AGR generates liquid effluents, which are processed in a treatment plant before their disposal into the local municipal sewage system. AGR also generates gas emissions that are treated before their release into the atmosphere. Neither AGEA nor AGR use any products that contain or use asbestos polychlorinated biphenyls (PCBs) or other substances that may be considered dangerous due to flammability or corrosiveness in their printing process. Papel Prensa is subject to the control of the environmental authorities of the Province of Buenos Aires and is in compliance with the applicable environmental regulation. Papel Prensa is a party to various administrative proceedings brought by the provincial environmental authorities, the outcome of which has been favourable to Papel Prensa so far. In connection with the Plan de Reconversión Productiva de la Industria de Celulosa y Papel, a national recycling plan, Papel Prensa is expected to enter into an agreement with the Secretaría de Ambiente y Desarrollo Sustentable de la Nación and other provincial entities, pursuant to which Papel Prensa will commit to making certain environmental- related investments. These investments would constitute an adequate response to recent requests by environmental authorities. As of the date of this Offering Circular, no claim or complaints had been filed or threatened by any neighbours, other parties or governing authorities in connection with environmental matters.

70 THE ARGENTINE MEDIA INDUSTRY

General As of 2001, the year of the most recent census, Argentina had a population of approximately 36.6 million inhabitants with an adult literacy rate of 97%. According to the World Bank, the country’s annual per capita income in 2005 was of U.S.$4,470, the third highest in Latin America, after Mexico and Chile. Approximately 33% of Argentina’s population lives in the AMBA Region. Over the years, two key factors have influenced the development of the Argentine media industry: • the high level of concentration of the national population with the highest income levels in the AMBA Region; and • numerous and cumbersome regulations that restricted foreign or even private ownership in several segments of the media industry. In the early 1990’s, the Argentine government took a number of steps designed to reduce state intervention in the economy and eliminate barriers to foreign investment, some of which had a significant impact on the Argentine media industry. Among the measures adopted, the Argentine government: • liberalised foreign exchange and capital markets; • launched a process of privatisation of state-owned companies, including radio and television broadcasters; • allowed a single person or entity to participate in the ownership of more than one broadcasting company; • allowed cross-ownership of broadcast and print media; • allowed broadcasting companies to have other additional corporate purposes; • allowed corporations (rather than only individuals) to be shareholders of broadcasting companies, and for the number of shareholders to exceed 20. As a result of this deregulation of the Argentine economy, media companies’ revenues increased and domestic and foreign entities increased their capital investment in that industry, leading to modernisation and, in some cases, towards a gradual convergence within the telecommunications industry. The economic and political crisis that affected Argentina in 2001 and 2002 had significant consequences for the media industry. The steep contraction of revenue streams measured in U.S. dollars rendered most media companies unable to service their financial debt, substantially all of which was denominated in that currency, as it became due. Several media industry players, including Cablevisión and Multicanal, resorted to newly enacted amendments to Argentine insolvency legislation allowing “pre-packaged” restructuring proceedings, to restructure their financial debts. The adoption of certain amendments to the Argentine insolvency legislation in 2002 facilitated to some extent the restructuring of financial debt. The 1998 — 2002 recession and crisis also led to a reformulation of the role of the public sector in the economy, with a marked tendency to increased intervention. While there has not been a return to the state-led capitalism that characterised the Argentine economy prior to the 1990s, the government identified areas where it has increased state regulation, supervision and involvement or has protected local industry against foreign ownership. Law No. 25,750 of Cultural Assets, passed on 18 June 2003, for example requires that corporations in media-related businesses be owned by Argentine persons and limits foreign ownership. Foreign persons may not own more than 30% of the outstanding capital stock representing 30% of the voting rights of any media-related company. As a

71 consequence of the general economic crisis, but also as a consequence of increased state intervention and protectionism, foreign investment in the Argentine media industry has been limited since 2001. See “Industry Regulation”, “Broadcast, Cable and Satellite Television and Broadcast Radio — Federal Broadcasting Regulation”.

Principal Segments The Argentine media industry includes the following principal segments: • cable and other pay television; • Internet access; • publishing and printing; • television and broadcast radio and programming; • digital content; and • outdoor advertisement. The following is a summary description of the development of the Argentine media industry in each of the principal segments in which we operate.

Cable and other Pay Television in Argentina Cable television in Argentina originated in the 1960’s when community antenna systems were built to retransmit television service from Buenos Aires to the rest of the country. The Argentine government, acting through Comfer, granted non-exclusive licenses to provide cable service which resulted in the development of a highly fragmented industry with over 1,500 operators. The non- exclusive licensing system also resulted in overlapping cable service areas, particularly in large markets such as the AMBA Region and the province of Buenos Aires. Beginning in 1993, in an effort to gain market share in the AMBA Region, the then-existing cable operators in Argentina began to compete aggressively for subscribers, offering incentives which included lower basic service rates, free activation and three months of free basic service, leading both to increased subscriptions and high subscriber termination rates as subscribers switched from one operator to another. At about the same time, the Argentine cable industry entered into a consolidation phase which significantly reduced the number of cable operators. In recent years Cablevisión, Multicanal and several of their largest competitors acquired cable systems by gaining control of medium and large-sized regional cable systems. Because the cable industry is capital intensive, the consolidation of various companies has created economies of scale, allowing multiple system operators to effectively link Argentina’s fragmented systems and expand and upgrade their networks. With the end of the convertibility regime and the devaluation of the Peso in January 2002, the pay television industry experienced a significant decline in the number of subscribers as a consequence of the severe economic crisis. Beginning in 2004, sustained economic recovery and relative price stability led to a partial recovery of the subscriber base that had disconnected during the crisis. Since then, Argentine cable operators have benefited from the country’s economic growth, expanding their services to use currently idle capacity, and upgrading the bandwidth of their networks to 750Mhz. Advertising revenues in cable television are substantially lower than those in free broadcast television. They reached a peak of U.S.$70 million in 2000, but decreased dramatically, in part due to subscriber termination and in part due to devaluation, to only U.S.$10 million in 2002. Since then, they have gradually recovered, to reach an estimated U.S.$56 million in 2006. Our sports signal, TyC Sports, holds 18% of the total cable television advertising spending.

72 Internet Access in Argentina As of 30 June 2007, approximately 1.96 million users subscribed to broadband Internet access services in Argentina. Our FiberTel and Flash brands accounted for a 32% market share, measured in terms of number of subscribers. Speedy, an affiliate of Telefónica de Argentina S.A., had a market share of 30%. Arnet, an affiliate of Telecom Argentina S.A., had a 26% market share. The remaining 12% was scattered among over 15 other broadband providers countrywide. Our FiberTel brand not only competes directly with other cable-modem based Internet service providers, but also with ADSL technologies. Telefónica de Argentina S.A. and Telecom Argentina S.A. both offer their ADSL services directly and through third party providers that market their products jointly with the two telephone companies, thus increasing their distribution, communications and sales channels. Additionally, though in lower numbers, wireless technologies have captured a portion of the demand for Internet access. Our Internet access operations concentrate their subscriber base in the AMBA Region, where approximately 95% of their subscribers are located.

The Publishing and Printing Industry in Argentina Newspaper Publishing and Advertising We participate in several markets within the publishing and printing industry. Through our subsidiary AGEA and its subsidiaries, we are active in the publication and printing of newspapers, magazines, directories, commercial inserts, leaflets, booklets and textbooks. The newspaper market in Argentina is characterised by the presence of approximately 12 paid newspapers and one major free distribution newspaper, published and distributed primarily in the AMBA Region, approximately 20 significant regional newspapers and a great number of small local newspapers sold in the rest of the country. Regional newspapers compete vigorously in each of their respective regions with so-called “national newspapers”, such as Diario Clarín, which are published in Buenos Aires and sold throughout Argentina. Based on statistical information compiled by AGEA, in 2006 regional newspapers accounted for approximately 40.2% of the total copies sold in the country. National newspapers have a large circulation and generally include national and international news and features. Regional newspapers, on the other hand, generally have smaller circulation, focus on regional and local news and features and are distributed at the regional or city level. Most of the advertising in national newspapers targets a wide geographical cross-section of the Argentine population, whereas advertising in regional newspapers generally focuses on reaching specific regional audiences. There are three national newspapers with market shares above 10% in the AMBA Region: Diario Clarín, La Nación and Diario Popular. Except for Diario Clarín and La Voz del Interior, however, no national or regional newspaper has a market share of more than 10% of copies sold in Argentina outside of the AMBA Region. With 12 newspapers published and sold, and one newspaper distributed freely in the AMBA Region, the newspaper market is more competitive than in other major cities worldwide, where two to four large newspapers are typically published. This high level of competition coupled with the overall decrease in circulation levels during the 2002 crisis, has become an entry barrier to new foreign and domestic competitors. During the 1990s, there were several efforts to launch new newspapers, none of which gained more than a 4% share of the circulation in the AMBA Region. Towards the end of 1999 and during the first quarter of 2000, regional newspapers began to reduce cover prices. This competition-driven phenomenon occurred mainly in cities such as La Plata, Rosario, Santiago del Estero, Córdoba and Mendoza, where a single newspaper (in some cases, the only one in the city) that dominated the local market was threatened by the appearance of new or recently created newspapers that were sold at lower prices to increase their market and circulation. Regional markets grew as a consequence of price reductions, but profitability fell. We estimate that

73 the likelihood of new competitors penetrating the newspaper market with a low-priced newspaper in the AMBA Region are low, given the strong competition in the AMBA Region. Additionally, low-priced newspapers tend to focus on readers from lower social strata and are generally unable to obtain the necessary advertising revenues that would make them sustainable. Market shares in terms of circulation have remained relatively stable. In the AMBA Region, Diario Clarín has accounted for 50% to 52% of circulation in the last five years. La Nación has maintained its market share in the 18% to 20% range and Diario Popular was the only other newspaper that exceeded a 10% share of the AMBA Region newspaper market, with 10% to 11% of total circulation in the last five years. Advertising spending in Argentine newspapers has increased steadily since the beginning of the country’s recovery in 2003. That year, advertising spending in national and local circulation newspapers totalled approximately Ps.640 million, compared to approximately Ps.422 million the previous year. In 2004, advertising spending in national and local circulation newspapers increased 33%, to approximately Ps.851 million. In 2005, advertising spending in national and local circulation newspapers increased an additional 25%, to approximately Ps.1,064 million and in 2006, it increased again by 16%, to an estimate of approximately Ps.1,235 million. Of the total advertising spending in all media, national circulation newspaper advertising has consistently represented between 36% and 41% in the last five years. Of that amount, Diario Clarín had a market share in the AMBA Region of approximately 58% in 2002 and 2003, and 61% from 2004 to 2006. The advertising market share of its closest competitor, La Nación, fluctuated between 24% and 26% throughout the same period. The magazine market in Argentina is characterized by a wide range of editions, exceeding 16,000 in 2006, of which approximately 2,150 were serial, including 1,370 Argentine magazines. Total circulation for 2006 is estimated at 98 million copies, with total sales of approximately U.S.$433 million. Approximately 80% of the Argentine magazines are edited by seven producers, including AGEA. Genios, a children’s magazine with an average weekly circulation of 102,000 copies in 2006, is the magazine with the highest circulation in Argentina, reaching 300,000 copies at the beginning of the school year. Viva, the magazine distributed with Clarín’s Sunday edition, had an average circulation of approximately 795,000 copies in 2006.

The Printing Industry Through AGR we have a 31% share of the Argentine commercial printing market (flyers, magazines, guides, instalment books, mail and others), which has also recovered steadily from the 2002 crisis, growing from a total market size of approximately U.S.$114 million in 2004 to approximately U.S.$151 million in 2006. Our growth in sales between 2002 and 2007 was of 143%, after a 71% drop from 2001 to 2002. There are seven major players in the printing market. AGR’s closest competitor, Anselmo L. Morvillo S.A. has a market share of approximately 19%. Quebecor, which prints flyers, magazines, guides and instalment books, has a market share of approximately 17%.

Textbook Publishing We also participate in the school textbook publishing market through Tinta Fresca, a subsidiary of AGEA. According to data from the Ministry of Education, Science and Technology, approximately 9.4 million children were enrolled in regular educational institutions (kindergarten through high school) in 2003, with an average of 1.26 new books purchased per student, per year. The average number of new books purchased per student, per year in Brazil and Mexico is of approximately 5 books. The current textbook market in Argentina, measured in number of copies sold, is of approximately 10.7 million copies. Ediciones Santillana, the largest private textbook publisher in the market, sold approximately one million copies in 2006 and had a 21% share of the private market (which excludes government publications). Its closest competitor, Puerto de Palos, sold approximately

74 760,000 copies and had a 16% market share. After only one and a half years in the market, Tinta Fresca was the sixth largest player in the market in 2006, with approximately 460,000 copies sold and a 10% market share.

The Broadcasting and Programming Industry in Argentina

Television Broadcasting and Programming

In 2006, approximately 98% of Argentina’s 10.3 million households owned a television set. Approximately 54% of those households had access to pay television. Television consumption in Argentina averages 3.4 hours a day, of which an average 2.6 hours are spent watching free broadcast television.

With the return to democracy in 1983, the Argentine government began to implement the process of deregulation and privatisation of television broadcasting under the framework that had been created by the Broadcasting Law in 1980. Four of the five broadcasting channels were transferred to private ownership and one (Canal 7) remained under the control of the federal government. Canal 9 and Canal 2 were privatised in 1984 and 1987, respectively. In 1990, the broadcasting licenses of Canal 11 and Canal 13 were granted in concession to private parties for a term of fifteen years, with an option to extend such concessions for an additional 10 year period. Upon expiration of that period, licenses are renewed or granted to a new licensee after a bidding process in which the original licensee has priority in case of a tie. The expiration term of all broadcasting licenses existing as of 24 May 2005 was suspended for 10 years, subject to certain conditions. On 24 May 2015, license terms will resume without counting the 10-year suspension towards expiration. See “Industry Regulation — Broadcast, Cable and Satellite Television and Broadcast Radio”.

There are currently five major free broadcast television networks in Argentina, of which we own Canal 13. Canal 11, also known as TELEFE, our principal competitor, is part of a network of television channels controlled by Telefónica Media S.A., a subsidiary of Telefónica S.A., a Spanish telecommunications company that is also active in the Argentine telecommunications market. It includes 12 broadcast television channels outside of Buenos Aires that broadcast TELEFE’s programming throughout the country. Canal 13 is part of a network that has four broadcast television channels outside of Buenos Aires, one in Córdoba, two in Río Negro and one in Bahía Blanca. Broadcast television channels are also transmitted by cable television systems.

Reception of broadcast television by the public is free of charge, pursuant to the Broadcasting Law. Broadcast television channels and networks derive their revenues mostly from advertising, which generally accounts for approximately 70% to 75% of total revenues. Total spending in advertising in free broadcast television stood at 0.18% of GDP in each of 1998 and 1999. As the country’s economic performance declined, it fell steadily to 0.14% of GDP in 2000, 0.12% of GDP in 2001, and experienced a sharp decline to 0.08% of GDP in 2002, at the height of the economic crisis. Since then, advertising spending in free broadcast television has recovered. It increased to approximately 0.10% of GDP in 2003 and 0.12% of GDP in 2004. In 2005 and 2006 it stood at 0.11% of GDP and 0.12% of GDP, respectively.

Approximately 27% of all broadcast television advertising spending in 2006 corresponded to retail products and services, 13% to financial services, 12% to beverages, 11% to telecommunication companies, 11% to laboratories and cosmetics, 7% to governmental entities, 4% to supermarkets and malls, 4% to appliances, 3% to automobiles and 2% to oil companies, among others.

From 2002 to 2006, Canal 13’s share of the advertising spending remained relatively stable, fluctuating from 45% in 2002 to 43% in 2003, 39% in 2004, 38% in 2005 and an estimated 44% in 2006. TELEFE, its closest competitor fluctuated between a low of 33% in 2005 and 37% in 2006. The decrease in market share in 2005 resulted from an extraordinary increase in the advertising market share of Canal 9, which climbed to 20% that year, to return to its traditional 10% to 11% share in

75 2006. Canal 2 (América TV) accounted for approximately 8% of the advertising spending in 2006 and the government’s Canal 7, accounted for 1%.

In terms of audience rating, the tendency in the broadcast television market has been towards consolidation, with the market shares of TELEFE and Canal 13 gradually increasing, while those of the other three channels remained substantially lower. TELEFE had an average of 11.1 points of rating (1 point of rating represents 96,792 viewers) in 2002, 12.5 in 2003, 15.0 in 2004, 14.3 in 2005 and an estimated 14.7 in 2006, in each case measured from noon to midnight in residential households. Canal 13 averaged 10.0 points in 2002, 10.8 in 2003, 10.9 in 2004, 9.4 in 2005 and an estimated 11.2 points in 2006, in each case measured from noon to midnight in residential households. The average for Canal 9 was of 6.2 points in 2002, 6.2 in 2003, 7.2 in 2004, 8.3 in 2005 and an estimated 6.0 in 2006, while América TV averaged 6.2 points in 2002, 5.5 in 2003, 5.5 in 2004, 4.7 in 2005 and an estimated 4.7 in 2006. Prime time (8:00PM to 12:00AM) ratings are even more concentrated, with Canal 13 and TELEFE averaging 18.1 and 17.8 points, respectively, in 2006. Prime time television concentrates approximately 76% of all advertising.

Argentine programming in both Canal 13 and TELEFE focuses on news, entertainment, sports, sitcoms and fiction. These may be produced in-house, by independent producers or as co- productions.

Radio Broadcasting and Programming

Broadcast radio has a strong tradition and high penetration rate in Argentina, reaching approximately 82% in 2005, compared, for example, to a 75% penetration rate in the United States and a 52% penetration rate in Spain. In 2006, approximately 6.8 million people listened to the radio during any given day in the AMBA Region. Of those, approximately 55% listen only to FM radio, 21% listen only to AM radio and 24% listen to both.

There are five main players in the broadcast radio market, which account for 67% of the audience share and 85% of all radio advertising sales. The CIE Group is the largest market competitor in terms of advertising sales (23%) and second in audience share (16%), controlling four FM stations and two AM stations. We are the second largest radio broadcaster in terms of advertising sales (21%) and third largest in terms of audience share (14%), and own Radio Mitre (AM), Radio Mitre Córdoba (AM810) and La 100 (FM). The Hadad Group controls four FM radio stations and one AM radio station, is also second in terms of advertising sales (21%) and has the largest audience share (23%). The PRISA Group owns one AM and one FM radio station and the Narváez-Vila-Manzano Group owns one AM station.

As in the rest of the media industries discussed herein, advertising spending in radio fell during the 1998-2002 Argentine crisis from U.S.$140 million in 1998 to a low U.S.$20 million in 2002, and then recovered gradually, increasing by 60% to U.S.$32 million in 2003, 40% to U.S.$45 million in 2004, 34% to U.S.$61 million in 2005 and 10% to an estimated U.S.$67 million in 2006, of which we accounted for 9%.

Digital Content in Argentina

Since 1996 we participate in the on-line services and new media market in Argentina through Clarín Global and Prima Internacional (since 26 September 2007, denominated Compañía de Medios Digitales (CMD) S.A.). Among other content websites, we have developed three news websites (Clarin.com, Ole.com.ar and TN.com.ar), classified advertisement (automobiles, real estate and employment), an auction site, a music download site and several e-commerce websites selling mobile phone ringtones, photos, games and wallpapers.

76 The on-line services and new media market in Argentina is growing together with personal computer (PC) home penetration and Internet penetration. According to INDEC the number of Argentine homes with PCs doubled, from approximately 3.1 million (or 30%) in 2002 to an estimated 6.2 million (59%) in 2006. Internet penetration followed a similar pattern, with approximately 1.6 million households (16%) with Internet access in 2002 to an estimated 3.1 million households (29%) in 2006. With an average of 611,000 unique visits per day and a 54% share of all visits to news websites in Argentina, Clarín.com dominates the Argentine Internet new media market. La Nación.com is the second largest market participant in terms of visitors, with a 21% share, followed by Infobae.com, with a 17% share of all daily visits. Aggregate market spending in Internet advertising peaked in 2000 at approximately Ps.10 million, fell to approximately Ps.1.3 million in 2002 and has increased steadily to an estimated Ps.6.5 million in 2006.

77 INDUSTRY REGULATION The Argentine media industry is subject to laws and regulations specific to each sector, as well as more general regulations applicable to the industry as a whole. The following section summarises the material regulations applicable to each of our business segments as well as to our operations as a whole.

Broadcast, Cable and Satellite Television and Broadcast Radio Federal Broadcasting Regulation The installation, operation and acquisition of cable television services, free broadcast television and broadcast radio in Argentina are governed by the Broadcasting Law. Our cable television and our broadcasting business are principally regulated and supervised by Comfer but also fall under the jurisdiction of the Comisión Nacional de Comunicaciones, the National Communications Commission, (the “CNC”), for matters related to compliance with technical regulations. Comfer is under the authority of, and reports directly to, the Secretaría General de Presidencia de la Nación (the “General Secretariat”), directly under the national presidency. The General Secretariat oversees the general enforcement of the Broadcasting Law and the regulatory framework for the industry. Comfer has the authority to: • manage the public bidding process whereby the executive branch grants operating television and broadcast radio licenses on a non-exclusive basis; • grant cable television licenses on a non-exclusive basis; • extend the terms of broadcasting and cable licenses; • approve the transfer of shares or other ownership interests in cable television licensees; • supervise the cultural, artistic and legal content of programming; • approve amendments to the bylaws of licensed companies; and • impose penalties on licensed companies for failure to comply with the Broadcasting Law, in the form of fines, suspension of advertising and the revocation of licenses. Rates charged by cable television companies are not currently regulated. Cable and broadcast television and broadcast radio companies in Argentina, which we collectively call “Broadcasting Companies”, are required to obtain a non-exclusive broadcasting license from the executive branch or Comfer, as the case may be, to carry and distribute programming over their systems. The CNC monitors the compliance by Broadcasting Companies with technical regulations through its surveillance of the use of the broadcasting spectrum and the granting of frequencies. Cable operators are required to submit to Comfer evidence of compliance with municipal regulations relating to use of airspace and poles and the CNC must approve all technical plans for the cable service installation. Cable operators are also required to maintain at least one headend and broadcast one local signal per license. All Comfer licenses have an initial fifteen-year term. At the end of this term, the licensee may apply for a one time ten-year extension. If Comfer verifies that the licensee has complied, during the first term, with all of the requirements and obligations set forth in the Broadcasting Law, it must grant the extension subject only to verification by Comfer of compliance with the Broadcasting Law. The Broadcasting Law does not provide for subsequent renewals. Our subsidiaries engaged in broadcast television and radio must apply for new licenses after the ten-year extension term lapses and undergo a new public bidding process. Cable licensees whose second (ten-year) term has expired must purchase new licenses. Pursuant to Resolution No. 726/2000, Comfer suspended the sale of new cable licenses. The suspension was extended by Comfer through successive resolutions and continues to be in place. In July 2006, Comfer issued new rules for access to, and issuance of, cable

78 television licenses and for the provision of cable television services submitted the new rules to a round of comments by the general public. The sale of cable television licenses will remain suspended until the final version of such rules has been approved. Pursuant to the terms of Decree No. 527/05, the expiration of all broadcasting licenses in effect as of 24 May 2005 was suspended for a period of ten years, subject to certain conditions. In order to benefit from the ten-year suspension, Broadcasting Companies were granted two years (which were subsequently extended until 6 July 2007) to submit proposals that will make broadcasting time available for programming that contributes to the protection of the national culture and the education of the population and submit a technological investment project to be implemented during the period of the suspension. All such proposals must be approved by Comfer. Comfer Resolution No. 214/CFR/ 07 sets forth the requirements for the ten-year suspension. All of our subsidiaries that have title to a broadcasting license have submitted the documentation required to comply with Decree No. 527/05 and Resolution No. 214/CFR/07. Our presentations are currently under review. If the suspensions are granted, all licenses we held as of 24 May 2005 will remain in effect until 24 May 2015, and thereafter for the remaining term of each license. Our licenses have remaining terms of between one and 17 years that will continue to run after the suspension is lifted. We expect to obtain the ten-year suspension for each of our licenses, but cannot assure you that Comfer will grant any of the suspensions for which we have applied. Decree No. 527/05 is an emergency decree that amends a law and has not been ratified by Congress. Its constitutionality could be challenged on a case by case basis before a judicial court. To date, there have been no challenges to the constitutional validity of Decree No. 527/05. We cannot assure you that it will not be challenged in the future or, if challenged, that its validity will be upheld by a judicial court. Comfer issues broadcasting licenses upon a review of several qualifications of the applicant and its shareholders and partners. Under Section 45 of the Broadcasting Law, a licensee’s shareholders and partners must: • be Argentine nationals that do not have corporate, legal or other affiliations with foreign media or broadcasting entities (except as permitted under treaties between Argentina and other countries, or in the case of transfers of shares agreed before the issuance of Law No. 25,750 with the approval of the CNDC); • have no criminal record; • present evidence of their adequate financial condition; • not be a judge, legislator, public official or a member of the armed forces; and • not be a public service provider, a director or manager of a public service provider, or hold 10% or more of the voting shares of a public service provider. When the licensee has more than one corporate shareholder, the above requirements apply only to the controlling shareholders. Comfer must be notified within 30 days of the appointment of directors, managers, syndics, administrative directors and attorneys-in-fact of any licensee, except for attorneys-in-fact for judicial purposes. As a result of any failure to comply with this requirement, the Comfer may impose fines on the noncomplying company or order the replacement of such director, manager, syndic, administrative director or attorney-in-fact. Prior to a 2005 amendment to Section 45 of the Broadcasting Law, directors of a broadcasting licensee’s controlling shareholder also had to meet the requirements the Broadcasting Law imposes on directors of broadcasting licensees. Even though after the amendment such requirement is no longer in place, regulations governing the transfer of broadcasting licenses still grant Comfer the authority to control that directors of the controlling shareholder of the licensee meet the same standards required for directors of licensees. Directors are not required to be Argentine nationals, but foreign directors must comply with additional certifications. Because several transfers of our licensee

79 subsidiaries are currently subject to Comfer approval, our directors must meet the requirements of the Broadcasting Law. A single person or entity may not hold more than a total of 24 radio or broadcast television licenses in different jurisdictions, and may not hold more than one radio, one broadcast television and one cable television license in any given jurisdiction. We cannot assure you that Comfer will not deem cable television licenses held by Cablevisión and Multicanal in a single jurisdiction as duplicative licenses and order that one of them be relinquished. Section 46 of the Broadcasting Law establishes that licensed companies may not be affiliates, subsidiaries or under the control of foreign persons. Law No. 25,750, passed on 18 June 2003, requires that corporations in media-related businesses be owned by Argentine persons and limits foreign ownership except in the case of transfers of shares executed before the issuance of Law No. 25,750 with the approval of the CNDC. Foreign persons may not own more than 30% of the outstanding capital stock representing 30% of the voting rights of any media-related company. The law defines “foreign persons” as individual foreign nationals, or entities organised under Argentine or foreign law that are under direct or indirect control of foreign individuals and “national persons” as individual Argentine nationals, or entities organised under Argentine law, domiciled in Argentina and under majority control of Argentine individuals or entities organised in Argentina or abroad, under direct or indirect control of individual Argentine nationals who are domiciled in Argentina. The foreign ownership cap may be raised when the law of, or a treaty with, a foreign jurisdiction grants reciprocal, non-discriminatory treatment. A treaty between Argentina and the United States grants residents of, or corporations domiciled in, the United States, Argentine resident status for purposes of such requirement, with respect to any company, including, for instance, our cable television subsidiaries to the extent they are subject to Law No. 25,750. There is no express legal provision distinguishing unlisted shares from listed shares for the purpose of determining the percentage of shares under foreign ownership pursuant to Law No. 25,750. However, in a non-binding opinion in relation with shares of Multicanal issued pursuant to its APE, the Argentine Procurador del Tesoro (Attorney General) stated that listed shares could be transferred freely, without Comfer authorisation or control of their ownership, as long as the then controlling shareholders, known to and authorised by Comfer, maintained their control over the company. We have been advised by our Argentine counsel that, based on that opinion and on Comfer’s practice, it would be reasonable to conclude that the listed Class B Shares would not count towards the 30% ownership cap set forth under Law No. 25,750. If a transfer of shares in a licensee is duly notified to Comfer, the transfer can be validly consummated and title to the shares will transfer, although it will remain subject to Comfer approval. The notice to Comfer must include documentation setting forth the new shareholder structure and identifying the directors of the acquiring company. Failure to obtain Comfer’s approval of the transfer of an ownership interest in a licensed company may result in the unwinding of the transfer. Violation of Comfer regulations regarding the transfer of an ownership interest in a licensed company may result in the revocation of the license of the licensee that violated Comfer regulations. Parties responsible for the revocation are banned from obtaining a new license or being shareholders of a licensee for a period of five to thirty years. Under the Broadcasting Law, licenses may be revoked because of, among other things: • fraud regarding ownership of the licenses; • approval by a licensed company of any forbidden transfer of its own ownership interests; • monopolistic behaviour; • any misrepresentation made by the licensee to Comfer with respect to the assets affected to the service being provided under the license; • transfer of the broadcasting license without submission for Comfer’s approval of such transfer within 180 days of its consummation.

80 Comfer also oversees the ongoing operations of broadcasting licensees. The Broadcasting Law provides basic guidelines regarding the general content of broadcasts, which must contribute to the common good, serve as a medium for cultural enrichment and education of the population, promote social communication, participation and democracy, and develop international cooperation. Program- ming may not violate people’s rights to intimacy and content within certain times of the day must be approved by Comfer for viewing by all audiences. The Broadcasting Law also provides certain parameters for the veracity and objectivity of news broadcasts, the protection of national security and the general decorum and sobriety in reporting. Failure to comply with content regulations may result in sanctions. Comfer Resolution No. 830/02, as amended classifies sanctions for violations of the Broadcast- ing Law as either a falta grave (severe violation) or as a falta leve (minor violation). Minor violations are sanctioned by llamados de atención (reprimands) and apercibimientos (warnings). Severe violations, such as the broadcast of obscene programs or the illegal installation and operation of a cable system, are subject to incremental fines, which may, in the case of numerous severe violations, eventually lead to the revocation of the license. In the past, the application of the regulatory framework by Comfer has resulted in numerous and, in the aggregate, substantial fines. We can give no assurance that we will not receive further sanctions or have any of our licenses revoked under Resolution No. 830/02 as amended.

Application of the Broadcasting and Telecommunications Laws to Grupo Clarín Licensees Share Transfers. The Controlling Shareholders were authorised by the executive branch or Comfer, as the case may be, as shareholders of ARTEAR, Multicanal and Radio Mitre. The executive branch or Comfer have been notified of the following transactions, among others, which remain subject to approval: • the acquisition by the Company of direct and indirect participations in ARTEAR, contributed to the Company by the Controlling Shareholders in 1999; • the acquisition by the Company of direct and indirect participations in Radio Mitre, contributed to the Company by the Controlling Shareholders in 1999; • the merger of 77 broadcasting licensees into Cablevisión in a series of transactions between 1998 and 2006; • the merger of 94 broadcasting licensees into Multicanal in a series of transactions between 1995 and 2006; • the merger of 24 broadcasting licensees into Teledigital in a series of transactions between 2005 and 2007; • the transfer of 22,321,687 Class A shares of Cablevisión by AMI CV Holding LLC to VLG Argentina LLC, the current shareholder composition of the holders of Class A shares of Cablevisión, i.e. VLG Argentina LLC and Southel Holding S.A., and the direct and indirect participation of the Company and Fintech in Cablevisión; • the transfer by the Company and AGEA of their shares of Multicanal to Cablevisión; and • the current shareholder composition of Teledigital, i.e. Holding Teledigital (45,881,541 shares), Hicks, Muse, Tate, Furst LA Argentina Cable Company LLC (1 share) and Carlos Ramón Ibáñez (6,969 shares) and the current indirect control of the Company by Cablevisión. Among other things, the Broadcasting Law provides that any amendments of the bylaws or any corporate resolutions of licensees, adopted by shareholders that have not been approved by Comfer are null and void. Comfer Opinion No. 18280 COMFER (DGJN)/94, states that resolutions adopted pending approval of the shareholder composition by Comfer, will be deemed approved and be valid as of the date of their adoption, to the extent that they do not contravene the Broadcasting Law, once the

81 new shareholder composition is approved by Comfer. We expect that all resolutions and bylaw amendments adopted pending approval by Comfer of the transactions described above will be valid as of the dates of their respective adoptions, but we cannot assure you that such transfers, resolutions or bylaw amendments will be approved by Comfer.

Cablevisión, Fibertel (now merged into Cablevisión), Multicanal and Prima are telecommunication services licensees. The changes of control of Cablevisión and Fibertel that resulted from the series of transactions whereby the Company and Fintech increased their holdings of Cablevisión’s share of capital to approximately 60% and 40%, respectively, and Cablevisión acquired 98.5% of Multicanal, were not approved by Secom prior to the share transfer. Failure to receive Secom approval contravenes the Rules for Telecommunication Service Licenses and could result in the revocation of the telecommunications licenses held by Cablevisión and Fibertel, and disqualify the current holder of the license and its affiliates under the Rules for Telecommunication Service Licenses for five years.

Broadcast and Cable License Extensions. Our broadcast television, radio and cable television subsidiaries hold 233 licenses, which are subject to extension. Although we expect to receive these extensions, because we have failed to meet the deadline for applying for extension of 46 of these licenses, such licenses may not be granted an extension by the Comfer and may terminate upon expiration of the ten-year suspension period set forth in Decree No. 527/05 if such suspension is granted. If such suspension is not granted, such licences may be terminated by Comfer. In certain cases, such licenses will expire immediately upon expiration of the ten-year suspension period. Some of our licensee subsidiaries hold licenses that have already been granted a first ten-year extension prior to the suspension period. Once the extended term elapses, the licensee subsidiary will have to apply for a new license in order to continue providing broadcast or cable television services in the geographic areas covered by the expired license. We expect but cannot assure you that such licenses will be granted. In the event that the Comfer denies the extension of our license in a specific geographic area, we must cease operations in such area, seek to acquire a company that has a valid license for the area or apply for a new license in our own name.

Overlapping Cable Licenses. Comfer may subject the approval of some of the share transfers of our licensee subsidiaries to the elimination of multiple overlapping licenses and order a licensee to relinquish all but one license in a given geographical area. In the past, in connection with transactions involving the roll-up of subsidiaries, Cablevisión elected to relinquish one of any pair of overlapping licenses upon the completion of the transaction as a matter of corporate law even pending Comfer’s approval, while Multicanal informed the Comfer of its decision to relinquish one of the overlapping licenses upon Comfer’s approval being granted. As a result of the series of transactions whereby the Company and Fintech increased their holdings of Cablevisión’s share of capital to approximately 60% and 40%, respectively, and Cablevisión acquired from the Company 98.5% of Multicanal, Cablevisión and Multicanal hold licenses in overlapping territories. Even though, arguably, Cablevisión and Multicanal are not a single licensee, we cannot assure you that Comfer will not order that either company relinquish its license where it overlaps with that of the other cable operator. If Cablevisión or Multicanal were to relinquish a license, subscribers under the relinquished license would have to be transferred to the remaining licensee or have their subscriptions cancelled, which could affect the relinquishing licensee’s revenues and results of operations.

Other Regulatory Compliance Issues. Cablevisión and Multicanal have unified headends in certain jurisdictions where their respective licenses overlap without Comfer authorisation. Even though such unifications have not had any effect on the service provided by the cable operators, they may lead to the imposition of sanctions of Ps.50,000 for first time offenders to the revocation of the cable license in the case of repeat offenders.

Neither Cablevisión nor Multicanal generate their own local signal in every jurisdiction for which they hold a license. Comfer may order Cablevisión and Multicanal to generate their own local signal and impose fines if such requirement is not satisfied. Comfer regulations also provide that a majority of cable signals on the grid of a cable network be of national origin. The majority of the cable signals

82 in Cablevisión’s and Multicanal’s grids are not of national origin. However, Comfer has never objected to their respective cable grids after successive presentations since 1996. Even though our broadcasting licensees have received fines in the past for the content of their broadcasts, such fines have not materially affected our financial conditions or the results of our operations.

Advertising The Broadcasting Law sets forth limits and conditions on the number of minutes of advertising and the periods during which advertising may be transmitted. The limits differ for radio broadcast stations and television broadcast stations. The Broadcasting Law provides that advertising must be agreed upon between the owners of the broadcasting services and the advertisers, or with advertising agencies previously registered with the Comfer acting on account of identified advertisers. Comfer keeps a register of all advertising companies and organisations which enter into advertising agreements or contract for programs with broadcasting services. In 2003, Comfer issued Resolution No. 1391/03, providing that feature films transmitted on cable television could not be interrupted by advertising. Even though Resolution No. 1391/03 is in force, its application has been suspended by successive Comfer resolutions and remains suspended to date. If the suspension were lifted, some of ARTEAR’s cable signals and signals owned by third parties that we transmit over our cable operators’ network may have to restructure their advertising content.

Publishing and Printing Distribution Approximately 79% of our publications are sold within the AMBA Region; while the balance is sold throughout the country. We transport our publications by land, except in the case of the most distant Argentine regions, which we reach by air. Prior to 2000, newspaper and magazine distribution and sale in the AMBA Region was regulated by Decree No. 24,095/45 and Resolutions No. 42/91 and 43/91 of the Ministry of Labour and Social Security. Even though the activity of newspaper and magazine salesmen was essentially commercial, the law granted such salesmen and their union certain protections related to the maintenance of their distribution lines and points of sale or “stops”. Pursuant to Decree No. 24,095/45 and its implementing regulations, newspaper and magazine publishers were only permitted to sell newspapers through established distribution channels or “lines” that had their final outlet to readers in newsstands or stops. Stops were granted by permits issued by the Ministry of Labour and Social Security to registered distributors and sellers. Sellers also had exclusive rights to make home deliveries within the territory assigned to them under the permit. In the rest of the country the sale of newspapers and magazines was regulated by the labour authorities of each province. Decree No. 1,025/00 deregulated the newspaper and magazine sale and distribution networks, allowing any distributor or seller freely to distribute or sell print media anywhere in Argentina. However, it also created a distributors’ and sellers’ registry for the AMBA Region for the distributors and sellers already in existence under the previous regime. The new registry is under the jurisdiction of the Ministry of Labour and is regulated by Resolution No. 434/01 of such Ministry. Registered distributors and sellers are still granted certain territorial protections (although they are subject to competition) and the right to return unsold copies of publications to publishers, but are required, in order to maintain their status, to keep their distribution channels open without major interruptions and to receive and sell any publication offered to them. They may not distribute free publications. In the AMBA Region, where distribution through traditional channels and sale at newsstands has been the long-standing practice for the industry, we use the distribution channels organised under Resolution No. 434/01, except for our free newspaper Diario La Razón. In the rest of the country, we rely on our own distribution network and other independent distributors.

83 Freedom of Expression Freedom of expression and the content of all publications in Argentina is constitutionally protected. Even though there have been lawsuits for libel against certain of our publications, these have not had a material impact on our business. See “Business Description, Legal Proceedings — Claims involving AGEA, Artear and Radio Mitre”.

Internet and Digital Content The Secom regulates Internet and telecommunications services. Due to the increasing use of the Internet, a number of legislative proposals that increase regulatory controls over Internet are under consideration by various Argentine governmental agencies or bodies. There are no specific laws or regulations governing on-line content providers in Argentina, but Internet access providers must hold a telecommunications license from Secom. Access providers are also required to include a legend on their invoices to clients stating that the national government does not control or regulate the information on the Internet and to provide contact information for assistance to subscribers in the blocking of undesirable content. Section 10.1 of the Rules for Telecommunication Service Licenses (Annex I of Decree No. 764/00) provides, among other obligations, that transfers of shares of telecommunications licensees that result in changes of control under the Argentine Corporate Law must be approved by Secom prior to the transfer that results in such change of control. The Rules for Telecommunications Service Licenses also provide, among other obligations, that telecommunications licensees must pay a fee for verification and supervision by Secom and make contributions to a Universal Telecommunications Service Fund. The Argentine government is legally constrained from regulating or controlling the information available on the Internet, and does not intervene in the production, creation or transmission of information available through the Internet, except for its own institutional sites. However, Argentine laws and regulations on consumer protection, contracts, competition and advertising generally apply to portal and electronic commerce service providers in the same way as they would apply to any provider of services to consumers in Argentina. In addition, the Argentine Constitution protects a person’s right to know the information that any public or private database contains about him or her, and grants that person the right to demand that information be changed or removed from the database if that information is false or discriminatory.

Triple Play Triple play means the provision of telephony, television and high-speed Internet access services over a single broadband network. Aspirants to the provision of triple play services must have satisfied all the requirements described under “Federal Broadcasting Regulations”, above, to obtain broadcasting licenses. Section 45 of the Broadcasting Law, as amended, sets forth the requirements to obtain a broadcasting license. Among such requirements, Subsection (h) prohibits companies that provide public services or holders of 10% or more of the voting shares of such companies from being broadcasting licensees. The law makes an exception for non-profit entities that are providers of a public service in an area where there are no other possible providers of broadcasting services. According to Opinion No. 19,475 GJNR/2003 of the CNC, the public telecommunications services comprise only public telephony and basic telephony. Basic telephony is defined as the deployment of fixed telecommunications links that are part of the national, public telephony network or that are connected to such network and the provision through those links of urban, inter-urban and international live voice telecommunications. Public telephony consists in the granting of public access to the national, public telephony network through points of access (such as payphones) located in public spaces. We have been advised that the

84 national, public telephony network is the original network used currently by the two basic telephony providers, Telefónica de Argentina S.A. and Telecom Argentina S.A. It must also be noted that the two current public and basic telephony providers in Argentina do not meet the requirement that corporations in media-related businesses be owned by Argentine persons, with a maximum potential foreign ownership of 30% of the outstanding capital stock representing up to 30% of the voting rights, subject to adjustment for reciprocal treatment in other countries or to the existence of bilateral treaties. Additionally, Annex I of Decree No. 62/00 sets forth the terms and conditions for the privatisation and the granting of basic telephony licenses to the two basic telephony providers in Argentina. Pursuant to Section 7.1.1. of Annex I of Decree No. 62/00, the only corporate purpose of the public telecommunications service licensees may be the provision of telecommunications services, excluding broadcasting services. Section 7.1.2 further provides that public telecommunications service licensees may not amend or broaden the scope of their corporate purpose for so long as their licenses remain valid. On 5 September 2007, the Asociación Argentina de Televisión por Cable, the Argentine Cable Television Association, Cablevisión, Multicanal and Telecentro S.A. (another cable television operator) filed a claim before a federal court requesting (i) a declaratory judgement that would, among other things, grant full certitude to their rights as broadcasting licensees and declare that public telecommunication service providers may not interfere with such rights and that the state must grant adequate protection to broadcasting licensees against potential distortions to market competition that would result from allowing public telecommunication service providers to also provide broadcasting and cable television services, and (ii) an injunction preventing certain providers of fixed and mobile telephony from obtaining broadcasting licenses and providing broadcasting and cable television services, Comfer from granting any such licenses, or the CNC or Secom from allowing the provision of such services by way of interpretation and application of telecommunications regulations. On 6 September 2007 the federal court granted the injunction with respect to Comfer, the CNC and Secom, and on 7 September 2007 it granted the injunction with respect to the fixed and mobile telephony providers. We cannot assure that such injunctions will not be appealed or lifted, or that the federal court will interpret the law and issue a declaratory judgement in accordance with the claimants’ petition. Even though we believe that the legal and regulatory framework that does not permit providers of basic telephony to be broadcasting licensees and prevents such companies from offering triple play will remain in place in the short and medium term, we cannot assure that the Argentine government will maintain such legal and regulatory frameworks.

Antitrust Law The Argentine Antitrust Law regulates competition in the Argentine market. It is structured on two basic pillars: a system of sanctions against anti-competitive behaviour, and a pre-emptive regulation of market concentrations with established pre-merger controls. The law defines the various acts that constitute anti-competitive behaviour if they restrict competition and cause harm to the general economic interest, and sets forth applicable fines. Acts that may give rise to penalties include among other acts: • fixing, concerting or manipulating market prices, directly or indirectly, or exchanging pricing information for that purpose; • limiting or controlling technical developments or investments in the production, distribution or marketing of goods or services by means of concerted action; • distributing zones, markets, clientele or sources of supply; • preventing third parties from entering, hindering their entrance to, or excluding them from, a given market;

85 • subjecting purchases or sales to the condition that the purchaser or seller shall not use, acquire, sell or supply itself with goods or services of a third party; and • selling goods or providing services at a price that is below cost without commercial justification, with the intention of excluding or producing harm to competitors. Under the Argentine Antitrust Law, penalties can range from Ps.10,000 to Ps.150 million and may be doubled for repeat violators. The CNDC and the Argentine Secretary of Domestic Trade (the “SDT”) have the power to order a party to abstain from or cease any activities in violation of the provisions of the Argentine Antitrust Law, and to request a court with jurisdiction over the company engaging in such violations to order their liquidation or dissolution. The entity engaged in the prohibited practice as well as its directors, legal representatives, attorneys-in-fact, managers, statutory auditors or members of the supervisory committee are jointly and severally liable for any fines imposed by the CNDC and the SDT under the Argentine Antitrust Law. The provisions of the Argentine Antitrust Law apply to all individuals and entities that carry out business activities in Argentina or abroad, to the extent that their acts, activities or agreements affect the Argentine market. The CNDC exercises its pre-emptive control over competition by analyzing and approving, rejecting or conditioning operations of economic concentration, such as mergers, transfers of on-going concerns, acquisitions of equity, convertible debt instruments or the entering into agreements that grant control of, or a dominant influence over a company, when the combined volume of business of the relevant companies exceeds a certain threshold. Companies engaged in operations of economic concentration must submit to the CNDC a full description of their respective businesses and of the transaction or series of transactions that give rise to the economic concentration. The CNDC has a waiting period of 45 business days from the date of filing to approve the transactions, condition their approval or deny authorisation. The final resolution of the matter is made by the SDT, based on a technical report by the CNDC. Conditions may include sale to a third party of a part of the operations or assets of the concentrated companies, or the partial approval of a global operation but rejection of one or more of the transactions under review. The 45-day period is suspended each time the CNDC requests additional information from the parties, until such additional information is furnished.

Antitrust Legal Proceedings Proceedings Relating to Anti-Competitive Behaviour. Our subsidiaries Cablevisión and Multicanal are parties to 13 administrative proceedings under the Argentine Antitrust Law. Both Cablevisión and Multicanal face charges of anticompetitive conduct, including territorial division of markets, price discrimination, abuse of dominant position, refusal to deal and predatory pricing. All of these proceedings are still pending resolution. Administrative proceedings under the Argentine Antitrust Law pending against Cablevisión and Multicanal include the following: • proceedings relating to allegedly concerted subscriber allocation between Cablevisión and Multicanal when these were unrelated companies (Multicanal S.A. y otros/Denuncia infracción Ley 22.262 and Video Cable 6 S.A. y otros/Infracción Ley 22.262); • a complaint filed by the Santa Fé Commerce Department alleging pricing discrimination practices by one of Video Cable Comunicación S.A.’s subsidiaries prior to our acquisition of a 50% interest in Fintelco S.A. • claims filed by different competitors relating to predatory pricing (Cablevisión S.A., Santa Clara de Asís S.A. y Enlaces S.A. (Ciudad de Salta // C.713) s/ Infracción Ley 25.156; Multicanal S.A. y Cablevisión S.A. ciudad de Santa Fé s/ Infracción Ley 25.156 (C. 1027) and Cablevisión S.A., Santa Clara de Asís S.A. y Enlaces S.A. s/ Infracción Ley 25.156 (C. 1026));

86 • proceedings relating to abuse of dominant position and exclusionary practices (Multicanal S.A. y Cablevisión S.A. (Ciudad de Santa Fé) s/ Infracción Ley 25.156 — (C. 685) and Denuncia c/ Cablevideo S.A. — (C.752)); • a proceeding relating to refusal to deal (Asociación de Fútbol Argentino, Torneos y Compe- tencias S.A., Enequis S.A., Cablevisión S.A. y Dayco Holdings Ltd. S/ nipersona a Ley 25.156 (C.625)); • claims against Cablevisión relating to excessive pricing (UCR Lobos s/solicitud de intervención de la CNDC (C.828) and Dirección de Comercio Interior de Misiones s/Solicitud de interven- ción de la CNDC (C.829)); • a proceeding against Cablevisión and Multicanal relating to price fixing (Cablevisión S.A. y Multicanal S.A. s/ infracción Ley 25.156 — (C. 1120)); and • a proceeding filed by the Cámara de Cableoperadores Independientes, the chamber of independent cable operators, challenging the transactions consummated on 26 September 2006 (C.1169). The proceedings referred to above to which our subsidiaries are a party will be decided by the SDT, based on the recommendation of the CNDC, and may be decided by the Tribunal Nacional de Defensa de la Competencia, a special administrative court created by the Argentine Antitrust Law but not yet formed. Each of our subsidiaries has responded that the actions under review were taken by them in compliance with the antitrust laws in effect at that time. We believe that the administrative proceedings described above may indicate a trend toward increased litigation in, and heightened regulatory scrutiny of, the cable television industry in Argentina. While we believe that our conduct has always been within the bounds of the Argentine Antitrust Law and regulations and that our positions in each of these proceedings are reasonably grounded, we can give no assurance that any of these cases will be resolved in our favour.

Control of Operations of Economic Concentration. On 4 October 2006, the Company, Vistone LLC, Fintech Advisory Inc., VLG Argentina LLC and Cablevisión as buyers and AMI CV Holdings LLC, AMI Cable Holdings Ltd., and HMTF-LA Teledigital Cable Partners LP, as sellers, filed for the approval of a series of transactions consummated on 26 September 2006 that resulted in an increase in our direct and indirect interest in Cablevisión to approximately 60%, Cablevisión’s acquisition of 98.5% of Multicanal and 100% of Holding Teledigital and Multicanal’s acquisition (from Prima Internacional) of Prima. On 6 November 2006, the CNDC made its first request for additional information, which was submitted on 26 February 2007. On 22 May 2007 the CNDC made a further request for information, which was submitted on 2 July 2007. On 30 July 2007, the CNDC notified us that the first stage of the procedure (Form F-1) had been completed and requested that the filing parties submit Form F-2. The Form F-2 was filed on 28 August 2007. On 7 September 2007 the CNDC made a further request for information. Until Form F-2 has been completed to the CNDC’s satisfaction, the 45-day waiting period remains suspended. Although we believe that the transactions that have been filed for approval meet the standards for such approval under the Argentine Antitrust Law, we can give you no assurance that they will be approved or that conditions that could have a material impact on our operations will not be imposed or that the competitive dynamics of the cable business will not be affected as a consequence of the above- mentioned transactions and/or their approval process. See “Risk Factors — The acquisition of Cable- visión by the Company and Fintech and the acquisition of Multicanal and Holding Teledigital by Cablevisión and the acquisition of Prima by Multicanal are subject to regulatory approval. In addition, in January 2007, Cablevisión and Multicanal were served with an injunction issued by a provincial court in the province of San Luis at the request of Grupo Radio Noticias, a company alleging to own a broadcast radio station that would presumably be harmed by the transactions involving Cablevisión, Multicanal, Holding Teledigital and Prima that we consummated in September 2006. Among

87 other measures, the injunction directed Cablevisión, Multicanal and its controlling shareholders and subsidiaries to refrain from a number of transactions, including mergers, acquisitions and the issuance of securities. The injunction was inconsistent with an order issued by a Federal Court in the City of Buenos Aires in 2005, to the effect that the CNDC had jurisdiction to determine the legality of our acquisition of an ownership interest in Cablevisión without prior judicial intervention. Accordingly, we took action to have the case initiated by Grupo Radio Noticias removed from the San Luis court and transferred to the Federal Court of the City of Buenos Aires. The Supreme Court of Argentina resolved our petition in our favour in June 2007. The Federal Court of the City of Buenos Aires has been adjudicated jurisdiction to decide the substance of the matter. On 11 September 2007 the Federal Court of Buenos Aires issued a ruling reversing the injunction and leaving it without effect. On 5 October 2007, the Company was notified of an appeal to such ruling filed by Grupo Radio Noticias on 24 September 2007. While we can give no assurance that we will prevail against Grupo Radio Noticias, we believe that their claims are unfounded.

Environmental Law Law No. 24,051 (the “Hazardous Wastes Law”) governs the generation, management, transportation, treatment and disposal of hazardous wastes in Argentina. Companies that generate or handle hazardous wastes must register with the National Registry and file affidavits upon registration and thereafter on an annual basis that provide information regarding, among other things: • a description of the processes that generate hazardous wastes; • the substances used; • the physical, chemical and/or biological characteristics of each of the wastes generated; and • the annual estimated volume of the generated wastes. Upon registration and subject to the filing of affidavits satisfactory to the National Registry, generators and operators are granted an environmental certificate attesting to the regulatory approval of their waste management system, including handling, transport, treatment and final disposal. The certificate has to be renewed on an annual basis. Registered and certified companies must also pay an annual fee to maintain their status. The fee is calculated according to a formula that takes into account: • the quantity of wastes generated; and • their hazardous nature. In no event can the fee be higher than 1% of the average presumed income of the activity resulting in the generation of the hazardous wastes. Our printing and publishing operations involve the use of inks, solvents (rubber cleaners), materials stained with inks, mineral oils, thinner, cleaning materials and other substances in their production systems which are considered hazardous wastes under the Hazardous Wastes Law. Both companies have registered with the National Registry and have obtained their environmental certificates as generators and operators of residual wastes.

Other Law No. 20,216, governs national postal services and originally granted the Argentine Adminis- tration of Postal Services a legal monopoly over such services. Law No. 20,216 was amended in 1982 to allow the Argentine Administration of Postal Services to entrust private companies with the supply of postal services. In 1993, Decree No. 1187/93 abolished the state monopoly on postal services and provided for open competition in the local and international postal markets.

88 Unir S.A., a subsidiary of AGEA, provides courier services within Argentina and is registered as a courier service with the National Registry of Postal Services Providers kept by the National Communication Commission. The terms and conditions, including prices, of services rendered by private postal providers are freely negotiable by the parties and are not subject to control or regulation by any governmental authority.

Cable Television Regulation in Uruguay and Paraguay Through Multicanal, we own subsidiaries or participations in companies that provide cable television services in Uruguay and Paraguay. The following sections summarise certain aspects of the regulatory framework applicable to our Uruguayan and Paraguayan operations.

Uruguay Decree No. 349/990 of the Uruguayan president provides that cable television systems may be operated by individuals and private or public companies, subject to authorisation by the Uruguayan executive. Authorisations are granted based on the opinion of the Communication Services Regula- tion Unit (the “URSEC”), which also oversees the conduct and activities of cable television licensees once authorisation has been granted. Decree-Law No. 15,671 and Decree No. 349/990 provide that the provision of cable television services is subject to Uruguayan broadcasting legislation. Until 2000, only Uruguayan nationals or companies domiciled in Uruguay could be cable television licensees. Decree No. 400/000 repealed the requirement, allowing foreign nationals and companies to hold cable television licenses in Uruguay.

Paraguay The installation, operation and acquisition of cable television services and UHF television in Paraguay are governed by Law No. 642 of 29 December 1995 and related regulations (the “Telecom- munications Law”). Our cable television and our UHF television business are regulated and supervised by the National Telecommunications Commission (“Conatel”), which reports to the President of the Paraguayan Republic through the Ministry of Public Works and Communications. Conatel oversees the general enforcement of the Broadcasting Law and the regulatory framework for the industry. Conatel has the authority to: • grant operating television and radio broadcasting licenses on a non-exclusive basis and extend the term of these licenses; • approve the shareholders of licensed companies and the transfer of shares or other ownership interests in licensed companies; and • impose penalties on licensed companies for failure to comply with the Telecommunications Law, in the form of fines, suspension of licenses and the revocation of licenses. Rates charged by cable television companies are regulated on the basis of “reasonableness” criteria applied by Conatel. Cable and broadcast UHF television companies in Paraguay (“Paraguayan Broadcasting Compa- nies”) are required to obtain a non-exclusive broadcasting license from Conatel to carry and distribute programming over their systems. Signals from broadcasting stations cannot be transmitted via satellite without Conatel’s prior authorisation. Conatel also monitors compliance by Paraguayan Broadcasting Companies with technical regulations. Cable and broadcast UHF television licenses have an initial ten-year term. At the end of this term, the licensee may apply for a one time ten-year extension. If Conatel verifies that the licensee has complied, during the first term, with all of the requirements and obligations set forth in the Broadcasting Law, it must grant the extension.

89 MARKET INFORMATION

Market Price Of Our Class B Shares And GDSs

Prior to this Offering, there has been no public market for our Class B Shares or our GDSs. We have applied for listing of our class C common shares, our Class B Shares and all our other class B common shares, and for admission to trading of all our class B common shares on the BCBA and of our GDSs on the Regulated Market of the London Stock Exchange. We cannot assure you that an active trading market will develop for the Class B Shares or the GDSs, or that the Class B Shares or the GDSs will trade in the public market subsequent to the Offering at or above the Offer Price. Each GDS will represent two Class B Shares.

Trading In The Argentine Securities Market

The securities market in Argentina is comprised of 11 stock exchanges consisting of the BCBA, Bahía Blanca, Corrientes, Córdoba, La Plata, La Rioja, Mendoza, Rosario, Santa Fé, Mar del Plata and Tucumán. Six of these exchanges (Buenos Aires, Rosario, Córdoba, Mendoza, Santa Fé, and La Rioja) have affiliated stock markets and, accordingly, are authorised to quote publicly offered securities. Securities listed on these exchanges include corporate equity and bonds and government securities.

The BCBA is the principal and longest-established exchange in Argentina and is currently the fourth largest exchange in Latin America in terms of market capitalisation. The BCBA began operating in 1854 and accounts for approximately 95% of all equity trading in Argentina. Bonds listed on the BCBA may simultaneously be listed on the Mercado Abierto Electrónico (“MAE”), the Argentine over- the-counter market, pursuant to an agreement between the BCBA and the MAE which stipulates that equity securities are to be traded exclusively on the BCBA while debt securities (both public and private) may be traded on both the MAE and the BCBA. In addition, through separate agreements with the BCBA, all of the securities listed on the BCBA may be listed and subsequently traded on the Córdoba, Rosario, Mendoza, La Plata and Santa Fé exchanges, by virtue of which many transactions originating on these exchanges relate to BCBA-listed companies and are subsequently settled in Buenos Aires. Although companies may list all of their capital stock on the BCBA, controlling shareholders in Argentina typically retain the majority of a company’s capital stock, resulting in a relatively small percentage of active trading of the companies’ stock by the public on the BCBA.

Argentina’s equity markets have historically been comprised of individual investors, though in recent years, there has been an increase in the level of investment by banks and insurance companies in these markets. The participation of Argentine pension funds represents an increasing percentage of the BCBA market, while Argentine mutual funds (fondos comunes de inversión) continue to have very low participation. As of 31 December 2006, 96 companies had equity securities listed on the BCBA, of which the ten most traded companies accounted for approximately 25.4% of the total market capitalisation during 2006.

The Buenos Aires Securities Market, or MERVAL is the largest market for securities in Argentina and is affiliated with the BCBA. MERVAL is a corporation consisting of 133 shareholder members who are the sole individuals or entities authorised to trade, either as principals or agents, in the securities listed on the BCBA. Trading on the BCBA is conducted either through the traditional auction system from 11:00AM to 5:00PM on trading days, or through the Sistema Integrado de Negociación Asistida por Computación (Computer-Assisted Integrated Negotiation System, or SINAC). SINAC is a computer trading system that permits trading in both debt and equity securities and is accessed by brokers directly from workstations located in their offices. Currently, all transactions relating to listed negotiable obligations and listed government securities can be effectuated through SINAC. In order to control price volatility, MERVAL imposes a 15-minute suspension on trading when the price of a security registers a variation in price between 10% and 15% and between 15% and 20%. Any

90 additional 5% variation in the price of a security will result in additional 10-minute successive suspension periods.

Regulation Of The Argentine Securities Market

The Argentine securities market is regulated and overseen by the CNV pursuant to Law No. 17,811, as amended, which in addition to having created the CNV governs the regulation of security exchanges, as well as stockbroker transactions, market operations, the public offering of securities, corporate governance matters relating to public companies and the trading of futures and options. Argentine pension funds and insurance companies are regulated by separate government agencies, whereas financial institutions are regulated primarily by the Central Bank.

In Argentina, debt and equity securities traded on an exchange or the over-the-counter market must, unless otherwise instructed by their shareholders, be deposited with Caja de Valores S.A., a corporation owned by the BCBA, MERVAL and certain provincial exchanges. Caja de Valores S.A. is the central securities depositary of Argentina and provides central depositary facilities, as well as acting as a clearinghouse for securities trading and as a transfer and paying agent for securities transactions. Additionally, Caja de Valores S.A. handles the settlement of securities transactions carried out by the BCBA and operates the computerised exchange information system mentioned above.

Despite a change in the legal framework of Argentine securities trading in the early 1990s, which permitted the issuance and trading of new financial products in the Argentine capital markets, including commercial papers, new types of corporate bonds and futures and options, there is still a relatively low level of regulation of the market for Argentine securities and investors’ activities in such markets and enforcement of them has been extremely limited. Because of the limited exposure and regulation in these markets, there may be less publicly available information about Argentine companies than is regularly published by or about companies in the United States and certain other countries. However, the CNV has taken significant steps to strengthen disclosure and regulatory standards for the Argentine securities market, including the issuance of regulations prohibiting insider trading and requiring insiders to report on their ownership of securities, with associated penalties for non-compliance.

In order to improve Argentine securities market regulation, the Argentine government issued Decree No. 677/01 on 1 June 2001, which provided certain guidelines and provisions relating to capital markets transparency and best practices. Decree No. 677/01 applies to individuals and entities that participate in the public offering of securities, as well as to stock exchanges. Among its key provisions, the decree broadens the definition of a “security”, governs the treatment of negotiable securities, obligates publicly listed companies to form audit committees comprised of three or more members of the board of directors (the majority of whom must be independent under CNV regulations), authorises market stabilisation transactions under certain circumstances, governs insider trading, market manipulation and securities fraud and regulates going-private transactions and acquisitions of voting shares, including controlling stakes in public companies.

Before offering securities to the public in Argentina, an issuer must meet certain requirements established by the CNV with regard to the issuer’s assets, operating history and management, among others, and only securities for which an application for a public offering has been approved by the CNV may be listed on a stock exchange. Despite these requirements imposed by the CNV, CNV approval does not imply any kind of certification as to the quality of the securities or the solvency of the issuer, although issuers of listed securities are required to file unaudited quarterly financial statements and audited annual financial statements and various other periodic reports with the CNV and the stock exchange on which their securities are listed, as well as to report to the CNV and the relevant stock exchange any event related to the issuer and its shareholders that may affect materially the value of the securities traded.

91 UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME

This section of the Offering Circular does not form part of the Prospectus relating to the Company prepared in accordance with the Prospectus Rules of the Financial Services Authority.

Our Unaudited Pro Forma Consolidated Statement of Income for the fiscal year ended 31 December 2006 below has been prepared in accordance with Argentine GAAP and CNV regulations. This Unaudited Pro Forma Consolidated Statement of Income should be read in conjunction with our audited financial statements as of and for the fiscal year ended 31 December 2006, included elsewhere in this Offering Circular.

On 20 July 2006, our subsidiary Multicanal completed the restructuring of its financial indebtedness pursuant to the terms of the Multicanal APE. The Multicanal APE provided, among other things, for the exchange of approximately U.S.$182.0 million of outstanding debt for shares representing approximately 35% of Multicanal’s total capital and the discharge of approximately U.S.$125.0 million of outstanding debt for a cash payment of U.S.$37.5 million. After giving effect to the Multicanal APE, Multicanal’s outstanding financial debt decreased from U.S.$526.4 million to U.S.$223.3 million. The consummation of Multicanal’s APE generated a non-recurrent gain before tax of Ps.1,493.3 million (including Ps.246.8 million attributable to the dilution for the benefit of existing shareholders — the Company and AGEA — resulting from the capitalisation described above).

On 26 September 2006, through a series of related transactions, the Company and Fintech increased their holdings of Cablevisión’s share capital to approximately 60% and 40%, respectively. We incurred U.S.$157.8 million of seller financing. In a simultaneous transaction, Cablevisión acquired 100% of the capital stock of Holding Teledigital from one of the prior shareholders of Cablevisión. Cablevisión made irrevocable capital contributions to Holding Teledigital of approximately Ps.76.4 million to permit the immediate prepayment of outstanding bank debt and seller financing debt of Holding Teledigital. Simultaneously, Multicanal acquired 100% of the capital stock of Prima from Prima Internacional and incurred seller financing, and Cablevisión acquired 98.5% of the shares of common stock of Multicanal, from the Company, AGEA and Fintech, and incurred seller financing. The Company’s consolidated audited financial statements incorporate the results of the businesses acquired as from 1 October 2006.

The Unaudited Pro Forma Consolidated Statement of Income has been compiled to show what our financial results for the year ended 31 December 2006 might have been had the following been in place on 1 January 2006:

• the dilution of our ownership in Multicanal from 100% to 65% that resulted from Multicanal’s debt restructuring process concluded on 20 July 2006;

• the increase of our ownership interest in Cablevisión to 60% of total capital and the related incurrence of seller financing;

• the acquisition by Cablevisión of 100% of the share capital of Holding Teledigital;

• the pre-payment by Holding Teledigital of Ps.77.5 million under an outstanding loan in connection with its acquisition by Cablevisión;

• the acquisition by Multicanal of 100% of the share capital of Prima; and

• the acquisition by Cablevisión of 98.5% of the share capital of Multicanal and the related incurrence of seller financing.

92 This Unaudited Pro Forma Consolidated Statement of Income is furnished for informational purposes only and does not purport to reflect our results of operations that would have actually resulted had each of the transactions and other adjustments above been effected on the dates indicated. Further, our pro forma results of operations are not necessarily indicative of our results of operations that may be obtained in the future.

Multicanal Debt Capitalisation Acquisition Transactions I II III IV V Through 30 September 2006 Holding Dilution MC Cablevisión Teledigital Acquisition Historical Ownership Historical(*) Historical(*) Adjustments Pro Forma (In Millions of Ps.) Net sales ...... 2,811.8 — 787.1 79.1 (49.1)(3) 3,628.9 Cost of sales (excluding depreciation and amortisation) ...... (1,491.6) — (322.5) (33.6) 44.8(3) (1,802.9) Subtotal ...... 1,320.2 — 464.6 45.5 (4.3) 1,826.0 Selling expenses (excluding depreciation and amortisation) . . . . (290.0) — (74.2) (4.9) 4.3(3) (364.8) Administrative expenses (excluding depreciation and amortisation) . . . . (320.5) — (86.5) (17.6) — (424.6) Subtotal expenses ...... (610.5) — (160.7) (22.5) 4.3 (789.4) Depreciation of property, plant and equipment...... (169.3) — (98.0) (3.0) (5.6)(4) (275.9) Amortisation of intangible assets . . . . (38.9) — — — (81.3)(5) (120.2) Amortisation of other investments. . . . (0.3) — — — — (0.3) Subtotal depreciation and amortisation ...... (208.5) — (98.0) (3.0) (86.9) (396.4) Financial and holding results, net . . . . 920.0 — (80.4) (8.9) (82.0)(6) 748.6 Equity in earnings (losses) from unconsolidated affiliates and gain on sale of subsidiaries...... 224.7 (246.8)(1) — — 17.1(7) (5.0) Other income (expense), net ...... 17.5 — (6.0) (2.1) — 9.4 Net income before income tax/tax on assets and minority interest ...... 1,663.3 (246.8) 119.5 9.0 (151.8) 1,393.2 Income tax and tax on assets ...... (490.7) — (55.5) 0.5 46.0(8) (499.7) Minority interest ...... (302.9) 19.5(2) (0.1) — (16.3)(9) (299.9) Net income for the year ...... 869.7 (227.3) 63.9 9.5 (122.1) 593.6

(*) For the nine month period ended 30 September 2006.

Column I

Column I shows historical consolidated income statement data derived from our audited consolidated financial statements for the year ended 31 December 2006.

Column II

As a result of Multicanal’s debt restructuring consummated on 20 July 2006 our interest in Multicanal decreased from 100% to 65%. Column II shows the following pro forma adjustments:

(1) The elimination of a non-recurring gain of Ps.246.8 million recognised by the Company in its historical financial statements, to reflect this dilution.

(2) The recognition of the minority interest in Multicanal’s net loss for the period 1 January 2006 through 20 July 2006.

93 Column III Column III shows historical consolidated income statement data derived from Cablevisión’s unaudited consolidated financial statements for the nine month period ended 30 September 2006, in light of the fact that until that date Cablevisión was not consolidated with the Company.

Column IV Column IV shows historical consolidated income statement data derived from Holding Tele- digital’s unaudited financial statements for the nine month period ended 30 September 2006, in light of the fact that until that date Holding Teledigital was not consolidated with the Company.

Column V The acquisition of Cablevisión has been accounted for using the purchase method of accounting, whereby assets acquired and liabilities assumed are recognised by the Company at their respective fair value at the acquisition date. Column V shows the following pro forma adjustments: (3) The elimination of all transactions between Grupo Clarín and its subsidiaries that it either proportionally or entirely consolidates (including mainly the sale of programming rights and advertising) and Cablevisión and Holding Teledigital from 1 January 2006 to 30 September 2006. (4) An additional depreciation expense of Ps.5.6 million resulting from the increased basis in property, plant and equipment (cable network) acquired, based on an estimated useful life of 16 months, computed from 1 January 2006 to the acquisition date (26 September 2006). (5) An additional amortisation expense of Ps.81.3 million resulting from the amortisation of identifiable intangible assets (subscriber base) acquired (Ps.1,052.8 million), based on the estimated useful life of 120 months for Cablevisión and 86 months for Teledigital, computed from 1 January 2006 to the acquisition date (26 September 2006). Goodwill amounting to approximately Ps.900 million resulting from the acquisitions is not amortised, as permitted by Argentine GAAP. (6) An additional financial charge of Ps.82.0 million resulting from: • an interest expense of Ps.87.1 million resulting from the interest charges for the nine month period ended 30 September 2006 on the notes issued by us and Cablevisión to Fintech in connection with the acquisition of Cablevisión and Multicanal, net of interest income derived on the notes issued to us by Cablevisión in connection with the purchase of our 65% interest in Multicanal and by Multicanal in connection with the purchase of our 82% interest in Prima. These notes accrue interest at a floating rate. The effect of a 1/8 percent variance in the interest rate on net income is approximately Ps.0.9 million; • the elimination of a loss of Ps.6.1 million recognised by Teledigital in its historical statement of income for the nine month period ended 30 September 2006 attributable to interest on a financial loan prepaid in connection with Cablevisión’s acquisition of Holding Teledigital; and • the elimination of a gain of Ps.1.0 million recognised by Cablevisión in its historical statement of income for the nine month period ended 30 September 2006 resulting from the restructuring of its outstanding debt. Following the purchase method of accounting assets acquired and liabilities assumed were accounted for at fair value at the acquisition date. (7) This gain includes: • the elimination of a Ps.20.3 million gain recognised on the equity in earnings of Cablevisión for the period from 1 January 2006 through the acquisition date

94 (26 September 2006) resulting from our indirect minority interest in Cablevisión during this period; and • the elimination of the net loss of Ps.37.4 million recognised on the sale of our 65% ownership interest in Multicanal to Cablevisión and the sale of Prima to Multicanal. (8) Reduction of the income tax expense resulting from the adjustments described above based on the statutory rate of 35%. No income tax effect was computed over the elimination of Ps.20.3 million gain recognised from the equity earnings of Cablevisión described in pro forma adjustment (7) since this gain is not taxable under Argentine Income Tax Law. (9) This loss comprises: • the recognition of the minority interest (40%) in Cablevisión and Holding Teledigital of Ps.29.4 million (loss) for the nine month period ended 30 September 2006. • the stake of the minority interest in the formal acquisition adjustments (V) of Ps.50.2 million (gain). • the recognition of Ps.37.1 million (loss) on the minority interest associated with the acquisition of Prima by Multicanal and the simultaneous sale of Multicanal to Cable- visión and the increase of our ownership interest in Cablevisión to 60%.

Pro Forma Adjusted EBITDA We define Pro Forma Adjusted EBITDA as pro forma net sales minus pro forma cost of sales and pro forma selling and administrative expenses (excluding pro forma depreciation and amortisation). Nonetheless, Pro Forma Adjusted EBITDA is not a measure of net income or cash flow from operations and should not be considered as an alternative to net income, an indication of our financial performance, an alterative to cash flow from operating activities or a measure of liquidity. For the year ended 31 December 2006, our Pro Forma Adjusted EBITDA totals Ps. 1,036.6 million, determined as follows: Pro Forma Net Sales of Ps.3,628.9 million minus pro forma cost of sales (excluding depreciation and amortisation) of Ps.1,802.9 million minus pro forma selling and administrative expenses (excluding depreciation and amortisation) of Ps.789.4 million.

95 SELECTED CONSOLIDATED FINANCIAL INFORMATION The following tables set forth selected consolidated financial and other operating information of the Company as of and for the years ended 31 December 2006, 2005 and 2004, as of 30 June 2007 and 2006, and for the six months ended 30 June 2007 and 2006. The selected financial information as of and for the years ended 31 December 2006, 2005 and 2004 was extracted from, and should be read in conjunction with, the Company’s audited consolidated financial statements and related notes. The selected financial information as of 30 June 2007 and for the six months ended 30 June 2007 and 2006 was extracted from, and should be read in conjunction with, the unaudited interim financial statements and related notes. The financial information as of 30 June 2006 was extracted from the unaudited interim financial statements as of 30 June 2006, which are not included in this Offering Circular. Results of operations for the six month period ended 30 June 2007 are not indicative of results for the full year ending 31 December 2007 or for any other interim period or for any future financial year. In the opinion of the Company’s management, the interim financial data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim period. The Independent Accountants have issued an opinion over the audited consolidated financial statements of the Company that includes the description of an uncertainty that results from pending regulatory approvals relating to the sale by the Company of its indirect participation in Prima to Multicanal, the sale of its direct and indirect participation in Multicanal to Cablevisión, and the indirect acquisition by the Company of additional shares in Cablevisión necessary to increase its participation in Cablevisión to 60% of the outstanding capital stock and votes. Additionally, in connection with the unaudited interim financial statements of the Company, the Independent Accountants have issued a limited review report with an observation relating to the uncertainty mentioned above. Our audited financial statements have been prepared in accordance with Argentine GAAP and CNV regulations, which differ in certain significant respects from U.S. GAAP. The U.S. GAAP Financial Statements are set forth in Annex A. Solely for the convenience of the reader, Peso amounts as of and for the year ended 31 December 2006 and as of and for the six months ended 30 June 2007 have been translated into U.S. dollars at the selling rate for U.S. dollars quoted by Banco Nación on 31 December 2006 of Ps.3.06 to U.S.$1.00 and on 30 June 2007 of Ps.3.09 to U.S.$1.00, respectively. The selling rate for U.S. dollars quoted by Banco Nación on 20 September 2007 was Ps.3.13 to U.S.$1.00. The U.S. dollar equivalent information should not be construed to imply that the Peso amounts represent, or could have been or could be converted into U.S. dollars at such rates or any other rate. See “Exchange Rate Information”. In accordance with the Argentine Corporate Law, we may pay dividends in Pesos out of retained earnings, if any, as set forth in our audited unconsolidated financial statements prepared in accordance with Argentine GAAP and CNV regulations. However, we conduct our operations through our subsidiaries and our ability to declare or pay dividends depends on us receiving dividends from our subsidiaries. Under the terms of the financial debt of certain of our subsidiaries, they are subject to restrictions in their ability to declare and pay dividends under certain circumstances. See “Operating and Financial Review — Liquidity and Capital Resources — Indebtedness”. This selected consolidated financial and other information should be read in conjunction with “Presentation of Financial and Other Information” and “Operating and Financial Review”.

96 Argentine GAAP Year Ended 31 December Six Months Ended 30 June Statement of Operations Data 2004 2005 2006 2006 2006 2007 2007 Ps. Ps. Ps. U.S.$ Ps. Ps. U.S.$ (Unaudited) (Millions) (Millions) Net sales ...... 1,667.3 1,988.4 2,811.8 918.9 1,141.5 1,993.3 645.1 Cost of sales — excluding depreciation and amortisation . . . . . (842.2) (1,088.5) (1,491.6) (487.5) (638.5) (963.4) (311.8) Subtotal ...... 825.1 900.0 1,320.2 431.4 503.0 1,029.9 333.3 Expenses — excluding depreciation and amortisation Selling expenses — excluding depreciation and amortisation . . . (192.0) (227.5) (290.0) (94.8) (116.9) (203.3) (65.8) Administrative expenses — excluding depreciation and amortisation...... (174.2) (215.7) (320.5) (104.7) (117.2) (209.9) (67.9) Expenses subtotal ...... (366.2) (443.2) (610.5) (199.5) (234.0) (413.3) (133.7) Depreciation of property, plant and equipment ...... (183.9) (142.7) (169.3) (55.3) (66.5) (138.2) (44.7) Amortisation of intangible assets. . . . . (12.0) (8.7) (38.9) (12.7) (5.1) (57.8) (18.7) Depreciation of other investments . . . . (0.3) (0.3) (0.3) (0.1) (0.2) (0.1) 0.0 Depreciation and amortisation subtotal ...... (196.1) (151.7) (208.5) (68.1) (71.8) (196.1) (63.5) Financing and holding results, net Generated by assets ...... (2.8) 13.1 (4.7) (1.5) 22.2 (9.3) (3.0) Generated by liabilities ...... (300.7) (354.3) 924.7 302.2 (259.6) (183.8) (59.5) Equity in earnings (losses) from unconsolidated affiliates and gain on sale of subsidiaries, net ...... 31.4 15.2 224.7 73.4 16.0 4.6 1.5 Other income (expense), net...... (10.1) 0.3 17.5 5.7 (1.5) (10.3) (3.3) Income/(loss) for the year/period before income tax, tax on assets and minority interest ...... (19.5) (20.7) 1,663.3 543.6 (25.7) 221.7 71.7 Income tax and tax on assets ...... 15.3 36.0 (490.7) (160.4) 10.6 (85.5) (27.7) Minority interest ...... 2.3 (1.7) (302.9) (99.0) (3.0) (32.7) (10.6) Net income/(loss) for the year/period ...... (1.9) 13.6 869.7 284.2 (18.1) 103.5 33.5 Adjusted EBITDA(1) ...... 458.9 456.7 709.7 231.9 269.0 616.6 199.5 Pro Forma Adjusted EBITDA(2) . . . . . N.A. N.A. 1,036.6 338.8 N.A. N.A. N.A.

97 As of 31 December As of 30 June Balance Sheet Data 2004 2005 2006 2006 2006 2007 2007 Ps. Ps. Ps. U.S.$ Ps. Ps. U.S.$ (Unaudited) (Millions) (Millions) ASSETS Current assets Cash and banks ...... 286.1 175.5 299.1 97.7 173.1 321.4 104.0 Short-term investments ...... 94.0 311.5 82.1 26.8 357.5 142.6 46.2 Trade receivables, net ...... 255.1 276.6 460.6 150.5 364.2 474.2 153.5 Other receivables, net ...... 102.2 108.9 148.3 48.4 176.4 116.4 37.7 Inventories...... 104.7 152.2 152.7 49.9 193.4 174.8 56.6 Other assets ...... 6.9 8.4 65.2 21.3 8.1 58.0 18.8 Total current assets ...... 849.2 1,033.1 1,208.0 394.8 1,272.7 1,287.4 416.6 Non-current assets Trade receivables, net ...... 14.5 12.1 9.7 3.2 12.1 9.1 2.9 Other receivables, net ...... 606.9 735.8 151.1 49.4 738.4 162.2 52.5 Inventories...... 28.2 34.1 32.9 10.7 31.7 33.1 10.7 Investments in unconsolidated affiliates ...... 60.4 253.9 72.5 23.7 333.1 79.7 25.8 Other long-term investments ...... 17.4 54.8 7.0 2.3 21.7 7.0 2.3 Property, plant and equipment, net . . 808.9 765.7 1,342.7 438.8 797.4 1,404.1 454.4 Intangible assets, net...... 24.9 25.4 1,086.6 355.1 21.7 1,030.2 333.4 Subtotal...... 1,561.2 1,881.8 2,702.5 883.2 1,956.2 2,725.4 882.0 Goodwill ...... 1,648.1 1,654.7 2,476.2 809.2 1,660.0 2,476.1 801.3 Total non-current assets ...... 3,209.3 3,536.4 5,178.7 1,692.4 3,616.2 5,201.5 1,683.3 Total assets ...... 4,058.5 4,569.5 6,386.7 2,087.2 4,888.9 6,488.9 2,100.0

LIABILITIES Current Liabilities Accounts payable ...... 291.3 283.7 437.4 143.0 347.3 458.5 148.4 Short-term debt and current portion of long-term debt ...... 2,241.3 2,781.6 420.5 137.4 2,966.2 448.0 145.0 Salaries and social security payable ...... 57.9 78.3 118.4 38.7 73.4 114.8 37.1 Taxes payable ...... 60.2 118.9 177.4 58.0 84.5 190.3 61.6 Other liabilities...... 61.6 82.6 136.5 44.6 117.7 116.5 37.7 Total current liabilities ...... 2,712.2 3,345.0 1,290.2 421.6 3,589.1 1,328.1 429.8 Non-current liabilities Accounts payable ...... 14.5 5.0 10.6 3.5 9.7 13.2 4.3 Long-term debt ...... 550.2 427.8 2,057.9 672.5 510.6 1,961.5 634.8 Salaries and social security payable ...... 0.0 0.1 0.3 0.1 0.1 0.2 0.1 Taxes payable ...... 2.0 5.9 14.8 4.8 4.8 19.0 6.1 Other liabilities...... 32.8 21.0 1,010.4 330.2 25.9 1,027.6 332.5 Provisions ...... 58.3 68.8 112.9 36.9 67.1 113.9 36.9 Total non-current liabilities ...... 657.8 528.6 3,206.9 1,048.0 618.2 3,135.3 1,014.7 Total liabilities ...... 3,370.0 3,873.6 4,497.1 1,469.7 4,207.3 4,463.4 1,444.5 Minority interest ...... 40.3 32.7 354.4 115.8 35.5 386.1 124.9 Shareholders’ equity ...... 648.2 663.3 1,535.2 501.7 646.1 1,639.5 530.6 Total liabilities, minority interest and shareholders’ equity ...... 4,058.5 4,569.5 6,386.7 2,087.2 4,888.9 6,488.9 2,100.0

98 U.S. GAAP (3) Six Months Ended Year Ended 31 December 30 June Statement Of Operations Data 2004 2005 2006 2006 2006 2007 2007 Ps. Ps. Ps. U.S.$ Ps. Ps. U.S.$ (Unaudited) (Millions) (Millions) Net sales ...... 1,571.2 1,847.6 2,560.5 836.8 1,058.2 1,895.5 613.4 Cost of sales — excluding depreciation and amortisation. . . (796.1) (1,002.1) (1,309.6) (428.0) (589.4) (917.2) (296.8) Selling and administrative expenses — excluding depreciation and amortisation. . . (349.6) (414.6) (569.5) (186.1) (221.1) (398.7) (129.0) Depreciation and amortisation . . . . (93.8) (76.4) (136.8) (44.7) (43.2) (150.1) (48.6) Operating income ...... 331.7 354.5 544.7 178.0 204.5 429.5 139.0 Financial results, net ...... 284.1 (305.3) 939.1 306.9 (200.7) (174.0) (56.3) Equity in earnings from unconsolidated affiliates ...... 48.3 51.9 32.0 10.5 20.1 20.4 6.6 Gain on sale of subsidiaries, net . . — — 6.0 2.0 — — — Income before income tax, tax on assets and minority interest . . . . 664.1 101.2 1,521.8 497.3 23.9 275.9 89.3 Income tax and tax on assets — (expense)/benefit ...... 98.2 (28.1) (174.6) (57.1) 205.8 (80.2) (26.0) Minority interest ...... (2.2) (3.1) (38.4) (12.6) (4.0) (44.3) (14.3) Net income...... 760.2 70.0 1,308.7 427.7 225.7 151.4 49.0 Adjusted EBITDA(4) ...... 425.5 430.9 681.5 222.7 247.7 579.6 187.6

99 As of 31 December As of 30 June Balance Sheet Data 2004 2005 2006 2006 2006 2007 2007 Ps. Ps. Ps. U.S.$ Ps. Ps. U.S.$ (Unaudited) (Millions) (Millions) ASSETS Current assets Cash and cash equivalents ...... 381.4 449.4 326.9 106.8 483.0 404.0 130.8 Trade receivables, net ...... 234.6 242.0 410.6 134.2 332.6 442.9 143.3 Other receivables, net ...... 160.6 393.7 321.6 105.1 667.1 263.8 85.4 Inventories...... 80.9 123.4 126.0 41.2 168.6 154.3 50.0 Other assets ...... 0.9 2.0 2.6 0.9 2.3 4.7 1.5 Total current assets...... 858.4 1,210.5 1,187.7 388.1 1,653.7 1,269.9 411.0 Trade receivables, net ...... 0.2 0.4 0.3 0.1 0.4 0.0 0.0 Other receivables, net ...... 370.8 203.1 280.6 91.7 198.3 284.0 91.9 Inventories...... 17.2 21.3 19.7 6.4 23.1 19.7 6.4 Investments in unconsolidated affiliates ...... 174.0 387.6 235.7 77.0 465.2 244.1 79.0 Other long-term investments ...... 9.4 47.0 3.3 1.1 17.9 3.2 1.0 Property, plant and equipment, net . . 398.9 416.9 1,025.3 335.1 461.7 1,107.3 358.4 Intangible assets, net...... 12.6 17.7 577.6 188.8 16.1 543.4 175.9 Goodwill ...... 1,147.4 1,156.6 2,909.0 950.7 1,155.6 2,905.3 940.2 Total assets ...... 2,988.8 3,461.0 6,239.3 2,039.0 3,992.2 6,376.9 2,063.7

(1) We define Adjusted EBITDA as net sales minus cost of sales (excluding depreciation and amortisation) and selling and administrative expenses (excluding depreciation and amortisation). We believe that Adjusted EBITDA is a meaningful measure of our performance because it is commonly used in the industry to analyze and compare media companies on the basis of operating performance, leverage and liquidity. Nonetheless, Adjusted EBITDA is not a measure of net income or cash flow from operations and should not be considered as an alternative to net income, an indication of our financial performance, an alternative to cash flow from operating

100 activities or a measure of liquidity. Because Adjusted EBITDA is not an Argentine GAAP measure, other companies may compute Adjusted EBITDA in a different manner. Therefore, Adjusted EBITDA as reported by other companies may not be comparable to Adjusted EBITDA as we report it. 2004 = Net sales Ps.1,667.3 million; Minus: Cost of sales (excluding depreciation and amortisation) Ps.842.2 million; Minus: Selling and administrative expenses (excluding depreciation and amortisation) Ps. 366.2 million. 2005 = Net sales Ps.1,988.4 million; Minus: Cost of sales (excluding depreciation and amortisation) Ps.1,088.5 million; Minus: Selling and administrative expenses (excluding depreciation and amortisation) Ps. 443.2 million. 2006 = Net sales Ps.2,811.8 million; Minus: Cost of sales (excluding depreciation and amortisation) Ps.1,491.6 million; Minus: Selling and administrative expenses (excluding depreciation and amortisation) Ps. 610.5 million. June 2006 = Net sales Ps.1,141.5 million; Minus: Cost of sales (excluding depreciation and amortisation) Ps.638.5 million; Minus: Selling and administrative expenses (excluding depreciation and amortisation) Ps.234.0 million. June 2007 = Net sales Ps.1,993.3 million; Minus: Cost of sales (excluding depreciation and amortisation) Ps.963.4 million; Minus: Selling and administrative expenses (excluding depreciation and amortisation) Ps.413.3 million. (2) See “Unaudited Consolidated Pro Forma Statement of Income”. (3) The summary data presented under U.S. GAAP was derived from and should be read in conjunction with the U.S. GAAP Financial Statements set forth in Annex A. (4) We define Adjusted EBITDA as sales minus cost of sales and selling and administrative expenses (excluding depreciation and amortisation). We believe that Adjusted EBITDA is a meaningful measure of our performance because it is commonly used in the industry to analyze and compare media companies. Nonetheless, Adjusted EBITDA is not a measure of net income or cash flow from operations and should not be considered as an alternative to net income, an indication of our financial performance, an alternative to cash flow from operating activities or a measure of liquidity. Because Adjusted EBITDA is not a U.S. GAAP measure, other companies may compute Adjusted EBITDA in a different manner. Therefore, Adjusted EBITDA as reported by other companies may not be comparable to Adjusted EBITDA as we report it. 2004 = Net sales Ps.1,571.2 million; Minus: Cost of sales (excluding depreciation and amortisation) Ps.796.1 million; Minus: Selling and administrative expenses (excluding depreciation and amortisation) Ps.349.6 million. 2005 = Net sales Ps.1,847.6 million; Minus: Cost of sales (excluding depreciation and amortisation) Ps.1,002.1 million; Minus: Selling and administrative expenses (excluding depreciation and amortisation) Ps.414.6 million. 2006 = Net sales Ps.2,560.5 million; Minus: Cost of sales (excluding depreciation and amortisation) Ps.1,309.6 million; Minus: Selling and administrative expenses (excluding depreciation and amortisation) Ps.569.5 million. June 2006 = Net sales Ps.1,058.2 million; Minus: Cost of sales (excluding depreciation and amortisation) Ps.589.4 million; Minus: Selling and administrative expenses (excluding depreciation and amortisation) Ps.221.1 million. June 2007 = Net sales Ps.1,895.5 million; Minus: Cost of sales (excluding depreciation and amortisation) Ps.917.2 million; Minus: Selling and administrative expenses (excluding depreciation and amortisation) Ps.398.7 million.

101 As of 31 December As of 30 June Operating Metrics 2004 2005 2006 2006 2007 Cable TV Subscribers(1),(2) ...... 1,057,900 1,145,200 2,837,500 1,218,900 2,903,800 Cable TV Homes passed(1) Cablevisión ...... n/a n/a 3,767,800 n/a 3,767,800 Multicanal ...... 4,074,300 4,286,600 4,381,700 4,381,700 4,381,700 Cable TV churn rate Cablevisión ...... n/a n/a 12.2% n/a 13.1% Multicanal ...... 16.1% 13.8% 14.4% 14.4% 16.4% Internet Access Subscribers(1),(3) . . 162,500 229,000 587,700 259,200 657,200 Newspaper — Circulation(4) ...... 463,987 468,433 464,180 475,210 451,182 Canal 13 — Audience Share Prime time(5) ...... 28.2% 27.1% 39.4% 37.6% 39.5% Total time(5) ...... 27.2% 24.9% 30.3% 28.3% 32.7%

(1) Numbers rounded to nearest hundred. The total homes passed as of 30 June 2007 is 6,753,600 if overlap among Cablevisión and its subsidiaries (including Multicanal and Teledigital) is eliminated. (2) Includes Uruguay and Paraguay. Numbers rounded to nearest hundred. (3) Includes Paraguay. Numbers rounded to nearest hundred. (4) Average number of copies according to IVC (including Diario Clarín and Olé). (5) Share of free TV audience according to IBOPE for AMBA. Prime time is defined as Monday through Friday from 8pm to 12am. Total time is defined as Monday through Sunday from 12 pm to 12 am.

102 OPERATING AND FINANCIAL REVIEW The following discussion should be read in conjunction with the financial statements and related notes included elsewhere in this Offering Circular. Except as discussed in the following paragraphs, financial statements have been prepared in accordance with Argentine GAAP, which differ in certain respects from U.S. GAAP, and the regulations of the CNV. This Offering Circular contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results of operations could differ materially from those discussed in the forward- looking statements. See “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors”. The discussion of our results of operations and financial condition set forth below for 2006, 2005 and 2004 and the six month periods ended 30 June 2007 and 2006 relates primarily to the Company, and only includes Cablevisión and Teledigital for any period ending on or after 26 September 2006. In July 2006, our ownership interest in Multicanal decreased from 100% to 65% as a result of the capitalisation of U.S.$182.0 million of outstanding debt pursuant to the terms of Multicanal’s APE. In September 2006, through a series of related transactions, we increased our ownership interest in Cablevisión to 60%. Cablevisión, in turn, acquired 100% of Holding Teledigital and 98.5% of Multicanal, who, in turn, acquired from Prima Internacional 100% of Prima (collectively, the “Cable- visión Acquisition”). See “Business Description — Cable Television and Internet Access — Summary of Ownership Changes and Recent Acquisitions” and “Unaudited Pro Forma Consolidated Statement of Income”.

Overview We are an Argentine sociedad anónima (corporation). Substantially all of our assets and operations and our customers are located in Argentina. Accordingly, our financial condition and results of operations depend to a significant extent on macroeconomic and political conditions prevailing in Argentina, and were materially adversely affected by Argentina’s 2001/2002 economic crisis. See “Risk Factors — Risks Related to Argentina”. The Company conducts all of its operations through subsidiaries and, accordingly, in addition to certain management fees that it collects from certain of its subsidiaries, the Company’s main source of cash to pay dividends are the dividends received from its subsidiaries. As a holding company, the Company’s ability to pay dividends and obtain financing depends on the results of operations and financial condition of its subsidiaries and could be restricted by legal, contractual or other limitations binding upon those subsidiaries. See “— Liquidity and Capital Resources — Indebtedness”. These dividend payments depend on the Company’s subsidiaries’ results of operations, financial condition, cash and capital requirements, future growth prospects and other factors deemed relevant by their respective boards of directors, as well as on any applicable legal restrictions. Certain of our subsidiaries are subject to certain contractual restrictions on their ability to declare or pay dividends. See “Risk Factors — Risk Related to our Securities — Our Shareholders’ ability to receive cash dividends may be limited” and “— Liquidity and Capital Resources — Indebtedness”.

The Argentine Economy

The 2001/2002 Crisis and Recovery in Argentina

Overview From December 2001 through most of 2002, Argentina experienced an unprecedented crisis that virtually paralyzed the country’s economy and led to radical changes in government policies. Since then, the Argentine economy has recovered significantly from the crisis and the business environment has largely stabilised.

103 Notwithstanding the recent improvements to the Argentine economy and its current prospects for growth, conditions in Argentina remain subject to significant uncertainties and risks. For more information, see “Risk Factors — Risks Related to Argentina”.

How the Economic Crisis Developed From the third quarter of 1998 through the first six months of 2002, Argentina suffered a severe economic recession. Structural barriers, including the rigidity of the convertibility regime and its fixed exchange rate system, a public sector deficit that continued to grow as a percentage of GDP and Argentina’s trade and fiscal deficits limited the Argentine government’s ability to stimulate the economy. Furthermore, the country’s excessive reliance on foreign capital, combined with its mounting external debt, resulted in a deep contraction of the economy and banking and fiscal crises when the debt markets shut down for Argentine issuers, including the Government, and capital flight increased. In 2001 in particular, economic conditions deteriorated significantly, as capital outflows totalled U.S.$14 billion and interest payments on public debt equalled 3.8% of GDP, compared to a primary surplus of only 0.5% at the federal level. In the second half of 2001, the growing perception that a devaluation of the peso was imminent triggered a massive run on bank deposits and accelerated capital flight from the Argentine economy. From December 2000 to November 2001, total deposits with the banking system fell by 21.0%. In a last bid to safeguard the convertibility regime and avert the collapse of the banking sector, in December 2001, the Argentine government imposed strict per-person limits on bank withdrawals (known as the corralito), limiting withdrawals from demand accounts to Ps.250 per week and from payroll accounts to Ps.1,000 per month. This action fuelled panic, and as a consequence, depositors seeking a way out of the corralito transferred their funds from matured time deposits to demand deposits. The total amount of private sector time deposits fell by 36% (Ps.16.4 billion), while private sector demand deposits increased by 75.6% (Ps.12.3 billion) during December 2001. The economic crisis and the restrictions on bank withdrawals caused massive social unrest, which led to a political crisis that resulted in the resignation of President Fernando de la Rúa in December 2001. Several interim presidents followed until the appointment of Eduardo Duhalde in January 2002.

The Argentine Government’s Response to the Crisis In response to the political and economic crisis, the Argentine government undertook a number of far-reaching initiatives that radically changed the monetary and foreign exchange regime and the regulatory environment for conducting business in Argentina, creating even greater financial uncertainty and virtually paralyzing all commercial and financial activities in Argentina in 2002.

Sovereign Default In response to the government’s declining revenues, substantial debt service obligations, growing deficit and diminishing access to the international capital markets, Argentina suspended payment on a significant portion of its public debt in December 2001. The government’s default both closed Argentina’s access to foreign financings and lowered the market value of government bonds.

Peso Devaluation In January 2002, the Argentine government passed the Public Emergency and Reform Law, which abolished the fixed parity between the Peso and the U.S. dollar, bringing the convertibility regime that had been in effect for ten years to an end. The Peso devalued dramatically, reaching its lowest level on 26 June 2002, when it had lost 74% of its value from Ps.1.00 to Ps.3.87 per dollar. The devaluation of the peso had a substantial and negative effect on the Argentine economy and on the financial condition of individuals and businesses, including the media industry. The devaluation

104 resulted in many Argentine businesses defaulting on their foreign currency debt obligations, significantly reduced real wages and crippled businesses that depended on domestic demand, such as utilities, the financial services industry and the media industry. The devaluation of the peso created pressure on the domestic pricing system and triggered very high rates of inflation. During 2002, wholesale inflation reached a rate of 118% and consumer prices rose 41%.

Rescheduling of Deposits and Asymmetric Pesification

From 30 January 2002 to 30 April 2002, as part of the Public Emergency and Reform Law, the government decreed the mandatory conversion of dollar-denominated deposits and dollar-denominated obligations that were governed by Argentine law into Pesos, in a process known as pesification. The pesification converted U.S. dollar-denominated obligations and U.S. dollar-denominated deposits into Pesos at different exchange rates (the so called “asymmetric pesification”). Additional restrictions were imposed on bank withdrawals (known as the corralón), which effectively froze and rescheduled all time deposits, including a significant portion that had matured during the time the corralito was in effect and had been converted into demand deposits.

Asymmetric pesification consisted of two basic elements. First, all foreign currency denominated, Argentine law governed obligations were converted into Pesos at a rate of Ps.1.00 per U.S.$1.00. The affected debts were also made subject to adjustment by a coeficiente de variación de salarios, (“CVS”), a wage inflation coefficient, in the case of certain types of loans to individuals (i.e., mortgages, personal loans, etc., in amounts of less than Ps.100,000), and all other debts were subject to adjustment by the coeficiente de estabilización de referencia, (“CER”), a consumer price inflation coefficient. The second element of pesification required that all foreign currency denominated deposits be converted into peso-denominated deposits at an exchange rate of Ps.1.40 per U.S.$1.00, subject to CER indexation. Asymmetric pesification had dramatic effects on the composition of banks’ balance sheets.

The Path to Stabilisation

In March 2002, GDP reached its maximum contraction. The economy then started its path to stabilisation in April 2002 with a clear improvement of economic variables during the second half of the year, mainly as a result of decreasing imports. While the devaluation of the peso had significant adverse consequences, it did result in a positive balance for Argentina’s merchandise trade and also current account balance, which in turn fostered a reactivation of domestic production. The sharp decline in the Peso’s value against foreign currencies, together with a decline in production costs in U.S. dollar terms, made Argentine products relatively inexpensive in the export markets. At the same time, the costs of imported goods increased significantly due to the devaluation of the peso, forcing Argentine consumers to substitute their purchase of foreign goods with domestic products, substantially boosting domestic demand for domestic products.

Despite the improvement in economic conditions during the second half of 2002, Argentina’s overall GDP contracted 10.9% for the full year, receding to 1993 values; investment collapsed (with, for example, negative growth of 36% in the second quarter as compared to the second quarter of 2001, i.e., 3.3 times greater than the decline in GDP); and inflation increased sharply. The main impact of the crisis was the unprecedented social hardship. Unemployment rates on average rose from 12.9% to 19.7% between 1998 and 2002, average private and public sector real wages (private and public sector on average) declined 24% in 2002 (deflected by the CPI), and the nationwide poverty index increased from 37% of the population in 2001 to 55% in 2002.

105 Economic Recovery The table below sets forth information about certain economic indicators in Argentina for the years indicated. Concept Unit of Measure 2002 2003 2004 2005 2006 ECONOMIC ACTIVITY Real GDP (Pesos of 1993) ...... % change (10.9)% 8.8% 9.0% 9.2% 8.5% Nominal GDP in current U.S.$(1) . . . Billions of U.S.$ 95.9 127.3 153.1 181.5 212.5 Per capita GDP ...... Current U.S.$ 2,618 3,438 4,090 4,798 5,559 Real Gross Domestic Investment % change (Pesos of 1993) ...... (36.4)% 38.2% 34.4% 22.7% 18.2% As % of GDP ...... — 11.3% 14.3% 17.7% 19.8% 21.6% PRICE INDEXES AND EXCHANGE RATE INFORMATION Consumer Prices Index (CPI) ...... % change Dec/Dec 41.0% 3.7% 6.1% 12.3% 9.8% Wholesale Prices Index (WPI) . . . . . % change Dec/Dec 118% 2.0% 7.9% 10.7% 7.1% Nominal Exchange Rate...... Ps./U.S.$ (December) 3.36 2.93 2.97 3.03 3.07 EXTERNAL INDICATORS AND INTERNATIONAL RESERVES POSITION Trade Merchandise Balance ...... Billions of U.S.$ 16.7 15.7 12.1 11.7 12.0 Current Account Balance(2) ...... Billions of U.S.$ 8.7 8.1 3.2 5.7 8.1 As % of GDP ...... 9.1% 6.3% 2.1% 3.1% 3.8% BCRA International Reserves(3) . . . . Billions of U.S.$ 10.5 14.1 19.6 28.1 32.0 FISCAL INDICATORS Federal Fiscal Revenues ...... Billions of U.S.$ 55.1 77.2 105.1 126.4 158.5 As % of GDP ...... 17.6% 20.5% 23.5 23.8% 24.2% Federal Primary Expenses ...... Billions of U.S.$ 52.8 68.5 87.7 106.8 135.4 As % of GDP ...... 16.9% 18.2% 19.6% 20.1% 20.7% Federal Primary Fiscal Balance(4) . . Billions of U.S.$ 2.3 8.7 17.3 19.6 23.2 Consolidated Primary Fiscal As a % of Nominal GDP Balance(4)...... 0.7% 3.2% 5.3% 4.4% 3.9% Federal ...... As a % of Nominal GDP 0.7% 2.3% 3.9% 3.7% 3.5% Provinces ...... As a % of Nominal GDP (0.0)% 0.9% 1.4% 0.7% 0.4% Sovereign Public Debt Stock(5). . . . . Billions of U.S.$ 153.0 178.8 191.3 128.6 136.7 As % of GDP ...... 159.5% 140.4% 125.0% 70.9% 64.3% UNEMPLOYMENT AND POVERTY Unemployment Rate(6) ...... End of year (incl Social Plans) 17.9% 14.5% 12.1% 10.1% 8.7% End of year (excl Social Plans) N/A 19.7% 16.2% 12.7% 10.1% Poverty Rate-Total Population ...... Average (% Persons) 55.3% 50.9% 42.3% 36.4% 26.9%

(1) Based on the average nominal Ps./U.S.$ exchange rate for each year. (2) Earned Basis. (3) Balances at year end. (4) Includes automatic and non-automatic transfers to provinces. (5) Data for December 2006 does not include a total of U.S.$26.1 billion held by creditors that did not participate in the 2005 restructuring. (6) Social plans are welfare payments made by the government without demanding compensation to mitigate the impact of economic crisis on certain segments of the population. Sources: Ministry of Public Works of Argentina, Central Bank, INDEC and Company estimates.

106 The economy continued to show indications of recovery, as GDP grew at a rate of 8.8% in 2003. A combination of sound fiscal and monetary policies kept CPI under control at 3.7% in 2003. In addition, during 2003, Argentina withdrew all the national and provincial governments’ quasi-money securities from circulation (amounting to Ps.7.8 billion), and eliminated all deposit restrictions. The merchandise trade balance experienced a second year of sustained surplus, aided by the rise in commodity prices and export volumes. As a consequence of the trade balance surplus the net amount of U.S. dollars entering the Argentine economy exceeded the amount of capital leaving the economy, leading to an appreciation of the Peso. As of 31 December 2003 the Central Bank reference exchange rate had reached Ps.2.93 per U.S.$1, compared to Ps.3.36 per U.S.$1 as of 31 December 2002. Meanwhile, social indicators improved. The unemployment rate decreased to 17.3% in 2003 and real wages began to recover. GDP grew by 9.0% in 2004, primarily as a result of increases in domestic consumption and gross domestic investment, continuing the trends that had begun in 2003. Argentina registered net capital inflows for the first time since 2000, resulting in a surplus in the country’s capital and financial account of U.S.$2.0 billion. The country’s balance of payments surplus also increased from U.S.$3.6 billion in 2003 to U.S.$5.3 billion in 2004. The unemployment rate decreased from 14.5% (including social plans) in the last quarter of 2003 to 12.1% in the last quarter of 2004, and the underemployment rate also decreased from 16.3% in the last quarter of 2003 to 14.3% in the last quarter of 2004. The nationwide poverty index decreased from 50.9% of the population in 2003 to 42.3% in 2004. The value of the peso remained stable in 2004, with the exchange rate increasing from Ps.2.93 per U.S.$1 as of 31 December 2003 to Ps.2.97 per U.S. dollar as of 31 December 2004. The Argentine economy continued to grow in 2005, with GDP growing by 9.2% and the Argentine peso remaining stable. As a result of this stable growth, the unemployment rate decreased from 12.1% in the last quarter of 2004 to 10.1% in the last quarter of 2005 (in both cases, including social plans), and the underemployment rate also decreased from 14.3% in the last quarter of 2004 to 11.9% in the last quarter of 2005. Economic growth applied upward pressure on the demand for goods and services, which resulted in an inflation rate of 12.3% in 2005, compared with an inflation rate of 6.1% in 2004. In June 2005, the Argentine government restructured the federal government’s public debt, which had been in default since December 2001. Argentina reduced its outstanding principal amount of public debt from U.S.$191.3 billion to U.S.$126.6 billion and negotiated lower interest rates and extended payment terms. Approximately U.S.$26.1 billion of defaulted bonds held by creditors who did not participate in the exchange offer remain outstanding. In addition, in January 2006, Argentina prepaid all amounts owing under outstanding credit lines to the International Monetary Fund (“IMF”). GDP grew at a rate of 8.5% in 2006, fuelled by a favourable international context with high commodity prices, and an increase in fixed investment and private consumption in Argentina. Total exports from Argentina increased by 15.1% to U.S.$46,456 million in 2006, mainly driven by an increase in exports of industrial and agricultural products. Imports rose by 19% due to the growth in consumption and investment in Argentina. The trade surplus remained high, growing from U.S.$11,663 million in 2005 to U.S.$12,305 million in 2006. Consistent with this economic growth, the unemployment rate continued to fall as a consequence of job growth, both regular and unreported. The data corresponding to the fourth quarter of 2006 showed that 8.7% of the active population is unemployed, compared to 10.1% (including social plans) in 2005. Average real wages of the economy increased by 8% in 2006 The Central Bank continued its policy of accumulating international reserves during 2006, which enabled it to recover and surpass the level of January 2006, prior to the cancellation of all financial obligations to the IMF. Central Bank reserves ended the year at U.S.$32 billion, after the repayment of approximately U.S.$9.5 billion to the IMF.

107 After appreciating in 2005, the Peso-U.S. dollar exchange rate increased to Ps.3.07 per U.S. dollar as of December 2006, a 1.3% depreciation compared to December 2005. The real exchange rate of the Argentine Peso against a basket of currencies remained stable throughout the year. Federal fiscal revenues increased by 25% in 2006, allowing for a national primary fiscal surplus of 3.5% of GDP. In relation to public debt, two issues are still pending: (i) a portion of the defaulted public sector debt was not included in the 2005 debt swap (the debt owed to the so-called “Paris Club”) and has not yet been restructured, and (ii) holders of approximately U.S.$26.5 billion (as of 30 June 2007) of government bonds did not accept the government’s proposal and in many instances continue judicial actions against the government. Additionally, foreign shareholders of several Argentine companies have filed claims in excess of U.S.$17 billion before the International Center for the Settlement of Investment Disputes (“ICSID”), alleging that the emergency measures adopted by the Argentine government in response to the economic crisis since 2001 are inconsistent with the fair and equitable treatment standards set forth in various bilateral investment treaties to which Argentina is a party. In May 2005, an ICSID tribunal rendered an award against Argentina in a case brought by CMS Gas Transmission Company, which was appealed by Argentina. In October 2006, another ICSID tribunal issued a “decision on liability” that is adverse to Argentina in a case brought by LG&E Energy Corp., LG&E Capital Corp. and LG&E International Inc. The decision on liability is not the tribunal’s final award and therefore the decision is not yet subject to appeal. On 22 May 2007, an ICSID tribunal rendered an award against Argentina in a case brought by Enron Corporation and Ponderosa Assets L.P. Italian holders of defaulted Argentine government bonds have also filed claims before ICSID. The CPI increased by 9.8% in 2006, which is an elevated rate compared to international standards. The government has been reluctant to adopt measures that could result in a reduction in the rate of economic growth and have attempted to curb inflation through formal and informal price controls. The Argentine economy began 2007 with favourable prospects in terms of economic growth, but with significant concerns over official inflation levels and the lack of investments, in particular in the energy sector. See “Risk Factors — Risks Related to Argentina — Restrictions on the supply of energy could negatively affect Argentina’s economic growth and negatively impact the Company’s results of operations”. We cannot predict the evolution of future macroeconomic events. The long-term evolution of the Argentine economy, however, remains uncertain. While economic, political and social conditions have improved, the country still faces significant challenges, including the need to attract investments in capital goods that will permit sustainable growth and reduce inflationary pressures, the renegotiation of utility contracts, the resolution of the energy crisis, the treatment of bondholders who rejected the government’s debt exchange offer, the restructuring of the financial system and the reform to its tax regime. In light of this uncertain situation, the following discussion may not be indicative of our current or future results of operations, liquidity or capital resources and may not contain all of the necessary information to help you understand the information contained in this discussion with results from previous or future periods. Accordingly, the following discussion should be read in conjunction with, and is qualified in its entirety by, the risk factors contained in this Offering Circular.

Factors Affecting the Comparability of Historical Results of Operations and Financial Condition Our Cable Television And Internet Access Operations Have Gone Through Important Transformations In Recent Years: • In 2005, we acquired a minority interest in Cablevisión, which we recorded under Investments in affiliates, and accounted for our equity portion of Cablevisión’s net income (loss) under Equity in earnings (losses) from unconsolidated affiliates and gain on sale of subsidiaries, net.

108 • On 20 July 2006, our subsidiary Multicanal completed the restructuring of its financial indebtedness pursuant to the terms of the Multicanal APE. The Multicanal APE provided, among other things, for the exchange of approximately U.S.$182.0 million of outstanding debt for shares representing approximately 35% of Multicanal’s total capital and the discharge of approximately U.S.$125.0 million of outstanding debt for a cash payment of U.S.$37.5 million. After giving effect to the Multicanal APE, Multicanal’s outstanding financial debt decreased from U.S.$526.4 million to U.S.$223.3 million. The consummation of Multicanal’s APE generated a non-recurrent gain before tax of Ps.1,493.3 million (including Ps.246.8 million attributable to the dilution for the benefit of existing shareholders — the Company and AGEA — resulting from the capitalisation described above). • On 26 September 2006, through a series of related transactions, we increased our ownership interest in Cablevisión to 60%. Cablevisión simultaneously acquired 100% of Holding Teledigital and 98.5% of Multicanal, and through Multicanal 100% of the outstanding shares of Prima, 3% of which were subsequently transferred to Univent’s and later to Cablevisión. See “Unaudited Pro Forma Consolidated Statement of Income”. In 2005 and 2006, inflation rates (as measured by the CPI) accelerated, reaching 12.3% in 2005, and 9.8% in 2006. Although under Argentine GAAP currently we are not required to adjust our financial statements to reflect inflation, our cost of sales, in particular our labour costs, was affected by the upward pressure on the prices of goods and services. Our future profitability will depend, among other factors, on our ability to increase the prices of our goods and services to offset increases in our cost of sales attributable to inflationary pressures. As of 30 June 2007 our ownership interest in Patagonik Film Group S.A. was 50% and our ownership interest in CIMECO was 33.33%. We have entered into certain agreements incorporating a third shareholder to Patagonik and as a result our ownership interest in the company decreased to 33.33%. On 28 August 2007, the Company, through AGEA and AGR, and S.A. La Nación each 1 completed the acquisition from COMIP of an additional ⁄6 interest in CIMECO, bringing each of their total interest in CIMECO to 50%. As a result of COMIP’s sale of its equity interest in CIMECO, the Company, through AGEA and AGR, and S.A. La Nación remain the only shareholders of CIMECO, with a 50% interest each. In addition, immediately after COMIP’s sales, CIMECO acquired a 12% interest in Papel Prensa from S.A La Nación. After the consummation of this transaction, the Company holds a 37% interest of Papel Prensa through AGEA and an additional 6% interest through CIMECO. As a result of the impact of the factors described above on our businesses, our results of operations and financial condition for 2004, 2005 and 2006 and for the six months ended 30 June 2006 and 2007 may not be comparable and may not be indicative of our results of operations, financial condition or business prospects after the dates indicated.

Operating Results We are a holding company and derive our operating income and cash flow from the operations of our direct and indirect subsidiaries in the following segments: • cable television and Internet access; • printing and publishing; • broadcasting and programming; and • other related activities. Substantially all of our operations and subscribers are located in Argentina, where we generate substantially all of our revenues. We also have operations in Paraguay and Uruguay. We create and acquire media content, develop brand names to associate with it, and manage the outlets distributing

109 the content. We distribute content in a variety of forms and through a variety of outlets, including television networks and stations, Internet services, newspapers, magazines, books and radio stations. Many of our businesses hold leading market positions, and we capitalise on these strong positions when expanding into new markets. We prepare our financial statements in accordance with Argentine GAAP. See “Presentation of Financial and Other Information” and “Selected Consolidated Financial Information”. Our operating results are affected by a number of factors, including, the number of households subscribing to our cable television and Internet access services, the level of advertising across our various media products, the circulation of newspapers and magazines, the occurrence of major sports and other entertainment events, seasonality, competition, regulatory developments and fluctuations in foreign exchange rates. Our results of operations also reflect general economic and political developments in Argentina. Subscription, advertising and circulation revenues in recent years have increased significantly as the Argentine economy recovered rapidly from its 2001/2002 crisis. Our revenues are primarily generated in Pesos, while a portion of our expenses and substantially all of our financial liabilities are denominated in U.S. dollars. Accordingly, our results of operations are affected by exchange rate volatility. See “Risk Factors — Risks Related to Investments in a Foreign Corporation — Fluctuations in exchange rates may affect our business and revenues”.

Net Sales Our net sales comprise cable television and Internet access subscription revenue, advertising revenue, circulation revenue, revenues from content rights and co-production, printing services revenue, revenue from the sale of paper and other revenue. Cable television and Internet access subscription fees are our principal source of revenue. Advertising revenue includes revenues received for advertising placed in our newspapers, magazines, Internet sites and through our cable, broadcast television and radio stations. Circulation revenue includes the cover price revenue received from the sale of newspapers, magazines and other publications. Revenue from content rights and co-production includes fees for programming (including sports). Printing services revenue consists mainly of fees received from the printing of magazines, books, leaflets and related products. Revenue from the sale of paper includes revenues from the sale of newsprint to third parties. Other revenue includes sales of digital content.

Cost of Sales (Excluding Depreciation and Amortisation) Our cost of sales (excluding depreciation and amortisation) includes salaries, wages and employer contributions, programming rights, production and co-production costs, and paper and printing costs. Programming rights include the cost of licensing third party programs. Production and co-production costs comprise the production cost of programs produced by our subsidiaries and our share of the costs incurred by joint ventures in which we have an equity interest, as well as the cost of programming rights for sporting events and films. Printing costs include raw materials such as paper and ink, and other direct costs relating to the printing process.

Selling and Administrative Expenses (Excluding Depreciation and Amortisation) Selling and administrative expenses (excluding depreciation and amortisation) include overhead costs from various divisions such as our marketing, public relations, warehousing, information systems, finance, accounting and human resources divisions.

Depreciation and Amortisation Depreciation and amortisation include charges relating to the depreciation of our tangible property, plant and equipment (including accounts chargeable to cost of sales, and selling and administrative expenses) and the amortisation of intangible assets arising primarily from acquisitions.

110 Proportional Consolidation of Certain Investments Under Argentine GAAP, we are required to proportionally consolidate certain of our minority investments. Our audited consolidated financial statements as of and for the year ended 31 December 2006 proportionally consolidate Papel Prensa (37% indirect ownership interest), Impripost S.A. (50% indirect ownership interest), TRISA and TSC (50% indirect ownership interest), Polka S.A. (30% indirect ownership interest), Ideas del Sur (30% indirect ownership interest), Patagonik Film Group S.A. (50% indirect ownership interest, which decreased to 33.3% in July 2007) and La Capital Cable (Multicanal holds a 50% ownership interest).

Critical Accounting Policies Our audited consolidated financial statements include our consolidated financial position, results of operations and cash flows. Our financial statements are prepared in conformity with Argentine GAAP. Argentine GAAP requires management to make estimates that affect the reported amounts of assets and liabilities, and the reported amounts of revenues and expenses. We evaluate our estimates, including those related to tangible and intangible assets, bad debts, inventories, provisions and income taxes, on an ongoing basis. We base our estimates on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. These estimates form the basis for making judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that the following accounting policies used in preparation of our financial statements prepared in accordance with Argentine GAAP are our critical accounting policies as they require management to make estimates that affect the reported amounts of assets and liabilities, and the reported amounts of revenues and expenses.

Recent Acquisitions Our consolidated financial statements reflect the increase of our ownership interest in Cable- visión to 60% as well as the acquisition by Cablevisión of 98.5% of the outstanding shares of Multicanal and 100% of the outstanding shares of Holding Teledigital, and Multicanal’s acquisition of 100% of the outstanding shares of Prima 3% of which were subsequently transferred to Univent’s and later to Cablevisión. To date, those transactions have not received any of the regulatory approvals to which they are subject. If such approvals were not forthcoming, or were made subject to material conditions, our future results of operations may be materially adversely affected. See “Risk Factors — Risks Related to Our Business — The legal and regulatory environment that applies to our cable television, telecommunications and Internet and digital content segments may change in a manner which, may be disadvantageous to us, or may limit our ability to operate our business — Our acquisition of a controlling interest in Cablevisión, and its acquisition of Multicanal, Holding Teledigital and Prima are subject to regulatory approval”.

Doubtful Accounts We review our doubtful accounts on a monthly basis for estimated losses resulting from the inability of our customers to make the required payments. The customer base in the cable television and Internet segment is primarily residential in nature while the customer base of our publishing and printing and broadcasting and programming operations involves a wide range of companies and, to a lesser extent, individuals. Generally, we do not require collateral from our customers, although we do require that all advertising agencies, receiver agencies and direct advertisers that are granted financing to sell advertisement in our print media, provide AGEA security with respect to at least 70% of the payment obligations, in general by means of a mortgage or bank guaranty. We invoice most of our cable television and Internet access subscribers in advance. A majority of Argentine cable television subscribers pay their invoices in cash, and encourage them to pay their

111 monthly invoices by automatic credit card or bank account debits. We seek to enforce a strict disconnection policy. On the third month after non-payment, we discontinue the mailing of bills and the monthly programming magazine to the subscriber and, if payment is not received, we disconnect the subscriber as soon as practicable after the expiration of this period. Our efforts to improve customer retention and collections since 2005 have resulted in a reduction in the lag between invoicing and collection and, accordingly, a decrease in our charges for doubtful accounts. In determining the adequacy of our allowances for doubtful accounts, we analyze, among other things, historic bad debt experience, customer creditworthiness, current economic trends in Argentina and customer payment history. If the financial condition of our customers deteriorates, and impairs their ability to make payments, additional charges may be required. We believe that the accounting estimate relating to doubtful accounts is a critical accounting estimate because changes in the estimated level of doubtful debts may materially affect net income. The estimate for doubtful accounts is a critical accounting estimate for all of our business segments. Under net bad debt expense as of 31 December 2006 we recorded an income of Ps.2.3 million mainly as a result of recoveries of doubtful accounts in our printing and publishing segment.

Provision for Contingencies We are involved in legal, fiscal and administrative disputes through our normal course of business. The outcome of these claims may have a material impact on our balance sheet as well as on our net income. See “Business Description — Legal Proceedings”. Our management estimates the potential outcome of these claims based on the most objective evidence on hand from our advisors until a final resolution is reached. Due to the uncertain nature of these issues, these estimates change as additional information becomes available and could result in material changes to the financial statements in subsequent periods. As at 31 December 2006, we had a provision for contingencies of Ps.112.9 million for pending disputes.

Accounting for Acquisitions We account for acquisitions under the purchase method of accounting. We allocate the total value of consideration paid to the underlying net assets acquired, based on their respective estimated fair values determined by using primarily internal valuations. We use various methods to determine the fair value of assets and liabilities acquired including discounted cash flows, external market values and others. Goodwill generated by recent acquisitions is a preliminary estimate, since we are in the process of compiling the evidence necessary to better estimate the fair market value of assets and liabilities identifiable at the time of acquisition. Therefore, the value of goodwill and the assets and liabilities so identified may be modified in the future, as permitted by the prevailing accounting standards. We believe that the valuation assumptions underlying each of these valuation methods are based on the current information available including discount rates, cash flow assumptions, market risk rates and others. We consider our accounting policy for valuation of acquisitions critical because the judgements made in determining the estimated fair value and expected useful lives assigned to each class of assets and liabilities acquired can impact the value of the asset or liability, including the impact on deferred taxes, the respective amortisation periods and ultimately net income. Therefore, the use of other valuation methods, as well as other assumptions underlying these valuation methods, could impact the determination of the financial position and results of operations.

Subscriber Portfolio Valuation We determine the useful life of the acquired subscriber portfolios on the basis of the churn rate of the acquired portfolio and discounted cash flows. We believe that this determination constitutes a critical accounting policy because a determination of the estimated useful life of a subscriber portfolio based on other criteria may result in a material different valuation and, accordingly, a different rate of depreciation with its related impact on our net income.

112 Impairment of Long-lived Assets and Goodwill Argentine GAAP requires that we test long-lived assets for impairment whenever indicators of impairment exist. Additionally, goodwill must be evaluated for impairment at least annually. If any impairment were indicated as a result of such reviews, we would measure it by comparing the discounted cash flows of the assets or business to our book value. The amount of impairment to be recognised is the excess of the reported book value of the assets over the recoverable value of those assets. Management has reviewed our long-lived assets, primarily property and equipment to be held and used in the business, long-term investments and goodwill for the purposes of determining and measuring impairment. Given the significant negative impact of the devaluation, the pesification and the macro-economic slowdown in Argentina of 2002 on our operating results, and as management’s best estimate of discounted future cash flows was below the book value of our long-lived assets, we recorded in the aggregate impairment charges of Ps.753.4 million on goodwill, Ps.29.1 million on property, plant and equipment and Ps.0.4 million on intangible assets. We believe that the accounting estimate related to this asset impairment is a “critical accounting estimate” because (1) it is highly susceptible to change from period to period, since it requires management to make assumptions about future revenues and costs; and (2) recognising an impairment has a material impact on assets reported on our balance sheet as well as our net loss. Management’s assumption about future revenues, as well as future number of subscribers, operating costs and selling, general and administrative costs have improved as a result of the recovery of the Argentine economy and its impact on our industry. In estimating future revenues, as well as future number of subscribers, operating costs and selling, general and administrative costs, we used internal projections. Although we believe our estimates are appropriate, significant differences in the actual performance of the asset or group of assets may materially affect our asset values and results of operations.

Valuation Allowance on Deferred Income Tax Assets Deferred income taxes are provided to reflect the net tax effects of temporary differences between the financial reporting and the tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws in each of the relevant jurisdictions. Deferred income taxes reflect management’s assessment of actual future taxes to be paid on items reflected in the financial statements, giving consideration to both timing and probability of realisation. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realised. Actual income taxes could vary from these estimates due to future changes in income tax law or the outcome of any review of our and our subsidiaries’ tax returns by the taxing authorities. We have recorded a valuation allowance under Argentine GAAP of Ps.94.6 million as of 31 December 2006 due to uncertainties related to our ability to utilise certain deferred tax assets, primarily consisting of tax losses carried forward, before they expire. We have considered the reversal of the deferred income tax liabilities, tax planning and taxable income projections based on our best estimates in assessing the need for the valuation allowance. However, in the event management determined that it would be able to realise its deferred tax assets in the future in excess of its net recorded amount, it would be required to an adjust the deferred tax asset at the time and for the period such determination was made.

113 episode of a program or single program is broadcast or transmitted. Programming purchased from third parties, from our own producers and co-productions acquired in perpetuity, are expensed against the cost of sales over its estimated useful life, considering the expected future benefit period over which a given program will generate revenues (generally, over an eight year period). We then capitalise the production costs related to a given program over the expected future benefit period. Under this policy, we generally expense substantially all of the production costs related to a given program in the year of its initial broadcast and defer and expense the remaining production costs over the remainder of the expected future benefit period. See Note 1.1.b) to our audited consolidated financial statements.

Rights related to feature films, series and single programs acquired in perpetuity for broadcasting by our cable signal Volver are expensed against the cost of sales over their estimated useful life (generally seven years), with a grace period of four years, amortised on a decreasing basis.

We estimate expected future benefit periods based on past historical revenue patterns for similar types of programming and any potential future events through which we can exploit or distribute our programming. To the extent that a given future expected benefit period is shorter than we estimate, we may have to write off capitalised production costs sooner than anticipated. Conversely, to the extent that a given future expected benefit period is longer than we estimate, we may have to extend the amortisation schedule for the remaining capitalised production costs.

We also purchase programming from, and enter into license agreements with, various third party programming producers and providers, pursuant to which we receive the rights to transmit programming produced by third parties over our television networks in Argentina and/or our pay television and other media outlets. In the case of programming acquired from third parties, we estimate the expected future benefit period based on the anticipated number of showings in Argentina over our television network and/or our pay television and other media outlets. In the case of programming licensed from third parties, we estimate the expected future benefit period based upon the term of the license. To the extent that a given future expected benefit period is shorter than we estimate, we may have to write off the purchase price or the license fee sooner than anticipated. Conversely, to the extent that a given future expected benefit period is longer than we estimate, we may have to extend the amortisation schedule for the remaining portion of the purchase price or the license fee.

Provision for Obsolescence of Materials

Provision for potentially obsolete or slow-moving materials is made based on management’s assumptions about future consumption.

While, based on our experience, losses due to obsolescence of materials have been within expectations and the provisions established, if circumstances change (i.e., significant changes in technology) management’s estimates of the recoverability of these materials could be reduced by a material amount. In this case, our results of operations and financial condition could be materially and adversely affected.

Valuation of Currency and Interest Rate Swap

We record receivables and liabilities generated by certain currency and interest rate swaps at their estimated fair value, which we determine by reference to arithmetic models, since the instruments cannot be marked to market. Variations in the estimated fair value are recognised as a gain or loss for the period. While we believe that management’s determinations of estimated fair value are reasonable based on their knowledge of current factors, these estimates may be adjusted and result in future losses.

114 Results of Operations The following table is derived from our audited consolidated financial statements as of 31 December 2004, 2005 and 2006 and for the years ended 31 December 2004, 2005 and 2006 and from our unaudited consolidated financial statements as of 30 June 2006 and 2007 and for the six months ended 30 June 2006 and 2007, which have been prepared in accordance with Argentine GAAP, and sets forth the results of our operations for the periods indicated: Six Months Year Ended 31 December Ended 30 June 2004 2005 2006 2006 2007 (Unaudited) (In millions of Pesos) Net Sales: Cable television and Internet access...... 642.9 742.8 1,274.8 438.1 1,218.9 Cable TV subscription fees . . . . 536.5 611.5 1,003.2 352.2 957.5 Internet access ...... 72.0 97.6 221.4 61.0 239.7 Other ...... 34.4 33.7 50.1 24.9 21.8 Printing and publishing ...... 732.1 827.0 989.4 463.4 524.4 Advertising ...... 379.8 458.7 532.5 231.9 273.1 Circulation ...... 227.5 236.8 266.8 134.0 138.5 Other ...... 124.8 131.5 190.0 97.4 112.7 Broadcasting and programming. . . 416.6 499.4 659.5 279.3 354.9 Other ...... 57.6 59.8 102.9 41.6 64.9 Eliminations ...... (181.9) (140.6) (214.8) (80.9) (169.9) Total ...... 1,667.3 1,988.4 2,811.8 1,141.5 1,993.3 Cost of Sales (excluding depreciation and amortisation): Cable television and Internet access...... (306.8) (395.8) (588.7) (219.6) (520.7) Printing and publishing ...... (361.3) (416.4) (513.3) (242.3) (264.4) Broadcasting and programming. . . (250.9) (314.7) (455.0) (192.1) (233.5) Other ...... (15.3) (19.2) (26.0) (11.7) (21.6) Eliminations ...... 92.1 57.6 91.4 27.1 76.8 Total ...... (842.2) (1,088.5) (1,491.6) (638.5) (963.4) Selling and administrative expenses (excluding depreciation and amortisation): Cable television and Internet access...... (160.7) (192.2) (352.8) (112.9) (279.2) Printing and publishing ...... (178.7) (197.1) (214.0) (99.8) (134.4) Broadcasting and programming. . . (94.2) (106.9) (120.8) (57.4) (66.4) Other ...... (22.4) (30.1) (41.1) (17.7) (26.3) Eliminations ...... 89.9 83.1 118.3 53.8 93.1 Total ...... (366.2) (443.2) (610.5) (234.0) (413.3) Depreciation and amortisation:(1) Cable television and Internet access...... (123.4) (95.9) (150.5) (44.1) (166.8) Printing and publishing ...... (57.3) (40.5) (38.4) (19.3) (19.6) Broadcasting and programming. . . (13.5) (13.1) (17.3) (7.2) (8.5) Other ...... (1.9) (2.1) (2.4) (1.2) (1.2) Eliminations ...... — — — — —

115 Six Months Year Ended 31 December Ended 30 June 2004 2005 2006 2006 2007 (Unaudited) (In millions of Pesos) Total ...... (196.1) (151.7) (208.5) (71.8) (196.1) Financing and holding results, net . . (303.5) (341.2) 920.0 (237.4) (193.1) Equity in earnings (losses) from unconsolidated affiliates and gain on sale of subsidiaries, net ...... 31.4 15.2 224.7 16.0 4.6 Other net income (expense), net . . . (10.1) 0.3 17.5 (1.5) (10.3) Income before income tax, tax on assets and minority interest...... (19.5) (20.7) 1,663.3 (25.7) 221.7 Income tax and tax on assets ...... 15.3 36.0 (490.7) 10.6 (85.5) Minority interest ...... 2.3 (1.7) (302.9) (3.0) (32.7) Net income/(loss) for the year/period ...... (1.9) 13.6 869.7 (18.1) 103.5

(1) Includes amounts chargeable to cost of sales and selling and administrative expenses. We define Adjusted EBITDA as sales minus cost of sales and selling and administrative expenses (excluding depreciation and amortisation). We believe that Adjusted EBITDA is a meaningful measure of its performance because it is commonly used in the industry to analyze and compare media companies on the basis of operating performance, leverage and liquidity. Nonetheless, Adjusted EBITDA is not a measure of net income or cash flow from operations and should not be considered as an alternative to net income, an indication of our financial performance, an alternative to cash flow from operating activities or a measure of liquidity. Because Adjusted EBITDA is not determined in accordance with Argentine GAAP, other companies may compute Adjusted EBITDA in a different manner. Therefore, Adjusted EBITDA as reported by other companies may not be comparable to Adjusted EBITDA as we report it. In November 2001, the FACPCE adopted Technical Resolution No. 18, which for reporting purposes requires public companies to include segment reporting information, grouping activities relating to products and services that are subject to similar risks and profitability. We grouped our operations into four business segments: cable television and Internet access, publishing and printing, broadcasting and programming, and other. See Note 3 to our audited consolidated financial statements. The segment data set forth in this Offering Circular do not reflect the elimination of intersegment sales and corporate expenses.

Total Results The Six Months Ended 30 June 2007 v. the Six Months Ended 30 June 2006 Net Sales Our net sales increased by 74.6% to Ps.1,993.3 million in the first six months of 2007, compared to Ps.1,141.5 million in the six months of 2006. The increase in net sales is largely attributable to increased net sales by the cable television and Internet segment resulting from the consolidation of Cablevisión as consequence of the Cablevisión Acquisition. In addition, practically all of our business segments experienced continued growth during the first six months of 2007.

Cost of Sales (Excluding Depreciation and Amortisation) Our cost of sales (excluding depreciation and amortisation) increased by 50.9% to Ps.963.4 million in the first six months of 2007, compared to Ps.638.5 million in the first six months of 2006. The increase

116 was principally due to increased cost of sales (excluding depreciation and amortisation) in our cable television and Internet segment resulting from the consolidation of Cablevisión as consequence of the Cablevisión Acquisition. In addition, all of our business segments experienced an increase in cost of sales (excluding depreciation and amortisation) driven by higher salaries and, in certain cases, a larger payroll.

Selling and Administrative Expenses (Excluding Depreciation and Amortisation) Our selling expenses (excluding depreciation and amortisation) increased by 74.0% to Ps.203.3 million in the first six months of 2007, compared to Ps.116.9 million in the first six months of 2006. The increase was principally due to increased selling expenses (excluding depreciation and amortisation) resulting from the consolidation of Cablevisión as a consequence of the Cablevisión Acquisition and, to a lesser extent, increases in salaries in all of our business segments. Our administrative expenses (excluding depreciation and amortisation) increased by 79.2% to Ps.209.9 million in the first six months of 2007, compared to Ps.117.2 million in the first six months of 2006. The increase was principally due to increased administrative expenses (excluding depreciation and amortisation) resulting from the consolidation of Cablevisión as a consequence of Cablevisión Acquisition and, to a lesser extent, increased in salaries in all of our business segments.

Depreciation and Amortisation Our depreciation and amortisation expenses increased by 173.1% to Ps.196.1 million in the first six months of 2007, compared to Ps.71.8 million in the first six months of 2006. The increase was principally due to increased amortisation and depreciation charges (including the amortisation of additional intangibles generated by the acquisition of the subscriber portfolios of Cablevisión and Teledigital with an original book value of Ps.1,052.8 million) resulting from the consolidation of Cablevisión as consequence of the Cablevisión Acquisition.

Financial and Holding Results, Net Our financial and holding expenses decreased by 18.7% to Ps.193.1 million in the first six months of 2007, compared to Ps.237.4 million in the first six months of 2006. The decrease was principally due to the reduction of our outstanding debt resulting from the completion of Multicanal’s APE in July 2006.

Equity in Earnings (Losses) from Unconsolidated Affiliates and Gain on Sale of Subsidiaries, Net Our equity in earnings (losses) from unconsolidated affiliates and gain on sale of subsidiaries, net decreased to Ps.4.6 million for the first six months of 2007 compared to a gain of Ps.16.0 million for the same period in 2006. The decrease is attributable to the consolidation of Cablevisión as from 26 September 2006.

Income Tax and Tax on Assets We had charges of Ps.85.5 million on account of income tax and tax on assets for the first six months of 2007 compared to gains of Ps.10.6 million for the same period in 2006. The gains for the first six months of 2006 are attributable to the tax loss carryforwards generated by Multicanal’s losses prior to the completion of its APE in July 2006, while in the same period in 2007 we generated net taxable income.

Net Income As a result of the factors described above, we had net income of Ps.103.5 million in the first six months of 2007, compared to a net loss of Ps.18.1 million in the first six months of 2006.

117 2006 v. 2005 Net Sales Our net sales increased by 41.4% to Ps.2,811.8 million in 2006, compared to Ps.1,988.4 million in 2005. The increase in net sales is largely attributable to the consolidation of Cablevisión as consequence of the increase in our ownership interest in Cablevisión and the acquisition of Teledigital in September 2006, as well as to the growth of our net sales across all of our business segments.

Cost of Sales (Excluding Depreciation and Amortisation) Our cost of sales (excluding depreciation and amortisation) increased by 37.0% to Ps.1,491.6 million in 2006, compared to Ps.1,088.5 million in 2005. The increase was principally due to increased cost of sales (excluding depreciation and amortisation) in our cable television and Internet segment resulting from the consolidation of Cablevisión as consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital in September 2006 and to a lesser extent a general increase in salaries as well as an increase in the cost of programming rights.

Selling and Administrative Expenses (Excluding Depreciation and Amortisation) Our selling expenses (excluding depreciation and amortisation) increased by 27.4% to Ps.290.0 million in 2006, compared to Ps.227.5 million in 2005. The increase was principally due to the consolidation of Cablevisión as consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital in September 2006 and, to a lesser extent, increases in salaries. Our administrative expenses (excluding depreciation and amortisation) increased by 48.6% to Ps.320.5 million in 2006, compared to Ps.215.7 million in 2005. The increase was principally due to the consolidation of Cablevisión as consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital in September 2006 and, to a lesser extent, increases in salaries.

Depreciation and Amortisation Our depreciation and amortisation expense increased by 37.5% to Ps.208.5 million in 2006, compared to Ps.151.7 million in 2005. The increase was principally due to increased amortisation and depreciation charges (including the amortisation of an additional Ps.1,052.8 million of intangibles generated by the acquisition of the subscriber portfolios of Cablevisión and Teledigital) resulting from the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital.

Financial and Holding Results, Net We recorded financial and holding gains of Ps.920.0 million in 2006, compared to losses of Ps.341.2 million in 2005. The gains in 2006 are primarily attributable to the completion of the restructuring of Multicanal’s financial debt in accordance with Multicanal’s APE in July 2006.

Equity in Earnings (Losses) from Unconsolidated Affiliates and Gain on Sale of Subsidiaries, Net Our equity in earnings (losses) from unconsolidated affiliates and gain on sale of subsidiaries, net increased to Ps.224.7 million in 2006 compared to Ps.15.2 million in 2005. The increase is attributable primarily to the non-recurrent gain of Ps.246.8 million recorded as a result of the dilution for the benefit of existing shareholders (the Company and AGEA) resulting from the capitalisation of approximately U.S.$182.0 million of outstanding debt for shares representing approximately 35% of Multicanal’s total capital pursuant to Multicanal’s APE in July 2006.

118 Income Tax and Tax on Assets We recorded charges of Ps.490.7 million on account of income tax and tax on assets for 2006 compared to gains of Ps.36.0 million for 2005. The gains for 2005 are attributable to the tax loss carryforwards generated by Multicanal’s losses prior to the completion of its APE in July 2006, while in 2006 we generated taxable income primarily from the gains by the consummation of Multicanal’s APE.

Net Income As a result of the factors described above, we had net income of Ps.869.7 million in 2006, compared to net income of Ps.13.6 million in 2005.

2005 v. 2004 Net Sales Our net sales increased by 19.3% to Ps.1,988.4 million in 2005, compared to Ps.1,667.3 million in 2004. The increase in net sales is largely attributable to growth in all of our business segments as well as increases in the prices of our goods and services.

Cost of Sales (Excluding Depreciation and Amortisation) Our cost of sales (excluding depreciation and amortisation) increased by 29.2% to Ps.1,088.5 million in 2005, compared to Ps.842.2 million in 2004. The increase was principally due to the increased level of activity in all of our business segments and the impact of inflation on certain of our costs.

Selling and Administrative Expenses (Excluding Depreciation and Amortisation) Our selling expenses (excluding depreciation and amortisation) increased by 18.5% to Ps.227.5 million in 2005, compared to Ps.192.0 million in 2004. The increase was principally due to increases in salaries, and additional advertising expenses related to Diario Clarín’s 60th anniversary. Our administrative expenses (excluding depreciation and amortisation) increased by 23.8% to Ps.215.7 million in 2005, compared to Ps.174.2 million in 2004. The increase was principally due to increases in salaries and a larger payroll.

Depreciation and Amortisation Our depreciation and amortisation expenses decreased by 22.7% to Ps.151.7 million in 2005, compared to Ps.196.1 million in 2004. The decrease was principally due to the full depreciation of equipment and the reduced level of capital expenditures.

Financial and Holding Results, Net Our financial and holding losses increased by 12.4% to Ps.341.2 million in 2005, compared to Ps.303.5 million in 2004. The increase was principally due to the impact of the devaluation of the Peso on our outstanding stock of foreign-currency denominated debt.

119 Income Tax and Tax on Assets Our gains on account of income tax and tax on assets increased by 135.9% to Ps.36.0 million in 2005 compared to Ps.15.3 million in 2004. The increase is attributable to the reversal of valuation allowances in deferred income tax assets by Multicanal.

Net Income As a result of the factors described above, we had net income of Ps.13.6 million in 2005, compared to a net loss of Ps.1.9 million in 2004. The following is a discussion of net sales, cost of sales (excluding depreciation and amortisation), selling and administrative expenses (excluding depreciation and amortisation), and depreciation and amortisation by segment as defined and set out in Note 3 to our audited consolidated financial statements. The information set forth below is also summarised in the table directly under the heading “Results of Operations”. The segment data discussed below do not reflect the elimination of intersegment sales and corporate expenses.

Cable Television and Internet Access Our cable television and Internet access segment generates substantially all of its net sales from monthly customer charges for basic cable and broadband Internet access services, and the balance from connection and other fees and advertising. We operate primarily in Argentina. A principal element of our strategy in the past was to increase our subscriber base through the acquisition of cable television companies and the expansion of our existing systems. More recently, we have focused on internal growth of cable television subscribers and expanding our Internet subscriber base. In addition, we have improved our net sales through increases in our basic monthly subscription fees at a rate comparable to the annual inflation rate and the offering of premium programming. Programming costs (including sports programming rights acquired from our broadcasting and programming operations) account for a significant portion of cost of sales (excluding depreciation and amortisation) of the segment. Under the terms of certain of our programming agreements, a decrease in the number of subscribers also causes a reduction in certain cost of sales (excluding depreciation and amortisation). We seek to improve operating performance and cash flow through the consolidation of the networks of Cablevisión and Multicanal. These efforts have resulted in a significant improvement in the results of operations since the Cablevisión Acquisition in September 2006. In addition, by absorbing wholly-owned subsidiaries, Cablevisión and Multicanal eliminate duplicative administrative functions. Under selling and administrative expenses (excluding depreciation and amortisation), our cable television and Internet access segment records charges for wages, salaries and fees as well as general advertising expenses.

120 The table set forth below presents net sales, cost of sales (excluding depreciation and amortisation), selling and administrative expenses (excluding depreciation and amortisation) and depreciation and amortisation data for the segment for the periods indicated: Cable Television and Internet Access Six Months Year Ended 31 December Ended 30 June 2004 2005 2006 2006 2007 (Unaudited) (Millions of Pesos) Net sales ...... 642.9 742.8 1,274.8 438.1 1,218.9 Cost of sales (excluding depreciation and amortisation) ...... (306.8) (395.8) (588.7) (219.6) (520.7) as a % of net sales...... 48% 53% 46% 50% 43% Selling and administrative expenses (excluding depreciation and amortisation) ...... (160.7) (192.2) (352.8) (112.9) (279.2) as a % of net sales...... 25% 26% 28% 26% 23% Depreciation and amortisation ...... (123.4) (95.9) (150.5) (44.1) (166.8) as a % of net sales...... 19% 13% 12% 10% 14%

The Six Months Ended 30 June 2007 v. the Six Months Ended 30 June 2006 (Cable Television and Internet Access) Net Sales Net sales increased by 178.2% to Ps.1,218.9 million for the six-month period ended 30 June 2007 compared to Ps.438.1 million for the six-month period ended 30 June 2006. The increase in net sales is principally attributable to the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital on 26 September 2006, and, to a lesser extent, an increase in the number of subscribers through internal growth, including additional Internet subscribers, and in average subscription charges for cable television registered in 2006 and in the first six months of 2007. In addition to the subscribers acquired through Cablevisión and Teledigital, our segment had 1,304,600 cable television basic subscribers as of 30 June 2007 compared to 1,218,900 cable subscribers as of 30 June 2006, and 305,900 Internet subscribers as of 30 June 2007 compared to 259,200 as of 30 June 2006.

Cost of Sales (Excluding Depreciation and Amortisation) Cost of sales (excluding depreciation and amortisation) increased by 137.1% to Ps.520.7 million for the first six months of 2007, compared to Ps.219.6 million for the same period in 2006. This increase is mainly due to the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital on 26 September 2006, and to a lesser extent, the increase in our programming costs attributable to internal growth in our subscriber base and pricing adjustments linked to basic monthly fee increases contemplated in certain programming contracts, and the effect of salary increases.

Selling and Administrative Expenses (Excluding Depreciation and Amortisation) Selling and administrative expenses (excluding depreciation and amortisation) increased by 147.4% to Ps.279.2 million for the first six months of 2007, compared to Ps.112.9 million for the same period in 2006. This increase is mainly due to the consolidation of Cablevisión as a consequence of

121 the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital on 26 September 2006. Expenses for salaries, wages, social security charges and other personnel expenses increased primarily as a result of the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital on 26 September 2006, and the effect of salary increases.

Depreciation and Amortisation Depreciation expenses of property, plant and equipment increased by 172.3% to Ps.112.2 million for the six months ended 30 June 2007 from Ps.41.2 million for the same period in 2006. The increase reflects the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital on 26 September 2006, and additions of cable and network equipment during 2006 and the first six months of 2007. We also recorded Ps.54.6 million in amortisation expenses for the six months ended 30 June 2007 compared to Ps.2.9 million for the same period in 2006. The increase is attributable to the intangible assets related to the purchase of Cablevisión’s and Teledigital’s subscriber portfolios in September 2006.

2006 v. 2005 (Cable Television and Internet Access) Net Sales Net sales increased by 71.6% to Ps.1.274.8 million in 2006 compared to Ps.742.8 million in 2005. The increase in net sales is principally attributable to the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital on 26 September 2006, the growth during 2006 in the number of subscribers, including additional subscribers of high-speed Internet, and increases in average subscription charges for cable television recorded in 2006. In addition to the subscribers acquired through Cablevisión and Teledigital, as of 31 December 2006 our segment had 1,267,400 basic subscribers, compared to 1,145,200 basic subscribers as of 31 December 2005, and 293,100 Internet subscribers, compared to 229,000 subscribers as of 31 December 2005.

Costs of Sales (Excluding Depreciation and Amortisation) Cost of sales (excluding depreciation and amortisation) increased by 48.7% to Ps.588.7 million in 2006, compared to Ps.395.8 million in 2005. This increase is mainly attributable to the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital, and to a lesser extent to the increase in our programming costs attributable to the internal growth in our subscriber base and pricing adjustments linked to basic monthly fee increases contemplated in certain programming contracts. Expenses for salaries, wages, social security charges and other personnel expenses increased primarily as a result of the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital on 26 September 2006, and the effect of salary increases.

Selling and Administrative Expenses (Excluding Depreciation and Amortisation) Selling and administrative expenses (excluding depreciation and amortisation) increased by 83.5% in 2006 to Ps.352.8 million, compared to Ps.192.2 million in 2005. This increase is mainly due to the consolidation of Cablevisión as a consequence of the increase in our ownership interest in

122 Cablevisión and the acquisition of Holding Teledigital on 26 September 2006 and to a lesser extent an increase in marketing campaigns. Expenses for salaries, wages, social security charges and other personnel expenses increased primarily as a result of the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Teledigital on 26 September 2006, and the effect of salary increases.

Depreciation and Amortisation Depreciation expenses of property, plant and equipment increased by 28.5% to Ps.115.7 million in 2006 from Ps.90.1 million in 2005. The increase reflects the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital on 26 September 2006, as well as additions of cable and network equipment in 2006. We also recorded Ps.34.8 million in amortisation expenses in 2006, compared to Ps.5.9 million in 2005. The increase is attributable mainly to the purchase of Cablevisión’s and Teledigital’s subscriber portfolios.

2005 v. 2004 (Cable Television and Internet Access) Net Sales Net sales increased by 15.5% to Ps.742.8 million in 2005 compared to Ps.642.9 million in 2004. The increase in net sales is attributable to the internal growth in our subscriber base, including Internet subscribers, and increases in average subscription fees recorded in 2005. As of 31 December 2005, we had 1,145,200 basic subscribers, an increase of 8.3% from 1,057,900 basic subscribers as of 31 December 2004. In the same period, our Internet subscriber base increased by 40.9% from 162,500 subscribers as of 31 December 2004 to 229,000 subscribers as of 31 December 2005.

Cost of Sales (Excluding Depreciation and Amortisation) Cost of sales (excluding depreciation and amortisation) increased 29.0% to Ps.395.8 million for the year ended 31 December 2005, from Ps.306.8 million for the year ended 31 December 2004. Programming costs increased principally due to the internal growth in our subscriber base and pricing adjustments linked to basic monthly fee increases contemplated in certain programming contracts. Expenses for salaries, wages, social security charges and other personnel expenses increased mainly as a result of salary increases, and to a lesser extent as a result of growth of our payroll in 2005.

Depreciation and Amortisation Depreciation and amortisation expenses decreased by 22.3% to Ps.95.9 million in 2005 from Ps.123.4 million in 2004. The decrease is principally attributable to the full depreciation of certain equipment in 2004.

123 Printing and Publishing

Sales in our printing and publishing segment are largely derived from four principal sources:

• display and classified advertising sales;

• sales of newspapers, optional products (booklets and magazines) and textbooks;

• printing services; and

• sales of newsprint paper.

Advertising revenues are determined by the prices achieved per single column centimetre (the advertising yield) and the number of advertising centimetres sold (advertising lineage) in the relevant period. Circulation revenues reflect the share retained of the cover price of each newspaper and optional product sold and the number of copies thereof sold in the relevant period, net of copies returned.

Macroeconomic conditions have a significant impact on advertising revenues and, to a lesser extent, circulation revenues.

The cost of sales (excluding depreciation and amortisation) of our printing and publishing segment comprise labour costs, the cost of raw material (primarily paper and ink, which are priced by reference to the international market) and printing costs, fees and utility costs.

The table set forth below presents net sales (excluding depreciation and amortisation), cost of sales, selling and administrative expenses (excluding depreciation and amortisation) and depreciation and amortisation data for the segment for the periods indicated:

Printing and Publishing Year Ended 31 Six Months December Ended 30 June 2004 2005 2006 2006 2007 (Unaudited) (Millions of Pesos) Net sales...... 732.1 827.0 989.4 463.4 524.4 Cost of sales (excluding depreciation and amortisation) ...... (361.3) (416.4) (513.3) (242.3) (264.4) as a % of net sales ...... 49% 50% 52% 52% 50% Selling and administrative expenses (excluding depreciation and amortisation) ...... (178.7) (197.1) (214.0) (99.8) (134.4) as a % of net sales ...... 24% 24% 22% 22% 26% Depreciation and amortisation ...... (57.3) (40.5) (38.4) (19.3) (19.6) as a % of net sales ...... 8% 5% 4% 4% 4%

The Six Months Ended 30 June 2007 v. the Six Months Ended 30 June 2006 (Printing and Publishing)

Net Sales

Net sales increased by 13.2% to Ps.524.4 million in the first six months of 2007, compared to Ps.463.4 million in the first six months of 2006. The increase was the result of an increase in advertising yield, the increase in sales of optionals and in the cover price of newspapers, which more than offset the decrease in circulation.

124 Cost of Sales (Excluding Depreciation and Amortisation) Cost of sales (excluding depreciation and amortisation) increased by 9.1% to Ps.264.4 million in the first six months of 2007, compared to Ps. 242.3 million in the first six months of 2006. The increase was primarily the result of an increase of the costs of raw materials (paper and ink), higher wages and salaries and a larger payroll.

Selling and Administrative Expenses (Excluding Depreciation and Amortisation) Selling and administrative expenses (excluding depreciation and amortisation) increased by 34.7% to Ps.134.4 million in the first six months of 2007, compared to Ps.99.8 million in the first six months of 2006. The increase was primarily the result of an increase in wages and salaries, and advertising expenses.

Depreciation and Amortisation Depreciation and amortisation expenses increased by 1.5% to Ps.19.6 million in the first six months of 2007, compared to Ps.19.3 million in the first six months of 2006. The increase reflects capital expenditures made during 2006 and the first six months of 2007.

2006 v. 2005 (Printing and Publishing) Net Sales Net sales increased by 19.6% to Ps.989.4 million in 2006, compared to Ps.827.0 million in 2005. The increase was primarily the result of an increase in the advertising yield and additional sales of advertising lineage, as well as additional sales of optionals and an increase in the cover price for newspapers, which more than offset the decrease in circulation, and increased printing of leaflets and magazines. In addition, in 2006 we began selling textbooks.

Cost of Sales (Excluding Depreciation and Amortisation) Cost of sales (excluding depreciation and amortisation) increased by 23.3% to Ps.513.3 million in 2006, compared to Ps.416.4 million in 2005. The increase was primarily the result of higher average prices for raw materials (primarily paper and ink), higher salaries and a larger payroll.

Selling and Administrative Expenses (Excluding Depreciation and Amortisation) Selling and administrative expenses (excluding depreciation and amortisation) increased by 8.6% to Ps.214.0 million in 2006, compared to Ps.197.1 million in 2005. The increase was primarily the result of increases in salaries and payroll and higher advertising expenses incurred to promote new optional products, which were offset by a decrease in general advertising and marketing expenses incurred in 2005 in connection with Diario Clarín’s 60th anniversary.

Depreciation and Amortisation Depreciation and amortisation expenses decreased by 5.4% to Ps.38.4 million in 2006, compared to Ps.40.5 million in 2005. The decrease was primarily the result of the full depreciation of certain equipment in 2005.

2005 v. 2004 (Printing and Publishing) Net Sales Net sales increased by 13.0% to Ps.827.0 million in 2005, compared to Ps.732.1 million in 2004. The increase was primarily the result of increased advertising yield and lineage, an increase in the cover price of newspapers and in circulation (including as a result of campaigns related to Diario Clarín’s 60th anniversary, additional printing revenues and higher sales of newsprint paper.

125 Cost of Sales (Excluding Depreciation and Amortisation) Cost of sales (excluding depreciation and amortisation) increased by 15.3% to Ps.416.4 million in 2005, compared to Ps.361.3 million in 2004. The increase was primarily the result of a higher level of the purchase of greater volumes of raw materials (paper and ink), copyright payments and higher salaries resulting from wages and payroll increases.

Selling and Administrative Expenses (Excluding Depreciation and Amortisation) Selling and administrative expenses (excluding depreciation and amortisation) increased by 10.3% to Ps.197.1 million in 2005, compared to Ps.178.7 million in 2004. The increase was primarily the result of advertising expenses incurred in connection with general advertising and marketing campaigns related to the 60th anniversary of Diario Clarín.

Depreciation and Amortisation Depreciation and amortisation expenses decreased by 29.3% to Ps.40.5 million in 2005, compared to Ps.57.3 million in 2004. The decrease was primarily the result of full depreciation of certain equipment in 2004.

Broadcasting and Programming Net sales in the broadcasting and programming segment, which includes our broadcast television and radio stations, the production of television content for our broadcast channels and cable signals and sports programming, are largely derived from advertising and the sale of sports and program signals and events. Cost of sales (excluding depreciation and amortisation) comprise primarily programming and sports rights, production and co-production costs and salaries. The table set forth below presents net sales, cost of sales (excluding depreciation and amortisation), selling and administrative expenses (excluding depreciation and amortisation), and depreciation and amortisation data for the segment for the periods indicated: Broadcasting and Programming Year Ended 31 Six Months December Ended 30 June 2004 2005 2006 2006 2007 (Unaudited) (Millions of Pesos) Net sales...... 416.6 499.4 659.5 279.3 354.9 Cost of sales (excluding depreciation and amortisation) ...... (250.9) (314.7) (455.0) (192.1) (233.5) as a % of net sales ...... 60% 63% 69% 69% 66% Selling and administrative expenses (excluding depreciation and amortisation) ...... (94.2) (106.9) (120.8) (57.4) (66.4) as a % of net sales ...... 23% 21% 18% 21% 19% Depreciation and amortisation ...... (13.5) (13.1) (17.3) (7.2) (8.5) as a % of net sales ...... 3% 3% 3% 3% 2%

The Six Months Ended 30 June 2007 v. the Six Months Ended 30 June 2006 (Broadcasting and Programming) Net Sales Net sales increased by 27.1% to Ps.354.9 million (including Ps.78.2 million to our other segments) in the first six months of 2007, compared to Ps.279.3 million (including Ps.28.8 million to

126 our other segments) in the first six months of 2006. The increase was primarily the result of an increase in advertising sales and the sale of cable signal and sports programming due to pricing linked to increases in the monthly subscription fees and a larger subscriber base.

Cost of Sales (Excluding Depreciation and Amortisation) Cost of sales (excluding depreciation and amortisation) increased by 21.6% to Ps.233.5 million in the first six months of 2007, compared to Ps.192.1 million in the first six months of 2006. The increase was primarily the result of an increase in programming costs due to a more active summer season programming schedule and an increase in salaries and, to a lesser extent, a larger payroll.

Selling and Administrative Expenses (Excluding Depreciation and Amortisation) Selling and administrative expenses (excluding depreciation and amortisation) increased by 15.6% to Ps.66.4 million in the first six months of 2007, compared to Ps.57.4 million in the first six months of 2006. The increase was primarily the result of an increase in salaries.

Depreciation and Amortisation Depreciation and amortisation expenses increased by 17.6% to Ps.8.5 million in the first six months of 2007, compared to Ps.7.2 million in the first six months of 2006. The increase is attributable to the amortisation of intangible assets resulting from the acquisition of Ideas del Sur in 2006.

2006 v. 2005 (Broadcasting and Programming) Net Sales Net sales increased by 32.0% to Ps.659.5 million (including Ps.100.1 million to our other segments) in 2006, compared to Ps.499.4 million (including Ps.55.4 million to our other segments) in 2005. The increase was primarily the result of increased advertising sales associated with an improvement in ratings and the transmission of the soccer/football world cup series as well as increased sales of programming and sports rights to third party cable operators.

Cost of Sales (Excluding Depreciation and Amortisation) Cost of sales (excluding depreciation and amortisation) increased by 44.6% to Ps.455.0 million in 2006, compared to Ps.314.7 million in 2005. The increase was primarily the result of higher programming costs and talent fees, as well as additional programming and sports costs associated with the soccer/football world cup.

Depreciation and Amortisation Depreciation and amortisation expenses increased by 31.8% to Ps.17.3 million in 2006, compared to Ps.13.1 million in 2005. The increase reflects investment in equipment during 2006.

2005 v. 2004 (Broadcasting and Programming) Net Sales Net sales increased by 19.9% to Ps.499.4 million (including Ps.55.4 million to our other segments) in 2005, compared to Ps.416.6 million (including Ps.91.8 million to our other segments) in

127 2004. The increase was primarily the result of increased advertising sales, and higher revenues on account of programming and sports from third party cable systems.

Cost of Sales (Excluding Depreciation and Amortisation) Cost of sales (excluding depreciation and amortisation) increased by 25.4% to Ps.314.7 million in 2005, compared to Ps.250.9 million in 2004. The increase was primarily the result of higher programming and sports costs and talent fees, as well as increased salaries and a larger payroll.

Selling and Administrative Expenses (Excluding Depreciation and Amortisation) Selling and administrative expenses (excluding depreciation and amortisation) increased by 13.4% to Ps.106.9 million in 2005, compared to Ps.94.2 million in 2004. The increase was primarily the result of increased salaries and a larger payroll, and additional general advertising expenses during 2005 related to new programming and the 80th anniversary of Radio Mitre.

Depreciation and Amortisation Depreciation and amortisation expenses decreased by 2.7% to Ps.13.1 million in 2005, compared to Ps.13.5 million in 2004.

Other Net sales in this segment are derived from the rendering of administrative and corporate services by the Company and by our subsidiary GC Gestión Compartida S.A. to third parties and subsidiaries of the Company. Additionally, this segment includes the production of digital content. Net sales to third parties are largely derived from advertising in our webpages and portals. Cost of sales (excluding depreciation and amortisation) is driven by salaries and professional fees paid to advisers.

Liquidity and Capital Resources We are a holding company and derive our operating income and cash flow from the operations of our direct and indirect subsidiaries, which in certain cases are subject to limitations on their ability to pay dividends. Our operations have historically relied on four main sources of liquidity: (1) equity contributions from our shareholders; (2) borrowings under bank facilities and debt security issuances; (3) cash flow from operations; and (4) seller financing. The conditions affecting the Argentine economy between 1998 and 2004 and the uncertainties as to future developments prevented several of our companies from raising the funds required to discharge their payment obligations under their then-outstanding financial debt as it became due in and after 2002. As a result, in 2002 each of Cablevisión, Multicanal, AGEA, AGR and ARTEAR defaulted on their then-outstanding financial debt and focused their efforts and resources on preserv- ing the continuation of their operations. In 2003, Cablevisión, Multicanal, AGEA, AGR and ARTEAR submitted debt restructuring proposals to their creditors, in certain cases relying on the expedited reorganisation procedures (APE). AGEA and AGR completed the restructuring of their financial debt by the beginning of 2004. Cablevisión and Multicanal, instead, confronted significant opposition to the judicial confirmation of their respective APEs from certain minority creditors. In the case of Multicanal, its board of directors sought recognition of its APE in the United States under Section 304 of the U.S. Bankruptcy Code. Multicanal’s APE was confirmed in Argentina and recognised in the United States, subject to the

128 implementation of certain remedies required by the Argentine court and the U.S. bankruptcy court. Multicanal consummated the transactions contemplated in its APE on 20 July 2006 and on 13 October 2006, the Argentine Court recognised the compliance by Multicanal of all of the terms and conditions of its APE. In the case of Cablevisión, however, the judicial confirmation of its APE in Argentina was appealed by creditors holding approximately U.S.$30,000 in aggregate principal amount of debt subject to the APE, and such appeal is still pending. Nevertheless, on 7 October 2005 and thereafter, holders of more than 97% of Cablevisión’s financial indebtedness subject to the terms of the APE agreed to give effect to the transactions contemplated in Cablevisión’s APE with respect to their claims, thus allowing Cablevisión effectively to complete the restructuring of substantially all of its financial debt. Cablevisión also delivered into escrow the consideration that the nonconsenting holders of its financial debt subject to the APE would be entitled to receive if the APE is finally judicially confirmed. The principal amount of financial indebtedness held by creditors that have not consented to the APE totals U.S.$20.9 million and therefore, until final judicial approval of Cablevisión’s APE, that indebtedness cannot be discharged pursuant to the terms and conditions of Cablevisión’s APE. If such indebtedness (including accrued interest) were successfully enforced against Cablevisión in accordance with its terms and conditions, Cablevisión would have to pay (net of all amounts held in escrow) an approximate amount of U.S.$19.5 million as of 30 June 2007. In connection with Cablevisión’s APE, its then shareholders contributed U.S.$55 million in equity on 3 October 2005, together with funds provided by Cablevisión, and made payments with respect to the cash option under Cablevisión’s APE. In connection with Multicanal’s APE, on 12 December 2003, we committed to contribute U.S.$15 million in equity, which, together with funds provided by Multicanal, were applied in June 2006 to make payments on account of the cash option in Multicanal’s APE. We expect capital expenditures and the servicing of our financial debt to be our principal uses of cash. We expect cash flow from operations to be our principal source of liquidity. We also expect to raise funds through borrowings, if and when the market presents opportunities to do so. In particular, we will seek to refinance a portion of our outstanding debt through the incurrence of long-term indebtedness. Although the restructuring of substantially all the debt of our main subsidiaries outstanding prior to the 2002 crisis has enabled us to access the credit market on a voluntary basis, the terms of our outstanding debt contains significant restrictions. See “— Indebtedness”. Certain of our subsidiaries (including Cablevisión, AGEA and Multicanal) are required under the terms of their indebtedness to apply excess liquidity to prepay their outstanding debt and are subject to limitations on their ability to declare and pay dividends. The following table summarises our contractual liabilities and commitments as of 30 June 2007. All transactions among Grupo Clarín and its consolidated subsidiaries or minority investees have been eliminated. Peso amounts have been translated from U.S. dollar amounts at the selling rate for U.S. dollars quoted by Banco Nación on 30 June 2007 of Ps.3.09 to U.S.$1.00: Payments Due by Period Less Than 1-3 4-5 After Total 1 Year Years Years 5 Years (In millions of Pesos) Long term debt obligations(1,2). . . . 3,325.2 367.2 1,165.9 419.1 1,373.0 Technical and financial assistance fees(3)...... — — — — — Lease commitments ...... 6.6 5.0 1.5 0.1 — Purchase obligations(4) ...... 1,394.6 338.4 542.7 296.6 217.0 Total ...... 4,726.5 710.6 1,710.1 715.8 1,590.0 (1) See “— Indebtedness” for a description of our long-term debt obligations including amortisation and interest payment terms and their principal covenants.

129 (2) The data reflects aggregate nominal principal amounts due under the debt instruments. We record our debt obligations at their net present value in accordance with Argentine GAAP. As a result, the amounts shown do not reflect the net present value of our long-term debt obligations. (3) Cablevisión is required to make annual payments to its minority shareholder in amounts equal to 1.2% of the prior fiscal year’s consolidated operating cash flow under a technical assistance agreement. This agreement expires in 2009. (4) Includes mainly expenses arising under programming agreements. The table below reflects our cash position at the dates indicated and the net cash provided by (used in) operating, investing and financing activities during the periods indicated: Year Ended 31 Six Months December Ended 30 June 2004 2005 2006 2006 2007 (Unaudited) (In millions of Pesos) Cash and cash equivalents at the beginning of the period/year ...... 464.0 424.2 487.1 487.1 381.2 Cash provided by operating activities ...... 311.5 358.3 565.4 149.7 481.9 Cash (used in) provided by investing activities...... 97.1 (320.7) (208.0) (78.1) (195.1) Cash (used in) provided by financing activities ...... (496.6) 29.1 (472.2) (36.3) (210.7) Of which: Financial interest paid, net of interest capitalised...... (71.3) (21.8) (196.7) (37.3) (105.6) Financial and holding results generated by cash and cash equivalents ...... 4.2 (4.7) 9.1 8.3 6.8 Cash and cash equivalents at the end of the period/year ...... 380.2 487.1 381.2 530.6 464.1 The following table sets forth cash flows provided by our operating activities for the six month periods ended 30 June 2007 and 2006 and the years ended 31 December 2006, 2005 and 2004: Six Months Ended 30 Year Ended 31 December June 2004 2005 2006 2006 2007 (Unaudited) (In millions of Pesos) 311.5 358.3 565.4 149.7 481.9 Cash flows provided by our operating activities increased to Ps.481.9 million in the first six months 2007, from Ps.149.7 million in the first six months of 2006. The increase in cash flows is attributable mainly to the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital, and the growth in all our business segments. Cash flows provided by our operating activities increased 57.8% to Ps.565.4 million in 2006, from Ps.358.3 million in 2005. This significant increase in cash flows is attributable mainly to the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital in September 2006, and the growth in all our business segments. Cash flows provided by operating activities increased 15.0% to Ps.358.3 million in 2005 from Ps.311.5 million in 2004. This increase in cash flows is attributable mainly to the variations in the working capital due to debt payments related to overdue programming fees and prepayments that were made during 2004 that were not made in 2005.

130 We believe our working capital is sufficient to meet our present requirements. The following table sets forth cash used in/provided by our investing activities (net of proceeds from sales) for the six month periods ended 30 June 2007 and 2006 and the years ended 31 December 2006, 2005 and 2004: Six Months Ended 30 Year Ended 31 December June 2004 2005 2006 2006 2007 (Unaudited) (In millions of Pesos) 97.1 (320.7) (208.0) (78.1) (195.1) Cash used in investing activities increased by 150.0% to Ps.195.1 million for the first six months of 2007 compared to Ps.78.1 million for the same period in 2006. This increase is attributable mainly to the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital, together with higher investments made in cable networks and set-top boxes. During 2006, we applied Ps.208.0 million to investing activities, a decrease of 35.1% from Ps.320.7 million in 2005. While we increased investments related to the acquisition of equipment for the provision of broadband services, and the construction, expansion and upgrading of existing systems, including the upgrade of networks to meet higher technological standards throughout the cable systems, and to offer a broader range of different programming alternatives, as well as broadband services in certain areas, such increase was more than offset by the decrease in the cash applied to the acquisition of equity investees which in 2005 included our indirect acquisition of a minority interest in Cablevisión. In 2005, we applied Ps.320.7 million to investing activities, compared to Ps.97.1 million generated in 2004 by the sale of a minority equity investment held in a foreign media company. The following table sets forth the net cash used in financing activities (excluding shareholders’ contributions) for the six months ended 30 June 2007 and 2006 and the years ended 31 December 2006, 2005 and 2004: Six Months Ended 30 Year Ended 31 December June 2004 2005 2006 2006 2007 (Unaudited) (In millions of Pesos) (496.6) 29.1 (472.2) (36.3) (210.7) In the first six months of 2007, we used Ps.210.7 million for financing activities compared to Ps.36.3 million used in the first six months of 2006. This variation is mainly attributable to the funds used in 2007 to cancel part of our debt with JP Morgan (U.S.$8.0 million), payments of interests related to the increase in our ownership interest in Cablevisión, payments by Cablevisión to cancel its debt with Banco Nación (Ps.33.8 million), a payment of Ps.18 million in favour of our Controlling Shareholders on account of dividends declared in 1999 by companies we absorbed in connection with our organisation and for which we became liable, and payments by Cablevisión and Multicanal under their outstanding debt instruments. In 2006 we generated funds from the issuance by AGEA of its Ps. 300 million notes due 2011, and applied funds in connection with cancellations of U.S.$74.8 million of outstanding debt by AGEA and AGR and short-term financial advances of Ps. 49 million. We used Ps.472.2 million for financing activities in 2006, compared to Ps.29.1 million generated in 2005. In 2006, Multicanal used Ps.384.9 million, in connection with the consummation of its APE,

131 including the payment of the cash option, all accrued interest under the terms of the APE and related fees, and Teledigital used Ps.76.4 million to prepay a bank loan. Since our establishment in 1999, we have not declared any dividends.

Indebtedness At 30 June 2007, our consolidated indebtedness was comprised of: Material Covenants/ Description/ Interest Events of Applicable Borrower Creditor Maturity Interest Rate Payments Default Law Collateral Grupo Clarín U.S.$12 million 50% in each of Highest of (i) Semiannual None Argentina 40% Shares of Notes/Telefónica 08/07 and 08/08 Libor + 0.75% IESA de Contenidos (or) 3.5% S.A. (Unipersonal) U.S.$32 million U.S.$16 million Libor + 2% Quarterly (1) US Reserve Loan/JP Morgan in 2008/ U.S.$16 Account(2) Chase Bank million in 2009. U.S.$157.8 September 2009, Libor + 3.5% up Semiannual (3) US (4) million Note/JP with a 1-year to September Morgan Chase extension option 2009 Bank NA at maturity if the outstanding Libor +4.25% up amount is equal to September or lower than 2010 60% of the Libor +5.0% up original principal to September amount, and a 2011 second 1-year extension option In case of at extended capitalisation of maturity if the interests, the outstanding margin increases amount is equal 0.25 each or lower than period. 30% of the original principal amount Vistone Ltd. U.S.$79.9 million On demand Libor + 0.75% Quarterly None US Term deposit Note/HSBC(5) pledges and standby letters of credit Cablevisión US$20.9 million N/A — — — US — Notes(6) U.S.$115.3 5% in 2007 6% until 2010 Semiannual (7) US First priority on million Notes 10% in 2008 Reserve 7% from 2011 Account(8) 15% in 2009 until maturity 20% in 2010 20% in 2011 30% in 2012 U.S.$235.1 3 Instalments of 4% until 2007 Semiannual (9) US First priority on million Notes U.S.$78.3 million Reserve from 2013 until 5% on 2008 Account(10) 2015 6% on 2009 8% on 2010 9% on 2011 and 2012 11% on 2014 and 2013 12% on 2015

132 Material Covenants/ Description/ Interest Events of Applicable Borrower Creditor Maturity Interest Rate Payments Default Law Collateral U.S.$3.5 million 5% in 2008, CER + 4% for Semiannual (11) Argentina — Loan/Banco 2009 and 2010 the first year Ciudad Ps.973,000 10% in 2011, CER + 5% for 2012, 2013 and the second year 2014 CER + 6% for 15% in 2015, the third year 2016 and 2017 CER + 7% for the fourth and fifth year CER + 8% from the sixth to the twelfth year U.S.$1.7 million Monthly 5% Monthly — Argentina — leasing instalments of agreement/The U.S.$0.1 Million Capita per month from Corporation July 2007 through November 2008 Ps.360.9 million September 2009 BADLAR + 6% Semiannual Subordinated to US — note due 2009 (if paid in cash) Cablevisión’s JP Morgan or 8% (if Notes due 2012 Chase NA Bank interests are and Notes due capitalised) with 2015 a maximum of CER + 6%. Borrower can choose to capitalise or pay in cash except in case that the ratio Net Debt/EBITDA is higher than 4 to 1 in which case capitalisation is mandatory. Multicanal U.S.$105.7 5% in 2009 7% Semiannual (12) US First priority on million Reserve Notes 10% in 2010 Account(13) 15% in 2011 20% in 2012 50% in 2013 U.S.$80.3 million 2016 2.5% until June Semiannual (14) US First priority on Note 2010 Reserve 3.5% from July Account(15) 2010 until July 2014 4.5% from July 2014 until July 2016. AGEA Ps. 300 million Eight semi- CER plus 4.25% Semiannual (16) Argentina — Notes annual instalments from June 2008 until December 2011

133 Material Covenants/ Description/ Interest Events of Applicable Borrower Creditor Maturity Interest Rate Payments Default Law Collateral U.S.$30.6 million 2014 2% from Semiannual (17) US Notes execution until fourth year 3% from the fourth year until eighth year 4% from eighth year until maturity. TRISA U.S.$6.5 million December 2007/ LIBOR plus 3% Semiannual — US 100% of the Loan/ shares of TRISA December 2011 and 75% of First Overseas shares of TyC Bank Limited Uruguay ARTEAR U.S.$3.3 million 2007/2013 From 4% to — — Argentina Pledge/mortgage Seller Notes in LIBOR plus over certain U.S.$ and Ps./ 8.5% assets of Ideas Various Creditors del Sur

(1) Restrictions on debt incurrence, liens, mergers, sale of substantial assets, liquidations, dissolution and winding-up and effecting changes of control. (2) Grupo Clarín must maintain deposited in the reserve account an amount at least equal to the aggregate amount payable under this loan on the next interest payment date. (3) Mandatory prepayment with proceeds paid by Cablevisión to the Company under a Ps.463.9 million Note due 2009. (4) Under the terms of the VLG Operating Agreement dated as of 26 September 2006, in the event that the Company fails to make payment of amounts due under its U.S.$157.8 million Notes, Fintech (the original holder and assignor of these Notes to JPMorgan Chase Bank NA) would be entitled to cause Clarín’s interest in VLG to be reduced, thereby causing beneficial ownership of up to 25.656% of the shares of Cablevisión to be transferred to Fintech. (5) The maturity and interest rate of this facility is renegotiated on a monthly basis. (6) These Notes are held by creditors that have not consented to the terms and conditions of Cablevisión’s APE. If the APE is finally judicially approved, these instruments will be discharged in accordance with the terms of the APE. The consideration to which the holders of these notes would be entitled under the APE is being held in escrow for such holders pending final resolution of Cablevisión’s APE proceeding. If Cablevisión’s APE is not approved by a final court resolution and these Notes (including accrued interest) were successfully enforced against Cablevisión in accordance with its terms and conditions, Cablevisión would have to pay (net of all amounts deposited in escrow) approximately U.S.$19.5 million. (7) Restrictions on debt incurrence, liens, mergers, sales of substantial assets, capital expenditures and on transactions with affiliates (including Grupo Clarín); provided that Cablevisión may pay certain amount of technical assistance fees to Grupo Clarín. Twice a year, Cablevisión is required to apply its excess cash (as defined in these Notes) to prepay amounts due under these Notes. Cablevisión can only make dividend payments with amounts available after giving effect to its excess cash prepayment obligations. Holders of the Notes are entitled to appoint one member and one alternate member to the Board of Directors of Cablevisión. (8) Excess cash (as defined in these Notes) must be transferred to the Reserve Account provided that the balance shall not exceed the greater of: (x) 15% of the initial principal amount of the Notes or (y) the aggregate amount of the interest and principal payments on the Notes due within the 12 months following the date of determination. In the event of failure by Cablevisión to make an interest payment in part or in full on a timely basis, on any of the Notes, the Trustee may draw

134 on any funds deposited in the Reserve Account to cover such payment shortfall pro rata among any Notes entitled to the benefits of such Reserve Account. (9) Same as 7, above. (10) Same as 8, above. (11) Same as 7, above. (12) Restrictions on capital expenditures, indebtedness incurrence, transactions with shareholders and affiliates, repurchase of capital stock, sale of assets, mergers and asset dispositions, payment restrictions by significant subsidiaries, significant subsidiary guarantees, liens and sale and leasebacks. Twice a year, Multicanal is required to apply a portion of its excess cash (as defined under these Notes) to prepay amounts due under these Notes. (13) Excess cash (as defined under these Notes) must be transferred to the Reserve Account so that the balance is equal to at least the sum of (i) 12 months of interest payments under these Notes and (ii) any amount of principal under these Notes due within the 12 months following the date of transfer of the excess cash to the Reserve Account. (14) Restrictions on indebtedness incurrence, transactions with shareholders and affiliates, payments to equity, sale of equity in significant subsidiaries, mergers and asset dispositions, payments of dividends and other payment restrictions by significant subsidiaries, significant subsidiary guarantees, liens and sale and leasebacks. (15) For so long as Multicanal’s Notes due 2013 are outstanding, in accordance with the terms of such Notes excess cash (as defined in the Notes due 2013) must be transferred to the Reserve Account provided that the balance shall not exceed the 12 months of interest payments under the Notes due 2016. (16) Restrictions on debt incurrence, liens, mergers, sale of substantial assets and transactions with affiliates. In addition, AGEA has restrictions to pay dividends or make any other payments to its shareholders (including payment of management fees to Grupo Clarín) to its shareholders (including Grupo Clarín) if the ratio of net worth to assets is below 30%. (17) Restrictions on debt incurrence, liens, sale of assets, transactions with affiliates that are not arms’ length, provided that payment of management fees to Grupo Clarín for certain amounts is permitted. AGEA must also apply 14% of any proceeds obtained from the sale of its equity participation (directly or through any of its subsidiaries) in Multicanal to a third party to prepay amounts due under these Notes. AGEA shall not pay dividends to its shareholders (including Grupo Clarín) if certain financial ratios are not met or if an event of default under these Notes has occurred. In addition, the Company has executed guarantees with the counterparties involved in certain outstanding interest rate and exchange rates swap agreements entered into by Grupo Clarín Services LLC (a subsidiary of the Company) relating to a nominal value of approximately Ps.152 million, whereby Grupo Clarín Services LLC transfers to or receives from the counterparties the net position resulting from swapping a Ps.152 million payment obligation accruing interest at a floating rate of CER plus 4.25% into a U.S. dollar obligation accruing interest at a fixed rate. The swap agreements, executed in January 2006, are effective until December 2011. See Note 7 to the audited consolidated financial statements included elsewhere in this Offering Circular.

Interest Expense The following table sets forth our interest expense for the periods indicated: Year Ended 31 December Six Months Ended 30 June 2004 2005 2006 2006 2007 (Unaudited) (In Millions of Pesos) 246.0 264.8 276.5 161.0 133.3

135 DIVIDEND POLICY

Dividend Policy

The Company does not have, and has no current plan to establish, a formal dividend policy governing the amount and payment of dividends or other distributions. According to the Bylaws and Argentine Corporate Law, the Company may make one or more declarations of dividends with respect to any single fiscal year, including advance dividend payments under Article 224 second paragraph of Argentine Corporate Law, out of the Company’s distributable net income (utilidades realizadas y líquidas) as reflected in the Company’s consolidated balance sheet prepared in accordance with Argentine GAAP and CNV regulations as of the last day of such fiscal year, or in consolidated special or interim balance sheets in the case of advanced or provisional dividends, provided that any such dividends would be payable rateably to all holders of the Company’s shares of common stock as of the relevant record date.

Subject to completion of the Offering, and after giving effect to the offering, all shares of our capital stock rank pari passu with respect to the payment of dividends. See “Description of Share Capital and Description of Argentine Legislation”.

The Company conducts all of its operations through subsidiaries and, accordingly, in addition to certain management fees that it collects from certain of its subsidiaries, the Company’s main source of cash to pay dividends are the dividends received from its subsidiaries. As a holding company, the Company’s ability to pay dividends and obtain financing depends on the results of operations and financial condition of its subsidiaries and could be restricted by legal, contractual or other limitations binding upon those subsidiaries. See “Operating and Financial Review — Liquidity and Capital Resources — Indebtedness”. These dividend payments depend on the Company’s subsidiaries’ results of operations, financial condition, cash and capital requirements, future growth prospects and other factors deemed relevant by their respective boards of directors, as well as on any applicable legal restrictions.

Certain of our subsidiaries are subject to certain contractual restrictions on their ability to declare or pay dividends. See “Risk Factors — Risks related to Argentina — Our Shareholders’ ability to receive cash dividends may be limited” and “Operating and Financial Review — Liquidity and Capital Resources.”

In 1999, we became liable for dividends of Ps.165 million declared by certain of our predecessor companies in favour of the Controlling Shareholders, of which Ps.153.9 million were paid in 1999. On 13 June 2007, we paid the Controlling Shareholders the balance, together with Ps.6.9 million in compensation for the deferral, in total cancellation of such liability. Since our establishment in 1999, we have not declared any dividends.

The issuance of class “C” common shares and class “A” preferred shares in 1999, resulted in paid-in-capital of Ps.333,636,239, which were appropriated to a “Class “A” and Class “B” Preferred shares Paid-in-capital Reserve” that would be irrevocably appropriated as follows: (a) to the payment of dividends in shares, even if no profits or insufficient profits are generated, to the holders of preferred shares, in accordance with the terms and conditions for the issuance and the preference of class “A” preferred shares established in the Sixth section of the bylaws of the Company in force at that time, and (b) in the first place, with preference, to the payment of class “A” preferred shares and/or common shares to be delivered as a result of the conversion of class “A” preferred shares and, in the second place and in a subordinate category, if a reserve remains after all class “A” preferred shares have been converted, to the payment of class “B” preferred shares and/or common shares to be delivered through the conversion of class “B” preferred shares, which must be issued in accordance with the terms and conditions for issuance established by section Sixth of the bylaws of the Company in force at that time. At a shareholders meeting held on 8 October 2007, our shareholders voted in favour of reallocating the Ps.333.6 million of the “Class “A” and Class “B”

136 Preferred Shares Paid-in Capital Reserve”, which will be recorded as paid-in capital for the benefit of all holders of common shares of the Company.

Amount Available for Distribution Dividends may be lawfully declared and paid only out of the Company’s retained earnings stated in the Company’s yearly financial statements prepared in accordance with Argentine GAAP and CNV regulations and approved by the annual ordinary shareholders’ meeting. According to the Argentine Corporate Law and the Bylaws, the Company is required to maintain a legal reserve of 20% of its then-outstanding capital stock. The legal reserve is not available for distribution to shareholders. Under the Argentine Corporate Law and the Bylaws, the Company’s yearly net income (as adjusted to reflect changes in prior results) is allocated in the following order: (i) to comply with the legal reserve requirement; (ii) to pay the accrued fees of the members of the board of directors and supervisory committee; (iii) for voluntary or contingent reserves, as may be resolved from time to time by our shareholders at the annual ordinary shareholders’ meeting; and (iv) the remainder of the net income for the year may be distributed as dividends on common shares or as otherwise decided by our shareholders at the annual ordinary shareholders’ meeting. The board of directors submits our financial statements for the preceding fiscal year, together with reports thereon by the supervisory committee, at the annual ordinary shareholders’ meeting for approval. Within four months of the end of each fiscal year, an ordinary shareholders’ meeting must be held to approve the financial statements and determine the allocation of the Company’s net income for such year. Under the Bylaws, the Company’s board of directors may distribute advanced or provisional dividends, or dividends that result from special or interim balance sheets subject to Argentine Corporate Law, CNV regulations and any other applicable regulations. Under applicable CNV regulations, cash dividends must be paid to shareholders within 30 days of the shareholders’ meeting approving such dividends. In the case of stock dividends, shares are required to be delivered within three months of our receipt of notice of the authorisation of the CNV for the public offering of the shares so issued. The statute of limitations to the right of any shareholder to receive dividends declared by the shareholders’ meeting is three years from the date in which they have been made available to the shareholder. Foreign exchange regulations impose certain restrictions on the distribution of dividends to foreign shareholders of Argentine Companies outside of Argentina. Since 2003, Argentine companies may purchase foreign currency in the foreign exchange market only to pay dividends abroad to foreign shareholders or to the Depositary for the benefit of the foreign holders of GDSs, provided that such dividends correspond to periods covered by approved annual audited financial statements. See “Exchange Rate Information — Exchange Controls”.

137 DILUTION Dilution in net tangible book value per share represents the difference between the amount per share paid by purchasers of shares, including in the form of GDSs, in the Offering and the net tangible book value per share immediately after the issuance of such shares, including in the form of GDSs. Our net tangible book value at as of 30 June 2007 was a deficit of Ps.1,866.8 million, or negative Ps.(8.15) per share based on the number of shares outstanding as of 30 June 2007. Our net tangible book value per share represents the amount of our total assets less intangible assets and goodwill less total liabilities and minority interest, divided by the number of ordinary shares outstanding as of 30 June 2007. Following (a) the conversion of all of our outstanding shares of preferred stock into common stock, and (b) our sale (the sale by the Selling Shareholders of class B common shares in the Offering or pursuant to the Over-allotment Option has no effect on dilution) of class B common shares in the Offering and pursuant to the Over-allotment Option (assuming the Over-allotment Option is exercised in full) at an Offer Price of Ps.29.14 per class B common share set forth below and after deducting the estimated underwriting commissions and expenses payable by the Company in connection with the Offering, our net tangible book value at 30 June 2007 would have been a deficit of Ps.1,391.4 million, or negative Ps.(4.84) per share. The conversion of the preferred stock into common stock will cause an immediate decrease in the negative net tangible book value per share to existing shareholders of Ps.1.24. The sale by the Company of Class B common shares in the Offering and pursuant to the Over-allotment Option (assuming it is exercised in full) represents an immediate decrease in the negative net tangible book value per share to existing shareholders of Ps.2.07 and an immediate dilution of Ps.33.98 per New Share to new investors in the Offering purchasing at an Offer Price of Ps.29.14 per Class B Share, as illustrated by the table below: Ps. Offering price per class B common share ...... 29.14 Net tangible book value per class B common share as of 30 June 2007 ...... (8.15) Increase in net tangible book value per share attributable to conversion of preferred stock ...... 1.24 Increase in net tangible book value per share ...... 2.07 Net tangible book value per class B common share, including in the form of GDSs, after the Offering ...... (4.84) Dilution per New Share attributable to investors purchasing Securities in the Offering ...... 33.98

Note: Each GDS represents an interest in two Class B Shares.

138 CAPITALISATION The following table sets forth, as of 30 June 2007, our capitalisation on an actual and as adjusted basis. The data set forth under the “As Adjusted” column below, adjusts the actual data to give effect to the issuance of 15,000,000 New Shares in the Offering (including New Shares in the form of GDSs), the conversion of our series A preferred shares and series B preferred shares into 22,693,904 class B common shares and 18,567,740 class C common shares, the conversion of 18,624,455 class C common shares into class B common shares in two steps (assuming the Over- allotment Option is exercised in full), and the application of the net proceeds we will receive from the Offering of the New Shares we will issue at an Offering Price of Ps.58.28 per GDS and Ps.29.14 per Class B Share. None of the proceeds arising from the sale of the Selling Shareholders Shares will be for us. You should read this information in conjunction with: • our unaudited consolidated financial statements and the related notes included elsewhere in this Offering Circular; and • “Use of Proceeds”. As of 30 June 2007 Actual As Adjusted (Unaudited) (In millions of Pesos) Amounts in Accordance with Argentine GAAP Short-Term Debt: Short-term Financial Loans and Negotiable Obligations ...... 416.5(1) 172.7(2) Bank overdraft...... 4.8(3) 4.8(3) Accrued interest ...... 23.1(4) 23.1(5) Current portion of long-term debt from acquisitions...... 36.9(6) 36.9(7) Total short-term debt ...... 481.3 237.5 Long-Term Debt: Long-term Financial Loans and Negotiable Obligations ...... 1,961.5(8) 1,961.5(9) Derivatives ...... 0.8(3) 0.8(3) Long-term debt from acquisitions ...... 854.3(10) 854.3(11) Total long-term debt ...... 2,816.6 2,816.6 Total debt ...... 3,297.9 3,054.1 Minority Interest ...... 386.1 386.1 Shareholders’ Equity: Capital Stock ...... 270.3 287.5 Inflation adjustment on Capital Stock ...... 309.9 309.9 Paid-in capital...... 1,364.8 1,822.9(12) Special Reserve ...... 21.7 21.7 Cumulative Translation Adjustment ...... 2.7 2.7 Accumulated deficit ...... (329.8) (329.8) Total shareholders’ equity ...... 1,639.5 2,114.8 Total capitalisation ...... 5,323.6 5,555.0

(1) Of which Ps.315.8 million correspond to secured short-term financial loans and Ps.100.7 million correspond to unsecured short-term financial loans and negotiable obligations. (2) Of which Ps.72.0 million correspond to secured short-term Financial Loans and Ps.100.7 million correspond to unsecured short-term financial loans and negotiable obligations. (3) Unsecured.

139 (4) Of which Ps.20.8 million correspond to secured and Ps.2.3 million correspond to unsecured accrued interest. (5) Of which Ps.20.8 million correspond to secured and Ps.2.3 million correspond to unsecured accrued interest. (6) Of which Ps.0.5 million correspond to secured and Ps.36.4 million correspond to unsecured current portion of long-term debt from acquisitions. (7) Of which Ps.0.5 million correspond to secured and Ps.36.4 million correspond to unsecured current portion of long-term debt from acquisitions. (8) Of which Ps.1,605.2 million correspond to secured long-term financial loans and long-term negotiable obligations secured by reserve accounts created pursuant to the terms of such obligations and Ps.356.3 million correspond to unsecured long-term financial loans and negotiable obligations. (9) Of which Ps.1,605.2 million correspond to secured long-term financial loans and long-term negotiable obligations secured by reserve accounts created pursuant to the terms of such obligations and Ps.356.3 million correspond to unsecured long-term financial loans and negotiable obligations. (10) Of which Ps.487.5 million correspond to secured and Ps.366.8 million correspond to unsecured long-term debt from acquisitions. (11) Of which Ps.487.5 million correspond to secured and Ps.366.8 million correspond to unsecured long-term debt from acquisitions. (12) At a shareholders meeting held on 8 October 2007, our shareholders voted in favour of reallocating Ps.333.6 million of the “class “A” and class “B” Preferred Shares Paid-in Capital Reserve”, which are recorded as paid-in capital for the benefit of all holders of common shares of the Company.

140 RELATED PARTY TRANSACTIONS The following table details the transactions carried out by the Company (parent only) and all its related parties, including its consolidated subsidiaries, for each year in the three-year period ended 31 December 2006 and the six months ended 30 June 2007: 30 June 31 December Company Item 2007 2006 2005 2004 (In Pesos) Subsidiaries AGEA ...... Management fees 12,103,657 21,600,000 19,200,000 16,400,000 Sale of long-term — 42,338,268 — — investments ARTEAR ...... Management fees 5,400,000 11,600,000 8,400,000 13,433,840 Other expenses (25,312) (5,347) — — Advertising purchases — — (14,198) — Services — — — (13,527) IESA ...... Management fees 1,800,000 3,450,000 2,800,000 2,700,000 Services — (14,985) (23,290) (20,117) Loan interest — — — 270,507 Other expenses (1,579) — — — Radio Mitre ...... Management fees 420,000 720,000 600,000 600,000 Interest income 26,247 — — — GC Gestión Compartida S.A...... Services (420,617) (669,503) (501,489) (349,140) Sale of buildings — — — 5,100,000 Other income — — — 80,000 Multicanal...... Management fees — 956,384 — — Disposal of other — 31,000,000 — — investments Reimbursed expenses — 2,406 — — Services — — — (5,370) Prima Internacional . . . . . Sale of long-term — 440,521 — — investments Interest income 45,535 — — — Compañía de Cable . . . . Sale of long-term Latinoamericana S.A. . . . investments — 15,000,838 — — Indirectly controlled companies AGR ...... Management fees 2,431,844 3,765,823 3,000,000 2,200,000 Sale of long-term — 18,086,000 — — investments Other expenses (631) — — — Printing services — (40,197) (44,199) (19,229) Acquisition of real property — — — (2,700,000) Impripost Tecnologías S.A...... Management fees 750,000 900,000 400,000 — TRISA ...... Maintenance expenses — (23,167) — — Management fees — 504,000 672,000 672,000 Prima...... Internet communication services (68,889) (163,448) (134,676) (130,232)

141 30 June 31 December Company Item 2007 2006 2005 2004 (In Pesos) Teledeportes Paraguay S.A...... Management fees — 411,720 876,441 735,400 Tinta Fresca ...... Loans plus interest — — 25,275 453,536 Cablevisión...... Management Fees 28,372,598 — — — Interest income 22,277,976 12,224,207 — — Sale of long-term — 377,739,883 — — investments Affiliates CIMECO ...... Management fees — 1,382,850 — — In addition, the Company has executed guarantees with the counterparties involved in certain outstanding interest rate and exchange rates swap agreements entered into by its subsidiary Grupo Clarín Services LLC, relating to a nominal value of approximately Ps.152 million, whereby Grupo Clarín Services LLC transfers to or receives from the counterparties the net position resulting from swapping a Ps.152 million payment obligation accruing interest at a floating rate of CER plus 4.25% into a U.S. dollar obligation accruing interest at a fixed rate. The swap agreements, executed in January 2006, are effective until December 2011. The Company and its consolidated subsidiaries have entered into certain transactions in the ordinary course of business with unconsolidated affiliates, which are required to be disclosed under U.S. GAAP and are accounted for under the equity method. These transactions have been executed on terms comparable to those of unrelated third parties and primarily include:

Year Ended 31 December Six Months Ended 2004 2005 2006 30 June 2007 Income (Expense) (in Pesos) Advertising sales ...... 2,791,718 6,084,622 7,858,057 6,015,621 Cable television signals and coproduction sales ...... 14,749,421 8,672,710 10,494,075 7,017,053 Other sales ...... 5,346,524 5,639,307 7,070,927 6,361,459 Total sales ...... 22,887,663 20,396,639 25,423,059 19,394,133

Cost of sales ...... (157,137,281) (180,507,015) (176,206,910) (231,333,115) Selling expenses ...... (2,479,591) (3,339,182) (4,647,634) (1,402,018) Administrative expenses...... — (581,751) (723,854) (628,501) Financial interest ...... (658,822) (450,009) (229,086) (39,303) Total costs and expenses . . . . . (160,275,694) (184,877,957) (181,807,484) (233,403,337)

142 PRINCIPAL AND SELLING SHAREHOLDERS The following tables set forth information about the ownership of our capital stock immediately prior to and after completion of the Offering after giving effect to the conversion of our series A preferred shares and series B preferred shares into 22,693,904 class B common shares and 18,567,740 class C common shares and the conversion of 18,624,454 class C common shares into class B common shares in two steps (assuming that the Over-allotment Option is exercised in full), and on the basis of the assumption that all of the Class B Shares and GDSs representing Class B Shares are placed without exercise of the Over-allotment Option, and on the basis of the assumption that all of the Class B Shares are placed and that the Over-allotment Option is exercised in full.

Class A Common Class A Common Shares Owned After Class A Common Shares the Offering Shares Owned After Including Owned the Offering Without Full Exercise of Prior Exercise of Over-Allotment to the Offering Over-Allotment Option Option Percentage of Percentage of Percentage of Total Total Total Owner Number Capital Votes Number Capital Votes Number Capital Votes GC Dominio S.A.(1) ...... 75,980,304 28.11% 66.16% 75,980,304 26.64% 64.48% 75,980,304 26.43% 64.23% Class B Common Class B Common Shares Owned After Class B Common Shares Owned After the Offering Shares the Offering Including Owned Without Exercise of Full Exercise Prior to Over-Allotment of Over-Allotment the Offering Option Option Percentage of Percentage of Percentage Total Total of Total Owner Number Capital Votes Number Capital Votes Number Capital Votes Ernestina L. Herrera de Noble . . 17,542,646 6.49% 3.06% 2,625,000 0.92% 0.45% 0 0.00% 0.00% The 1999 Ernestina Laura Herrera de Noble New York Trust (2) ...... 75,738,549 28.02% 13.19% 75,738,549 26.55% 12.85% 75,738,549 26.34% 12.81% HHM Media New York Trust (3) ...... 33,241,035 12.30% 5.79% 33,241,035 11.65% 5.64% 33,241,035 11.56% 5.62% José Antonio Aranda ...... 8,197,737 3.03% 1.43% 8,197,737 2.87% 1.39% 8,197,737 2.85% 1.39% The LRP New York Trust (4) . . . 9,428,894 3.49% 1.64% 9,428,894 3.31% 1.60% 9,428,894 3.28% 1.59% Aranlú S.A(5) ...... 1,485,278 0.55% 0.26% 1,335,278 0.47% 0.23% 1,335,278 0.46% 0.23% Corbery S.A(6) ...... 2,432,354 0.90% 0.42% 0 0.00% 0.00% 0 0.00% 0.00% GS Unidos, L.L.C(7) ...... 9,502,270 3.52% 1.65% 0 0.00% 0.00% 0 0.00% 0.00% GS Private Equity Partners II- Direct Investment Fund, L.P(8) ...... 154,372 0.06% 0.03% 0 0.00% 0.00% 0 0.00% 0.00% GS Capital Partners III, L.P(9). . 6,501,018 2.41% 1.13% 0 0.00% 0.00% 0 0.00% 0.00% GS Private Equity Partners 1999 — Direct Investment Fund, L.P(10) ...... 126,162 0.05% 0.02% 0 0.00% 0.00% 0 0.00% 0.00% Tinicum GC Investors, L.L.C(11) ...... 1,313,472 0.49% 0.23% 656,736 0.23% 0.11% 558,226 0.19% 0.09% Farallon GC Investors, L.L.C(12) ...... 1,118,884 0.41% 0.19% 559,442 0.20% 0.09% 475,526 0.17% 0.08% Freefloat ...... 0 0.00% 0.00% 50,000,000 17.53% 8.49% 57,500,000 20.00% 9.72% Total class B Shares ...... 166,782,671 61.71% 29.05% 181,782,671 63.72% 30.85% 186,475,245 64.86% 31.53%

143 Class C Common Class C Common Shares Owned After Class C Common Shares Owned After the Offering Shares the Offering Including Owned Without Exercise of Full Exercise Prior to Over-Allotment of Over-Allotment the Offering Option Option Percentage of Percentage of Percentage Total Total of Total Owner Number Capital Votes Number Capital Votes Number Capital Votes GS Unidos, L.L.C(7) ...... 15,043,094 5.57% 2.62% 15,043,094 5.27% 2.55% 13,617,753 4.74% 2.30% Gs Private Equity Partners II — Direct Investment Fund, L.P(8) ...... 283,530 0.10% 0.05% 283,530 0.10% 0.05% 260,374 0.09% 0.04% GS Capital Partners III, LP(9) . . . 11,940,208 4.42% 2.08% 11,940,208 4.19% 2.03% 10,965,055 3.81% 1.85% GS Private Equity Partners 1999 — Direct Investment Fund, L.P(10) ...... 231,717 0.09% 0.04% 231,717 0.08% 0.04% 212,793 0.07% 0.04% Total class C common shares ...... 27,498,549 10.17% 4.79% 27,498,549 9.64% 4.67% 25,055,975 8.71% 4.24%

(1) GC Dominio is an Argentine corporation owned by The 1999 Ernestina Laura Herrera de Noble New York Trust (35.555%), HHM Media New York Trust (35.335%), Mr. José Antonio Aranda (14.555%) and The LRP New York Trust (14.555%). Pursuant to the bylaws of Dominio, except in the case of transfers to certain family members, trusts established for the benefit of such family members and affiliates that only hold Dominio shares, transfers of shares in Dominio are subject to a right of first refusal in favour of all non-selling shareholders (rateable to their ownership interest in Dominio). Furthermore, any non-selling shareholder is entitled to require that the selling shareholder exchange all or part of the shares in Dominio it proposes to sell for a number of Class B Shares equal to the percentage ownership interest in the total capital of the Company represented by the Dominio shares so exchanged. Finally, Dominio retains a residual right of first refusal with respect to any shares proposed to be sold by any of its shareholders that have not been acquired or exchanged by its non-selling shareholders. The shares in Dominio owned by The 1999 Ernes- tina Laura Herrera de Noble New York Trust, HHM Media New York Trust and The LRP New York Trust are subject to usufructs in favour of Mrs. Noble and certain of her family members and affiliates, Mr. Magnetto and certain of his family members and affiliates, and Mr. Pagliaro and certain of his family members and affiliates, respectively. Except with respect to matters contemplated in Sec- tions 197 and 244 of the Argentine Corporate Law, decisions are adopted by the simple majority of the shares of Dominio present or represented at a shareholders meeting.

(2) The 1999 Ernestina Laura Herrera de Noble New York Trust is an irrevocable trust established under the law of the State of New York, which unless extended will expire on 22 December 2016. The beneficiaries of the trust are Mrs. Noble and ultimately certain of her family members. The trust has five trustees, including Messrs. Magnetto, Aranda and Pagliaro as well as Mrs. Noble. Except for certain decisions that cannot be adopted without the consent of Mrs. Noble, and/or certain of the trustees (including on certain matters the voting of the shares of Dominio and the Com- pany owned by the trust), decisions are adopted by the vote of the majority of the trustees. All shares in Dominio and the Company currently owned by the trust are currently subject to a usufruct in favour of Mrs. Noble and certain of her family members and affiliates.

(3) The HHM Media New York Trust is an irrevocable trust established under the law of the State of New York, which unless extended will expire on 21 April 2015. The beneficiaries of the trust are Mr. Magnetto and ultimately certain of his family members and other persons as may be designated by Mr. Magnetto. The trust has six trustees, including Messrs. Magnetto, Aranda and Pagliaro. Except for certain decisions that cannot be adopted without the consent of Mr. Magnetto, and/or certain of the trustees (including on certain matters the voting of the shares of Dominio

144 and the Company owned by the trust), decisions are adopted by the vote of the majority of the trustees. All shares in Dominio and the Company currently owned by the trust are subject to a usufruct in favour of Mr. Magnetto and certain of his family members and affiliates.

(4) The LRP New York Trust is an irrevocable trust established under the law of the State of New York, which unless extended will expire on 29 October 2016. The beneficiaries of the trust are Mr. Pagliaro and ultimately certain of his family members. The trust has five trustees, including Mr. Pagliaro and two of his family members. Except for certain decisions that cannot be adopted without the consent of Mr. Pagliaro and/or certain of the trustees (including on certain matters the voting of the shares of Dominio and the Company owned by the trust), decisions are adopted by the vote of the majority of the trustees. All shares in Dominio and the Company currently owned by the trust are currently subject to a usufruct in favour of Mr. Pagliaro and certain of his family members and affiliates.

(5) Aranlú S.A. is an Argentine corporation controlled by Mr. José Antonio Aranda.

(6) Corbery S.A. is a Uruguayan corporation jointly owned by the Controlling Shareholders.

(7) GS Unidos, L.L.C. (“GS Unidos”) is a Delaware Limited Liability Company owned by GS Capital Partners III Offshore, L.P. (20.64%), Goldman, Sachs & Co. Verwaltungs GmbH (3.47%), GS Private Equity Partners Connecticut, L.P. (0.63%), GS Private Equity Partners 1999, L.P. (6.07)%), GS Private Equity Partners 1999 Offshore, L.P. (0.97%), GS Private Equity Partners, L.P. (3.41%), GS Private Equity Partners Offshore, L.P. (1.64%), GS Private Equity Partners II L.P. (4.30%), GS Private Equity Partners II Offshore, L.P. (2.23%), GS Private Equity Partners III, L.P. (4.51%), GS Private Equity Partners III Offshore, L.P. (1.05%), NBK/GS Private Equity Part- ners, L.P. (0.48%), Booth American Company (19.22%), Rebecca C. Booth and Comerica Bank, Trustees U/A with John L. Booth, II, dated December 19, 1984 FBO Descendents of John L. Booth, II (14.13%), John L. Booth, II, (5.09%), Stone Street Fund 2000, L.P. (2.97%), Bridge Street Special Opportunities Fund 2000, L.P. (8.00%) and DMI Holding, LLC (1.19%). The managing member of GS Unidos is Capital Partners III Offshore, L.P. and its general partner is GS Advi- sors III, L.L.C. Members of GS Unidos are not allowed to transfer their membership interests without the consent of the managing member. Prior to the date of this Offering Circular, DMI Hold- ing, LLC transferred a single class B common share of the Company to GS Unidos and ceased to be a shareholder of the Company.

(8) GS Private Equity Partners II Direct Investment Fund, L.P. (“GS PEP II”) is a Delaware Limited Partnership due to dissolve upon the later of 31 December 2009 and one year after the date by which all of its portfolio investments have been liquidated. The general partner of GS PEP II is GS PEP II Direct Investment Advisors, L.L.C. and its managing member is GSAM Gen-Par, L.L.C. Limited Partners of GS Unidos are allowed to transfer their membership interests upon compliance with certain conditions including the provision of an opinion of counsel.

(9) GS Capital Partners III, L.P. (“GSCP III”) is a Delaware Limited Partnership due to dissolve on 4 June 2008, however the general partner may extend the term for up to three successive one year terms and the term may also be extended upon the agreement of a majority of limited partners. The general partner of GSCP III is GS Advisors III, L.L.C. Limited partners may only transfer to a “qualified purchaser” within the meaning of Section 2(a) (51) of the United States Investment Company Act and upon compliance with certain conditions including the provision of an opinion of counsel.

(10) GS Private Equity Partners 1999 Direct Investment Fund, L.P. (“GS PEP 1999”) is a Delaware Limited Partnership due to dissolve upon the later of 31 December 2010 and one year after the date by which all of its portfolio investments have been liquidated. The term of the partnership may also be extended upon the agreement of a majority of limited partners. The general partner of GS PEP 1999 is GS PEP 1999 Direct Investment Advisors, L.L.C. and its managing member is GSAM Gen-Par, L.L.C. Limited Partners of GS PEP 1999 are allowed to transfer their

145 membership interests upon compliance with certain conditions including the provision of an opinion of counsel.

(11) Tinicum GC Investors L.L.C. (“Tinicum”) is a Delaware limited liability company.

(12) Farallon GC Investors L.L.C. (“Farallon”) is a Delaware limited liability company.

At the time the GS Investors, Tinicum and Farallon became shareholders in the Company, it was agreed that to satisfy regulatory requirements, these shareholders would be given access to certain Company information, from time to time, at their request.

Shareholders Agreement

Dominio, Ernestina Laura Herrera de Noble, The 1999 Ernestina Laura Herrera de Noble New York Trust, HHM Media New York Trust, The LRP New York Trust, José Antonio Aranda, Aranlú S.A. and Corbery S.A. and GS Unidos, LLC, GS Private Equity Partners II — Direct Investment Fund, LP, GS Capital Partners III, LP, GS Private Equity Partners 1999 — Direct Investment Fund, L.P. and the GS Unidos members listed and defined therein (collectively with GS Unidos, LLC, GS Private Equity Partners II — Direct Investment Fund, LP, GS Capital Partners III, LP and GS Private Equity Partners 1999-Direct Investment Fund, LP, the “GS Investors”) are party to a shareholders agreement dated as of 27 December 1999 and amended as of 2 August 2005, 30 May 2007 and further amended as of 19 October 2007, which amendment is subject to completion of the Offering (the “Shareholders Agreement”) that provides the holders of class C common shares the right to elect two members of the board of directors of the Company (and their alternate members) for so long as the class C common shares represent at least 5% or more of the Company’s total capital and one member of the board of directors of the Company (and one alternate member) for so long as the class C common shares represent less than 5% but at least 2% of the Company’s total capital.

Under this section, we describe the Shareholders Agreement as it will be in effect upon completion of the Offering.

Pursuant to the Shareholders Agreement, for as long as the class C common shares represent 5% or more of the fully diluted equity of the Company at the time of voting and the holders of class C common shares do not hold an investment excluded by the Shareholders Agreement, the Controlling Shareholders and the GS Investors have agreed that the GS Investors will have approval rights with respect to any of the following matters:

• certain capital expenditures in connection with the acquisition and development of a new business by the Company and/or certain of its subsidiaries;

• proposals to effect any merger, spin-off, reorganisation, voluntary dissolution or liquidation of the Company and/or certain of its subsidiaries, that result in the transfer of a significant amount of assets to a third party or the significant increase in the participation of third parties in the Company and/or certain of its subsidiaries;

• acquisitions by the Company or certain of its subsidiaries of assets or stock of other companies in excess of certain thresholds;

• transfers of assets of the Company or certain of its subsidiaries to third parties, other than in the ordinary course of business, in excess of certain thresholds;

• agreements, refinancings or other transactions by the Company or certain of its subsidiaries that would result in an increase in the consolidated indebtedness of the Company beyond certain thresholds;

• expenses, allowances or other capital expenditures that in the aggregate exceed budgeted annual capital expenditures by certain amounts;

146 • proposals with respect to the issuance of equity instruments of the Company or certain of its subsidiaries to persons other than to certain shareholders or in the context of a public offering, the proceeds of which exceed certain threshold amounts and proposals relating to the issuance of equity instruments of certain of its subsidiaries exceeding certain thresholds; • transactions between the Company and/or certain of its subsidiaries and the Company’s shareholders and/or their affiliates or relatives in excess of certain amounts; • distributions of dividends other than on a pro-rata basis (other than dividends on preferred shares, if any); • compensation or fees payable to officers and managers in excess of certain thresholds; and • any amendment of the Bylaws. However, such GS Investors will lose the approval right once the class C common shares represent less than 5% of the total capital of the Company at the time of voting, and will not be entitled to prevent the approval of any such matter for so long as any of the holders of class C common shares holds an investment excluded by the Shareholders Agreement. Additionally, according to the Shareholders Agreement, the following matters must be submitted to the consideration of the board of directors and shall not be carried out unless adopted by the board of directors, without prejudice to the subsequent submission to the shareholders meeting, if applicable: • any sale or transfer of assets of the Company, except in the ordinary course of business, in excess of U.S.$10 million or 0.33% of the equity value of Grupo Clarín; • any proposal to increase capital and/or to issue equity instruments of the Company; and • any proposal relating to the distribution of dividends. The Shareholders Agreement also provides that under certain circumstances, such as conflict of interest, the directors elected by holders of class C common shares or the holders of class C common shares, may not vote, either in a board meeting or shareholders meeting, as the case may be, against the matters described above. In addition, the Shareholders Agreement provides for certain transfer restrictions including the following rights of first offer, tag-along rights and drag-along rights: • the GS Investors may not transfer their shares to certain competitors of the Company without the prior consent of the Controlling Shareholders; • the GS Investors’ obligation to first offer its common shares in the Company to certain other parties to the Shareholders Agreement prior to (and on the same terms as) a proposed transfer or sale of such common shares to a third party, provided that after a public offering these restrictions apply only to privately negotiated transactions; • the right of certain parties to the Shareholders Agreement to request the inclusion of their common shares in the Company in a proposed sale or transfer of common shares in the Company; and • holders of class A common shares are entitled to certain drag along rights in respect of shares held by other parties to the Shareholders Agreement. Generally, certain of the transfer restrictions described above do not apply to transfers of shares made pursuant to any underwritten offer in Argentina, Brazil, the United States or one or more member states of the European Union, a bona fide sale pursuant to Rule 144A under the Securities Act, an underwritten offering pursuant to Rule 144A under the Securities Act, or a sale of common shares (other than in a block trade) over a stock exchange.

147 Registration Rights Agreement Pursuant to a registration rights agreement among, inter alia, the Company and the GS Investors, the GS Investors have the right to request, at any time from the completion of the Offering and subject to certain requirements and conditions, that the Company from time to time assist such shareholders in connection with underwritten offerings of their shares and include all or a portion of the common shares in the Company held by the shareholders in any subsequent underwritten offering that the Company proposes or is required to make.

Selling Shareholder Information Name Domicile Mrs. Ernestina L. Herrera de Noble ...... Piedras 1743, Ciudad Autónoma de Buenos Aires (C1140ABK), Argentina Aranlú S.A...... Av. Leandro N. Alem 690, piso 17, Ciudad Autónoma de Buenos Aires (C1001AAO), Argentina Corbery S.A...... Av. Gral. Rivera 6329, piso 1, Of. 106, Montevideo, Uruguay GS Unidos, LLC ...... Av. Del Libertador 498, piso 19, Ciudad Autónoma de Buenos Aires (C1001AGR), Argentina GS Private Equity Partners II — Direct Investment Fund, LP...... Av. Del Libertador 498, piso 19, Ciudad Autónoma de Buenos Aires (C1001AGR), Argentina GS Capital Partners III, LP ...... Av. Del Libertador 498, piso 19, Ciudad Autónoma de Buenos Aires (C1001AGR), Argentina GS Private Equity Partners 1999 — Direct Investment Fund, LP ...... Av. Del Libertador 498, piso 19, Ciudad Autónoma de Buenos Aires (C1001AGR), Argentina Tinicum GC Investors, LLC...... 800 Third Ave., 40th Floor, New York, NY 10022, U.S.A. Farallon GC Investors, LLC ...... One Maritime Plaza, Suite 2100 San Francisco, CA 94111, U.S.A. Mrs. Ernestina L. Herrera de Noble is the editorial director of Diario Clarín.

148 MANAGEMENT

Board of Directors and Senior Management This section is a summary of the composition of the Company’s board of directors, audit committee and supervisory committee and includes a description of the executive officers and the material provisions of the Bylaws applicable to such corporate bodies, as will be in effect subject to completion of and after giving effect to the Offering. According to the Bylaws to be effective as of the Offering our board of directors consists of ten directors and ten alternate directors. The current board of directors was elected at the shareholders meeting held on 13 July 2007, for a period of one fiscal year and subject to completion of the Offering. We are not a party to any employment agreement with any member of our board of directors, except for Messrs. Héctor H. Magnetto, José A. Aranda, Lucio R. Pagliaro, Alejandro A. Urricelqui, Jorge Rendo, Pablo C. Casey, Héctor M. Aranda, Lucio A. Pagliaro, Saturnino Herrero Mitjans and Ignacio Driollet, who occupy various executive and managerial positions. The following table sets forth the names of the individuals that will form part of our board of directors upon completion of the Offering, their age, their positions on the board of directors, the class of shares that elected them at the shareholders meeting held on 8 October 2007, their tenure in service as directors and whether they qualify as independent directors, as such term is defined under the CNV regulations. Current Elected by Position Name Age Position Holders of Held Since Independent Héctor Horacio Magnetto ...... 63 Chairman Class A 1999 No José Antonio Aranda ...... 65 Vice Chairman Class A 1999 No Lucio Rafael Pagliaro ...... 62 Director Class A 1999 No Alejandro Alberto Urricelqui ...... 47 Director Class A 1999 No Jorge Carlos Rendo...... 54 Director Class A 2005 No Pablo César Casey ...... 40 Director Class A 2006 No Mario Parrado ...... 48 Director Class B 2007 Yes(1) Alberto César José Menzani ...... 66 Director Class B 2007 Yes(1) Muneer Satter ...... 46 Director Class C 1999 No David Castelblanco ...... 38 Director Class C 2007 No Ignacio José Ma. Sáenz Valiente . . . . . 32 Alternate Class A 2005 No Héctor Mario Aranda ...... 54 Alternate Class A 1999 No Lucio Andrés Pagliaro ...... 35 Alternate Class A 2006 No Saturnino Lorenzo Herrero Mitjans. . . . 74 Alternate Class A 1999 No José Ma. Sáenz Valiente (h.) ...... 58 Alternate Class A 1999 No Ignacio Rolando Driollet ...... 46 Alternate Class A 2007 No Sebastián Bardengo ...... 40 Alternate Class B 2007 Yes(1) Federico Ríos ...... 37 Alternate Class B 2007 Yes(1) Ralph H. Booth (II)...... 53 Alternate Class C 1999 No Luis Ma. Blaquier ...... 41 Alternate Class C 1999 No

(1) Meets the requirements of independence set forth in Chapter III, Section 11 of CNV regulations. Set forth below is a brief biographical description of the members of our board of directors. All of our directors reside in Argentina except for Messrs. Satter, Castelblanco and Booth, who reside in the United States and Mr. Parrado, who resides in the Republic of Uruguay. Héctor Horacio Magnetto joined AGEA as manager in 1972 and soon became general manager. He later became shareholder of various entities that are now our subsidiaries. He is the chairman of

149 our board of directors elected by the holders of our class A common shares. He has been a member of our board of directors since 1999. He is also a member of the World Association of Newspapers, the Sociedad Interamericana de Prensa, the International Press Institute and the International Advertising Agency among other international organisations, and is vice president of the Asociación Empresaria Argentina. Mr. Magnetto graduated as a public accountant from the Universidad Nacional de La Plata. José Antonio Aranda joined AGEA as financial manager in 1972. He later became a shareholder of various entities that are now our subsidiaries. Since 1999 he has been a shareholder of Grupo Clarín and the vice-chairman of our board of directors elected by the holders of our class A common shares since 1999. He is also secretary of the Noble Foundation, member of the boards of the Asociación Cristiana de Dirigentes de Empresa and the Instituto para el Desarrollo Empresarial de la Argentina, and president of the Asociación para el Futuro del Niño. Mr. Aranda graduated as a public accountant from the Universidad Nacional de La Plata. Mr. Aranda is the brother of Mr. Héctor Mario Aranda. Lucio Rafael Pagliaro became a manager of AGEA in 1974, and later a shareholder of various entities that are now our subsidiaries. In 1990 he became general manager of ARTEAR and is our operating director of our radio, television, cable and entertainment divisions. He has been a member of our board of directors elected by the holders of our class A common shares since 1999. He is also a member of the International Advertising Agency, a former counsellor of the United Nations development program and Argentine representative to ALALC (Latin American Free Trade Associa- tion). In 1996 he was designated member of the international council of the United States Academy of Television Arts and Sciences. Mr. Pagliaro is the father of Lucio Andrés Pagliaro. Alejandro Alberto Urricelqui has been a member of our board of directors since 1999, and was recently re-elected for that position by the holders of our class A common shares. He joined AGEA in 1990, and was its Financial Director until 1994. Between 1994 and 1999 he acted as Financial Director of the group of corporations that as of 1999 became subsidiaries of Grupo Clarín. Since 1999 he has been our Chief Financial Officer. He is also a member of the boards of directors of Cablevisión, AGR, Prima, Multicanal and AGEA. Before joining Grupo Clarín, Mr. Urricelqui was Chief Financial Officer of Grupo Juncal. Jorge Carlos Rendo has been a member of our board of directors since 2005 and was recently re-elected for that position by the holders of our class A common shares. He joined AGEA in 1998, and is currently our Director of External Relations. He graduated with a law degree from Universidad de Buenos Aires and later obtained an MBA from the Wharton School of the University of Pennsylvania. Mr. Rendo also serves on the boards of several of our subsidiaries, including Cablevisión, Papel Prensa, Clarín Global, ARTEAR, AGR and Radio Mitre. Pablo César Casey has been a member of our board of directors elected by the holders of our class A common shares since 2006. He has worked with the Company in several capacities since 1986, and currently serves as our Manager of Public Affairs. He served as General Counsel for Multicanal from 1997 to 2005 and is a member of the board of directors of Cablevisión and Multicanal. Mr. Casey has a law degree from the Universidad de Buenos Aires and a Master’s degree in Law and Economics from the Universidad Torcuato di Tella. Mr. Casey is Mr. Magnetto’s nephew. Mario Parrado is an independent member of our board of directors, elected by the holders of our class B common shares in October 2007. He graduated from the Business Administration of the Universidad Argentina de la Empresa. After spending seven years with Credit Lyonnais, Mr. Parrado joined BankBoston in 1994 and shortly thereafter was appointed managing director for BankBoston’s investment banking activities in Argentina. From 2001 to 2004, Mr. Parrado led BankBoston’s loan recovery efforts following Argentina’s economic crisis in 2001, through Fleet International Advisors. Since 2004, Mr. Parrado renders consulting and investment advisory services through Prisma Investments.

150 Alberto César José Menzani is an independent member of our board of directors, elected by the holders of our class B common shares in October 2007. He has a degree in public accounting from the University of Buenos Aires. From 1964 to 2003, he was a member of Pistrelli, Henry Martin & Asociados, where he was appointed partner in 1978 and was director of the Audit Department. Mr. Menzani was also a member of the board of directors of Papel Prensa. On 28 September 2007, Mr. Menzani tendered his resignation to his board position in Papel Prensa, which resignation was accepted by the shareholders of that company on 24 September 2007.

Muneer Satter has been a member of our board of directors elected by the holders of our class C common shares since 1999. He is a Managing Director at Goldman Sachs in the Principal Investment Area (the “PIA”) where he sits on the Investment Committee of the PIA and is the Global Head of the Mezzanine Group. Mr. Satter also serves on the Boards of CCC Information Systems, Inc., the Nature Conservancy, and is the Co-Chair of the boards of directors of Room to Read and Diveo Broadband Networks. He is also a member of the board of trustees of Northwestern University. He received a B.A. from Northwestern University, a J.D. from Harvard Law School, and an M.B.A. from the Harvard Graduate School of Business Administration.

David Castelblanco is a member of our board of directors elected by the holders of our class C common shares in October 2007. He is a Vice President at Goldman Sachs in PIA, sits on the boards of American Golf Corporation, National Golf Properties, Leslie’s Poolmart, Inc., and Union Settlement Association (a non-profit organisation). Mr. Castelblanco is also an observer on the board of the YES Network, and a term member of the Council on Foreign Relations. He holds a J.D. from Stanford Law School, an MBA from the Stanford Graduate School of Business and a BA from Brown University.

Ignacio José Ma. Sáenz Valiente has been an alternate member of our board of directors elected by the holders of our class A common shares since 2005. He has been member of the board of directors of Southel Holding S.A. since 2006 and member of the board of directors of Multicanal since 2007. He is the son of José María Sáenz Valiente (h).

Héctor Mario Aranda became manager of AGR in 1979. In 1983, he joined AGEA, assuming responsibility for the administrative and financial divisions of that company. Since 1998 he has been the general manager of AGEA. He is also a member of the board of AGR and Tinta Fresca. He has been an alternate member of our board of directors elected by the holders of our class A common shares since 1999. Héctor Aranda is a public accountant from the Universidad Nacional de La Plata. Mr. Aranda is a brother of José Antonio Aranda.

Lucio Andrés Pagliaro has been an alternate member of our board of directors elected by the holders of our class A common shares since 2006. He works at the human resources division of the Company and has occupied positions in GC Gestión Compartida and Cablevisión. He is the son of Lucio Rafael Pagliaro.

Saturnino Lorenzo Herrero Mitjans has been an alternate member of our board of directors elected by the holders of our class A common shares since 1999. He is the chairman of several of our subsidiaries including AGEA, Radio Mitre and Prima, among others. He was a professor and director of the School of Management of the Instituto para el Desarrollo Empresarial de la Argentina, and a professor of various Argentine universities and academic institutions. Mr. Herrero Mitjans holds a degree in industrial relations from the Universidad Argentina de la Empresa.

José María Sáenz Valiente (h.) has been a member of our board of directors elected by the holders of our class A common shares since 1999. He has been member of the board of directors of Multicanal since 1993 and held the position of chairman in 1994. He is currently member of the board of directors of Southel Holding S.A., CV Berazategui S.A. and AVC Continente Audiovisual S.A. He is the chairman of IESA. He is an alternate member of the Supervisory Committee of AGEA, ARTEAR and Pem S.A. He is partner of Sáenz Valiente & Asociados, Argentine legal counsel of the Company. He is the father of Ignacio José Ma. Sáenz Valiente.

151 Ignacio Rolando Driollet has been an alternate member of our board of directors elected by the holders of our class A common shares since 2007. Mr. Driollet joined AGEA in 1992, and served until 1994 as Deputy of Institutional Relations. Until December 1997, he led Grupo Clarín’s New Develop- ment Projects Group and during 1997, also served as Director of Strategic Analysis. From 1998 to date, he has been our Director of Corporate Strategy. He is also a member of the board of directors of Cablevisión. Mr. Driollet graduated with a law degree from Universidad Católica Argentina in 1987. Sebastián Bardengo is an independent alternate member of our board of directors, elected by the holders of our class B common shares in October 2007. Mr. Bardengo has a degree in business administration from the University of Buenos Aires and completed graduate studies at Harvard University. He has over 15 years of experience in investment and commercial banking, having held positions at BankBoston, Argentina, and the Argentine subsidiary of Banco Bozano Simonsen. He is a founding partner of Buenos Aires Advisors, a business consulting and advisory firm. Additionally, he is treasurer of the Harvard Club of Argentina, and valuation expert for the Republic of Argentina in several cases filed with ICSID (International Centre for Settlement of Investment Disputes) and UNCITRAL (United Nations Commission on International Trade Law). Federico Ríos is an independent alternate member of our board of directors, elected by the holders of our class B common shares in October 2007. Mr. Ríos graduated as public accountant from the University of Buenos Aires in 1994. He is chief executive officer of SVECA Vehículos Pesados S.A., a company established in 2007 and awarded with distribution rights for Volvo trucks for certain areas of the province of Buenos Aires, and chief executive officer of GESTAGRO S.A., an agricultural enterprise with activities in the province of Buenos Aires. Until 2005, Mr. Ríos was general manager of ANDECAM S.A., the official distributor of Volkswagen trucks in Argentina. From 1996 to 1998, Mr. Ríos was chief financial officer of Andelo S.A. Ralph H. Booth II has been a member of our board of directors elected by the holders of our class C common shares since 1999. He has been the Chairman and Chief Executive Officer of Booth American Company, a private investment concern, since 1995 and is currently a director of Diveo Broadband Networks, Inc. Previously he was a founder of English Cable Enterprises which merged into NTL, Inc. in February 1994 and later co-founded European Cable Capital Partners with Goldman Sachs, which purchased a controlling interest in Diamond Cable Communications, Plc. Luis Ma. Blaquier has been an alternate member of our board of directors elected by the holders of our class C common shares since 1999. He is currently a Director of Texas Emerging Energy S.A. and an independent board member of Transportadora de Gas del Sur S.A. Mr. Blaquier was an Executive Director at Goldman Sachs & Co. (Investing Banking Division) where he worked for over 13 years in the United States and Latin America. Mr. Blaquier was head of Goldman Sachs’ Southern Cone office in Buenos Aires from 1998 through 2006. He also worked at Alliance Capital Management LP, IBM Argentina S.A. and Ledesma S.A.A.I. Mr. Blaquier received a degree in Economics from the Universidad Católica Argentina in 1988 and a Master in Business Administration — Finance at Dartmouth College in 1993. Prior to a 2005 amendment to Section 45 of the Broadcasting Law, directors of a broadcasting licensee’s controlling shareholder also had to meet the requirements the Broadcasting Law imposes on directors of broadcasting licensees. Even though after the amendment such requirement is no longer in place, regulations governing the transfer of broadcasting licenses still grant Comfer the authority to require that directors of the controlling shareholder of the licensee meet the same standards required for directors of licensees. Pursuant to the above-mentioned amendment, directors are no longer required to be Argentine nationals, but foreign directors must comply with additional certifications. Because several transfers of our licensee subsidiaries are currently subject to Comfer approval, our directors must meet the requirements of the Broadcasting Law. There are no conflicts of interest between any duties to us of any of the members of our Board of Directors and their private interests and/or other duties except for Messrs. Satter and Castelblanco, who are employees of affiliates of The Goldman Sachs Group, Inc., and to that extent may have

152 interests that conflict with those of the Company. See “Risk Factors — Risks Related to Our Business — Certain of our Existing Shareholders have Additional Approval Rights and their Interests May be Contrary to Yours”.

Composition, Election and Replacement According to our Bylaws, our board of directors consists of ten directors and ten alternate directors, of which six directors and six alternate directors are elected by the holders of the issued and outstanding class A common shares, two directors and two alternate directors are elected by the holders of the issued and outstanding class B common shares and two directors and two alternate directors are elected by the holders of the issued and outstanding class C common shares. Under our Bylaws, two directors and two alternate directors elected by the holders of class B common shares must be independent, as such term is defined under the CNV regulations. If the participation of the holders of class C common shares in the total issued and outstanding capital stock of the company is reduced below 5% but is equal to or higher than 2%, then such holders shall be entitled to elect only one director and one alternate director, and the holders of class B common shares shall be entitled to elect three directors and three alternate directors. If the participation of the holders of class C common shares in the total issued and outstanding capital stock of the company is reduced below 2%, then such holders shall not be entitled to elect any directors or alternate directors, and the holders of class B common shares shall be entitled to elect four directors and four alternate directors. The changes in the composition of the board as a consequence of the reduction in the participation of the holders of class C common shares in the Company have immediate effect, and the board of directors shall call a special meeting of holders of class B common shares as soon as reasonably possible to appoint the new directors and accept the resignation of the corresponding director previously elected by the class C shareholders. Directors will be elected by the majority of holders of each class of shares present at the meeting in which directors of such class are to be elected. According to our Bylaws, if no quorum of a given class of shares exists at a meeting in which directors of such class are to be elected or no decision is reached, a second meeting must be held no less than five business days after the first meeting was convened. If no holders of such class of shares are present at such second meeting, or if they are present at any of the first or second meeting but do not exercise their right to elect the directors corresponding to their class, such directors will be elected by the majority of all shareholders present at the meeting acting as a single body. Directors so elected will be deemed to have been elected by the class originally entitled to such election. The Directors will hold office for a term of one year, and may be re-elected without limitation. Except under certain circumstances set forth under Sections 264 and 276 of the Argentine Corporate Law, directors may only be removed from their position by the holders of the class of shares that elected them or is deemed to have elected them. At the first meeting of board of directors of a given term, the directors will appoint a chairman, and a vice-chairman to replace the chairman in the event of absence or unavailability. The chairman, or the vice-chairman in the event of absence or unavailability of the chairman, is Grupo Clarín’s legal representative.

Independence Standards For a director of the Company to be considered independent under CNV rules, he or she must not: • be a member of the board or an employee of a shareholder with a significant participation in the Company, or of any other company in which such shareholder has a significant participation or over which it has a significant influence;

153 • be an employee of the Company or have been an employee of the Company in the past three years;

• have a professional relationship with, or belong to, an entity that has a professional relationship with the Company, or receive fees (other than directors’ fees) from the Company, a shareholder with a significant participation in, or has a significant influence over, the Company, or any other company for which such shareholder has a significant influence;

• hold a significant participation in, or have significant influence over, the Company, directly or indirectly;

• sell goods or services to the Company or to a shareholder with a significant participation in, or significant influence over, the Company, or such shareholder’s affiliates for amounts that exceed substantially those received as compensation for his or her services as director; or

• be married to, or a relative of, an individual who would not have been considered independent had he or she been a member of the board of directors.

Holders of more than 35% of the outstanding capital stock and/or the votes of a company or entitled to elect one or more directors in a given class, or who are a party to a shareholders’ agreement relating to the governance of the company or of such company’s parent are deemed to have a “significant participation” in the company.

Meetings, Quorum, Majorities

Our board of directors must hold a minimum of one regularly scheduled meeting every three months. Meetings must also be convened when called by any member of the board of directors. Subject to the paragraph below, the quorum for a board of directors’ meeting is the majority of its members. Pursuant to our Bylaws, and for as long as we are registered with the CNV, our Directors may participate in a meeting of the board of directors by means of a communication system that provides for a simultaneous transmission of sound, images or words. Participation in a meeting by such means will not constitute presence in person at such meeting for quorum purposes, although if quorum exists, directors who are not physically present are entitled to vote. The board of directors will resolve by the affirmative vote of the majority of members present. The minutes of such meeting are to be transcribed into the corporate books and signed by the members present and the members of our statutory supervisory committee, who are to verify and certify any resolution adopted.

Pursuant to the Shareholders Agreement, for as long as the class C common shares represent 5% or more of the fully diluted equity of the Company or holders of class C common shares do not hold an investment excluded by the Shareholders Agreement at the time of voting, the Controlling Shareholders and the GS Investors have agreed that the GS Investors will have approval rights with respect to any of the following matters:

• certain capital expenditures in connection with the acquisition and development of a new business by the Company and/or certain of its subsidiaries;

• acquisitions by the Company or certain of its subsidiaries of assets or stock of other companies in excess of certain thresholds;

• transfers of assets of the Company or certain of its subsidiaries to third parties, other than in the ordinary course of business, in excess of certain thresholds;

154 • agreements, refinancings or other transactions by the Company or certain of its subsidiaries that would result in an increase in the consolidated indebtedness of the Company beyond certain thresholds; • expenses, allowances or other capital expenditures that in the aggregate exceed budgeted annual capital expenditures by certain amounts; • proposals with respect to the issuance of equity instruments of the Company or certain of its subsidiaries to persons other than to certain shareholders or in the context of a public offering, the proceeds of which exceed certain threshold amounts and proposals relating to the issuance of equity instruments of certain of its subsidiaries exceeding certain thresholds; • transactions between the Company and/or certain of its subsidiaries and the Company’s shareholders and/or their affiliates or relatives in excess of certain amounts; • distributions of dividends other than on a pro-rata basis (other than dividends on preferred shares, if any); • compensation or fees payable to officers and managers in excess of certain thresholds; and • any amendment of the Bylaws. However, such GS Investors will lose the approval right once the class C common shares represent less than 5% of the total capital of the Company at the time of voting, and will not be entitled to prevent the approval of any such matter for so long as any of the holders of class C common shares hold certain investments. Additionally, according to the Shareholders Agreement, the following matters must be submitted to the consideration of the board of directors and shall not be carried out unless adopted by the board of directors, without prejudice to the subsequent submission to the shareholders meeting, if applicable: • any sale or transfer of assets of the Company, except in the ordinary course of business, in excess of U.S.$10 million or 0.33% of the equity value of Grupo Clarín; • any proposal to increase capital and/or to issue equity instruments of the Company; and • any proposal relating to the distribution of dividends.

Executive Committee Day-to-day decisions relating to our business are taken by an executive committee of our board of directors formed by three members, appointed by the board of directors from among its own members. The executive committee acts under the oversight of the board of directors. The current members of our executive committee are Mr. Héctor H. Magnetto (Chairman), Mr. José A. Aranda (Vice Chairman) and Lucio R. Pagliaro.

Duties and Liabilities Our directors have the obligation to perform their duties with the loyalty and diligence of a prudent business person. Under Section 274 of the Argentine Corporate Law, our directors are jointly and severally liable to us, our shareholders, and third parties for negligence in discharging their duties, for violating any law or our Bylaws, and for any other damage caused by wilful misconduct, abuse of authority or gross negligence. Notwithstanding the foregoing, we may assign certain specific duties to a director by resolution adopted at a shareholders meeting, and the determination of the director’s liability for actions taken while performing these specific duties must take into account whether the actions of the director are within the scope of the director’s authorised duties. However, any shareholders resolution assigning specific duties to a director must be registered with the IGJ in order for the director to benefit from this limitation on liability.

155 In general, a director will not be held liable for a decision of the board of directors, even if that director participated in the decision or had knowledge of the decision, if (i) there is written evidence of the director’s opposition to the decision and (ii) the director notifies the supervisory committee of that opposition. However, both conditions must be satisfied before the liability of the director is claimed before the board of directors, the supervisory committee or the shareholders or relevant authority or the commercial courts.

Section 271 of the Argentine Corporate Law allows directors to enter into agreements with the Company that relate to such director’s activity and under arms’ length conditions. Agreements that do not satisfy any of the foregoing conditions must have prior approval of the board of directors (or the supervisory committee in the absence of board quorum), and must be notified to the shareholders at a shareholders’ meeting. If the shareholders reject the agreement, the directors or the members of the supervisory committee, as the case may be, shall be jointly and severally liable for any damages to the Company that may result from such agreement. Agreements that do not satisfy the conditions described above and are rejected by the shareholders are null and void, without prejudice to the liability of the directors or members of the supervisory committee for any damages to the Company.

We may initiate causes of action against directors if so decided at a meeting of the shareholders. If a cause of action has not been initiated within three months of a shareholders’ resolution approving its initiation, any shareholder may start the action on behalf and on our account. A cause of action against the directors may be also initiated by shareholders who object to the approval of the performance of such directors if such shareholders represent, individually or in the aggregate, at least 5% of our capital stock.

Except in the event of our mandatory liquidation or bankruptcy, shareholder approval of a director’s performance, or express waiver or settlement approved by the Shareholders Meeting, terminates any liability of a director vis-à-vis us, provided that shareholders representing at least 5% of our capital stock do not object and provided further that such liability does not result from a violation of law or our bylaws.

Audit Committee

Pursuant to Decree No. 677/2001 and its implementing regulations, we are required to have an audit committee consisting of at least three members of our board of directors with experience in business, finance or accounting matters. A majority of the members of the audit committee must be independent directors, as defined by CNV regulations. The audit committee must also have as many alternate members as it has full members in order to fill in possible vacancies. Members and alternate members of the audit committee serve for a period of one fiscal year and may be re-elected. Our Bylaws provide that our audit committee must meet at least once every three months or at the request of any member. A quorum for a decision by the audit committee requires the presence of a majority of its members and matters are decided by the vote of a majority of those present at the meeting. In the event of an evenly divided vote of directors, the Chairman casts the tie-breaking vote. Decisions of the audit committee are recorded in a special corporate book and signed by all members of the committee who were present at the meeting.

Among its duties, the audit committee must:

• advise on the board of directors’ proposal for the designation of external independent accountants and to ensure their independence;

• oversee our internal control mechanisms and administrative and accounting procedures and assess the reliability of all financial and other relevant information filed with the CNV and other entities to which we report;

• oversee our information policies concerning risk management;

156 • provide the market with complete information on transactions in which there may be a conflict of interest with members of our various corporate bodies or controlling shareholders; • advise on the reasonableness of fees or stock option plans for our directors and managers proposed by the board of directors; • advise on our fulfilment of legal requirements and the reasonableness of the terms of the issuance of shares or other instruments that are convertible into shares in cases of capital increase in which pre-emptive rights are excluded or limited; • verify the fulfilment of any applicable rules of conduct; and • issue grounded opinions on related-party transactions under certain circumstances and file such opinions with regulatory agencies as required by the CNV in the case of possible conflicts of interest. Additionally, the audit committee must prepare an annual working plan and present it to the board of directors and the supervisory committee. Members of the board, members of the supervisory committee and external independent accountants must attend the meetings of the audit committee if the audit committee so requests it, and must grant the audit committee full cooperation and information. The audit committee is entitled to hire experts and counsel to assist it in its tasks and has full access to all of our information and documentation. The members of our audit committee will be designated among the board members to be elected by the shareholders meeting convened for 8 October 2007, and will include Messrs. Menzani and Parrado, the independent members of our board. There are no conflicts of interest between any duties to us of any of the members of our Audit Committee and their private interests and/or other duties.

Compensation of Directors Our shareholders fix our directors’ compensation, including their salaries and any additional wages arising from the directors’ permanent performance of any administrative or technical activity. Compensation of our directors is regulated by the Argentine Corporate Law and the CNV regulations. Any compensation paid to our directors must previously have been approved at an ordinary shareholders meeting. Article 261 of the Argentine Corporate Law, along with the CNV regulations, specify that the maximum amount of compensation that corporate directors may receive, including salaries and other compensation for the performance of technical or administrative activities, may not surpass 5% of our “computable income” for the fiscal year if we do not distribute dividends, and may be increased proportionately up to a cap of 25% of our “computable income” for the fiscal year, to the extent that dividends are distributed. Computable income is defined to mean income for the fiscal year, net of taxes, plus (or minus) adjustments from prior fiscal years, and net of accumulated losses, minus a legal reserve, plus the amount of compensation for the directors corresponding to the fiscal year. Nonetheless, both the Argentine Corporate Law and the CNV regulations provide that this percentage amount may be exceeded if that amount is insufficient to cover fixed fees distributed to directors who carry out specific duties, so long as the fees exceeding the percentage limitation are expressly approved at an ordinary shareholders meeting where approval of the fees is expressly included in the published meeting agenda. According to the Shareholders Agreement, compensations to directors substantially in excess of (a) those established by the compensation and fee policy adopted by the Company prior to 27 Decem- ber 1999, and, (b) if no such policy exists, compensations consistent with current market practice, will not be approved or implemented if a majority of votes of class C common shares present at the shareholders’ meeting vote against its approval if such majority and the class C shareholders satisfy certain conditions. We do not maintain any pension or retirement plans for our directors. In addition, in 2006 our directors waived their right to compensation.

157 Executive Officers The following table sets forth the names of our executive officers, their corporate positions and their tenure in service as executive officers. Current Position Name Age Position(1) Held Since Grupo Clarín Héctor H. Magnetto ...... 63 Chief Executive Officer 1997 Jorge C. Rendo ...... 54 Director of Public Affairs 1998 Alejandro A. Urricelqui...... 47 Chief Financial Officer 1998 Francisco Iván Acevedo...... 41 Director of Corporate Control 2004 Ignacio R. Driollet ...... 46 Director of Corporate Strategy 2000 Ricardo Anglada ...... 53 Director of Audiovisual 1999 Contents Horacio E. Quirós ...... 58 Director of Human Resources 1997 Saturnino L. Herrero Mitjans ...... 74 Director of Corporate Affairs 1999 Alejandro Mondrzak...... 44 Director of Digital Contents 2006 Cable Televisión and Internet Access Carlos Alberto Moltini ...... 46 Chief Executive 2006 Officer — Cablevisión Printing and Publishing Héctor M. Aranda ...... 54 General Manager — AGEA 1998 Ricardo L. Kirschbaum ...... 58 Editor-in-Chief — Diario Clarín 2003 Broadcasting and Programming Daniel Zanardi...... 45 Chief Executive 2002 Officer — ARTEAR

(1) As used here, the term “Director” is unrelated to the position of director on our board of directors. Set forth below is a brief biographical description of each of our executive officers, except for Messrs. Magnetto, Urricelqui, Rendo, Driollet, Herrero Mitjans and Aranda whose biographical descriptions are included with those of our directors, above. All of our executive officers reside in Argentina: Francisco Iván Acevedo joined the Company in 2000 and is currently our Director of Corporate Control. He graduated from the University of Buenos Aires with a degree in public accounting and subsequently earned a Master’s degree in Business Management from the Instituto de Altos Estudios Empresariales of the Universidad Austral. He is also a member of the boards of directors of ARTEAR, Cablevisión and AGEA. Mr. Acevedo worked for eight years before joining Grupo Clarín at Grupo Bunge (in Argentina and abroad) and before that for five years with Pistrelli, Díaz y Asociados (Arthur Andersen). Ricardo Anglada joined AGEA in 1990 where he worked in several executive positions and is currently our Director of Audiovisual Contents. Mr. Anglada has developed his executive career in both Argentine and international companies. He also serves on the boards of other Argentine companies, including Multicanal, ARTEAR and IESA. Mr. Anglada graduated from the Universidad of Buenos Aires with a degree in public accounting. He subsequently obtained a Master’s degree in finance from Columbia University, and participated in executive programs conducted by the Universidad de San Andrés and the Instituto de Altos Estudios Empresariales. He has lectured at the University of Buenos Aires teaching on the subject of “Investment Decisions” since 1990. Horacio E. Quirós has served as Director of Corporate Human Resources at Grupo Clarín since 1999. He is also a member of the boards of directors of Cablevisión, AGR, Multicanal and other

158 subsidiaries. Previously he has worked in the human resources area at various businesses in the automotive, industrial agriculture, and food sectors. He has also served as president to the Amcham Commission on Industrial Relations and is President of Argentina Association of Human Resources (or ADRHA) and regional Vice President of the Inter-American Federation of People Management Associations. Mr. Quirós graduated from the Universidad Argentina de la Empresa in 1972 with a degree in Industrial Relations. Alejandro Mondrzak has served as our Director of Digital Contents since 2006 and as general manager of Clarín Global since 2000. He has a degree in computer systems engineering from the Universidad de Buenos Aires and has completed courses in management at U.C. Berkeley, Stanford University and the Massachusetts Institute of Technology. Carlos Alberto Moltini was appointed Chief Executive Officer of Cablevisión in October 2006. Mr. Moltini joined Cablevisión after five years as the Chief Executive Officer of Multicanal and, prior to occupying that position, seven years as the Chief Financial Officer of ARTEAR. Previously, Mr. Moltini worked at Bagley and at companies in the broadcasting sector. He graduated from the University of Buenos Aires with a degree in public accounting. Ricardo L. Kirschbaum is Diario Clarín’s Editor-in-Chief since May 2003. He joined AGEA in December 1976 and in April 1979 was appointed to the position of Editing Secretary in charge of the Political Area, where he worked until May 2003, when he was promoted to General Editor. Prior to joining AGEA, Mr. Kirschbaum worked at the editorial office of El Cronista Comercial. Recently, Mr. Kirschbaum has become a member of the Academia Nacional de Periodismo (Argentine National Journalism Academy). Daniel Zanardi has served as the chief executive officer of ARTEAR since 2002. Mr. Zanardi has a degree in public accounting from the University of La Plata. Initially he developed his professional career as an independent advisor for several companies. In 1990, he joined ARTEAR as senior analyst, later was designated as Financial and Administration Manager and in 2000 he was appointed CFO. We have compensation arrangements with all of our officers occupying various executive and managerial positions that contemplate a fixed remuneration as well as a variable component tied to performance. Aggregate compensation paid to our executive officers in 2006 totalled Ps.16.0 million (excluding Ps.0.6 million paid by Papel Prensa in 2006). From time to time, Grupo Clarín makes advances to certain executive officers. As of 31 December 2006, the aggregate amount of advances to executive officers outstanding totalled Ps.0.24 million. In 2007, Grupo Clarín announced its intention to establish a long term savings plan that would allow senior management to make annual contributions, to be matched by Grupo Clarín or its subsidiaries and affiliate companies, to a certain portfolio of investments, which would be held until retirement.

Supervisory Committee Our Bylaws provide that our supervisory committee (comisión fiscalizadora) shall be comprised of three members and three alternates elected at an ordinary shareholders meeting. As long as the participation of the holders of class C common shares in the total issued and outstanding capital stock of the company is equal to or more than 5%, then the holders of class C common shares shall be entitled to elect one member and one alternate member of the supervisory committee. Another member and alternate member of the supervisory committee shall be appointed by the holders of class A common shares, and the third member and alternate member shall be appointed by the holders of class A common shares and the holders of class B common shares acting as a single class. Members and alternate members of the supervisory committee serve for a period of one fiscal year and may be re-elected. A quorum for a decision by the supervisory committee requires the presence of a majority of its members and matters are decided by the vote of a majority of those present at the meeting.

159 Members of the supervisory committee must be lawyers or accountants and be residents of Argentina. The supervisory committee examines and verifies the corporation’s books and records; verifies its liquid assets; monitors its compliance with laws, regulations, articles of incorporation, Bylaws, and shareholder resolutions; attends and voices opinions in shareholders and directors’ meetings; prepares written reports on the corporation’s financial and economic conditions, presenting these to shareholders at annual meetings; calls extraordinary shareholders meetings whenever necessary; and performs other duties and has other powers provided for under Article 294 of the Argentine Corporate Law. Members of the supervisory committee may be liable to shareholders if they fail to discharge their duties conscientiously and may also be jointly liable with directors if such a failure results in the directors taking improper actions that otherwise would have been avoided.

The following table sets forth the names of our supervisory committee members, their positions on the committee and whether they qualify as independent, as such term is defined under the CNV regulations.

Name Position Independent Raúl Antonio Morán ...... Member Yes Carlos A. P. Di Candia...... Member Yes Miguel Maxwell ...... Member No Hugo Ernesto López ...... Alternate Yes Martín Guillermo Ríos ...... Alternate No Alberto López Carnabucci ...... Alternate No

Raúl Antonio Morán is a Public Accountant from Universidad Nacional de La Plata. He joined AGEA as senior auditor in 1973 and was a member of AGEA’s control and finance management office from 1975 until the creation of the Company in 1999. He is also a member of the supervisory committee of ARTEAR, AGEA, Multicanal, Prima and Impripost Tecnologías S.A. and an alternate member of the supervisory committee of Prima. Mr. Morán is an independent member of the committee, as defined by CNV regulations.

Carlos A. P. Di Candia is a Public Accountant from Universidad Nacional de La Plata. He was appointed as internal auditor of AGEA in 1972 and syndic in 1987. He is also a member of the supervisory committees of AGEA, ARTEAR, Cablevisión, Multicanal, CIMECO and syndic of AGR, Prima and Radio Mitre, among others. Mr. Di Candia is an independent member of the committee, as defined by CNV regulations.

Miguel Maxwell is a Public Accountant from Universidad de Buenos Aires. He is partner of the audit department of Deloitte & Touche Argentina since 1986, and director of such department since 2005. Mr. Maxwell is not an independent member of the committee, as defined by CNV regulations.

Hugo Ernesto López is a Public Accountant from Universidad de Belgrano. In 1984 he was appointed as General Accounting Chief of AGEA. In 2000 he joined Grupo Clarín. He is also a member of the supervisory committees of ARTEAR, Multicanal, Cablevisión and AGEA, an alternate member of the supervisory committee of Impripost Tecnologías S.A. and alternate syndic of other companies of Grupo Clarín. Mr. López is an independent alternate member of the committee, as defined by CNV regulations.

Martín Guillermo Ríos is an attorney with Estudio Sáenz Valiente & Asociados, Argentine legal counsel to Grupo Clarín. He is also an alternate director of Multicanal. Mr. Ríos is not an independent member of the committee, as defined by CNV regulations.

Alberto López Carnabucci is a Public Accountant from Universidad de Buenos Aires. He is partner of the audit department of Deloitte & Touche Argentina, and heads the Media, Technology and Telecommunications audit department for Latin America. Mr. Lopez Carnabucci is not an independent alternate member of the committee, as defined by CNV regulations.

160 The aggregate compensation we paid to the members of our supervisory committee for the year ended 31 December 2006 was Ps.9,000.

Compensation of Officers, Directors and Committee Members The aggregate compensation we paid to our executive officers, directors as members of the board and members of our supervisory committee for the year ended 31 December 2006 was Ps.16.0 million (excluding Ps.0.6 million paid by Papel Prensa). Members of the committees of our board of directors receive no additional compensation for their capacity as committee members. Mrs. Ernestina L. Herrera de Noble and Messrs. Héctor H. Magnetto, José Antonio Aranda and Lucio Rafael Pagliaro, as well as certain members of their families, hold executive positions with the Company and certain of its subsidiaries and affiliates and are members of the board of certain of those entities, and in that connection became entitled to aggregate payments of Ps.14.0 million in 2006 (excluding Ps.0.5 million paid by Papel Prensa). In addition, in 2007, they received Ps.11.1 million corresponding to the balance of dividends declared by certain of our predecessor companies in favour of the Controlling Shareholders, for which we became liable in 1999, and Ps.6.9 million in compensation for the deferral of such dividends. See “Dividend Policy”.

Litigation Statement About the Company’s Directors and Officers At the date of this Offering Circular, for at least the previous five years, none of the Company’s Directors or executive officers: • has had any convictions in relation to fraudulent offences; • has held an executive function in the form of a senior executive officer or a member of the administrative, management or supervisory bodies, of any company at the time of or preceding any bankruptcy, receivership or liquidation, except for the Multicanal APE and the APE of Cablevisión and, in the case of Mr. Satter, the Chapter 11 proceeding of Atkins Nutritional, Inc., a company in which Mr. Satter has served as director since October 2003; or • has been subject to any official public incrimination and/or sanction by any statutory or regulatory authority (including any designated professional body) or has ever 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.

161 DESCRIPTION OF SHARE CAPITAL AND APPLICABLE ARGENTINE LEGISLATION

This section is a summary of the Company’s share capital and the material provisions of the Bylaws that will be in effect subject to completion of, and after giving effect to, the Offering. In addition, we also describe certain requirements of Argentine legislation in effect as of the date of this Offering Circular applicable to the Class B Shares and their holding and disposal. GDS holders will be able to exercise their rights with respect to the Class B Shares underlying the GDSs only in accordance with the provisions of the Deposit Agreement and the relevant requirements of Argentine law. See “Terms and Conditions of the Global Depositary Shares” for more information.

General Our authorised capital is Ps.285,261,524 (without exercise of the Over-allotment Option) and Ps.287,511,524 (if the Over-allotment Option is exercised in full). Upon completion of the Offering, we will have three classes of common shares consisting of: • 75,980,304 class A common shares of Ps.1.00 nominal value each and five votes per share, issued in certificated form; • 181,782,671 class B common shares (including 22,693,904 class B common shares issued upon the conversion of 2,063,082 series A preferred shares and 20,630,822 series B preferred shares, and the class B common shares issued upon conversion of 16,181,880 class C common shares immediately prior to the consummation of the Offering and upon conversion of all class B common shares from certificated form in book entry forms) or (if the Over-allotment Option is exercised in full) 186,475,245 class B common shares (including 22,693,904 class B common shares issued upon the conversion of 2,063,082 series A preferred shares and 20,630,822 series B preferred shares, and the class B common shares issued upon conversion of 18,624,454 class C common shares (in two steps) immediately prior to the consummation of the Offering and upon conversion of all class B common shares from certificated form in book entry forms) of Ps.1.00 nominal value each and one vote per share, issued in book entry form; and • 27,498,549 class C common shares (including 18,567,740 class C common shares issued upon the conversion of 18,567,740 series A preferred shares immediately prior to the consummation of the Offering) or 25,055,975 class C common shares (if the Over-allotment Option is exercised in full) (including 18,567,740 class C common shares issued upon the conversion of 18,567,740 series A preferred shares immediately prior to the consummation of the Offering) of Ps.1.00 nominal value each and one vote per share, issued in certificated form. After giving effect to the conversion of our series A preferred shares and the series B preferred shares in connection with the Offering, our authorised capital will not comprise any shares of preferred stock. All of the preferred and common stock have the right to one vote per share, except for the class A common shares, which have the right to five votes per share. Shares issued after the Company has been admitted to public offering may not carry more than one vote per share unless otherwise permitted by law. Class A common shares and class C common shares may be converted into class B common shares at any time, at the holder’s request, except that conversion by holders of class A common shares is subject to certain conditions.

Corporate purpose The Company’s Bylaws set forth that our corporate purpose is to carry out only the following business: • Investment: to contribute capital to other existing or newly created companies and share corporations, whatever their purpose, and in particular those relating to communications, multimedia, broadcasting in general, broadcast, closed circuit, codified air, or cable television, telephony in its various forms (basic, mobile or of whatever other nature, existing or to be invented in the future), the graphic industry, the publishing of newspapers, magazines and

162 other publications, and telecommunications, as well as investments in equity, notes and other public or private securities; and • Financial: to grant loans in Argentine or foreign currencies, issue long and short term securities, with or without guarantees or collateral, discount, negotiate, accept and sell letters of credit, promissory notes, pledges, checks, wires and other instruments of credit and grant guaranties of any kind. Our Bylaws expressly exclude all financial activities regulated under the Argentine Law No. 21,526 (the “Financial Entities Law”).

Common Stock Our class A common shares and class C common shares are issued in certificated form and our class B common shares will be held as of the Offering in book-entry form. Holders of a majority of the common stock of each class entitled to vote in any election of directors may elect all of the directors standing for election by that class. Common stock holders are entitled to receive dividends declared by the shareholders or the board of directors, as the case may be, on a proportionate basis. See “Dividend Policy”. All outstanding shares of our common stock are fully paid and each shareholder is registered in our stock registry books.

New Common or Preferred Shares New common or preferred shares may only be issued with the prior approval in a general meeting of our shareholders. The approval, if granted, will lapse at the conclusion of the annual general meeting following the date on which the approval was granted. Shares issued after the Company has been admitted to public offering may not carry more than one vote per share unless otherwise permitted by law.

Shareholders Only persons who are registered in our shareholder register books are recognised as shareholders. We will not, except as required by law, recognise any equitable, contingent, future or partial interest in any common share or other rights for any common share other than the absolute right thereto of the registered holder of the common share or of the person whose names is entered in the shareholder registers for that common share. Under CNV rules, the names of holders of more than 5% of the votes of the Company should be disclosed.

Shareholders’ Liability Shareholder liability for a Company’s losses is limited to the value of the shareholder’s shareholding in the Company. However, under the Argentine Corporate Law, shareholders who have a conflict of interest with the Company with respect to certain matters and who do not abstain from voting on such matters may be held liable for damages to the Company, provided that their votes were necessary for the adoption of the relevant decision. In addition, shareholders who voted in favour of a resolution that is subsequently declared void by a court as contrary to the Argentine Corporate Law or the Company’s Bylaws (or regulations, if any) may be held jointly and severally liable for damages to the Company, other shareholders or third parties resulting from the resolution. See also “Risk factors — Risks related to our Securities — Our shareholders may be subject to liability for certain votes of their securities”.

Appraisal Rights Whenever the Company’s shareholders approve: • a merger or spin-off in which the Company is not the surviving corporation, unless the acquiror’s shares are authorised for public offering or listed on any stock exchange; • a transformation of the Company’s corporate legal status; • a fundamental change in the Company’s Bylaws;

163 • a change in the Company’s domicile outside Argentina; • a voluntary termination of the public offering or listing authorisation; • a decision in favour of the Company’s continuation upon delisting or cancellation of the Company’s public offering authorisation; or • a total or partial recapitalisation following a mandatory reduction of the Company’s capital or liquidation any shareholder that voted against such action or did not attend the relevant meeting may exercise appraisal rights, that is, the rights to withdraw from the Company and have its shares cancelled in exchange for the book value of its shares, determined on the basis of our latest balance sheet prepared, or that should have been prepared, in accordance with Argentine laws and regulations, provided that such shareholder exercises its appraisal rights within the time frame set forth below. Appraisal rights must be exercised within five days following the meeting at which the resolution was adopted in the event of a dissenting shareholder that voted against such resolution, or within 15 days following such meeting in the case of a dissenting shareholder that did not attend the meeting and who can prove that it was a shareholder at the date of the meeting. In the case of mergers or spin- offs involving an entity authorised to make public offering of its shares, appraisal rights may not be exercised if the shares to be received as a result of the transaction are listed in any stock exchange. Appraisal rights are terminated if the resolution giving rise to such rights is overturned at another shareholders’ meeting held within 60 days as from the meeting at which the resolution was adopted. Payment of appraisal rights must be made within one year of the date of the shareholders’ meeting at which the resolution was adopted, except where the resolution that gave rise to such rights was to delist the capital stock of the company or to reject a public offering or listing proposal, in which case the payment period is reduced to 60 days from the end of the term a shareholder that did not attend the meeting at which the resolution was adopted to exercise such rights or from the publication of the notice informing the delisting or rejection of the public offering or listing of the capital stock. Because of the absence of legal precedent directly on point, there is doubt as to whether holders of GDSs will be able to exercise appraisal rights either directly or through the Depositary with respect to Class B Shares in the form of GDSs.

Transfer of Shares There is no restriction on the transfer of our fully paid shares, except that pursuant to the Shareholders Agreement and the Bylaws: • the GS Investors may not transfer their shares to certain competitors of the Company without the prior consent of the Controlling Shareholders; • class C common shares must be converted into class B common shares prior to their transfer to parties that are not affiliates of holders of class C common shares; • transfers or conversions of class A common shares are subject to a right of first refusal in favour of all non-selling shareholders of class A common shares (rateable to their ownership interest in class A common shares) with a right to accrete in case any of the non-selling shareholders do not exercise their rights. If the non-selling shareholders referred to above do not exercise their rights, the selling holder of class A common shares shall exchange its class A common shares into class B common shares, except when such transfer is made in favour of other holders of class A common shares, and/or family members and affiliates that only hold class A common shares: • the GS Investors must first offer their respective common shares in the Company to certain other parties to the Shareholders Agreement prior to (and on the same terms as) a proposed transfer or sale of such common shares to a third party; provided that this restriction does not apply after a public offering other than with respect to privately negotiated transactions;

164 • certain parties to the Shareholders Agreement have the right to request the inclusion of their common shares in the Company in a proposed sale or transfer of common shares in the Company by any of the GS Investors; and

• holders of class A common shares are entitled to certain drag along rights in respect of shares held by other parties to the Shareholders Agreement.

Certain of the transfer restrictions described above do not apply to transfers of shares made pursuant to any underwritten offer in Argentina, Brazil, the United States or one or more member states of the European Union, a bona fide sale pursuant to Rule 144A under the Securities Act, an underwritten offering pursuant to Rule 144A under the Securities Act, or a sale of common shares (other than in a block trade) over a stock exchange.

Meetings of Shareholders and Voting Rights

Notices of Meetings

Notices of shareholders’ meetings are governed by the provisions of our Bylaws and the Argentine Corporate Law and Decree 677/01. Notice of shareholders’ meetings must be published for five days in the Official Gazette, in an Argentine newspaper of wide circulation and in the publications of Argentine exchanges or securities markets in which the shares are traded, at least 20 days but not more than 45 days prior to the date on which the meeting is to be held and must include information regarding the type of meeting to be held, the date, time and place of such meeting and the agenda. If a quorum is not available for such meeting, a notice for a second meeting, which must be held within 30 days from the date on which the first meeting was called, must be published for three days, at least eight days before the date of the second meeting. The above-described notices of shareholders’ meetings may be effected simultaneously, in the case of ordinary meetings, in order for the second meeting to be held on the same day as the first meeting except in certain circumstances.

The quorum for an ordinary shareholders’ meeting is the majority of the share capital entitled to vote. The quorum for an extraordinary meeting is at least 60% of the share capital entitled to vote. Shareholders may attend in person or by proxy. Directors, syndics, members of the Supervisory Committee, managers and employees of the Company may not hold proxies in representation of shareholders. If the quorum is not achieved, meetings may be reconvened with lower quorum requirements. Decisions at an ordinary or extraordinary shareholders’ meeting require the affirmative vote of the absolute majority of the present votes. Class B common shares and class C common shares are entitled to one vote per share. Class A common shares are entitled to five votes per share. The Argentine Corporate Law requires that certain resolutions, such as early dissolution, major changes in corporate purpose or the transfer of a company’s legal domicile abroad, be decided by the majority of all outstanding shares and without allowing multiple votes per share.

The Shareholders Agreement provides that so long as the class C common shares represent at least 5% or more of the Company’s fully diluted equity and none of the holders of class C common shares holds an investment excluded by the Shareholders Agreement, the GS Investors will have approval rights with respect to:

• subject to certain limitations, a merger, spin-off, reorganisation, voluntary dissolution and/or liquidation of the Company and/or certain of its subsidiaries;

• subject to certain limitations, the issuance of equity instruments of the Company or of certain of its subsidiaries exceeding certain thresholds;

• distributions of dividends other than on a pro-rata basis (other than dividends on preferred shares, if any);

• any amendment of the Bylaws; and

165 • compensations and fees payable to officers and managers of the Company and/or managers and directors of certain of the Company’s subsidiaries substantially exceeding certain thresholds. In addition, the Controlling Shareholders and the GS Investors have entered into an Acuerdo de Sindicación de Acciones (the “Share Syndication Agreement”), dated as of 19 October 2007, whereby, so long as the class C common shares represent at least 5% or more of the Company’s fully diluted equity and none of the holders of class C common shares holds an investment excluded by the Shareholders Agreement, whenever one of the matters listed above is brought before the shareholders for approval, the Controlling Shareholders and the GS Investors, must vote the same way or abstain from voting. The Company is not a party to the Share Syndication Agreement and neither the Company nor any shareholder that is not a party to the Share Syndication Agreement are bound by its terms. Notwithstanding the foregoing, the Company has been notified of the existence of the Share Syndication Agreement. Our Bylaws require that decisions with respect to any of the matters listed below be adopted by an extraordinary shareholders meeting with the attendance of holders of voting shares representing at least 50% of our capital (including on second call), for so long as the class C common shares represent at least 5% or more of the Company’s equity: • subject to certain limitations, a merger, spin-off, reorganisation, voluntary dissolution and/or liquidation of the Company and/or certain of its subsidiaries; • subject to certain limitations, the issuance of equity instruments of the Company or of certain of its subsidiaries exceeding certain thresholds; • any amendment of the Bylaws; and • compensations and fees payable to officers and managers of the Company and/or managers and directors of certain of the Company’s subsidiaries substantially exceeding certain thresholds. Decisions to be taken by individual classes of shares require the absolute majority of the present votes of the relevant class. In certain cases, if the relevant class may not make a decision due to lack of quorum, the decision may be taken by all present votes acting as a single class.

Registration Requirements of Foreign Companies Holding Class B Shares Under the Argentine Corporate Law, foreign companies that own shares in an Argentine corporation must be registered with the IGJ in order to exercise certain shareholder rights, including voting rights. The registration requires the filing of corporate and accounting documents in order to demonstrate that the foreign shareholder’s principal activity is performed outside Argentina. Therefore, it will have to prove that it is entitled to conduct business in its place of incorporation and meets certain foreign assets requirements. If you own Class B Shares directly (rather than in the form of GDSs) and you are a non-Argentine company and you fail to register with the IGJ, your ability to exercise your rights as a holder of our Class B Shares may be limited. The Depositary is registered with the IGJ.

Pre-emptive and Accrual Rights Shareholders have the right to subscribe for a number of newly issued shares proportionate to their share ownership prior to a new issuance. If a shareholder does not exercise its pre-emptive rights, the other existing shareholders may subscribe for the newly issued shares that shareholder was entitled to subscribe. Pursuant to our Bylaws, for as long as the Company is admitted to public offering, capital increases may only consist in issuances of Class B Shares unless Argentine law at the time of any such increase allows the issuance of all other existing classes of shares. If within a class of shares there are unsubscribed shares, upon termination of the term for exercising pre-emptive

166 and accrual rights within the relevant class, all shareholders of other classes of shares are entitled to subscribe the unsubscribed shares in proportion to their ownership of total capital. Shares subscribed in this manner will be converted into class B common shares. If the capital increase consists in the issuance of all classes of shares, each shareholder shall have the right to subscribe a number of newly issued shares proportionate to their share ownership of each given class prior to the new issuance. If the capital increase consists in the issuance of class B common shares only, then each shareholder shall have the right to subscribe a number of class B common shares proportionate to their ownership of total capital. Holders of class C common shares that exercised their preferential rights (but not accretion rights) in a capital increase consisting in the issuance of class B common shares only, shall be entitled to request that the Company convert any class B common shares so subscribed into class C common shares.

Mandatory Tender Offers The Company has opted out of the mandatory tender offer rules set forth in Decree No. 677/01.

Mandatory Tender Offer in the case of Acquisition of more than 50% of the Capital Stock or Votes of the Company. Pursuant to our Bylaws, if a person (or a group of persons acting in concert) not owning shares of the Company that represent, in the aggregate, 50% or more of the Company’s total capital or total votes (the “Future Holder”) intends to acquire, in a transaction or a series of related transactions (including by way of merger or exchange) occurring within a period of 90 days, direct or indirect title to, or control of, shares of the Company or other securities convertible into shares of the Company that, when added to the securities held by the Future Holder prior to the acquisition, would result in such Future Holder to hold or control more than 50% of the capital stock or votes of the Company, then the Future Holder will be required to launch a mandatory tender offer for all outstanding shares of the Company and all other securities convertible into shares of the Company. This mandatory tender offer provision does not apply in the case of acquisitions by any Permitted Shareholder, as well as by corporations controlled by any of the Permitted Shareholders or trusts established for the benefit of any of them. The Future Holder may set the price payable to accepting holders of shares or convertible securities in the mandatory tender offer, with the following limitations: • if the Future Holder acquired any shares of the Company or securities convertible into shares of the Company within the 90 days immediately preceding the notice by the Future Holder launching the tender offer, the price per share or convertible security in the mandatory tender offer may not be lower than the highest price paid in such acquisitions, and • if the Future Holder has obtained firm sale commitments or has made firm commitments for the direct or indirect purchase of shares or securities convertible into shares of the Company within the 90 days immediately preceding the notice by the Future Holder launching the tender offer, the price per share or convertible security in the mandatory tender offer may not be lower than the highest price agreed under such commitments.

Tender Offer Regime in the Case of a Voluntary Withdrawal from the Public Offering and List- ing System in Argentina Decree 677/2001 and CNV regulations also established that when a company whose shares are publicly offered and listed in Argentina agrees to withdraw voluntarily from the public offering and listing system in Argentina, it must follow the procedures provided for in the CNV’s regulations and it must likewise launch an OPA for its aggregate shares and/or subscription rights or securities convertible into shares or stock options under the terms provided for in such regulation. It is not necessary to extend the public offering to those shareholders that voted for the withdrawal at the

167 shareholders’ meeting. The public offering can only be made as a purchase and sale and the consideration must be cash. The acquisition of one’s own shares must be made with liquid and realised profits or with free reserves, whenever paid up in full, and for the amortisation or disposition thereof, within the term set forth in Section 221 of the Argentine Corporate Law and the company must present the CNV with evidence that it has the necessary solvency to effect such purchase and that the payment for the shares will not affect its solvency. The price offered in the case of a voluntary withdrawal from the public offering and listing system in Argentina should be equitable and take into account the following relevant criteria: • The equity value of the shares, taking into account a special financial statement for the withdrawal from the public offering system and/or listing. • The value of the company, in accordance with discounted cash flow criteria and/or ratios applicable to comparable businesses or companies. • The company’s liquidation value. • Average quotation prices on the stock exchange where the shares are listed during the six- month period immediately preceding the withdrawal application, regardless of the number of sessions necessary for such negotiation. • The consideration offered before, or the placement of the new shares, in the event that a public offering has been made with regard to the same shares or if new shares have been issued, if applicable, during the last year, to be counted as of the date of the agreement for the withdrawal application. Under no circumstances can the price offered be lower than the average quotation price discussed in this paragraph. The criteria to determine the price per share in the case of withdrawal from the public offering and listing system in Argentina are set forth in Decree No. 677/01 and may differ from the price that would result from the application of the Argentine Corporate Law in the case of exercise of appraisal rights by a shareholder.

Mandatory or Voluntary Tender Offer in the Case of Near-Total Control If a person holds, directly or indirectly, 95% or more of the outstanding capital stock of a publicly traded Argentine Company, any minority shareholder may request that the controlling shareholder launch an OPA for all outstanding shares of such company. In addition, a person that holds, directly or indirectly, 95% or more of the outstanding capital stock of a publicly traded Argentine company may issue a unilateral declaration of its intention to purchase all outstanding shares of such company within six months following the date of acquisition of near-total control and withdraw the Company from public offering and its shares from listing and trading. The price offered should be a fair price, following the criteria set forth in Decree No. 677/01.

Shareholder Claims Pursuant to article 38 of Decree No. 677/01, companies whose shares are listed on the BCBA, such as the Company, are subject to the jurisdiction of the BCBA arbitration court for all matters concerning such companies’ relationship with shareholders and investors, without prejudice to the right of shareholders and investors to submit their claims to the courts of the City of Buenos Aires.

Corporate Governance The Company complies with the Argentine Corporate Law and will be in compliance with Decree No. 677/01 and CNV corporate governance regulations upon completion of the Offering.

168 TERMS AND CONDITIONS OF THE GLOBAL DEPOSITARY SHARES JPMorgan Chase Bank, N.A. has agreed to act as the Depositary for the GDSs. The Depositary’s principal offices are located at 4 New York Plaza, New York, New York 10004. In this summary, the term “GDSs” refers to the Rule 144A GDSs and to the Regulation S GDSs. GDSs are represented by certificates that are commonly known as “Global Depositary Receipt Certificates” or “GDR Certificates”. The GDSs offered and sold in the United States are referred to and will be issued as the Rule 144A GDSs and the GDSs offered and sold outside the United States are referred to and will be issued as the Regulation S GDSs. GDSs represent ownership interests in securities, cash or other property on deposit with the Depositary. The Depositary has appointed Banco Santander Río S.A. to act as the Custodian for the safekeeping of the securities, cash or other property on deposit. The Custodian’s principal office is located at Bartolomé Mitre 480, Buenos Aires, Argentina. The Company has appointed the Depositary pursuant to a Deposit Agreement for the Rule 144A GDSs and the Regulation S GDSs. Copies of the Deposit Agreement are available for inspection by any holder of the GDSs at the principal offices of the Depositary during business hours. This is a summary description of the material terms of the GDSs and of each holder’s material rights as an owner of the GDSs. Prospective investors should note that this summary is provided for informational purposes only, is not exhaustive, and is qualified in its entirety by reference to the terms of the Deposit Agreement, which determine rights and obligations of holders and beneficial owners of the GDSs. Each GDS represents two class B common shares of the Company on deposit with the Custodian. Each GDS will also represent the right to receive cash or any other property received by the Depositary or the Custodian on behalf of the owner of the GDS but which has not been distributed to the owners of GDSs due to legal restrictions or practical considerations. Each owner of a GDS is a party to the Deposit Agreement and is therefore bound by terms of that Deposit Agreement and by the terms of the GDR Certificate that represents the relevant GDS. The Deposit Agreement and the GDR Certificate specify the rights and obligations of the Company, the owner of the GDS represented by the GDR Certificate and the Depositary. Each GDS holder and beneficial owner appoints the Depositary to act as its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the Deposit Agreement, to adopt any and all procedures necessary to comply with applicable laws and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the Deposit Agreement and the requirements of applicable law. Initially, GDSs may only be held through a brokerage or safekeeping account. As such, each GDS owner must rely on the procedures of its broker or bank to assert its rights. Each GDS holder should consult with its broker or bank to determine what those procedures are. No temporary master GDSs or other temporary documents of title have been or will be issued in connection with this Offering.

Distinctions Between Rule 144A GDSs and Regulation S GDSs The Rule 144A GDSs and the Regulation S GDSs are generally similar except for provisions designed to meet the requirements of the U.S. securities laws. The Rule 144A GDSs are “restricted securities” under the U.S. securities laws and as such are subject to limitations on their issuance, transfer and cancellation. The Regulation S GDSs are not “restricted securities” under the U.S. securities laws, but are subject to certain contractual restrictions in order to prevent the transfer of Regulation S GDSs in violation of the U.S. securities laws. Differences between the Regulation S GDSs and the Rule 144A GDSs and the restrictions imposed on the Rule 144A GDSs and the Regulation S GDSs include the following: • Eligibility for book-entry transfer. See “— Settlement and Safekeeping”.

169 • Restrictions on the transfers, deposits and withdrawals of the Class B Shares underlying the GDSs. See “— Transfer Restrictions”.

• Special restrictions on deposits and withdrawals that apply to affiliates of the Company.

These differences and the restrictions imposed in accordance with U.S. securities laws may require the Company and the Depositary to treat the Regulation S GDSs and the Rule 144A GDSs differently from time to time. There can be no guarantee that holders of Rule 144A GDSs will always receive the same entitlements as holders of Regulation S GDSs and vice versa.

Settlement and Safekeeping

Rule 144A GDSs

The Depositary has made arrangements with DTC to act as securities depository for the Rule 144A GDSs. All Rule 144A GDSs issued in the Offering will be registered in the name of Cede & Co., as DTC’s nominee. One master Rule 144A GDS certificate will represent all Rule 144A GDSs issued to and registered in the name of Cede & Co. Transfers of ownership interests in Rule 144A GDSs are accomplished by entries made on the books of DTC and participants in DTC acting on behalf of Rule 144A GDS owners.

DTC may discontinue providing its services as securities depository with respect to the Rule 144A GDSs at any time by giving notice to the Depositary. Under such circumstances and in the event a successor securities depositary cannot be appointed, individual Rule 144A GDS certificates representing the applicable number of Rule 144A GDSs held by each owner of Rule 144A GDSs will be printed and delivered to the relevant Rule 144A GDS owners. Owners of Rule 144A GDSs will not otherwise receive physical certificates representing their ownership interests in the Rule 144A GDSs.

Regulation S GDSs

The Depositary has made arrangements with DTC to act as securities depository for the Regulation S GDSs. One master Regulation S GDS certificate will represent all Regulation S GDSs issued to and registered in the name Cede & Co., as DTC’s nominee. The Company has also requested that Euroclear and Clearstream accept to settle trades in the Regulation S GDSs. Transfers of Regulation S GDSs will be permitted within DTC, Euroclear and Clearstream in accordance with the usual rules and operating procedures of the relevant system. Transfers of ownership interests in Regulation S GDSs will be accomplished by entries made on the books of DTC, Euroclear and Clearstream and of participants in DTC; Euroclear and Clearstream acting in each case on behalf of Regulation S GDS owners.

If at any time DTC ceases to make its respective book-entry settlement systems available for the Regulation S GDSs, the Company and the Depositary will attempt to make other arrangements for book-entry settlement. If alternative book-entry settlement arrangements cannot be made, the Depos- itary will make Regulation S GDSs available in physical certificated form. Owners of Regulation S GDSs will not otherwise receive physical certificates representing their ownership interests in the Regulation S GDSs.

Transfer Restrictions

Subject to restrictions on securities dealers pursuant to Section 4(3) of the Securities Act, during the 40-day period from date hereof, the GDSs may be reoffered, resold, pledged or otherwise

170 transferred only in compliance with the U.S. securities laws and are subject to the following restrictions:

Restrictions Upon the Transfer of GDSs

Rule 144A GDSs Regulation S GDSs The Rule 144A GDSs may be reoffered, resold, None pledged or otherwise transferred only: (i) outside the United States in accordance with Regulation S; or (ii) to a QIB in a transaction meeting the requirements of Rule 144A under the Securities Act; or (iii) pursuant to Rule 144 under the Securities Act, if applicable; or (iv) pursuant to an effective registration statement under the Securities Act.

Restrictions Upon Deposit of Class B Common Shares

Rule 144A GDSs Regulation S GDSs Class B common shares will be accepted for Class B common shares will be accepted for deposit under the Deposit Agreement in deposit under the Deposit Agreement only if exchange for Rule 144A GDSs only if delivered delivered by, or on behalf of, a person that is: by, or on behalf of, a person that is: (i) not the Company or an affiliate of the (i) not the Company or an affiliate of the Company or a person acting on behalf of the Company or a person acting on behalf of the Company or an affiliate of the Company and Company or an affiliate of the Company and (ii) (a) a QIB or (b) a person outside the (ii) not in the business of buying or selling United States, as defined in Regulation S securities, or if such person is in the business under the Securities Act, and who acquired, of buying or selling securities, such person did or agreed to acquire and will have acquired, not acquire the class B common shares to be the class B common shares to be deposited deposited from the Company or an affiliate of outside the United States. the Company in the initial distribution of class B common shares and GDSs; and (iii) a person outside the United States, as defined in Regulation S under the Securities Act, and who acquired, or agreed to acquire and will have acquired, the class B common shares to be deposited outside the United States. Class B common shares withdrawn from deposit under the Deposit Agreement by a holder of a Rule 144A GDS will not be accepted for deposit pursuant to the Deposit Agreement in exchange for Regulation S GDSs unless such class B common shares are not and may not be deemed to be “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act.

171 Restrictions Upon the Withdrawal of Class B Shares Rule 144A GDSs Regulation S GDSs Class B common shares may be withdrawn by a Class B common shares may be withdrawn by holder of Rule 144A GDS only if such holder is: any holder of a Regulation S GDS. (i) a person located outside the United States, as defined in Regulation S under the Securities Act, who will be the beneficial owner of the class B common shares upon withdrawal and acquired, or agreed to acquire and at or prior to the time of the withdrawal will have acquired, the Rule 144A GDSs or the class B common shares outside the United States; or (ii) a QIB, as defined in Rule 144A under the Securities Act, who (a) a person that has sold the Rule 144A GDSs to another QIB in a transaction meeting the requirements of Rule 144A under the Securities Act, or in accordance with Regulation S under the Securities Act, or (b) will be the beneficial owner of the class B common shares and agrees (1) to observe the transfer restrictions applicable to Rule 144A GDSs in respect of the class B common shares so withdrawn and (2) not to deposit the class B common shares in an unrestricted depositary receipts facility for so long as the Class B Shares are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act.

General Restrictions Restrictions on Transfer The Company may restrict transfers of the class B common shares or the GDSs where such transfer might result in ownership of class B common shares exceeding the limits applicable to beneficial ownership of class B common shares under applicable law or the Bylaws. The Company may, in its sole discretion, but subject to applicable law, instruct the Depositary to take action with respect to the ownership interest of any holder or beneficial owner in excess of the limits set forth in the preceding sentence, including but not limited to, the imposition of restrictions on the transfer of GDSs, the removal or limitation of voting rights or the mandatory sale or disposition on behalf of a holder or beneficial owner of the class B common shares in the form of GDSs held by such holder or beneficial owner in excess of such limitations, if and to the extent such disposition is permitted by applicable law and the Bylaws. The Depositary shall have no liability for actions taken in accordance with such instructions. The registration of any transfer of GDSs in particular instances may be refused, or the registration of transfers generally may be suspended, during any period when the transfer books of the Depositary, the Company, the GDR Register (as defined below) or the Argentine Share Registrar are closed, or if any such action is deemed necessary or advisable by the Company or the Depositary, in good faith, at any time or from time to time because of any requirement of law, any government or governmental body or commission or any securities exchange on which the GDSs or class B common shares are listed, or

172 under any provision of the Deposit Agreement or provisions of, or governing, the class B common shares, or any meeting of the Company’s shareholders or for any other reason. The Depositary may close the transfer books with respect to GDR Certificates, at any time or from time to time, when deemed necessary or advisable by it in good faith in connection with the performance of its duties hereunder, or at the Company’s reasonable request.

Restrictions on Deposits The Depositary will refuse to accept class B common shares for deposit whenever it is notified in writing by the Company that such deposit would result in any violation of applicable laws, including ownership restrictions under Argentine laws. The Depositary will also refuse to accept certain class B common shares for deposit under the Deposit Agreement for issuance of Rule 144A GDSs if notified in writing that the class B common shares or GDS are listed on a U.S. securities exchange or quoted on a U.S. automated inter-dealer quotation system, unless accompanied by evidence satisfactory to the Depositary that any class B common shares or GDS presented for deposit are eligible for resale pursuant to Rule 144A under the Securities Act.

Dividends and Distributions Generally, each GDS holder has the right to receive distributions made by the Company on the underlying class B common shares deposited with the Custodian. Receipt of these distributions may be limited, however, by practical considerations and legal limitations. GDS holders will receive such distributions under the terms of the Deposit Agreement in proportion to the number of GDSs held as at a specified GDS record date, which the Depositary will use reasonable efforts to establish as close as possible to the record date set by the Company for the class B common shares underlying the GDSs. See “Dividend Policy”.

Distributions of Cash Whenever the Company makes a cash distribution in respect of class B common shares on deposit with the Custodian, the Company will transfer the funds in Pesos to the Custodian or, if permitted by law, in U.S. dollars to the Depositary. In the first case, upon receipt of confirmation from the Custodian of the deposit of the requisite funds, the Depositary will arrange for the funds to be converted into U.S. dollars and for the distribution of the U.S. dollars to the GDS holders, if in the reasonable judgement of the Depositary it is practicable and lawful. The amounts distributed to holders of GDSs will be net of the fees, charges, expenses, taxes and governmental charges payable by holders under the terms of the Deposit Agreement. The Depositary may make adjustments to a distribution if any of the deposited securities is not entitled, by reason of its date of issuance or otherwise, to receive the full amount thereof.

Distributions of Class B Common Shares Whenever there is a dividend or free distribution of class B common shares in respect of the class B common shares on deposit with the Custodian, the Company will deposit the applicable number of class B common shares with the Custodian. Upon receipt of confirmation of such deposit from the Custodian, the Depositary will distribute to holders additional GDSs representing the class B common shares deposited or modify, to the extent permissible by law, the GDS-to-class B common shares ratio, in which case each GDS will represent rights and interests in the additional class B common shares so deposited. Only whole GDSs will be issued. Shares that would result in fractional GDSs will be sold and the proceeds of such sale will be distributed as in the case of a cash distribution. The distribution of new GDSs or the modification of the GDS-to-class B common shares ratio upon a distribution of Class B Shares will be made net of the fees, charges, expenses, taxes and

173 governmental charges payable by GDS holders under the terms of the Deposit Agreement. In order to pay such taxes or governmental charges, the Depositary may sell all or a portion of the additional class B common shares so distributed.

No such distribution of new GDSs or payments in connection therewith will be made in violation of applicable laws (including the U.S. securities laws and Argentine foreign exchange regulations) or if it is not operationally practicable. To the extent holders of GDSs receive a distributed GDS or any interest therein they will be deemed to have acknowledged that the GDSs and the shares represented thereby have not been registered under the Securities Act and to comply with any applicable restrictions on transfer set forth thereon. By holding a GDR or an interest therein, holders of GDSs will be deemed to have acknowledged that the GDSs and the shares have not been registered under the Securities Act and to have agreed to comply with any applicable restrictions on transfer set forth in such GDSs. If the Depositary does not distribute new GDSs as described above, it may sell the class B common shares received and distribute the proceeds of the sale as in the case of a distribution of cash. The Depositary will hold and/or distribute any unsold balance in accordance with the provisions of the Deposit Agreement and applicable law.

Distributions of Rights

In the case of a distribution of rights to purchase additional class B common shares, if the Company assists the Depositary in determining whether it is lawful and reasonably practicable to distribute the rights to GDS holders, the Depositary will establish procedures to distribute rights to purchase additional GDSs to GDS holders and to enable GDS holders to exercise such rights only if the Depositary shall have determined that it is lawful and reasonably practicable to make the rights available to GDS holders, and the Company has provided all of the documentation contemplated in the Deposit Agreement, such as opinions to address the lawfulness of the transaction. Each GDS holder will be responsible for the related fees, charges, expenses and taxes and other governmental charges to subscribe for the class B common shares upon the exercise of the rights. The Depositary is not obligated to establish procedures to facilitate the distribution and exercise by GDS holders of rights to purchase additional class B common shares other than in the form of GDSs.

The Depositary will not distribute the rights to GDS holders if:

• the Company fails to deliver satisfactory documents, such as opinions of counsel as to compliance with applicable law, to the Depositary; or

• it is not reasonably practicable or lawful to distribute the rights.

The Depositary will sell the rights that are not exercised or not distributed if such sale is lawful and reasonably practicable and distribute the proceeds of such sale will be distributed to holders as in the case of a cash distribution. If the Depositary is unable to sell the rights, it will allow the rights to lapse.

The Depositary shall not be responsible for (i) any good faith failure to determine whether it may be lawful or practicable to make such rights applicable to GDS holders in general or to any GDS holder in particular, (ii) any foreign exchange exposure or loss incurred in connection with any sale or exercise of rights, or (iii) the content of any materials forwarded to the GDS holders on behalf of the Company in connection with the rights distribution. There can be no assurance that GDS holders in general or any GDS holder in particular will be given the opportunity to exercise rights on the same terms and conditions as the holders of class B common shares or to exercise such rights at all. See “Risk Factors — Risks Related to Our Securities — Your voting rights with respect to the GDSs are limited by the terms of the Deposit Agreement”.

174 Elective Distributions Subject to applicable laws, whenever the Company intends to distribute a dividend payable at the election of shareholders either in cash or in additional class B common shares, it will assist the Depositary in determining whether such distribution is lawful and reasonably practicable. The Depositary may make the election available to GDS holders only if it is lawful, reasonably practicable and if the Company has provided all of the documentation contemplated in the Deposit Agreement (such as opinions of counsel as to compliance with applicable law). In such case, the Depositary will establish procedures to enable each GDS holder to elect to receive either cash or additional class B common shares in the form of GDSs, in each case as described in the Deposit Agreement. If the election is not made available to the GDS holders, GDS holders will, to the extent permitted by law, receive either cash or GDSs, depending on whether a shareholder in Argentina would receive cash or shares on failing to make an election. The Depositary is not obliged to make available to GDS holders a method to receive the elective dividend in the form of shares rather than in the form of GDSs. There can be no assurance that GDS holders or owners of beneficial interests in GDSs generally, or any GDS holder in particular, will be given the opportunity to receive elective distributions on the same terms and conditions as the holders of the Class B Shares.

Other Distributions Subject to applicable laws, whenever the Company distributes property other than cash, additional class B common shares or rights to purchase additional class B common shares the Depositary will distribute the property to the GDS holders in a manner it reasonably deems equitable and practicable. The distribution will be made net of fees, charges, expenses, taxes and governmental charges payable by GDS holders under the terms of the Deposit Agreement. In order to pay such taxes and governmental charges, if permitted by applicable law the Depositary may sell all or a portion of the property received. Any US dollars will be distributed by checks drawn on a bank in the United States for whole dollars and cents. Fractional cents will be withheld without liability and dealt with by the Depositary in accordance with its then current practices. The Depositary may choose any practical method of distribution for any specific GDS holder or beneficial owner of an interest in a GDS, including the distribution of foreign currency, securities or property, or it may retain such items, without paying interest on or investing them, on behalf of the GDR holder as deposited securities. The Depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any GDR holders or beneficial owners of interests in the GDS. There can be no assurances that the Depositary will be able to convert any currency at a specified exchange rate or sell any property, rights, shares or other securities at a specified price, nor that any of such transactions can be completed within a specified time period.

Redemption Whenever the Company decides to redeem any of the securities on deposit with the Custodian, the Company will notify the Depositary in advance in a timely manner. If the Depositary has received timely notice from the Company, determined that such redemption is practicable and received from the Company all of the documentation (such as opinions of counsel as to compliance with applicable

175 law) contemplated in the Deposit Agreement, the Depositary will mail notice of the redemption to the GDS holders.

The Custodian will be instructed to surrender the class B common shares being redeemed against payment of the applicable redemption price. The Depositary will convert the redemption funds received into U.S. dollars in accordance with the terms of the Deposit Agreement and will establish procedures to enable GDS holders to receive the net proceeds from the redemption upon surrender of the GDSs to the Depositary. The GDS holders will have to pay the fees and charges of, and the expenses incurred by, the Depositary, and any taxes upon the redemption of the GDSs. If less than all GDSs are being redeemed, the GDSs to be redeemed will be selected by lot or on a pro rata basis, as the Depositary may determine.

Changes Affecting Class B Common Shares

The class B common shares held on deposit for the GDSs are subject to change from time to time. For example, there may be a change in nominal or par value, a split-up, cancellation, consolidation or reclassification of such class B common shares or a recapitalisation, reorganisation, merger, consolidation or sale of assets affecting the Company.

If any such change were to occur, any securities which shall be received by the Depositary or the Custodian in exchange for, or in conversion, replacement or otherwise in respect of, such class B common shares shall, to the extent permitted by law, be treated as new securities under the Deposit Agreement, and the GDR Certificates shall, subject to the terms of the Deposit Agreement and applicable law, evidence the GDSs representing the right to receive such replacement securities. The Depositary in such circumstances may, after consultation with the Company, execute and deliver additional GDS Certificates or make appropriate adjustments in its records, or call for the exchange of existing GDSs for new GDSs. If the Depositary may not lawfully distribute such securities to GDS holders, the Depositary may with the Company’s approval sell such securities and distribute the net proceeds to GDS holders as in the case of a cash distribution, and shall do so upon the Company’s request and if the Company provides the Depositary at the Company’s own expense a satisfactory opinion of counsel that such action is not in violation of applicable laws or regulations. GDS owners will have to pay the fees and charges of, and the expenses incurred by, the Depositary, and any taxes and other governmental charges upon the sale of such securities.

The Depositary shall not be responsible for (i) any good faith failure to determine that it is lawful or practicable to make such securities available to GDS holders in general or to any GDS holder in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale, or (iii) any liability to the purchaser of such securities.

Issuance of GDSs Upon Deposit of Class B Common Shares

Subject to the limitations set forth in the Deposit Agreement and the GDSs, the Depositary may create GDSs on a GDS holder’s behalf if the GDS holder or its broker deposits the class B common shares with the Custodian. The Depositary will deliver these GDSs to the person indicated by the GDS holder only after any applicable issuance fees, any charges and any taxes payable for the transfer of the class B common shares to the Custodian have been paid by the GDS holder and the applicable deposit certification is provided. Each GDS holder’s ability to deposit class B common shares and receive GDSs may be limited by U.S. and Argentine legal considerations applicable at the time of deposit.

The issuance of GDSs may be delayed until the Depositary or the Custodian receives confirmation that all required approvals have been given and that the class B common shares have been duly transferred to the Custodian. The Depositary will only issue GDSs in whole numbers.

176 When class B common shares are deposited to receive Rule 144A GDSs, the prospective GDS holder will be required to provide the Depositary with a deposit certification stating, among other things, that: • it acknowledges that the class B common shares and the Rule 144A GDSs have not been and will not be registered under the Securities Act or with any securities regulatory authority in any state or other jurisdiction in the United States; • it is not an affiliate of the Company and it is not acting on behalf of the Company or one of its affiliates; • at the time of issuance of the Rule 144A GDSs it will be the beneficial owner thereof or a broker acting for the account of such person; • it is (i) a QIB or (ii) a broker acting for the account of such person; and • it agrees, as the owner of the Rule 144A GDSs, to offer, sell, pledge and otherwise transfer the Rule 144A GDSs or the class B common shares represented by the Rule 144A GDSs in accordance with the applicable U.S. state securities laws and only: • to a QIB in a transaction meeting the requirements of Rule 144A; or • outside the United States in accordance with Regulation S; or • in accordance with Rule 144 under the Securities Act, if available; or • pursuant to an effective registration statement under the Securities Act. A copy of the form of deposit certification for Rule 144A GDSs is attached to the Deposit Agreement and may be obtained from the Depositary upon request. When class B common shares are deposited to receive Regulation S GDSs, the prospective GDS holder will be required to provide the Depositary with a deposit certification stating, among other things, that: • it acknowledges that the class B common shares and the Regulation S GDSs have not been and will not be registered under the Securities Act or with any securities regulatory authority in any state or other jurisdiction in the United States; • it is not an affiliate of the Company and it is not acting on behalf of the Company or one of its affiliates; • it is, or at the time the class B common shares are deposited and at the time the Regulation S GDSs are issued, will be, the beneficial owner of the class B common shares and the Regulation S GDSs to be issued upon deposit of such class B common shares; • it is a person outside the United States and has acquired or has agreed to acquire and will acquire the class B common shares to be deposited outside the United States; and • it is not in the business of buying and selling securities or, if it is in such business, it did not acquire the class B common shares presented for deposit from the Company or any of the Company’s affiliates; or • it is a broker acting on behalf of a customer that has confirmed the above. A copy of the form of deposit certification for Regulation S GDSs is attached to the Deposit Agreement and may be obtained from the Depositary on request.

Withdrawal of Class B Common Shares Upon Cancellation of GDSs Subject always to the withdrawal of deposited property being permitted under applicable laws and the terms of the Deposit Agreement, a GDS holder will be entitled to present its GDSs to the

177 Depositary for cancellation and then receive the corresponding number of underlying class B common shares at the Custodian’s offices. The ability to withdraw the class B common shares may be limited by U.S. and Argentine law considerations applicable at the time of withdrawal. In order to withdraw the class B common shares represented by the GDSs, each GDS holder will be required to pay to the Depositary the fees for cancellation of the GDSs and any changes and taxes payable upon the transfer of the class B common shares being withdrawn and will be required to provide to the Depositary the applicable withdrawal certification. Each GDS holder assumes the risk for delivery of all funds and securities upon withdrawal. Once cancelled, the GDSs will not have any rights under the Deposit Agreement. Each GDS holder must, upon the request of the Depositary, provide proof of identity and genuineness of any signature and such other documents as the Depositary may deem appropriate before it will cancel the GDSs. The withdrawal of the class B common shares represented by the GDSs may be delayed until the Depositary receives satisfactory evidence of compliance with all applicable laws and regulations. The Depositary shall be entitled at all times to sell any fractional GDSs presented for cancellation and remit the proceeds of such sale to the GDS holder net of fees, expenses, charges and taxes. When a GDS holder requests withdrawal of the class B common shares represented by its Rule 144A GDSs, it will be required to represent and warrant that the withdrawal of the shares complies with the restrictions on transfer set forth in the legend on GDSs and to provide the Depositary with a withdrawal certification stating, among other things, that: (A) it acknowledges that the class B common shares represented by its Rule 144A GDSs have not been and will not be registered under the Securities Act or with any other securities regulatory authority in any state or other jurisdiction in the United States; and (B) it certifies that either: (1) it is a QIB, as defined under Rule 144A of the Securities Act, acting for its own account or for the account of one or more other QIBs, who is the beneficial owner of the Rule 144A GDSs presented for cancellation; and either • it has sold or agreed to sell the class B common shares to a person outside the United States in accordance with Regulation S; or • it has sold or agreed to sell the class B common shares to a QIB in a transaction meeting the requirements of Rule 144A under the Securities Act; or • it will be the beneficial owner of the class B common shares upon withdrawal; and • it, or the person on whose behalf it is acting, will sell the class B common shares only to another QIB in a transaction meeting the requirements of Rule 144A under the Securities Act; outside the United States in accordance with Regulation S; in accordance with Rule 144, if available; or pursuant to an effective registration statement under the Securities Act; and • it will not deposit the class B common shares in any Depositary receipts facility that is not a “restricted” Depositary receipts facility; or (2) it is a person located outside the United States and has acquired or agreed to acquire the class B common shares outside the United States and will be the beneficial owner of the class B common shares upon withdrawal. Holders of Regulation S GDSs will be required to provide the Depositary with a withdrawal certification under the Deposit Agreement during the forty (40) day period ending after the closing of the Offering.

178 Proofs, Certificates and Other Information; Obligations of Owners Each GDS holder may be required (i) to provide to the Depositary and the Custodian proof of citizenship or residence, taxpayer status, payment of all applicable taxes or other governmental charges, exchange control approvals, legal or beneficial ownership of GDSs, compliance with all applicable laws and the terms of the Deposit Agreement, and (ii) to execute certifications and to make representations and warranties and to provide such other information and documentation as the Depositary or the Custodian may deem necessary or proper or as the Company may reasonably require by written request to the Depositary consistent with its obligations under the Deposit Agreement. The Depositary may withhold the execution or delivery or registration of transfer or cancellation of any GDS, or the distribution or sale of any dividend or distribution of rights, until such proof or other information is filed or such certifications are executed, or such representations are made, or such other documentation or information is provided, in each case, to the Depositary’s and the Company’s reasonable satisfaction. Holders and beneficial owners of GDSs shall make all necessary notifications or filings and shall obtain, maintain, extend or renew all necessary approvals to, with or from state authorities in Argentina, and shall take all such other actions as may be required to remain at all times in compliance with the applicable rules and regulations of Argentina.

Voting Rights As soon as practicable after receipt from the Company of notice of any meeting or solicitation of consents or proxies from holders of class B common shares the Depositary will distribute to each GDS holder any notice of shareholders’ meetings or solicitation of consents or proxies from holders of class B common shares received from the Company, if any, together with information explaining how to instruct the Depositary to exercise the voting rights of the class B common shares represented by the GDSs. Each GDS holder generally has the right under the Deposit Agreement to instruct the Depositary to exercise the voting rights for the class B common shares represented by its GDSs. If the Depositary receives voting instructions in a timely manner from a GDS holder in the manner specified by the Depositary, it will endeavour — insofar as practicable and permitted under applicable law, the provisions of the Deposit Agreement, the Bylaws and terms of the class B common shares — to vote or cause the Custodian to vote the class B common shares represented by the GDS in accordance with such voting instructions. Neither the Depositary nor the Custodian will, under any circumstances, exercise any discretion as to voting. If the Depositary does not secure timely instructions or receives timely voting instructions from a GDS holder which fail to specify the manner in which the Depositary is to vote the GDS holder’s underlying class B common shares, the Depositary will (except as otherwise set forth in the Deposit Agreement) consider the holder of the GDS to have authorised the Depositary to give a discretionary proxy to a person designated by the Company. The Depositary will give a discretionary proxy with respect to those class B common shares in those circumstances to the person designated by the Company to vote on all matters to be voted on. Notwithstanding anything else contained herein or in the Deposit Agreement, the Depositary shall not have any obligation to take any action with respect to any meeting, or solicitation of consents or proxies, of holders of the class B common shares if the taking of such action would violate Argentine or English laws, rules or regulations, including the rules of the London Stock Exchange and the rules of any Argentine exchange on which the class B common shares are listed or the provisions of or governing the class B common shares. The ability of the Depositary to carry out voting instructions may be limited by practical, legal and regulatory limitations and the terms of the securities on deposit. GDS holders cannot be assured that they will receive voting materials in time to enable them to return voting instructions to the Depositary

179 in a timely manner. The Company will use its best efforts to provide timely notice to the Depositary of any meeting or solicitation of consents or proxies from holders of class B common shares.

Fees and Charges The Depositary shall be entitled to charge the following fees to GDS owners and persons depositing class B common shares or surrendering GDSs for cancellation: • for the issue of GDSs (other than upon the issue of GDSs pursuant to the Initial Offering, as defined in the Deposit Agreement) or the cancellation of GDSs upon the withdrawal of deposited securities, or for transferring interests from and between the Regulation S GDSs and the Rule 144A GDSs: up to U.S.$0.05 per GDS issued or cancelled; • for the issue of GDS Certificates in definitive registered form in replacement of mutilated, defaced, lost, stolen or destroyed GDS Certificates: a sum per GDS Certificate which is determined by the Depositary to be a reasonable charge to reflect the work, costs and expenses involved; • for any other issue of GDS Certificates in definitive registered form: a sum per GDS Certificate which is determined by the Depositary to be a reasonable charge to reflect the work, costs (including, but not limited to, printing costs) and expenses involved; • for receiving and paying any cash dividend or other cash distribution on or in respect of the Deposited Securities: a fee of up to U.S.$0.02 per GDS for each such dividend or distribution; • in respect of any issue of rights or distribution of class B common shares (whether or not evidenced by GDSs) or other securities or other property (other than cash) upon exercise of any rights, any free distribution, stock dividend or other distribution (except where converted to cash): up to U.S.$0.05 per GDS for each such issue of rights, dividend or distribution; • for the operation and maintenance costs associated with the administration of the GDSs: an annual fee of U.S.$0.04 per GDS (such fee to be assessed against holders of record as at the date or dates set by the Depositary as it sees fit and collected at the sole discretion of the Depositary by billing such holders for such fee or by deducting such fee from one or more cash dividends or other cash distributions); and • for the issue of GDSs pursuant to a change for any reason in the number of class B common shares in the form of GDSs, regardless of whether or not there has been a deposit of class B common shares to the Custodian or the Depositary for such issuance: a fee of up to U.S.$0.05 per GDS (or portion thereof). Each such person will also be responsible for paying the following charges incurred by the Depositary: • taxes, including applicable interest and penalties, and governmental charges; • fees for the transfer and registration of class B common shares charged by the Share Registrar (as defined below) (i.e., upon deposit and withdrawal of class B common shares); • fees and expenses incurred for converting foreign currency into U.S. dollars and compliance with exchange control regulations; • expenses for fax transmissions and for delivery of securities; and • fees and expenses incurred in connection with the delivery or servicing of class B common shares on deposit. The Company has agreed to pay certain other charges and expenses of the Depositary. The fees and charges that a GDS holder may be required to pay may vary over time and may be changed by the Company and by the Depositary. Each GDS holder will receive prior notice of such changes.

180 Amendments and Termination The Company may agree with the Depositary to modify the Deposit Agreement at any time without the consent of the GDS holders. The Company undertakes to give the GDS holders 30 days’ prior notice of any modifications that would materially prejudice any of their substantial rights under the Deposit Agreement or that shall impose or increase fees or charges, other than charges in connection with foreign exchange control regulations and taxes and other governmental charges, delivery expenses and other such expenses. In addition, the Company may not be able to provide the GDS holders with prior notice of any modifications or supplements that are required to accommodate compliance with applicable provisions of law. Each GDS holder will be bound by the modifications to the Deposit Agreement if it continues to hold its GDSs after the modifications to the applicable Deposit Agreement become effective. The Deposit Agreement cannot be amended to prevent the GDS holders from withdrawing the class B common shares represented by the GDSs. Notwithstanding any such restriction on amendments or supplements to the Deposit Agreement, the Company and the Depositary may at any time amend or supplement the Deposit Agreement or the GDS Certificates in order to comply with mandatory provisions of applicable laws, rules or regulations, and such amendments or supplements may become effective before notice thereof is given to GDS holders or within any other period required to comply with such laws, rules or regulations. The Company has the right to direct the Depositary to terminate the Deposit Agreement. Similarly, the Depositary may in certain circumstances on its own initiative terminate the Deposit Agreement. In addition, the Depositary may resign, with such resignation to take effect upon the earlier of 90 days’ notice or the acceptance of appointment by a successor Depositary, or the Company may remove the Depositary, with such removal to take effect upon the later of 90 days’ notice or the acceptance of appointment by a successor Depositary, and if in either such case no successor Depositary shall have accepted appointment by the Company, then the Depositary may terminate the Deposit Agreement. In either case, the Depositary must give notice to the holders of the GDSs at least 30 days before termination. Upon termination, the following will occur under the Deposit Agreement: • for a period of six months after termination, each GDS holder will be able to request the cancellation of its GDSs and the withdrawal of the underlying class B common shares and the delivery of all other property held by the Depositary in respect of those class B common shares on the same terms as prior to the termination including the payment of any applicable taxes or governmental charges. During such six-month period the Depositary will continue to collect all distributions received on the class B common shares on deposit, such as dividends, but will not distribute any such property to a GDS holder until it requests the cancellation of its GDSs. • after the expiration of such six-month period, the Depositary shall sell the securities held on deposit. The Depositary will hold the net proceeds from such sale and any other funds then held for the GDS holder in segregated, non-interest bearing account, without liability for interest. At that point, the Depositary will have no further obligations to a GDS holder other than to account for the funds then held for the holders of GDSs still outstanding, net of fees, expenses, taxes and governmental charges payable by holders under the terms of the Deposit Agreement, and the Company will have no further obligations to a GDS holder under the Deposit Agreement.

Books of Depositary The Depositary will maintain the GDS register at a designated location, initially at its principal office at 4 New York Plaza, New York, NY 10004, which at all reasonable times will be open for

181 inspection by Holders and the Company for the purpose of communication with Holders in the interest of the business of the Company or a matter relating to the GDSs and the Deposit Agreement.

The Depositary or its agent will keep, at a designated transfer office, (a) a register (the “GDR Register”) for the registration, registration of transfer, combination and split-up of GDSs, which at all reasonable times will be open for inspection by holders of GDSs and the Company for the purpose of communicating with such holders in the interest of the business of the Company or a matter related to the Deposit Agreement and (b) facilities for the delivery and receipt of GDSs.

Transmission of Notices to Shareholders

The Company will promptly transmit to the Depositary those communications that applicable law requires the Company to make available to its shareholders. If any communications are not in English, the Company will translate the communications prior to transmitting them to the Depositary. Upon the Company’s request and at its expense, the Depositary will arrange for the mailing of copies of such communications to all GDS holders and will make a copy of such communications available for inspection at its principal office.

Limitations on Obligations and Liabilities

The Deposit Agreement limits the Company’s obligations and the Depositary’s obligations to the GDS holders, in particular:

• The Company and the Depositary are obligated only to take the actions specifically stated in the Deposit Agreement and the GDSs without gross negligence or bad faith.

• Neither the Company nor the Depositary, nor any of their respective agents, shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect to any class B common shares or in respect of the GDS Certificates, which in the case of the Company and its agents, in the Company’s opinion may involve the Company in expense or liability, unless an indemnity satisfactory to the Company against all expense (including fees and disbursements of counsel) and liability be furnished as often as may be required.

• The Depositary and its agents disclaim any liability to any Holder or beneficial holder for any failure to carry out any voting instructions to vote any class B common shares, or for any manner in which a vote is cast or for the effect of any vote, provided it acts in good faith.

• The Depositary disclaims any liability for any failure to determine the lawfulness or practicality of any action, for the content of any document or information forwarded to the GDS holders on the Company’s behalf or for the accuracy of any translation of such document or information, for any investment risks associated with acquiring an interest in the class B common shares, for the validity or worth of the class B common shares, for any tax consequences that result from the ownership of the shares or the GDSs, for the creditworthiness of any third party, for allowing any rights to lapse under the terms of the Deposit Agreement or for the failure or timeliness of any of the Company’s notices.

• The Depositary and the Custodian disclaim any liability with respect to Argentina’s system of share registration and custody, including any liability in respect of the unavailability of the class B common shares or other deposited securities, or any distribution in respect thereof.

• The Company and the Depositary agree that neither the Depositary nor the Custodian assumes any obligation or responsibility to make any payments for, nor shall either of them be subject to any liability under the Deposit Agreement or otherwise for non-payment for, any

182 class B common shares newly issued and placed by the Company or sold by any selling shareholders in the Offering.

• The Depositary disclaims any liability for any acts or omissions made by a successor Depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations while it acted as Depositary without negligence or bad faith.

• The Company, the Depositary, and the Company’s or the Depositary’s affiliates and the respective officers, directors, employees, agents and advisors of any of the foregoing will not be obliged to do or perform any act that is inconsistent with the provisions of the Deposit Agreement.

• The Company, the Depositary, and the Company’s or the Depositary’s affiliates and the respective officers, directors, employees, agents and advisers of any of the foregoing disclaim any liability if the Company or the Depositary is prevented or forbidden from or delayed in doing or performing any act or thing required by the terms of the Deposit Agreement by reason of any provision of any law or regulation, any provision of its Bylaws, any provision of or governing any securities on deposit or by reason of any act of God or war or other circumstances beyond its control, including, without limitation, nationalisation, expropriation, currency restrictions, work stoppage, strikes, civil unrest, acts of terrorism, revolutions, rebellions, explosions and computer failure.

• The Company, the Depositary, and the Company’s or the Depositary’s respective agents disclaim any liability by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement or in the GDS or in any provisions of or governing the deposited securities.

• The Company, the Depositary and their respective agents further disclaim any liability for any action or inaction in reliance on the advice or information received from legal counsel, accountants, any person presenting class B common shares for deposit, any GDS holders or beneficial owners or any other person believed by either of the foregoing in good faith to be competent to give such advice or information.

• The Company, the Depositary and their respective agents also disclaim liability for the inability by a GDS holder or any beneficial owner to benefit from any distribution, offering, right or other benefit which is made available to holders of class B common shares but is not, under the terms of the Deposit Agreement, made available to holders of GDSs.

• The Company, the Depositary and its agents may rely and shall be protected in acting upon any written notice, request or other document believed to be genuine and to have been signed or presented by the proper parties.

• The Company, the Depositary and their respective agents of any of the foregoing also disclaim any liability for indirect, special, consequential or punitive damages for any breach of the terms of the Deposit Agreement.

• The Depositary disclaims liability for any actions taken in accordance with the Company’s instructions to take actions with respect to the ownership interest of any holder or beneficial

183 owner in excess of the limits applicable to the class B common shares under applicable law or the Bylaws.

Indemnification

The Depositary has agreed to indemnify the Company against any loss, liability or expense of any kind whatsoever, including the reasonable fees and expense of counsel, incurred by the Company in respect of the Deposit Agreement to the extent such loss, liability or expense is due to the negligence or bad faith of the Depositary or its agents.

The Company has agreed to indemnify the Depositary and its agents against, and hold each of them harmless from, any loss, liability or expense including the reasonable fees and expenses of counsel, that may arise, among other things: (i) out of any offering document in respect thereof, except to the extent of the information contained in the section “Information Relating to the Depositary” in this Offering Circular, (ii) out of acts performed or omitted in connection with the provisions of the Deposit Agreement, in any such case by the Depositary or its agents, except to the extent such loss, liability, or expense arises directly out of the negligence or bad faith of any of them, or by the Company or any of its directors, employees, agents or affiliates.

Pre-Release Transactions

The Depositary may, in certain circumstances, to the extent permitted by applicable laws and regulations, issue GDSs before receiving a deposit of class B common shares or release class B common shares before receiving GDSs for cancellation, unless requested in writing by the Company to cease doing so in advance of the proposed deposit. These transactions are commonly referred to as “pre-release transactions”. The Deposit Agreement limits the aggregate size of pre-release transactions (which in general will not exceed 30% of all GDSs outstanding at any given time (excluding pre-released GDSs), unless the Depositary elects to disregard such limit from time to time as it deems reasonably appropriate)) and imposes a number of conditions on such transactions, including conditions concerning the need to receive collateral, the type of collateral required, the representations required from brokers. The Depositary may retain the compensation received from the pre-release transactions.

Taxes

The Company, the Depositary and the Custodian may withhold or deduct from any distribution the taxes and governmental charges payable by GDS holders and may sell any and all class B common shares on deposit to pay the taxes and governmental charges payable by GDS holders. The GDS holders will be liable for any deficiency if the sale proceeds do not cover the taxes that are due. The Depositary may refuse to issue GDSs, to deliver, transfer, split or combine GDSs or to release securities on deposit, until all taxes and charges are paid by the GDS holder.

The Company, the Depositary and/or the Custodian and/or their respective agents may, but are not obligated to, take reasonable administrative actions to obtain tax refunds and reduced tax withholding for any distributions on a GDS holder’s behalf. However, each GDS holder may be required to provide to the Depositary and to the Custodian proof of taxpayer status and residence and such other information as the Depositary and the Custodian may require to fulfil legal obligations. Each GDS holder and beneficial owner is required to indemnify the Company, the Depositary and the Custodian and any of their respective agents, officers, employees and affiliates for, and to hold each of them and the Company harmless from, any claims with respect to taxes, including applicable interest and penalties thereon, based on any tax benefit obtained for such holder and beneficial owner.

184 The Depositary is under no obligation to provide the GDS holders with any information about the Company’s tax status. Neither the Depositary nor the Custodian shall incur any liability for any tax consequences that may be incurred by the GDS holders on account of their ownership of the GDSs, including, without limitation, by virtue of the Company’s tax status.

Disclosure of Interests By purchasing GDSs, each GDS holder agrees to comply with requests from the Company or the Depositary pursuant to Argentine law, the rules and requirements of any stock exchange on which the class B common shares are, or may be, registered, traded or listed, or the Bylaws, which are made to provide information, among other things, as to the capacity in which a holder holds or owns a beneficial interest in the GDSs and the class B common shares, as the case may be, and regarding the identity of any other person interested in such GDSs, the nature of such interest and various related matters, whether or not a particular person or entity is a holder or owner of a beneficial interest in the GDSs at the time of such request.

Foreign Currency Conversion The Depositary will, or will cause the Custodian to, arrange for the conversion into U.S. dollars of all foreign currency received if such conversion is in the reasonable judgement of the Depositary practicable and lawful, and it will distribute the U.S. dollars in accordance with the terms of the Deposit Agreement. Each GDS holder will have to pay fees and expenses incurred in converting foreign currency, such as fees and expenses incurred in complying with currency exchange controls and other governmental requirements.

Governing Laws and Jurisdiction Although New York law has been chosen to govern the construction and interpretation of the Deposit Agreement and the GDSs, the rights of holders of the class B common shares and other deposited securities and the Company’s obligations and duties in respect of such GDS holders shall be governed by the laws of Argentina, or the laws of such other jurisdiction as may govern the deposited securities. Under the terms of the Deposit Agreement, GDS holders agree that any dispute, controversy or cause of action against the Company and/or the Depositary arising out of the Deposit Agreement or any transaction contemplated therein, may be instituted in any state or federal court in New York, New York. EACH PARTY TO THE DEPOSIT AGREEMENT, INCLUDING HOLDERS AND BENEFICIAL OWNERS OF GDSs, IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLI- CABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE DEPOSIT AGREEMENT OR THE TRANSACTIONS CONTEMPLATED UNDER THE DEPOSIT AGREEMENT, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY.

Argentine Share Register The Company has appointed Caja de Valores S.A. (the “Share Registrar”) as the Registrar of the class B common shares in Argentina and the Company has agreed to take any and all action necessary to continue such appointment or the appointment of another Argentine Share Registrar reasonably acceptable to the Depositary, for so long as the GDSs remain outstanding or the Deposit Agreement remains in force. The Company has agreed in the Deposit Agreement to: • take any and all actions reasonably required to ensure the accuracy and completeness of all of the information contained in the register of shareholders maintained by the Share Registrar;

185 • provide or use reasonable efforts to cause the Share Registrar to provide unrestricted access by the Depositary and the Custodian to the register of shareholders regularly, at least monthly, so as to permit verification of the registration of the class B common shares in the form of the GDSs in the name of the Depositary or the Custodian or their respective nominees; • use reasonable efforts to cause the Share Registrar to promptly notify the Depositary of (i) any material and uncured breaches by the Share Registrar of the terms of the Deposit Agreement, and (ii) any time the Share Registrar will no longer be able to materially comply with, or has engaged in conduct that indicates it will not materially comply with, the provisions of the Deposit Agreement relating to it; • use reasonable efforts to cause the Share Registrar to promptly re-register the class B common shares being deposited into or withdrawn from the GDS facilities; and • use reasonable efforts to cause the Share Registrar to promptly (and, in any event, within three (3) business days in Buenos Aires, Argentina, of the receipt by the Share Registrar of such documentation as may be required by applicable law and regulation and the reasonable and customary internal regulations of the Share Registrar, or as soon as practicable thereafter) notify the Depositary of (i) any alleged unlawful removal of shareholders from the shareholders’ register, or any alleged unlawful alteration of shareholder records, (ii) any alleged unlawful refusal to register the class B common shares, and (iii) any time the Share Registrar holds the class B common shares for its own account. In the Deposit Agreement, the Company has agreed to assume liability for: • any act or failure to act of the Share Registrar, other than such act or failure to act arising in connection with any act or failure to act by the Depositary or the Custodian (or their respective directors, employees, agents or affiliates); and • the unavailability of the class B common shares on deposit under the terms of, or the failure of the Depositary to make any distributions with respect thereto contemplated by, the Deposit Agreement as a result of any one or more of the following: (i) any act or failure to act by the Company or its agents, the Argentine Share Registrar (other than such act or failure to act arising in connection with any act or failure to act by the Depositary or the Custodian (or their respective directors, employees, agents or affiliates)), or their respective directors, employees, agents or affiliates, (ii) any provision of the Company’s present or future Bylaws, or other documents relating to the class B common shares, and (iii) any provisions of any securities the Company issues or distributes and any related distribution or offering.

Securities Act Legends and Other Legends Legends for the Regulation S GDR Certificates Unless this certificate is presented by an authorised representative of The Depository Trust Com- pany, a New York corporation (“DTC”), to the Depository or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorised representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorised representative of DTC), any transfer, pledge, or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. NEITHER THIS GDR, NOR THE GDSs EVIDENCED HEREBY, AND THE CLASS B COMMON SHARES (“SHARES”) REPRESENTED THEREBY HAVE BEEN OR WILL BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND SUCH SECURITIES MAY ONLY BE RE-OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE

186 LAWS OF THE STATES, TERRITORIES AND POSSESSIONS OF THE UNITED STATES GOVERN- ING THE OFFER AND SALE OF SECURITIES AND, PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD ONLY (1) OUTSIDE THE UNITED STATES TO A PERSON OTHER THAN A U.S. PERSON (AS SUCH TERMS ARE DEFINED IN REGULATION S UNDER THE SECURITIES ACT) IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) TO A PERSON WHOM THE HOLDER AND THE BENEFICIAL OWNER AND ANY PERSON ACTING ON THEIR BEHALF REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEAN- ING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (3) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT; PROVIDED THAT IN CONNECTION WITH ANY TRANSFER UNDER (2) ABOVE, THE TRANSFEROR SHALL, PRIOR TO THE SETTLEMENT OF SUCH SALE, WITHDRAW THE SHARES IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE DEPOSIT AGREEMENT AND INSTRUCT THAT SUCH SHARES BE DELIVERED TO THE CUSTODIAN UNDER THE DEPOSIT AGREEMENT FOR ISSUANCE, IN ACCORDANCE WITH THE TERMS AND CONDITIONS THEREOF, OF RULE 144A GDSs TO OR FOR THE ACCOUNT OF SUCH QUALIFIED INSTITUTIONAL BUYER. UPON THE EXPIRATION OF THE RESTRICTED PERIOD, THIS GDR, THE GDSs EVI- DENCED HEREBY AND THE DEPOSITED SECURITIES REPRESENTED BY GDSs SHALL NO LONGER BE SUBJECT TO THE RESTRICTIONS ON TRANSFER PROVIDED IN THIS LEGEND, PROVIDED THAT AT THE TIME OF SUCH EXPIRATION THE OFFER AND SALE OF THE GDSs EVIDENCED HEREBY AND THE DEPOSITED SECURITIES REPRESENTED THEREBY BY THE HOLDER THEREOF IN THE UNITED STATES WOULD NOT BE RESTRICTED UNDER THE SECURITIES LAWS OF THE UNITED STATES OR ANY STATE, TERRITORY OR POSSESSION OF THE UNITED STATES. EACH HOLDER AND BENEFICIAL OWNER, BY ITS ACCEPTANCE OF THIS GDR OR A BENEFICIAL INTEREST IN THE GDSs EVIDENCED HEREBY, AS THE CASE MAY BE, REPRE- SENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS. EACH PARTY TO THE DEPOSIT AGREEMENT, INCLUDING HOLDERS AND BENEFICIAL OWNERS OF GDSs, IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLI- CABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE DEPOSIT AGREEMENT; OR THE TRANSACTIONS CONTEMPLATED UNDER THE DEPOSIT AGREEMENT, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY.

Legends for the Rule 144A GDR Certificates Unless this certificate is presented by an authorised representative of The Depository Trust Com- pany, a New York corporation (“DTC”), to the Depository or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorised representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorised representative of DTC), any transfer, pledge, or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. THIS MASTER RULE 144A GLOBAL DEPOSITARY RECEIPT, THE RULE 144A GLOBAL DEPOSITARY SHARES EVIDENCED HEREBY AND THE CLASS B COMMON SHARES (“SHARES”) OF GRUPO CLARIN S.A. REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT OF 1933”). THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED

187 OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHOM THE SELLER OR ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT OF 1933 IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANS- ACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OF 1933, OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OF 1933 (IF AVAILABLE), AND (B) IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGO- ING, THE SHARES MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY IN RESPECT OF THE SHARES ESTABLISHED OR MAINTAINED BY A DEPOSITARY BANK, UNLESS AND UNTIL SUCH TIME AS THE SHARES ARE NO LONGER RESTRICTED SECURITIES UNDER THE SECURITIES ACT OF 1933. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OF 1933 FOR RESALE OF THE SHARES OR RULE 144A GLOBAL DEPOSI- TARY SHARES. EACH PARTY TO THE DEPOSIT AGREEMENT, INCLUDING HOLDERS AND BENEFICIAL OWNERS OF GDSs, IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLI- CABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE DEPOSIT AGREEMENT OR THE TRANSACTIONS CONTEMPLATED UNDER THE DEPOSIT AGREEMENT, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY.

188 TAXATION The following summary of the principal Argentine, United States federal income and U.K. tax consequences of ownership of the Class B Shares and GDSs is based upon laws, regulations, decrees, rulings, income tax conventions (treaties), administrative practice and judicial decisions in effect at the date of this Offering Circular. Legislative, judicial or administrative changes or interpretations may, however, be forthcoming. Any such changes or interpretations could affect the tax consequences to holders of the Class B Shares or GDSs, possibly on a retroactive basis, and could alter or modify the statements and conclusions set forth herein. This summary does not purport to be a legal opinion or to address all tax aspects that may be relevant to a holder of the Class B Shares or GDSs. Each prospective holder is urged to consult its own tax adviser as to the particular tax consequences to such holder of the ownership and disposition of the Class B Shares or GDSs, including the applicability and effect of any other tax laws or tax treaties, of pending or proposed changes in applicable tax laws as of the date of this Offering Circular, and of any actual changes in applicable tax laws after such date.

Argentine Tax Considerations The following discussion is a summary of the material Argentine tax considerations relating to the purchase, ownership and disposition of the Class B Shares or GDSs. There is at present no income tax treaty in force between Argentina and the United States, although there are such treaties in force between Argentina and certain other jurisdictions.

Dividends Tax Dividends paid on the Class B Shares or GDSs, whether in cash, property or other equity securities and any other payment in kind, are not subject to income tax withholding, except for dividends paid in excess of the Company’s taxable accumulated income for the previous fiscal period, which are subject to withholding at the rate of 35% in respect of such excess. This is a final tax and it is not applicable if dividends are paid in shares (acciones liberadas) rather than in cash. With respect to dividends paid to shareholders residing abroad, the above-mentioned withholding rate may be reduced by a tax treaty between Argentina and the country of the residing shareholder.

Capital Gains Tax Opinion No. 351 of the National Treasury General Attorney Office clarified the legal status of certain matters affecting the tax treatment of capital gains, but certain issues still remain unclear. The following considerations are based on such opinion:

Resident Individuals Income derived from the sale, exchange or other disposition of the Class B Shares or GDSs by resident individuals who do not sell or dispose of Argentine shares on a regular basis is not subject to Argentine income tax. Income derived from the sale, exchange or other disposition of the Class B Shares or GDSs by resident individuals who sell or dispose of shares on a regular basis are subject to Argentine income tax.

Foreign Beneficiaries Capital gains obtained by non residents or foreign entities from the sale, exchange or other disposition of the Class B Shares or GDSs are exempt from income tax. Such treatment would also apply to those foreign beneficiaries that qualify as “offshore entities” for purposes of Argentine tax laws. For this purpose, an offshore entity is any foreign legal entity which pursuant to its by-laws or to the applicable regulatory framework (i) its principal activity is to invest outside the jurisdiction of its incorporation and/or (ii) cannot perform certain transactions in such jurisdiction.

189 Argentine Entities Capital gains obtained by Argentine entities (in general, entities organised or incorporated under Argentine law, certain traders and intermediaries, local branches of non Argentine entities, sole proprietorships and individuals carrying on certain commercial activities in Argentina) derived from the sale, exchange or other disposition of the Class B Shares or GDSs are subject to income tax at the rate of 35%. Losses arising from the sale of the Class B Shares or GDSs can be applied only to offset such capital gains arising from sales of shares or GDSs within five years of origination.

Personal Assets Tax Argentine entities, such as the Company, have to pay the personal assets tax corresponding to Argentine resident individuals, foreign individuals and foreign entities for the holding of shares in the Company at 31 December of each year. The applicable tax rate is 0.5% and is levied on the equity value (valor patrimonial proporcional), or the book value, of the shares arising from the latest financial statements. Pursuant to the Personal Assets Tax Law, the Company is entitled to seek reimbursement of such paid tax from the applicable foreign shareholders, even by withholding and/or foreclosing on the shares, or by withholding dividends. Argentine entities, such as the Company, are not obligated to pay the personal assets tax on shares or participations in their capital owned by foreign individual or entities located in certain jurisdictions with a tax treaty in force with Argentina (i.e. Chile, Switzerland and Spain).

Value Added Tax The sale, exchange or other disposition of the Class B Shares or GDSs and the distribution of dividends are exempted from the value added tax.

Transfer Taxes The sale, exchange or other disposition of the Class B Shares or GDSs is not subject to transfer taxes.

Stamp Taxes Stamp taxes may apply in certain Argentine provinces in case transfer of the Class B Shares or GDSs is performed or executed in such jurisdictions by means of written agreements. Transfer of the Class B Shares or GDSs is exempted from stamp tax in the City of Buenos Aires.

Tax on Debits and Credits in Bank Accounts There is a tax on debits and credits in Argentine bank accounts. This tax applies to certain debits and credits in Argentine bank accounts and to other transactions that, due to their special nature and characteristics, are similar or could be used in lieu of a bank account. Therefore, any debit or credit in an Argentine bank account or any transaction deemed to be used in lieu of a bank account would be subject to the tax on debits and credits unless a particular exemption applies. The general tax rate is 0.6%. However, 34% of the tax arising from credits in bank accounts can be used as a payment on account of the taxpayer’s income tax liability.

Other Taxes There are no Argentine inheritance or succession taxes applicable to the ownership, transfer or disposition of the Class B Shares or GDSs. In addition, neither the minimum presumed income tax nor any local gross turnover tax is applicable to the ownership, transfer or disposition of the Class B Shares or GDSs.

190 Tax Treaties

Argentina has signed tax treaties for the avoidance of double taxation with Australia, Austria, Belgium, Bolivia, Brazil, Canada, Chile, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Spain, Sweden, Switzerland and the United Kingdom. There is currently no tax treaty or convention in effect between Argentina and the United States. It is not clear when, if ever, a treaty will be ratified or entered into effect. As a result, the Argentine tax consequences described in this section will apply, without modification, to a holder of the Class B Shares or GDSs that is a U.S. resident.

U.S. Federal Income Tax Considerations

General

TO ENSURE COMPLIANCE WITH INTERNAL REVENUE SERVICE CIRCULAR 230, PRO- SPECTIVE HOLDERS ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF U.S. FEDERAL TAX ISSUES CONTAINED OR REFERRED TO IN THIS OFFERING CIRCULAR OR ANY DOCU- MENT REFERRED TO HEREIN IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY PROSPECTIVE HOLDERS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON THEM UNDER THE INTERNAL REVENUE CODE; (B) SUCH DISCUSSION IS INCLUDED HEREIN FOR USE IN CONNECTION WITH THE PROMOTION OR MARKETING (WITHIN THE MEANING OF CIRCULAR 230) OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) PROSPECTIVE HOLDERS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

The following summary describes certain U.S. federal income tax consequences for a U.S. holder (as defined below) of purchasing, owning and disposing of Class B Shares or GDSs. This summary applies only to a U.S. holder that acquires GDSs in the initial offering and holds the Class B Shares or GDSs as capital assets for U.S. federal income tax purposes. It does not purport to be a comprehensive description of all tax considerations that may be relevant to a decision to purchase GDSs. In particular, this summary does not address tax considerations applicable to a U.S. holder that may be subject to special rules, including, without limitation, a dealer in securities or currencies, a trader in securities that elects to use a mark-to-market method of accounting for securities holdings, a bank or other financial institution, a life insurance company, a tax-exempt organisation, a person that holds Class B Shares or GDSs as part of a hedge, straddle, conversion transaction or other integrated investment for tax purposes, a person who is liable for the alternative minimum tax, a person whose functional currency for U.S. tax purposes is not the U.S. dollar, or a person that owns or is deemed to own either 10% or more of any class of the Company’s stock, or 10% or more of the total combined voting power of all classes of the Company’s stock entitled to vote. In addition, if an entity treated as a partnership for U.S. federal income tax purposes holds Class B Shares or GDSs, the tax treatment of each partner of the partnership generally will depend upon the status of the partner and the activities of the partnership. If you are a partner in a partnership holding the Class B Shares or GDSs, you should consult your own tax advisors.

This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), its legislative history, existing and proposed regulations promulgated thereunder, published rulings and court decisions, all as currently in effect. These laws are subject to change, possibly on a retroactive basis. You should consult your own tax advisors concerning the consequences of purchasing, owning, and disposing of Class B Shares or GDSs in your particular circumstances, including the possible application of state, local, non-U.S. or other tax laws.

For purposes of this summary, you are a “U.S. holder” if you are a beneficial owner of a Class B Share or GDS that is a citizen or resident of the United States, a U.S. domestic corporation, or otherwise subject to U.S. federal income tax on a net income basis with respect to income from the Class B Shares or GDSs.

191 In general, if you are the beneficial owner of GDSs you will be treated for U.S. federal income tax purposes as the beneficial owner of the Class B Shares in the form of those GDSs. No gain or loss will be recognised upon the exchange of GDSs for Class B Shares in the form of such GDSs.

Dividends The gross amount of cash dividends that you receive with respect to the Class B Shares or GDSs (prior to deduction of Argentine taxes) generally will be subject to U.S. federal income taxation as foreign-source dividend income on a net income basis; provided that the cash dividend does not exceed our current and accumulated earnings and profits as determined for U.S. federal income tax purposes. The dividends paid generally will not be eligible for the dividends received deduction allowed to certain U.S. corporate shareholders in respect of dividends paid by a domestic corporation, nor will the dividends be eligible for the special reduced dividend rate applicable to qualified dividends. Dividends paid in Argentine Pesos will be included in your income in a U.S. dollar amount calculated by reference to the exchange rate in effect on the date of receipt of the dividend by you or, in the case of shares held in GDS form, by the Depositary, regardless of whether the payment is in fact converted into U.S. dollars. If such a dividend is converted into U.S. dollars on the date of receipt, you generally should not be required to recognise foreign currency gain or loss in respect of the dividend income. If such dividend is not converted from Argentine Pesos into U.S. dollars on the date of receipt, you generally will have a basis in those Argentine Pesos equal to their U.S. dollar value on that date. You also generally will be required to recognise foreign currency gain or loss realised on a subsequent conversion or other disposition of the Argentine Pesos, which will be treated as U.S.-source ordinary income or loss. Distributions of additional shares in respect of Class B Shares or GDSs that are made as part of a pro-rata distribution to all of our shareholders generally will not be subject to U.S. federal income tax.

Sale or Other Taxable Disposition Upon a sale or other taxable disposition of Class B Shares or GDSs, you will recognise gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the U.S. dollar value of your amount realised and your tax basis, determined in U.S. dollars, in the Class B Shares or GDSs. Generally, such gain or loss you realise on the sale or other disposition of Class B Shares or GDSs will be treated as U.S.-source capital gain or loss, and will be long-term capital gain or loss if the Class B Shares or GDSs were held for more than one year. Your ability to offset capital losses against ordinary income is limited. Long-term capital gain recognised by an individual U.S. holder before 1 January 2011 generally is subject to taxation at a maximum rate of 15%.

Foreign Tax Credit Considerations You should consult your own tax advisors to determine whether you are subject to any special rules that limit your ability to make effective use of foreign tax credits. If no such rules apply, you may claim a credit against your U.S. federal income tax liability for Argentine income taxes withheld from cash dividends on the Class B Shares or GDSs, so long as you have owned the Class B Shares or GDSs (and not entered into specified kinds of hedging transactions) for at least a 16-day period that includes the ex-dividend date. Instead of claiming a credit, you may, at your election, deduct such Argentine taxes in computing your taxable income, subject to generally applicable limitations under U.S. tax law. The calculation of foreign tax credits and, in the case of a U.S. holder that elects to deduct foreign taxes, the availability of deductions, involve the application of complex rules that depend on a U.S. holder’s particular circumstances. You should consult your own tax advisors regarding the creditability or deductibility of such taxes.

U.S. Information Reporting and Backup Withholding Rules Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting and may be

192 subject to backup withholding unless the holder (1) is a corporation or other exempt recipient or (2) provides a taxpayer identification number and certifies that no loss of exemption from backup withholding has occurred. You may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim or refund with the Internal Revenue Service and filing any required information.

U.K. Tax Considerations The comments below are of a general nature and are based on current U.K. law and published HM Revenue & Customs practice as of the date of this Offering Circular, as well as the provisions of the 1996 double taxation convention between the United Kingdom and Argentina (which the Company refers to as the “United Kingdom/Argentina double tax treaty”), each of which is subject to change, possibly with retrospective effect. The summary only covers the principal U.K. tax consequences for the ultimate beneficial owners of Class B Shares or GDSs and any dividends paid in respect of them (in circumstances where the dividends paid are regarded for U.K. tax purposes as that person’s own income, and not the income of some other person). In addition, the summary: (a) only addresses the principal U.K. tax consequences for holders who hold the Class B Shares or GDSs as capital assets and does not address the tax consequences which may be relevant to certain other categories of holders, for example, brokers or dealers; (b) does not address the tax consequences for holders that are banks, financial institutions, insurance companies, collective investment schemes, tax-exempt organisations or persons connected with the Company; (c) assumes that the holder does not control or hold, either alone or together with one or more associated or connected persons, directly or indirectly, 10% or more of the share capital or voting power of the Company; (d) assumes that the holder does not carry on business in Argentina through a permanent establishment or fixed base therein; (e) assumes that the holder is, for U.K. tax purposes, beneficially entitled to the underlying Class B Shares and to the dividends on those Class B Shares; and (f) assumes that the holder has not (and is not deemed to have) acquired the Class B Shares or GDSs by virtue of an office or employment. 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 holder. Potential investors should satisfy themselves as to the overall tax consequences, including, specifically, the consequences under U.K. law, HM Revenue & Customs practice and the United Kingdom/Argentina double tax treaty, of the acquisition, ownership and disposal of Class B Shares or GDSs in their own particular circumstances, by consulting their own tax advisers.

Taxation of Dividends Individual holders who are resident in the United Kingdom for U.K. tax purposes, and corporate holders which are resident in the United Kingdom for U.K. tax purposes or which carry on a trade, profession or vocation in the United Kingdom through a permanent establishment in the United Kingdom, in connection with which the GDSs or Class B Shares are held, will, in general, be subject to U.K. income tax or U.K. corporation tax (as applicable) on the gross amount of any dividends paid on their Class B Shares or GDSs before the deduction of any Argentine withholding taxes, subject to the availability of any credit for Argentine tax withheld. Special rules may apply to individual holders who are not ordinarily resident or domiciled in the United Kingdom. As discussed in “ — Argentine Tax Considerations — Dividends tax”, dividends paid on the Class B Shares or GDSs are not subject to Argentine withholding taxes other than in the case of dividends paid in excess of the Company’s taxable accumulated income as of the end of the previous fiscal period. The excess of any dividends paid over the Company’s taxable accumulated income as of the end of the previous fiscal period will, under Argentine current law, be subject to withholding at the rate of 35%. However, the rate of withholding tax applicable to holders that are eligible for the benefits of the United Kingdom/Argentina double tax treaty is reduced to a maximum of 15% of the gross

193 amount of any dividend. See — Argentine Tax Considerations — Dividends Tax” for a discussion of the procedures for obtaining such relief.

Holders will in principle be entitled to a tax credit against U.K. income or U.K. corporation tax (as the case may be) payable in respect of dividends paid on the Class B Shares or GDSs for Argentine tax withheld from such dividends, up to the maximum rate of Argentine withholding tax permitted under the United Kingdom/Argentina double tax treaty, subject to the U.K. rules generally governing the availability of U.K. tax credits for non-U.K. withholding taxes.

For individual holders who are liable to U.K. income tax at the starting or basic rate, and who will therefore be liable for U.K. income tax on the dividend at the dividend ordinary rate (currently 10%), the credit for Argentine tax deducted at source may equal or exceed such individual’s U.K. income tax liability in respect of the dividend, in which case such individual will have no further U.K. income tax to pay. However, if there is any excess of such Argentine withholding tax over the U.K. tax payable, it is generally not refundable. For individual holders who are liable to U.K. income tax at the higher rate and who will therefore be liable to U.K. income tax on the dividend at the dividend upper rate (currently 32.5%), U.K. income tax will be chargeable on the gross dividend with credit for Argentine tax deducted at source as described above. Whether a U.K. resident individual holder is liable for U.K. income tax at the starting, basic or higher rate will depend on the particular circumstances of the holder.

The Company is not required to make any deduction from payments of dividends on the Class B Shares or GDSs for or on account of U.K. tax.

Taxation of Capital Gains

The disposal or deemed disposal of Class B Shares or GDSs by a holder that is resident or, in the case of an individual, ordinarily resident, in the United Kingdom may give rise to a chargeable gain or an allowable loss for the purposes of U.K. taxation of capital gains (where the holder is an individual) and U.K. corporation tax on chargeable gains (where the holder is within the charge to U.K. corporation tax), depending on their circumstances and subject to any available exemption or relief. In addition, individual holders who dispose of their Class B Shares or GDSs while they are temporarily not resident or ordinarily resident in the United Kingdom may be treated as disposing of them in the tax year in which they again become resident or ordinarily resident in the United Kingdom. Any gains or losses in respect of currency fluctuations over the period of holding the Class B Shares or GDSs would also be brought into account on the disposal. Special rules may apply to individual holders who are not domiciled in the United Kingdom.

For individual holders, the factors that will determine the extent to which such gain will be subject to U.K. capital gains tax include (i) the extent to which they realise any other capital gains in that year, (ii) the extent to which they have incurred capital losses in that or any earlier year and (iii) the level of the annual allowance of tax-free gains in the tax year in which the disposal takes place.

A holder that is a company is entitled to an indexation allowance which applies to reduce capital gains to the extent that (broadly speaking) they arise due to inflation. Indexation allowance may reduce a chargeable gain but not create any allowable loss.

Stamp Duty and Stamp Duty Reserve Tax

No U.K. stamp duty or stamp duty reserve tax will be payable on the issue of the GDSs and their delivery into DTC, Euroclear and Clearstream.

No U.K. stamp duty or stamp duty reserve tax will be payable in respect of any dealings in the GDSs once they are issued into DTC, Euroclear and Clearstream where such dealings are effected in electronic book entry form in accordance with the procedures of DTC, Euroclear and Clearstream.

194 No U.K. stamp duty reserve tax will be payable in respect of any agreement to transfer the Class B Shares provided that the Class B Shares are not registered in a register kept in the United Kingdom. No U.K. stamp duty will be payable in connection with a transfer of Class B Shares where the instrument of transfer is not executed in the United Kingdom and does not relate to any property situated, or to any matter or thing done or to be done, in the United Kingdom.

Inheritance Tax U.K. inheritance tax may be chargeable on the death of, or in certain circumstances on a gift by the owner of, Class B Shares or GDSs, where the owner is an individual who is domiciled or is deemed to be domiciled in the United Kingdom. For inheritance tax purposes, a transfer of assets at less than full market value may be treated as a gift and particular rates apply to gifts where the donor reserves or retains some benefit.

195 SUBSCRIPTION AND SALE The Offering described in this Offering Circular consists of (i) an international tranche of the offering of 38,500,000 Class B Shares, in the form of 19,250,000 GDSs, in the United States and other jurisdictions outside Argentina, and (ii) a tranche of the offering in Argentina of 11,500,000 Class B Shares. The Company, the Selling Shareholders and the International Underwriters have entered into a Purchase Agreement with respect to the Class B Shares and GDSs being offered. Subject to certain conditions, each International Underwriter has severally agreed to purchase, at the Offer Price, the number of Class B Shares indicated in the following table (all of which will be in the form of GDSs). Principal Amount International Underwriter of Class B Shares Goldman Sachs International ...... 16,041,796 Credit Suisse Securities (Europe) Limited ...... 16,041,796 J.P. Morgan Securities Inc...... 3,850,000 Merrill Lynch International ...... 1,283,204 Itaú Securities, Inc...... 1,283,204 Total ...... 38,500,000

The International Underwriters are committed to take and pay for all of the Class B Shares being offered, if any are taken, other than the Class B Shares covered by the Over-allotment Option unless and until such option is exercised. The Company has entered into a placement agreement with JPMorgan Chase S.A. Sociedad de Bolsa and Merrill Lynch Valores S.A. Sociedad de Bolsa (the “Argentine Placement Agents” and, together with the International Underwriters, the “Underwriters”) providing for the concurrent offer and sale of Class B Shares in Argentina. The closings of the international tranche of the offering and the Argentine tranche of the offering are conditioned upon each other.

Intersyndicate Agreement The International Underwriters and the Argentine Placement Agents have entered into an intersyndicate agreement which governs matters relating to the Offering. Under this agreement, each International Underwriter has agreed that, as part of its distribution of GDSs and subject to permitted exceptions, it has not offered or sold, and will not offer to sell, directly or indirectly, any GDSs or distribute any prospectus relating to the GDSs to any person in Argentina or to any other dealer who does not so agree. The Argentine Placement Agents similarly have agreed that, as part of its distribution of Class B Shares and subject to permitted exceptions, they have not offered or sold, and will not offer to sell, directly or indirectly, any Class B Shares or distribute any prospectus relating to Class B Shares to any person outside Argentina or to any other dealer who does not so agree. These limitations do not apply to transactions between the International Underwriters and the Argentine Placement Agents, who have agreed that they may sell Class B Shares or GDSs, as the case may be, between respective syndicates. The number of Class B Shares or GDSs, as the case may be, actually allocated to each offering may differ from the amount offered due to reallocation between the international tranche of the Offering and the Argentine tranche of the Offering.

Over-allotment Option The Company and certain Selling Shareholders have granted Credit Suisse Securities (Europe) Limited an Over-allotment Option to acquire, in the aggregate, up to 7,500,000 additional Class B Shares in the form of GDSs at the Offer Price for the purposes of meeting over-allotments in connection with the Offering. The Over-allotment Option is exercisable upon written notice by Credit Suisse Securities (Europe) Limited to the Company and such certain Selling Shareholders at any time during the Stabilisation Period. If Credit Suisse Securities (Europe) Limited exercises this option, the

196 Company and such certain Selling Shareholders will be obligated to sell, and Credit Suisse Securities (Europe) Limited will be obligated, subject to the conditions contained in the Purchase Agreement, to purchase or procure purchases for additional shares in the form of GDSs.

Discounts and Commissions

The following tables show the per share and total discounts and commissions to be paid to the International Underwriters by the Company and the Selling Shareholders. Such amounts are shown assuming both no exercise and full exercise of the Over-allotment Option.

Paid by the Company No Exercise Full Exercise Per GDS ...... U.S.$ 0.5342 U.S.$ 0.5342 Total ...... U.S.$934,828 U.S.$1,535,789

Paid by the Selling Shareholders No Exercise Full Exercise Per GDS...... U.S.$ 0.5342 U.S.$ 0.5342 Total ...... U.S.$9,348,281 U.S.$10,750,523

If all the Class B Shares are not sold at the Offer Price, the International Underwriters may change the offering price and the other selling terms.

Lock-up Provisions

The Company, the Selling Shareholders and certain other shareholders of the Company have agreed, subject to certain exceptions, not to issue, offer, sell, contract to sell, pledge, grant options over or otherwise dispose of any class B common shares of the Company, GDSs or any securities convertible into, or exchangeable or exercisable for, any class B common shares or GDSs for a period commencing on 4 October 2007 and ending 180 days from the date of the Purchase Agreement, without the prior written consent of the Joint Global Coordinators and International Bookrunners.

Listing

Prior to the Offering, there has been no public market for the Class B Shares, whether in the form of GDSs or otherwise. The Offer Price has been established by the Company. Among the factors considered in determining the Offer Price of the Class B Shares and GDSs, in addition to prevailing market conditions, were the Company’s historical performance, estimates of the business potential and earnings prospects of the Company, an assessment of the Company’s management and the consideration of the above factors in relation to market valuation of companies in related businesses.

The GDSs will be listed on the Regulated Market of the London Stock Exchange under the symbol “GCLA”. The class B common shares of the Company (including the Class B Shares) are admitted for trading on the BCBA under the symbol “GCLA”.

Stabilisation

In connection with the Offering, Credit Suisse Securities (Europe) Limited may purchase and sell Class B Shares and GDSs in the open market. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by Credit Suisse Securities (Europe) Limited of a greater number of Class B Shares or GDSs than they are required to purchase in the Offering. “Covered” short sales are sales made in an amount not

197 greater than the Over-allotment Option. Credit Suisse Securities (Europe) Limited may close out any covered short position by either exercising their Over-allotment Option or purchasing Class B Shares or GDSs in the open market. In determining the source of Class B Shares or GDSs to close out the covered short position, Credit Suisse Securities (Europe) Limited will consider, among other things, the price of Class B Shares or GDSs available for purchase in the open market as compared to the price at which they may purchase additional Class B Shares or GDSs pursuant to the Over-allotment Option. “Naked” short sales are any sales in excess of such Over-allotment Option. Credit Suisse Securities (Europe) Limited must close out any naked short position by purchasing Class B Shares or GDSs in the open market. A naked short position is more likely to be created if Credit Suisse Securities (Europe) Limited is concerned that there may be downward pressure on the price of the securities in the open market after pricing that could adversely affect investors who purchase in the Offering. Stabilizing transactions consist of various bids for or purchases of securities made by Credit Suisse Securities (Europe) Limited in the open market prior to the completion of the Offering.

The International Underwriters also may impose a penalty bid. This occurs when a particular International Underwriter repays to the International Underwriters a portion of the discount received by it because Credit Suisse Securities (Europe) Limited or its affiliates have repurchased Class B Shares or GDSs sold by or for the account of such International Underwriter in stabilising or short covering transactions.

In connection with the Offering, Credit Suisse Securities (Europe) Limited (or persons acting on its behalf) may over-allot GDSs or effect transactions with a view to supporting the market price of the GDSs at a level higher than that which might otherwise prevail. However, there is no assurance that Credit Suisse Securities (Europe) Limited (or persons acting on its behalf) will undertake stabilisation action. Any stabilisation action may begin on or after the date of adequate public disclosure of the final price of the relevant securities and, if begun, may be ended at any time, but must end no later than 30 days after that date.

GDSs allocated under the Offering will, following determination of the Offer Price, be fully underwritten by the International Underwriters. Allocations will be determined at the discretion of the International Underwriters, following consultation with the Company and the Selling Shareholders, after the book-building process. Subject to the International Underwriters, there is no minimum or maximum number of GDSs that can be applied for.

All GDSs offered and sold pursuant to the Offering will be offered and sold at the Offer Price. A number of factors will be considered in determining the Offer Price and the basis of allocation, including the objective of establishing an orderly aftermarket in the GDSs, prevailing market conditions and the level of absolute demand.

The International Underwriters, through their respective affiliates, proposed to sell GDSs in the United States to QIBs in reliance on Rule 144A under the Securities Act. Any offer or sale of GDSs in reliance on Rule 144A will be made by broker-dealers who are registered as such under the Exchange Act.

The Company and the Selling Shareholders have agreed to indemnify the International Under- writers against certain liabilities, including liabilities under the Securities Act of 1933.

Certain of the International Underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for the Company, for which they received or will receive customary fees and expenses.

GS Unidos, LLC, GS Private Equity Partners II — Direct Investment Fund, LP, GS Capital Partners III, LP and GS Private Equity Partners 1999 — Direct Investment Fund, LP are affiliates of Goldman Sachs International.

198 SELLING AND TRANSFER RESTRICTIONS

Selling Restrictions United States The Class B Shares and GDSs have not been and will not be registered under the Securities Act. Each International Underwriter has agreed that it will only offer or sell the GDSs (A) in the United States to qualified institutional buyers in reliance on Rule 144A under the Securities Act, or (B) outside the United States to non-U.S. persons in offshore transactions in reliance on Regulation S under the Securities Act. Terms used above have the meanings given to them by Rule 144A and Regulation S under the Securities Act. In addition, with respect to GDSs initially sold pursuant to Regulation S, until 40 days after the period referred to above, an offer or sale of such GDSs within the United States by a dealer that is not participating in the Offering may violate the registration requirements of the Securities Act.

Argentina The concurrent offering of 11,500,000 Class B Shares in Argentina is being made on the basis of a Spanish-language prospectus dated as of 11 October 2007. The Argentine prospectus, which has been filed with the CNV, is in a format different from that of this Offering Circular, consistent with CNV regulations, but contains substantially the same information as this Offering Circular, other than certain U.S. GAAP information, information relating to the GDSs, U.S. and U.K. taxation matters and information required under the FSMA.

European Economic Area In relation to each Member State of the EEA which has implemented the Prospectus Directive (each, a “Relevant Member State”) an offer to the public of any GDSs may not be made in that Relevant Member State (except in the United Kingdom once the prospectus comprising all information contained in this Offering Circular (including Annex A) other than the section “Unaudited Consolidated Pro Forma Statement of Income” and all references to that section contained elsewhere in this Offering Circular (the “Prospectus”) has been approved by the Financial Services Authority and published in accordance with the Prospectus Directive as implemented in the United Kingdom) except that an offer to the public in that Relevant Member State of any GDSs may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State: (a) 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; (b) 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 e43,000,000 and (3) an annual net turnover of more than e50,000,000, as shown in its last annual or consolidated accounts; (c) by the International Underwriters to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of Credit Suisse Securities (Europe) Limited for any such offer; or (d) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of GDSs shall result in a requirement for the publication by the Company, Selling Shareholders or any International Underwriter of a prospectus pursuant to Article 3 of the Prospectus Directive.

199 For the purposes of this section, the expression an “offer to the public” in relation to any GDSs 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 any GDSs to be offered so as to enable an investor to decide to purchase any GDSs, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

United Kingdom Each International Underwriter has represented and agreed that: • it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the GDSs in circumstances in which Section 21(1) of the FSMA does not apply to the Company and the Selling Shareholders; and • it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the GDSs in, from or otherwise involving the United Kingdom. This document is for distribution only to persons who (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Financial Promotion Order”), (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc”) of the Financial Promotion Order, (iii) are outside the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any GDSs may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). This document 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 document relates is available only to relevant persons and will be engaged in only with relevant persons. In connection with the Offering, the International Underwriters are not acting for anyone other than the Company and the Selling Shareholders and will not be responsible to anyone other than the Company and the Selling Shareholders for providing the protections afforded to their clients nor for providing advice in relation to the Offering.

Singapore This Offering Circular has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this Offering Circular and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the GDSs may not be circulated or distributed, nor may the GDSs be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. Where the GDSs are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and

200 units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the GDSs under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation of law.

Brazil The GDSs have not been and will not be publicly issued or publicly placed, distributed, offered or negotiated in the Brazilian capital markets. Neither the Company nor the issuance of any GDSs has been or will be registered with the Brazilian Securities and Exchange Commission (Comissao de Valores Mobiliários).

General No action has been taken or will be taken in any jurisdiction that would permit a public offering of the Securities, or the possession or distribution of this Offering Circular or any other material relating to the Offering or the Securities, where action for such purpose is required. Accordingly, the Securities, may not be offered or sold, directly or indirectly, nor may this Offering Circular or any other offering material or advertisement in connection with such Securities be distributed or published, in or from any country or jurisdiction except under circumstances that will result in compliance with any applicable rules and regulation of any such country or jurisdiction. No dealer, salesperson or other person has been authorised to give any information or to make any representation not contained in this Offering Circular, and, if given or made, such information or representation must not be relied upon as having been authorised by the Company, any Selling Shareholder or any International Underwriter. This Offering Circular does not constitute an offer to sell or the solicitation of an offer to buy any Securities other than the Securities to which it relates or an offer to sell or the solicitation of an offer to buy such Securities in any circumstances in which such offer or solicitation is unlawful. Neither the delivery of this Offering Circular nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the Company’s affairs since the date hereof or that the information contained in this Offering Circular is correct as of a date after its date.

Buyer’s Representation Each subscriber for, or purchaser of, Securities in the Offering located within a Member State of the EEA will be deemed to have represented, warranted and agreed to and with each International Underwriter, the Selling Shareholders and the Company that: (a) it is a qualified investor within the meaning of Article 2(1)(e) of the Prospectus Directive; and (b) in the case of any Securities being offered to a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, the Securities acquired by it in the Offering have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any Securities to the public other than their offer or resale in a Relevant Member State to qualified investors, as that term is defined in the Prospectus Directive or in circumstances in which the prior consent of the International Underwriters has been given to the offer or resale. The Company, the International Underwriters and their affiliates, and others will rely (and the Company acknowledges that the International Underwriters and their affiliates, and others will rely) upon the truth and accuracy of the foregoing representations, acknowledgements, and agreements. Notwithstanding the foregoing, a person who is not a qualified investor and who has notified the Joint Global Coordinators and International Bookrunners of such fact in writing

201 may, with the consent of the Joint Global Coordinators and International Bookrunners, be permitted to subscribe for or purchase Securities in the Offering. The Company, the International Underwriters and their affiliates may rely upon the truth and accuracy of the aforementioned deemed representations, acknowledgements and agreements and will not be responsible for any loss occasioned by such reliance.

Transfer Restrictions None of the Securities have been or will be registered under the Securities Act, and the Class B Shares and the GDSs may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Accordingly, the Class B Shares and the GDSs are being offered and sold only: (a) to QIBs in compliance with Rule 144A; and (b) in offshore transactions in compliance with Regulation S. As used in this document, the term “offshore transaction” has the meaning given to it in Regulation S.

Rule 144A Class B Shares and GDSs Each purchaser of Rule 144A Class B Shares or GDSs in the Offering, by its acceptance thereof, will be deemed to have represented and agreed as follows (terms used in this paragraph that are defined in Rule 144A or Regulation S are used herein as defined therein): 1. The purchaser (i) is a QIB, (ii) is aware, and each beneficial owner of such Rule 144A GDSs or Class B Shares has been advised, that the sale to it is being made in reliance on Rule 144A and (iii) is acquiring such Rule 144A GDSs or Class B Shares for its own account or for the account of a QIB. 2. The purchaser is aware that the Rule 144A GDSs and the Class B Shares represented thereby have not been and will not be registered under the Securities Act and are being offered in the United States in reliance on Rule 144A only in a transaction not involving any public offering in the United States within the meaning of the Securities Act and that the GDSs and the Class B Shares represented thereby are subject to significant restrictions on transfer. 3. If in the future the purchaser decides to offer, resell, pledge or otherwise transfer such Rule 144A GDSs or the Class B Shares represented thereby, such Rule 144A GDSs and Class B Shares may be offered, sold, pledged or otherwise transferred only in accordance with the following legend, which the Rule 144A GDSs will bear unless otherwise determined by the Company and the Depositary in accordance with applicable law: Unless this certificate is presented by an authorised representative of The Depository Trust Company, a New York corporation (“DTC”), to the Depository or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorised representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorised representative of DTC), any transfer, pledge, or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. THIS MASTER RULE 144A GLOBAL DEPOSITARY RECEIPT, THE RULE 144A GLOBAL DEPOSITARY SHARES EVIDENCED HEREBY AND THE CLASS B COMMON SHARES (“SHARES”) OF GRUPO CLARIN S.A. REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT OF 1933”). THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PER- SON WHOM THE SELLER OR ANY PERSON ACTING ON ITS BEHALF REASONABLY

202 BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT OF 1933 IN A TRANSACTION MEETING THE REQUIRE- MENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OF 1933, OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OF 1933 (IF AVAILABLE), AND (B) IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGO- ING, THE SHARES MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY IN RESPECT OF THE SHARES ESTABLISHED OR MAINTAINED BY A DEPOSITARY BANK, UNLESS AND UNTIL SUCH TIME AS THE SHARES ARE NO LONGER RESTRICTED SECURITIES UNDER THE SECURITIES ACT OF 1933. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OF 1933 FOR RESALE OF THE SHARES OR RULE 144A GLOBAL DEPOSITARY SHARES.

EACH PARTY TO THE DEPOSIT AGREEMENT, INCLUDING HOLDERS AND BENEFI- CIAL OWNERS OF GDSs, IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE DEPOSIT AGREEMENT OR THE TRANSACTIONS CONTEMPLATED UNDER THE DEPOSIT AGREEMENT, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY.

4. The purchaser acknowledges that the Depositary will not be required to accept for registration of transfer any GDSs acquired by such purchaser, except upon presentation of evidence satisfactory to the Company and the Depositary that the restrictions set forth herein have been complied with.

Each purchaser of Rule 144A Class B Shares or GDSs will be deemed to have acknowledged that the Company, the International Underwriters, their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations and agreements and agrees that if any of the representations or agreements deemed to have been made by its purchase of the Rule 144A Class B Shares or GDSs are no longer accurate, it shall promptly notify the Company and the International Underwriters. If it is acquiring the Rule 144A Class B Shares or GDSs as a fiduciary or agent for one or more investor accounts, it represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing representations and agreements on behalf of each account.

Prospective purchasers are hereby notified that sellers of the Rule 144A Class B Shares or GDSs may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A.

Regulation S Class B Shares and GDSs

Each purchaser of Regulation S Class B Shares or GDSs in the Offering, by its acceptance thereof, will be deemed to have represented and agreed as follows (terms used in this paragraph that are defined in Rule 144A or Regulation S are used herein as defined therein):

1. The purchaser (i) is, and the person, if any, for whose account it is acquiring the Regulation S GDSs or Class B Shares is, outside the United States, (ii) is not an affiliate of the Company or a person acting on behalf of such an affiliate and (iii) is not a securities dealer or, if it is a securities dealer, it did not acquire the Regulation S GDSs or the Class B Shares represented thereby from the Company or an affiliate thereof in the initial distribution of Regulation S.

203 2. The purchaser is aware that the Regulation S GDSs and the Class B Shares represented thereby have not been and will not be registered under the Securities Act, and are being offered outside the United States in reliance on Regulation S. 3. If in the future the purchaser decides to offer, resell, pledge or otherwise transfer such Regulation S GDSs or the Class B Shares represented thereby, such Regulation S GDSs and Class B Shares may be offered, sold, pledged or otherwise transferred only in accordance with the following legend, which the Regulation S GDSs will bear unless otherwise determined by the Company and the Depositary in accordance with applicable law: Unless this certificate is presented by an authorised representative of The Depository Trust Company, a New York corporation (“DTC”), to the Depository or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorised representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorised representative of DTC), any transfer, pledge, or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. NEITHER THIS GDR, NOR THE GDSs EVIDENCED HEREBY, AND THE CLASS B COMMON SHARES (“SHARES”) REPRESENTED THEREBY HAVE BEEN OR WILL BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURI- TIES ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND SUCH SECURITIES MAY ONLY BE RE-OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE LAWS OF THE STATES, TERRITORIES AND POSSESSIONS OF THE UNITED STATES GOVERNING THE OFFER AND SALE OF SECURI- TIES AND, PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD ONLY (1) OUTSIDE THE UNITED STATES TO A PERSON OTHER THAN A U.S. PERSON (AS SUCH TERMS ARE DEFINED IN REGULATION S UNDER THE SECURITIES ACT) IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) TO A PERSON WHOM THE HOLDER AND THE BENEFICIAL OWNER AND ANY PERSON ACTING ON THEIR BEHALF REASON- ABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (3) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT; PROVIDED THAT IN CONNEC- TION WITH ANY TRANSFER UNDER (2) ABOVE, THE TRANSFEROR SHALL, PRIOR TO THE SETTLEMENT OF SUCH SALE, WITHDRAW THE SHARES IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE DEPOSIT AGREEMENT AND INSTRUCT THAT SUCH SHARES BE DELIVERED TO THE CUSTODIAN UNDER THE DEPOSIT AGREEMENT FOR ISSUANCE, IN ACCORDANCE WITH THE TERMS AND CONDITIONS THEREOF, OF RULE 144A GDSs TO OR FOR THE ACCOUNT OF SUCH QUALIFIED INSTITUTIONAL BUYER. UPON THE EXPIRATION OF THE RESTRICTED PERIOD, THIS GDR, THE GDSs EVIDENCED HEREBY AND THE DEPOSITED SECURITIES REPRESENTED BY GDSs SHALL NO LONGER BE SUBJECT TO THE RESTRICTIONS ON TRANSFER PROVIDED IN THIS LEGEND, PROVIDED THAT AT THE TIME OF SUCH EXPIRATION THE OFFER AND SALE OF THE GDSs EVIDENCED HEREBY AND THE DEPOSITED SECURITIES REPRESENTED THEREBY BY THE HOLDER THEREOF IN THE UNITED STATES WOULD NOT BE RESTRICTED UNDER THE SECURITIES LAWS OF THE UNITED STATES OR ANY STATE, TERRITORY OR POSSESSION OF THE UNITED STATES.

204 EACH HOLDER AND BENEFICIAL OWNER, BY ITS ACCEPTANCE OF THIS GDR OR A BENEFICIAL INTEREST IN THE GDSs EVIDENCED HEREBY, AS THE CASE MAY BE, REPRESENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS. EACH PARTY TO THE DEPOSIT AGREEMENT, INCLUDING HOLDERS AND BENEFI- CIAL OWNERS OF GDSs, IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE DEPOSIT AGREEMENT; OR THE TRANSACTIONS CONTEMPLATED UNDER THE DEPOSIT AGREEMENT, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY. 4. The purchaser acknowledges that the Depositary will not be required to accept for registration of transfer any GDSs acquired by such purchaser, except upon presentation of evidence satisfactory to the Company and the Depositary that the restrictions set forth herein have been complied with. Each purchaser of Regulation S Class B Shares or GDSs will be deemed to have acknowledged that the Company, the International Underwriters, their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations and agreements and agrees that if any of the representations or agreements deemed to have been made by its purchase of the Regulation S Class B Shares or GDSs are no longer accurate, it shall promptly notify the Company and the International Lead Manager. If it is acquiring the Regulation S Class B Shares or GDSs as a fiduciary or agent for one or more investor accounts, it represents that it has sole investment discretion with respect to each such account and it has full power to make the foregoing representations and agreements on behalf of each account.

205 SETTLEMENT AND TRANSFER

Clearing and Settlement of GDSs Custodial and depositary links have been established between Euroclear, Clearstream and DTC to facilitate the initial issue of the GDSs and cross-market transfers of the GDSs associated with secondary market trading.

The Clearing Systems Euroclear and Clearstream Euroclear and Clearstream each hold securities for participating organisations and facilitate the clearance and settlement of securities transactions between their respective participants through electronic book-entry changes in accounts of such participants. Euroclear and Clearstream provide to their respective participants, among other things, services for safekeeping, administration, clearance and settlement of internationally-traded securities and securities lending and borrowing. Euroclear and Clearstream participants are financial institutions throughout the world, including securities brokers and dealers, banks, trust companies, clearing corporations and certain other organisations. Euroclear and Clearstream have established an electronic bridge between their two systems across which their respective customers may settle trades with each other. Indirect access to Euroclear or Clearstream is also available to others, such as banks, brokers, dealers and trust companies which clear through or maintain a custodial relationship with a Euroclear or Clearstream participant, either directly or indirectly. Distributions of dividends and other payments with respect to book-entry interests in the GDSs held through Euroclear or Clearstream will be credited, to the extent received by the Depositary, to the cash accounts of Euroclear or Clearstream participants in accordance with the relevant system’s rules and procedures.

DTC DTC is a limited-purpose trust company organised under the laws of the State of New York, a “banking organisation” within the meaning of the New York Banking Law, a member of the United States Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities for DTC participants and facilitates the clearance and settlement of securities transactions between DTC participants through electronic computerised book-entry changes in DTC participants’ accounts. DTC participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organisations. Indirect access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a DTC participant, either directly or indirectly. Holders of book-entry interests in the GDSs holding through DTC will receive, to the extent received by the Depositary, all distributions of dividends or other payments with respect to book-entry interests in the GDSs from the Depositary through DTC and DTC participants. Distributions in the United States will be subject to relevant U.S. tax laws and regulations. See “Taxation — U.S. Federal Income Tax Considerations”. As DTC can act on behalf of DTC direct participants only, who in turn act on behalf of DTC indirect participants, the ability of beneficial owners who are indirect participants to pledge book-entry interests in the GDSs to persons or entities that do not participate in DTC, or otherwise take actions with respect to book-entry interests in the GDSs, may be limited.

206 Registration and Form Book-entry interests in the GDSs held through DTC will be represented by the Master Rule 144A GDR Certificate and the Master Regulation S GDR Certificate, each registered in the name of Cede & Co. as nominee for DTC, which will be held by the Depositary or its agent as custodian for DTC. As necessary, the GDR Register will adjust the amounts of GDSs on the relevant register for the accounts of the nominee to reflect the amounts of GDSs held through DTC. Beneficial ownership in the GDSs will be held through financial institutions as direct and indirect participants in DTC, including Euroclear and Clearstream. DTC and every other intermediate holder in the chain to the beneficial owner of book-entry interests in the GDSs, including Euroclear and Clearstream, will be responsible for establishing and maintaining accounts for their participants and customers having interests in the book-entry interests in the GDSs. The Depositary will be responsible for maintaining a record of the aggregate holdings of GDSs registered in the name of the nominee for DTC. The Depositary will be responsible for ensuring that payments received by it from the Company for holders holding through DTC are paid by it to DTC. The Company will not impose any fees in respect of the GDSs; however, holders of book-entry interests in the GDSs may incur fees normally payable in respect of the maintenance and operation of accounts in Euroclear, Clearstream or DTC and certain fees and expenses payable to the Depositary in accordance with the terms of the Deposit Agreement.

Global Clearance and Settlement Procedures Initial Settlement The GDSs will be in global form evidenced by the two Global Master GDRs. Purchasers electing to hold book-entry interests in the GDSs through Euroclear and Clearstream accounts will follow the settlement procedures applicable to depositary receipts. DTC participants acting on behalf of purchasers electing to hold book-entry interests in the GDSs through DTC will follow the delivery practices applicable to depositary receipts.

Secondary Market Trading For a description of transfer restrictions relating to the Securities, see “Selling and Transfer Restrictions — Transfer Restrictions”.

Trading Between Euroclear and Clearstream Participants Secondary market sales of book-entry interests in the GDSs held through Euroclear or Clearstream to purchasers of book-entry interests in the GDSs through Euroclear or Clearstream will be conducted in accordance with the normal rules and operating procedures of Euroclear and Clearstream and will be settled using the normal procedures applicable to depositary receipts.

Trading Between DTC Participants Secondary market sales of book-entry interests in the GDSs held through DTC will occur in the ordinary way in accordance with DTC rules and will be settled using the procedures applicable to depositary receipts, if payment is effected in U.S. dollars, or free of payment, if payment is not effected in U.S. dollars. Where payment is not effected in U.S. dollars, separate payment arrangements outside DTC are required to be made between the DTC participants.

Trading Between DTC Seller and Euroclear/Clearstream Purchaser When book-entry interests in the GDSs are to be transferred from the account of a DTC participant to the account of a Euroclear or Clearstream participant, the DTC participant must send to

207 DTC a delivery free of payment instruction at least two business days prior to the settlement date. DTC will in turn transmit such instruction to Euroclear or Clearstream, as the case may be, on the settlement date. Separate payment arrangements are required to be made between the DTC participant and the relevant Euroclear or Clearstream participant. On the settlement date, DTC will debit the account of its DTC participant and will instruct the Depositary to instruct Euroclear or Clearstream, as the case may be, to credit the relevant account of the Euroclear or Clearstream participant, as the case may be. In addition, on the settlement date, DTC will instruct the Depositary to (i) decrease the amount of book-entry interests in the GDSs registered in the name of a nominee for DTC and represented by the Master Rule 144A GDR Certificate and (ii) increase the amount of book-entry interests in the GDSs registered in the name of the common nominee for Euroclear and Clearstream and represented by the Master Regulation S GDR Certificate.

Trading Between Clearstream/Euroclear Seller and DTC Purchaser When book-entry interests in the GDSs are to be transferred from the account of a Euroclear or Clearstream participant to the account of a DTC participant, the Euroclear or Clearstream participant must send to Euroclear or Clearstream a delivery free of payment instruction at least two business days prior to the settlement date. Separate payment arrangements are required to be made between the DTC participant and the relevant Euroclear or Clearstream participant, as the case may be. On the settlement date, Euroclear or Clearstream, as the case may be, will debit the account of its participant and will instruct the Depositary to instruct DTC to credit the relevant account of Euroclear or Clearstream, as the case may be, and will deliver such book-entry interests in the GDSs free of payment to the relevant account of the DTC participant. In addition, Euroclear or Clearstream, as the case may be, shall on the settlement date instruct the Depositary to (i) decrease the amount of the book-entry interests in the GDSs registered in the name of the common nominee and evidenced by the Master Regulation S GDR Certificate and (ii) increase the amount of the book-entry interests in the GDSs registered in the name of a nominee for DTC and represented by the Master Rule 144A GDR Certificate.

General Although the foregoing sets out the procedures of Euroclear, Clearstream and DTC in order to facilitate the transfers of interests in the GDSs among participants of Euroclear, Clearstream and DTC, none of Euroclear, Clearstream or DTC are under any obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. None of the Company, the International Underwriters, the Depositary, the Custodian or their respective agents will have any responsibility for the performance by Euroclear, Clearstream or DTC or their respective participants of their respective obligations under the rules and procedures governing their operations.

208 INFORMATION RELATING TO THE DEPOSITARY The Depositary is JPMorgan Chase Bank, NA. (“JPMCB”), having its address at 4 New York Plaza, New York, New York 10004. JPMCB is a wholly-owned bank subsidiary of JPMorgan Chase & Co., a Delaware corporation. JPMCB is a commercial bank offering a wide range of banking services to its customers both domestically and internationally. It is chartered, and its business is subject to examination and regulation, by the Office of the Comtroller of the Currency, a bureau of the United States Department of the Treasury. It is a member of the Federal Reserve System and its deposits are insured by the Federal Deposit Insurance Corporation. Effective 1 July 2004, Bank One Corporation merged with and into JPMorgan Chase & Co., the surviving corporation in the merger, pursuant to the Agreement and Plan of Merger dated as of 14 January 2004. Prior to 13 November 2004, JPMCB was in the legal form of a banking corporation organized under the laws of the State of New York and was named JPMorgan Chase Bank. On that date, it became a national banking association and its name was changed to JPMorgan Chase Bank, National Association (the “Conversion”). Immediately after the Conversion, Bank One, NA (Chicago) and Bank One, NA (Columbus) merged into JPMCB. Additional information, including the most recent Form 10-K for the year ended 31 December 2006, of JPMorgan Chase & Co. and additional annual, quarterly and current reports filed with the Securities and Exchange Commission by JPMorgan Chase & Co., as they become available, may be obtained from the Securities and Exchange Commission’s Internet site (http://www.sec.gov), or without charge by each person to whom this Official Statement is delivered upon the written request of any such person to the Office of the Secretary, JPMorgan Chase & Co., 270 Park Avenue, New York, New York 10017. Such information will be updated as long as the GDSs are admitted to listing on the Official List and admitted to trading on the Regulated Market of the London Stock Exchange and JPMorgan Chase Bank, N.A. is the Depositary.

209 GENERAL INFORMATION

Corporate Information The Company was organised in Buenos Aires, Argentina as Grupo Clarín S.A. The Company was registered with the Public Registry of Commerce of the City of Buenos Aires on 30 August 1999 under No. 12,574, Book 3, Volume of “Sociedades Anónimas”. The Company’s duration is 99 years. The principal legislation under which the Company operates is the legislation of Argentina, and the regulations and orders made thereunder. The registered address and the principal place of business of the Company is at Piedras 1743, (C1140ABK) Ciudad Autónoma de Buenos Aires, Argentina (Tel. No. +54 11 4309 7500).

Legal Matters Certain legal matters in connection with the Offering will be passed upon for the Company with respect to Argentine law by Sáenz Valiente & Asociados and with respect to U.S. law by Cleary Gottlieb Steen & Hamilton LLP. Certain legal matters in connection with the Offering will be passed upon for the Joint Global Coordinators, International Bookrunners, the International Lead Manager and the International Co-Managers with respect to Argentine law by Marval, O’Farrell & Mairal and with respect to U.S. law by Shearman & Sterling LLP.

Independent Accountants The audited consolidated financial statements included in this Offering Circular, have been audited by Price Waterhouse & Co. S.R.L. Buenos Aires, Argentina (a member firm of Pricewaterhou- seCoopers), independent accountants, domiciled at Bouchard 557, piso 7, Ciudad de Buenos Aires, as stated in their report, which includes the description of an uncertainty that results from pending regulatory approvals for the sale by the Company of its indirect participation in Prima to Multicanal, the sale of its direct and indirect participation in Multicanal to Cablevisión, and the indirect acquisition by the Company of additional shares in Cablevisión necessary to increase its participation in that company to 60% of its outstanding capital stock and votes, appearing herein. With respect to the unaudited interim financial statements, included in this Offering Circular, Price Waterhouse & Co. S.R.L. Buenos Aires, Argentina (a member firm of PricewaterhouseCoopers), independent accountants, reported that they have applied limited procedures in accordance with professional standards for a review of such information. However, their separate report dated 5 September 2007 appearing herein, states that they did not audit and they do not express an opinion on that unaudited financial information. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. The consolidated financial statements of Cablevisión as of and for the years ended 31 December 2006 and 2005, included in this Offering Circular, have been audited by Price Waterhouse & Co. S.R.L. Buenos Aires, Argentina (a member firm of PricewaterhouseCoopers), independent accountants, as stated in their report, which includes the description of an uncertainty that results from pending regulatory approvals relating to the acquisition by Cablevisión of Multicanal and by Multicanal of Prima, appearing herein.

Consent Price Waterhouse & Co. S.R.L. Buenos Aires, Argentina (a member firm of Pricewaterhou- seCoopers), independent accountants, has given and not withdrawn its written consent to the inclusion of its audit report in Annex A to this Offering Circular in the context in which it is included and has authorised the content of that part of the Offering Circular to which it consents for the purposes of item 5.5.4R(2)(f) of the Prospectus Rules.

210 Significant Subsidiaries The following table sets forth certain information with respect to the Company’s significant subsidiaries: Registered office Percentage Interest Entity Address Activity Owned by Company Cablevisión S.A. Cuba 2370, Operator of video and 60% (C1428AEL) Ciudad data cable transmission Autónoma de Buenos systems Aires, Argentina Arte Gráfico Editorial Piedras 1743, Newspaper publishing 100% Argentino S.A. (C1140ABK), Ciudad and commercial Autónoma de Buenos printing Aires, Argentina Arte Radiotelevisivo Lima 1261(C1138ACA), Broadcasting TV 99.2% Argentino S.A. Ciudad Autónoma de Buenos Aires, Argentina Inversora de Eventos Av. San Juan 1170 Sports marketing 100% S.A. (C1147AAW), Ciudad operations Autónoma de Buenos Aires, Argentina Radio Mitre S.A. Mansilla 2668, 3™ piso Broadcasting Radio 100% (C1425BPD), Ciudad Autónoma de Buenos Aires, Argentina

211 Property The material properties owned or leased by the Company and its subsidiaries are as follows: Property Address Production plant Av. Del Barco Centenera 2880, Owned by AGR Ciudad Autónoma de Buenos Aires Vacant Av. Del Barco Centenera 2650, Owned by AGR Ciudad Autónoma de Buenos Aires Raw material deposit. Partially Av. Del Barco Centenera 2750, Owned by AGR vacant Ciudad Autónoma de Buenos Aires Production plant Zepita 3220, Ciudad Autónoma Owned by AGEA de Buenos Aires Offices and parking Piedras 1731 / 1733 / 1783 / Owned by AGEA 1785 / 1787 ; Ituzaingo 647 / 651 Y 675 ; Tacuarí 1830/32 / 1872 / 1874 ; Finochietto 736 / 738 / 762 / 770, Ciudad Autónoma de Buenos Aires Vacant lot Ituzaingo 678/80, Ciudad Owned by AGEA Autónoma de Buenos Aires AGEA commercial offices Av. Corrientes 526 SS al 3™ Owned by AGEA piso, Ciudad Autónoma de Buenos Aires ARTEAR commercial offices, Lima 1261, Ciudad Autónoma Owned by ARTEAR TV studios de Buenos Aires Cablevisión head offices Cuba 2370 and 2376, Ciudad Owned by Cablevisión Autónoma de Buenos Aires Cablevisión head offices Cuba 2368, Ciudad Autónoma Owned by Cablevisión de Buenos Aires Cablevisión offices General Hornos 690, Ciudad Owned by Multicanal Autónoma de Buenos Aires Multicanal commercial offices San Juan 2520, Ciudad Owned by Multicanal Autónoma de Buenos Aires GC Gestión Compartida head San Juan 1170, Ciudad Owned by GC Gestión offices Autónoma de Buenos Aires Compartida TRISA/TSC head offices San Juan 1130/32, Ciudad Owned by TRISA Autónoma de Buenos Aires Pol-Ka head offices Jorge Newbery 3449, Ciudad Owned by Pol-Ka(1) Autónoma de Buenos Aires Ideas del Sur head offices Olleros 3551, Ciudad Autónoma Owned by Ideas del Sur(1) de Buenos Aires Papel Prensa head offices Bartolomé Mitre 739, 4th floor, Ciudad Autónoma de Buenos Aires Paper mill offices Parque Industrial, San Pedro, Owned by Papel Prensa(1) Provincia de Buenos Aires Willow plantation “Las Carabelas” field, on the Owned by Papel Prensa(1) bank of the Carabelas river, Provincia de Buenos Aires

212 Property Address Willow plantation “Las Animas” field, Arroyo Owned by Papel Prensa(1) Martínez, Islas Ibicuay, Provincia de Entre Ríos Willow plantation “María Dolores” field, Bragado, Owned by Papel Prensa(1) Provincia de Buenos Aires Willow plantation “El Gazapo” field, Teodelina, Owned by Papel Prensa(1) Provincia de Sante Fe Radio Mitre head offices Mansilla 2668, Ciudad Leased By Radio Mitre Autónoma de Buenos Aires Prima head offices La Rioja 301, Ciudad Autónoma Leased By Prima de Buenos Aires Clarín Global head offices La Rioja 301, Ciudad Autónoma Leased By Clarín Global de Buenos Aires

(1) Under Argentine GAAP, consolidated proportionally. Under U.S. GAAP, the Company is an equity investee.

Significant Change

Save as disclosed in “Operating and Financial Review — Factors affecting the comparability of historical results of operations and financial condition” of this Offering Circular, there has been no significant change in the financial or trading position of the Company since 30 June 2007, the date of the Company’s latest interim consolidated financial statements.

Litigation

From time to time, the Company is involved in litigation in the ordinary course of its business activities such as tax disputes, labour disputes, disputes with other companies, etc. See “Business Description — Legal Proceedings” (pages 65-70 of this Offering Circular). However, the Company believes that such ordinary course litigation is immaterial and is unlikely to affect Company’s operating results or financial position significantly. Neither Company nor any subsidiary of the Company is or has been involved in any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware) during the 12 months preceding the date of this Offering Circular which may have, or have had a significant effect on the financial position or profitability of the Company.

Material Contracts

The following contracts (not being contracts entered into in the ordinary course of business) have been entered into by a member of the Company and its subsidiaries within the two years immediately preceding the date of this Offering Circular and are, or may be, material or have been entered into at any time by any member of the Company and its Subsidiaries and contain provisions under which any member of the Company and its Subsidiaries has an obligation or entitlement which is, or may be, material to the Company and its Subsidiaries as at the date of this Offering Circular:

Agreements in Connection With the Offering

• Purchase Agreement

The Purchase Agreement dated 19 October 2007 among the Company, the Selling Shareholders and the International Underwriters providing for, inter alia, the underwriting of the international tranche of the Offering, and described in “Subscription and Sale”.

213 • Placement Agreement The placement agreement dated 19 October 2007 among the Company and the Argentine Placement Agents providing for, inter alia, the placement of the New Shares in Argentina, and described in “Subscription and Sale”. • Deposit Agreement The Deposit Agreement dated 23 October 2007 among the Company, the Depositary and the holders of GDSs. See “Terms and Conditions of the Global Depositary Shares”.

Financing and Indebtedness See “Operating and Financial Review — Liquidity and Capital Resources — Indebtedness”.

Related Party Transactions See “Related Party Transactions”.

Authorisation The issuance of the Securities was approved by the shareholders of the Company and the board of directors of the Company pursuant to resolutions adopted on 20 July 2007 and 8 October 2007, respectively. The entry into the Purchase Agreement, the Placement Agreement and the Deposit Agreement was approved by the board of directors of the Company pursuant to a resolution adopted on 12 October 2007.

Listing Application has been made to the UKLA for the GDSs to be admitted to the Official List. Application has been made to the London Stock Exchange for the GDSs to be admitted to trading on the Regulated Market through IOB. It is expected that admission of the GDSs to the Official List of the UKLA and admission to trading of the GDSs on the Regulated Market of the London Stock Exchange will be granted on or around 24 October 2007, subject to the issue of the GDSs. It is expected that dealings in the GDSs will commence on 25 October 2007. Application has been made for the class B common shares (including the Class B Shares) and the class C common shares of the Company to listing on the BCBA and for the class B common shares of the Company (including the Class B Shares) to be admitted to trading on the BCBA.

Expense of Admission to Trading Expenses related to admission of the Class B Shares and the GDSs to trading on the London Stock Exchange and the BCBA will be approximately U.S.$17.3 million.

Clearing Reference Numbers The Regulation S GDSs have been accepted for clearance through the Clearstream, Luxem- bourg and Euroclear systems with a Common Code of 032363881 and CUSIP number 40052A209. The International Securities Identification Number for the Regulation S GDSs is US40052A2096. The address of Euroclear is 1 Boulevard du Roi Albert II, B-1210 Brussels, Belgium, and the address of Clearstream, Luxembourg is 42 Avenue JF Kennedy, L-1855, Luxembourg. The Rule 144A GDSs, with CUSIP number 40052A100, have been accepted for clearance with The Depository Trust Company, whose address is 55 Water Street, New York, NY 10041, United States.

Interests of Persons Involved in the Issue None of the directors of the Company, the members of the executive committee of the board of directors of the Company, the members of our supervisory committee, the members of the audit

214 committee of our board of directors and our executive officers has any interest in any contract, arrangement or transaction entered into by the Company which is or was unusual in its nature or conditions or significant in relation to the business of the Company and which was effected during the current or immediately preceding financial year or which was effected during an earlier financial year and remains in any respect outstanding or unperformed. There are no potential conflicts of interest between any duties of the directors of the Company, the members of the executive committee of the board of directors of the Company, the members of our supervisory committee, the members of the audit committee of our board of directors and our executive officers and their private interests and other duties, except for Messrs. Satter and Castelblanco, who are employees of affiliates of The Goldman Sachs Group, Inc., and to that extent may have interests that conflict with those of the Company. See “Risks Factors — Risks Related to Our Business — Certain of Our Existing Sharehold- ers have Approval Rights and their Interests May Be Contrary to Yours” (page 14 of this Offering Circular). Save for the fees payable to the Joint Global Coordinators, the International Bookrunners, the International Lead Manager, the International Co-Managers and the Depositary, so far as the Company is aware no person involved in the issue of the Securities has an interest that is material to the issue of the Securities.

Documents for Inspection So long as the GDSs are admitted to listing on the Official List and the rules of the Financial Services Authority shall so require, copies of the following documents (together with English translations, where applicable) may be inspected during normal business hours at the registered office of the Company: • the Bylaws of the Company; • the audited consolidated financial statements of the Company for the three years ended 31 December 2006, 2005 and 2004; • the unaudited interim financial statements as of 30 June 2007 and for the six month periods ended 30 June 2007 and 2006; • this Offering Circular; and • the Deposit Agreement.

215 GLOSSARY OF SELECTED TERMS AAADP means the Asociación Argentina de Agentes Distribuidores de Publicaciones, the Argentine Association of Publication Distributors. Adjusted EBITDA means net sales minus cost of sales (excluding depreciation and amortisation) and selling and administrative expenses (excluding depreciation and amortisation). ADSL means asymmetrical digital subscriber line. AFA means the Asociación del Fútbol Argentino, the Argentine Football Association. AFIP means the Administración Federal de Ingresos Públicos, the Argentine Federal Revenue Service. AGEA means Arte Gráfico Editorial Argentino S.A. AGR means Artes Gráficas Rioplatense S.A. AMBA Region means the City of Buenos Aires and its surrounding areas. ANA means the Administración Nacional de Aduanas, the National Customs Administration. Antitrust Tribunal means the Tribunal Nacional de Defensa de la Competencia. Argentine Antitrust Law means Argentine Law No. 25,156, as amended. Argentine Corporate Law means Argentine Law No. 19,550, as amended. Argentine GAAP means the accounting principles generally accepted in the City of Buenos Aires, Argentina. Argentine Placement Agents means JP Morgan Chase S.A. Sociedad de Bolsa and Merrill Lynch Valores S.A. Sociedad de Bolsa. ARTEAR means Arte Radiotelevisivo Argentino S.A. Banco Nación means the Banco de la Nación Argentina. BCBA means the Bolsa de Comercio de Buenos Aires, the Buenos Aires Stock Exchange. Broadcasting Law means Argentine Law No. 22,285, as amended, and related regulations. Bylaws means the bylaws of the Company (estatutos sociales), as registered with the IGJ on 30 August 1999, as amended from time to time and as will be amended as of the date of the completion of the Offering. Cablevisión means Cablevisión S.A. Canal Rural means Canal Rural Satelital S.A. Central Bank means the Banco Central de la República Argentina, the Argentine central bank. Clarín Global means Clarín Global S.A. Class B Share Closing Date means 24 October 2007.

216 Class B Shares means 50,000,000 class B common shares of the Company offered in the Offering, with nominal value of Ps.1.00 and 1 (one) vote per share, and with equal rights to dividends as the outstanding shares of the Company. Clearstream means Clearstream Banking, société anonyme. CIMECO means Compañía Inversora en Medios de Comunicación (CIMECO) S.A. CNC means the Comisión Nacional de Comunicaciones, the National Communications Commission. CNDC means the Comisión Nacional de Defensa de la Competencia, the National Antitrust Commission. CNV means the Comisión Nacional de Valores, the Argentine Securities Commission. Comfer means the Comité Federal de Radiodifusión, the Federal Broadcasting Committee. COMIP means Corporación de Medios Internacionales de Prensa, S.A. Controlling Shareholders means, collectively, Mrs. Ernestina Laura Herrera de Noble, Mr. Héctor Horacio Magnetto, Mr. José Antonio Aranda and Mr. Lucio Rafael Pagliaro and/or any of their affiliates, family members or trusts under which they, their family members or affiliates are beneficiaries. Convertibility Law means Argentine Law No. 23,928, as amended. Custodian means Banco Santander Río S.A. Deposit Agreement means the deposit agreement among the Company, the Depositary and the holder of GDSs. Depositary means JPMorgan Chase Bank, N.A. Dominio means GC Dominio S.A. DTC means The Depository Trust Company. Editorial Atlántida means Editorial Atlántida S.A. EEA means the European Economic Area. Euroclear means Euroclear Bank S.A./N.V. as operator of the Euroclear System. Exchange Act means the United States Securities Exchange Act of 1934, as amended. FACPCE means the Federación Argentina de Consejos Profesionales de Ciencias Económicas, the Argentine Federation of Profes- sional Councils in Economic Sciences. Farallon means Farallon GC Investors, LLC. Ferias y Exposiciones means Ferias y Exposiciones S.A.

217 Financial Entities Law means Argentine Law No. 21,526. Financial Services Authority means the U.K Financial Services Authority. Fintech means Fintech Energy LLC, an affiliate of Fintech Advisory, Inc., together with its affiliates. FSMA means the Financial Services and Markets Act 2000. GDS Closing Date means 24 October 2007. GDSs means, collectively, the Rule 144A GDSs and the Regulation S GDSs. GS Investors means, collectively, GS Unidos, LLC, GS Private Equity Part- ners II — Direct Investment Fund LP, GS Capital Partners III, LP, GS Private Equity Partners 1999 — Direct Investment Fund, LP, and the GS Unidos members listed and defined in the Shareholders Agreement. GS Selling Shareholders means GS Unidos, LLC; GS Private Equity Partners II — Direct Investment Fund, LP; GS Capital Partners III, L.P.; GS Private Equity Partners 1999 — Direct Investment Fund, L.P.; Tinicum GC Investors, LLC and Farallon GC Investors, LLC. GS Unidos means GS Unidos, LLC. Hazardous Wastes Law means Argentine Law No. 24,051. HMTF means Hicks Muse Tate & Furst Group Holding Teledigital means Holding Teledigital Cable S.A. IBOPE means IBOPE Argentina S.A. IESA means Inversora de Eventos S.A. Ideas del Sur means Ideas del Sur S.A. IGJ means the Inspección General de Justicia, the Argentine Superintendency of Legal Entities. Independent Accountants means Price Waterhouse & Co. S.R.L., Buenos Aires, Argen- tina (a member firm of PricewaterhouseCoopers), independent accountants. International Co-Managers means Merrill Lynch International and Itaú Securities, Inc. International Lead Manager means J.P. Morgan Securities Inc. International Underwriters means, collectively, the Joint Global Coordinators and Interna- tional Bookrunners, the International Lead Manager and the International Co-Managers. IVC means the Instituto Verificador de Circulaciones, the newspaper and magazine circulation verification institute. Joint Global Coordinators and International Bookrunners means Goldman Sachs International and Credit Suisse Secu- rities (Europe) Limited. Local Selling Shareholders means Mrs. Ernestina L. Herrera de Noble, Aranlú S.A. and Corbery S.A.

218 MAE means the Mercado Abierto Electrónico, S.A., the Argentine over-the-counter market. Master GDRs means, collectively, the Master Rule 144A GDR and the Mas- ter Regulation S GDR. Master Regulation S GDR means the Master Regulation S Global Depositary Receipt, which will be issued by the Depositary, registered in the name of Cede & Co., as nominee of DTC in New York. Master Rule 144A GDR means the Master Rule 144A Global Depositary Receipt registered in the name of Cede & Co., as nominee for DTC in New York. MERVAL means the Mercado de Valores de Buenos Aires, the Buenos Aires Securities Market. Multicanal means Multicanal S.A. National Registry means the Registro Nacional de Generadores y Operadores de Residuos Peligrosos, the National Registry of Producers and Operators of Hazardous Waste. Negotiable Obligations Law means Argentine Law No. 23,576, as amended. New Shares means 15,000,000 Class B Shares sold by the Company in the Offering. Offer Price means Ps.29.14 per Class B Share and U.S.$18.50 per GDS. Offering means the global offering by the Company and the Selling Shareholders of the class B common shares. Official List means the official list of the Financial Services Authority. Over-allotment Option means the option, exercisable for 30 days following the announcement of the definitive Offer Price for the GDSs, to acquire up to 7,500,000 additional Class B Shares (15% of the Offering) in the form of GDSs at the Offer Price for the purposes of meeting over-allotments in connection with the Offering, granted to Credit Suisse Securities (Europe) Limited by the Company and certain Selling Shareholders. Papel Prensa means Papel Prensa S.A.I.C.F. y de M. Permitted Shareholder means Ernestina L. Herrera de Noble, Héctor Horacio Magnetto, José Antonio Aranda, Lucio Rafael Pagliaro, certain authorised assignees of the foregoing and certain of their designated relatives, as well as corporations controlled by any of them or trusts established for the benefit of any of them. Pol-ka means Pol-ka Producciones S.A. Prima means Primera Red Interactiva de Medios Argentinos (Prima) S.A. Prima Internacional means Primera Red Interactiva de Medios Americanos (Prima) Internacional S.A., since 26 September 2007, denominated Compañía de Medios Digitales (CMD) S.A. Prospectus means all information contained in this Offering Circular (including Annex A) other than the section “Unaudited Pro

219 Forma Consolidated Statement of Income” and all references to that section contained elsewhere in this Offering Circular. Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State. Prospectus Rules means the prospectus rules of the Financial Services Author- ity made under Section 73A of the FSMA. QIB means a qualified institutional buyer as defined in Rule 144A. Radio Mitre means Radio Mitre S.A. Regulation S means Regulation S under the Securities Act. Regulation S GDSs means the global depository receipts offered outside the United States and Argentina in reliance on Regulation S. Relevant Member State means each member state of the EEA which has implemented the Prospectus Directive. Rule 144A means Rule 144A under the Securities Act. Rule 144A GDSs means the global depository receipts offered in the United States to certain QIBs in reliance on Rule 144A. SATSAID means the Sindicato Argentino de la Televisión y Servicios Audiovisuales, Interactivos y de Datos, the Argentine Union of Television and Audiovisual, Interactive and Data Services Secom means the Secretaría de Comunicaciones, the Argentine Sec- retariat of Communications. Securities means, collectively, the Class B Shares and the GDSs. Securities Act means the United States Securities Act of 1933, as amended. Selling Shareholder Shares means 35,000,000 Class B Shares sold by the Selling Share- holders in the Offering. Selling Shareholders means, collectively, Mrs. Ernestina L. Herrera de Noble, Aranlú S.A. Corbery S.A. and the GS Selling Shareholders. Share Registrar means Caja de Valores S.A. Share Syndication Agreement means the Acuerdo de Sindicación de Acciones relating to the Company dated on or about 19 October 2007 among the Con- trolling Shareholders and the GS Investors. Shareholders Agreement means the shareholders agreement relating to the Company, dated as of 27 December 1999, as amended on 2 August 2005 and 30 May 2007 and further amended as of 19 October 2007, subject to completion of the Offering, among GC Dominio S.A., Ernestina Laura Herrera de Noble, The 1999 Ernestina Laura Herrera de Noble New York Trust, HHM Media New York Trust, The LRP New York Trust, José Antonio Aranda, Aranlú S.A., Corbery S.A., GS Unidos, LLC, GS Private Equity Partners II — Direct Investment Fund, LP, GS Capital Partners III, LP, GS Private Equity Partners 1999 — Direct Investment Fund, L.P., and the GS Unidos members listed therein.

220 Stabilisation Period means the period beginning on the date of adequate public disclosure of the Offer Price and ending no later than 30 calendar days thereafter. Teledigital means Teledigital Cable S.A. Tinicum means Tinicum GC Investors, LLC. Tinta Fresca means Tinta Fresca Ediciones S.A. TPO means Televisora Privada del Oeste S.A. TRISA means Tele Red Imagen S.A. TSC means Televisión Satelital Codificada S.A. TyC means Torneos y Competencias S.A. UKLA means the U.K. Listing Authority. Underwriters means, collectively, the Argentine Placement Agents and the International Underwriters. Univent’s means Univent’s S.A. U.S. GAAP means the accounting principles generally accepted in the United States of America.

221 INDEX TO FINANCIAL STATEMENTS

Page

ARGENTINE GAAP Financial Statements of the Company as of and for the six-month Period ended June 30, 2007 ...... F-3 Consolidated Balance Sheets as of June 30, 2007 and December 31, 2006 ...... F-6 Consolidated Statements of Operations for the six-month periods ended June 30, 2007 and 2006...... F-7 Consolidated Statements of Cash Flows for the six-month periods ended June 30, 2007 and 2006...... F-8 Notes to the Consolidated Financial Statements ...... F-9 Balance Sheets as of June 30, 2007 and December 31, 2006 ...... F-33 Statements of Operations for the six-month periods ended June 30, 2007 and the year ended December 31, 2006 ...... F-34 Statement of Changes in the Shareholders’ Equity for the six-month periods ended June 30, 2007 and the year ended December 31, 2006...... F-35 Statements of Cash Flows for the six-month periods ended June 30, 2007 and the year ended December 31, 2006 ...... F-36 Notes to the Unaudited Financial Statements ...... F-37 Report of Independent Accountants ...... F-60 Financial Statements of the Company for the Years Ended December 31, 2006, 2005 and 2004 ...... F-62 Consolidated Balance Sheets as of December 31, 2006, 2005 and 2004 ...... F-65 Consolidated Statements of Operations for the years ended December 31, 2006, 2005 and 2004...... F-66 Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004...... F-67 Notes to the Consolidated Financial Statements ...... F-69 Balance Sheets as of December 31, 2006, 2005 and 2004...... F-92 Statements of Operations for the years ended December 31, 2006, 2005 and 2004 ...... F-93 Statements of Changes in Shareholders’ Equity for the years ended December 31, 2006, 2005 and 2004 ...... F-94 Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004 ...... F-95 Notes to the Financial Statements ...... F-96 Report of Independent Accountants ...... F-118 Financial Statements of Cablevisión for the Years Ended December 31, 2006 and 2005 ...... F-120 Consolidated Balance Sheet as of December 31, 2006 and 2005 ...... F-123 Consolidated Statement of Income for the years ended December 31, 2006 and 2005 ...... F-124 Consolidated Statement of Cash Flows for the years ended December 31, 2006 and 2005 . . F-125 Notes and Exhibits to the Consolidated Financial Statements ...... F-126 Balance Sheet as of December 31, 2006 and 2005 ...... F-139 Statement of Income for the years ended December 31, 2006 and 2005 ...... F-140 Statement of Changes in Shareholders’ Equity for the years ended December 31, 2006 and 2005 ...... F-141 Statement of Cash Flows for the years ended December 31, 2006 and 2005 ...... F-142 Notes and Exhibits to the Financial Statements ...... F-143

F-1 Page Report of Independent Accountants ...... F-171 U.S. GAAP (ANNEX A)...... A-1 Operating and Financial Review — U.S. GAAP ...... A-2 Selected consolidated financial information ...... A-2 Overview...... A-4 The Argentine economy ...... A-5 Factors affecting the comparability of historical results of operations and financial condition . . A-5 Operating results ...... A-5 Critical accounting policies ...... A-7 Results of operations ...... A-11 Total results ...... A-12 Cable television and Internet access...... A-16 Printing and publishing ...... A-20 Broadcasting and programming ...... A-22 Other...... A-24 Liquidity and capital resources ...... A-24 Cash flows provided by operating activities ...... A-26 Cash (used in) provided by investing activities ...... A-26 Net cash (used in) provided by financing activities ...... A-27 Indebtedness ...... A-27 Interest expense ...... A-27 Consolidated Financial Statements of the Company for the Years Ended December 31, 2006, 2005 and 2004 ...... A-F-1 Consolidated Balance Sheets as of December 31, 2006, 2005 and 2004 ...... A-F-2 Consolidated Statements of Operations for the Years ended December 31, 2006, 2005 and 2004 ...... A-F-3 Consolidated Statement of Cash Flows for the Years ended December 31, 2006, 2005 and 2004 ...... A-F-4 Consolidated Statement of Shareholders’ Equity (Deficit) and Other Comprehensive (Loss) Income ...... A-F-6 Notes to the Consolidated Financial Statements ...... A-F-7 Report of Independent Accountants ...... A-F-48 Condensed Consolidated Financial Statements of the Company as of June 30, 2007 and December 31, 2006 and for the six-month Periods ended June 30, 2007 and December 31, 2006 ...... A-F-49 Consolidated Balance Sheets as of June 30, 2007 and December 31, 2006 ...... A-F-50 Consolidated Statements of Operations for the six-months Periods ended June 30, 2007 and December 31, 2006 ...... A-F-51 Consolidated Statement of Cash Flows for the six-months Periods ended June 30, 2007 and December 31, 2006 ...... A-F-52 Consolidated Statement of Shareholders’ Equity (Deficit) and Other Comprehensive (Loss) Income ...... A-F-54 Notes to the Consolidated Financial Statements ...... A-F-55 Report of Independent Accountants ...... A-F-69

F-2 GRUPO CLARIN S.A.

Financial Statements as of June 30, 2007 and for the Six-Month Period Ended on Such Date Presented Comparatively With the Prior Year’s Financial Statements

F-3 GRUPO CLARIN S.A. Financial Statements as of June 30, 2007 and for the Six-Month Period Ended on Such Date Presented Comparatively with the Prior Year’s Financial Statements

CONTENTS Consolidated Financial Statements Consolidated Balance Sheets ...... F-6 Consolidated Statements of Operations ...... F-7 Consolidated Statements of Cash Flows ...... F-8 Notes to the Consolidated Financial Statements ...... F-9 Exhibit F Consolidated — Cost of Sales ...... F-31 Exhibit H Consolidated — Information required under Section 64, subsection b) of Act No. 19,550 ...... F-32 Parent Company Only Financial Statements Balance Sheets ...... F-33 Statements of Operations ...... F-34 Statements of Changes in Shareholders’ Equity ...... F-35 Statements of Cash Flows ...... F-36 Notes to the Financial Statements ...... F-37 Exhibit A — Property, plant & equipment, net ...... F-53 Exhibit C — Investments ...... F-54 Exhibit D — Other Investments ...... F-56 Exhibit E — Allowances and Provisions...... F-57 Exhibit G — Foreign Currency Assets and Liabilities ...... F-58 Exhibit H — Information required under Section 64, b) of Act No. 19,550 ...... F-59 Limited Review Report ...... F-60

F-4 GRUPO CLARIN S.A. Financial Statements as of June 30, 2007 and for the Six-Month Period Ended on Such Date Presented Comparatively with the Prior Year’s Financial Statements In Argentine Pesos (Ps.) — Note 2.1 to the parent company only financial statements Registered office: Piedras 1743, Buenos Aires, Argentina Main corporate business: Investing and financing Date of incorporation: July 16, 1999 Date of registration with the Public Registry of Commerce: • Of the by-laws: August 30, 1999 • Of the latest amendment: April 21, 2004 (see Note 12 to the parent company only financial statements) Registration number with the Inspección General de Justicia (“IGJ”), the Regulatory Authority for non-public companies in Argentina: 1.669.733 Expiration of articles of incorporation: August 29, 2098 Information on Parent company: Name: GC Dominio S.A. Registered office: Piedras 1743, Buenos Aires Information on subsidiaries in Exhibit C CAPITAL STRUCTURE (See Note 12 to the parent company only financial statements) Capital Subscribed, Number of Votes Registered and Type per Share Paid-in Ps. Class “A” Common shares, Ps.1 par value ...... 5 70,880,304 Class “B” Common shares, Ps.1 par value ...... 1 133,006,887 Class “C” Common shares, Ps.1 par value ...... 1 25,112,689 Class “A” Preferred shares, Ps.1 par value ...... 1 20,630,822 Class “B” Preferred shares, Ps.1 par value ...... 1 20,630,822 Total as of June 30, 2007 ...... 270,261,524 Total as of December 31, 2006 ...... 270,261,524

F-5 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 CONSOLIDATED BALANCE SHEETS As of June 30, 2007 and December 31, 2006 In Argentine Pesos (Ps.) — Note 2.1 to the Parent Company Only Financial Statements

As of June 30, 2007 December 31, 2006 ASSETS CURRENT ASSETS Cash and banks ...... 321,424,341 299,100,551 Short-term investments — Note 2.a) ...... 142,647,114 82,142,004 Trade receivables, net — Note 2.b) ...... 474,201,832 460,608,164 Other receivables, net — Note 2.c) ...... 116,362,538 148,251,933 Inventories — Note 2.d) ...... 174,811,458 152,704,766 Other assets ...... 57,959,330 65,235,709 Total current assets ...... 1,287,406,613 1,208,043,127 NON-CURRENT ASSETS Trade receivables, net — Note 2.b) ...... 9,107,729 9,741,215 Other receivables, net — Note 2.c) ...... 162,217,676 151,084,555 Inventories — Note 2.d) ...... 33,148,574 32,850,180 Investment in unconsolidated affiliates — Note 2.e) ...... 79,680,378 72,521,864 Other long-term investments ...... 6,962,088 7,031,748 Property, plant and equipment, net — Note 2.f) ...... 1,404,117,195 1,342,725,846 Intangible assets, net — Note 2.g) ...... 1,030,161,266 1,086,559,244 Subtotal ...... 2,725,394,906 2,702,514,652 Goodwill — Note 2.h)...... 2,476,128,098 2,476,156,285 Total non-current assets...... 5,201,523,004 5,178,670,937 Total assets...... 6,488,929,617 6,386,714,064

LIABILITIES CURRENT LIABILITIES Accounts payable — Note 2.i)...... 458,492,966 437,439,485 Short-term debt and current portion of long-term debt — Note 2.j)...... 448,005,752 420,508,325 Salaries and Social Security payable ...... 114,771,918 118,426,541 Taxes payable...... 190,302,511 177,406,201 Other liabilities — Note 2.k) ...... 116,496,778 136,463,000 Total current liabilities ...... 1,328,069,925 1,290,243,552 NON-CURRENT LIABILITIES Accounts payable — Note 2.i)...... 13,152,316 10,640,522 Long-term debt — Note 2.j) ...... 1,961,508,264 2,057,858,346 Salaries and Social Security payable ...... 199,132 309,668 Taxes payable...... 18,983,875 14,759,728 Other liabilities — Note 2.k) ...... 1,027,563,374 1,010,446,297 Provisions ...... 113,890,483 112,879,172 Total non-current liabilities ...... 3,135,297,444 3,206,893,733 Total liabilities ...... 4,463,367,369 4,497,137,285 MINORITY INTEREST...... 386,092,220 354,381,111 SHAREHOLDERS’ EQUITY ...... 1,639,470,028 1,535,195,668 Total liabilities, minority interest and shareholders’ equity ...... 6,488,929,617 6,386,714,064

The accompanying notes 1 to 9 are an integral part of these consolidated financial statements.

F-6 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 CONSOLIDATED STATEMENTS OF OPERATIONS For the Six-Month Periods Ended June 30, 2007 and 2006 In Argentine Pesos (Ps.) — Note 2.1 to the Parent Company Only Financial Statements

As of June 30, 2007 June 30, 2006 Net sales ...... 1,993,263,083 1,141,498,163 Cost of sales (excluding depreciation and amortization) — Exhibit F Consolidated ...... (963,393,585) (638,502,707) Subtotal ...... 1,029,869,498 502,995,456 Expenses (excluding depreciation and amortization) Selling expenses — Exhibit H Consolidated ...... (203,344,282) (116,868,411) Administrative expenses — Exhibit H Consolidated ...... (209,935,992) (117,167,382) Expenses subtotal ...... (413,280,274) (234,035,793) Depreciation of property, plant and equipment(1) ...... (138,227,229) (66,485,085) Amortization of intangible assets...... (57,777,691) (5,115,619) Depreciation of other investments ...... (69,993) (196,369) Depreciation and amortization subtotal ...... (196,074,913) (71,797,073) Financing and holding results Generated by assets Interest ...... 12,158,994 15,850,722 Other taxes and expenses ...... (25,689,424) (10,997,416) Exchange differences...... 3,993,909 14,111,425 Holding (gains) losses on inventories ...... 1,134,015 2,938,403 Inventories impairment ...... — (120,000) Holding (gains) losses on financial instruments ...... 326,871 — Effect of financial discounts on assets ...... 214,072 — Other ...... (1,443,737) 390,644 Generated by liabilities Interest ...... (133,349,362) (160,999,985) Other taxes and expenses ...... (1,390,089) (5,181,153) Exchange differences...... (21,118,166) (58,199,476) Effect of financial discounts on liabilities...... (22,243,714) — Fees and other financial expenses ...... — (2,202,374) CER restatement ...... (2,771,556) (6,570,672) Holding gains (losses) on financial instruments ...... 4,410,490 (16,890,657) Other ...... (7,372,455) (9,548,804) Equity in earnings from unconsolidated affiliates and gain on sale of subsidiaries, net ...... 4,622,188 16,026,031 Other expense, net ...... (10,308,417) (1,465,086) Income/(loss) before income tax, tax on assets and minority interest ...... 221,687,930 (25,695,808) Income tax and tax on assets ...... (85,485,099) 10,600,951 Minority interest ...... (32,692,783) (2,955,629) Net income (loss) for the period ...... 103,510,048 (18,050,486) (1) Chargeable to: Cost of sales ...... (125,237,662) (58,702,796) Selling expenses ...... (7,986,147) (3,130,736) Administrative expenses ...... (5,003,420) (4,651,553)

The accompanying notes 1 to 9 are an integral part of these consolidated financial statements.

F-7 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 CONSOLIDATED STATEMENTS OF CASH FLOWS For the Six-Month Periods Ended June 30, 2007 and 2006 In Argentine Pesos (Ps.) — Note 2.1 to the Parent Company Only Financial Statements

As of June 30, 2007 June 30, 2006 CASH PROVIDED BY OPERATING ACTIVITIES Net income (loss) for the period ...... 103,510,048 (18,050,486) Income tax and tax on assets ...... 85,485,099 (10,600,951) Accrued interest ...... 121,190,368 145,149,263 Adjustments to reconcile net income/(loss) for the period to cash provided by operating activities: Depreciation of property, plant and equipment ...... 138,227,229 66,485,085 Amortization of intangible assets ...... 57,777,691 5,115,619 Depreciation of other investments ...... 69,993 196,369 Setting up / (Reversal) of allowances for doubtful accounts ...... 11,199,132 (7,577,809) Setting up of provision for contingencies ...... 6,527,453 5,944,089 Exchange difference and other financial results ...... 38,393,671 51,696,903 Equity in earnings from unconsolidated affiliates and gain on sale of subsidiaries, net ...... (4,622,188) (16,026,031) Minority interest ...... 32,692,783 2,955,629 Holding gains on financial instruments ...... (4,737,361) 16,890,657 Holding gains on inventories...... (1,134,015) (2,938,403) Gains on sale of property, plant and equipment ...... (170,326) — Allowance for impairment in value of inventories ...... — 120,000 Changes in assets and liabilities: Trade receivables, net ...... (28,013,645) (80,237,880) Other receivables, net ...... 23,505,731 (42,921,393) Inventories...... (21,438,486) (41,169,531) Other assets ...... (1,569,286) 223,632 Accounts payable ...... 25,446,064 92,467,602 Salaries and Social Security payable...... (3,657,819) (4,872,729) Taxes payable ...... (3,053,691) 22,912,049 Other liabilities ...... (23,682,570) 27,580,621 Provisions ...... (5,441,732) (7,720,512) Income tax and tax on assets payments ...... (64,627,614) (55,968,803) Cash provided by operating activities ...... 481,876,529 149,652,990 CASH USED IN INVESTING ACTIVITIES Payment for the acquisition of property, plant and equipment ...... (200,085,461) (82,182,349) Payment for the acquisition of intangible assets ...... (1,234,445) (778,855) Payment for the acquisition of subsidiaries ...... — (27,180,467) Payment for the acquisition of other investments ...... — (14,719,018) Collection for proceeds from sale of property, plant and equipment ...... 635,394 — Restricted cash ...... — 45,750,000 Collection of interest ...... 5,543,789 504,601 Collection of dividends ...... — 548,800 Cash used in investing activities ...... (195,140,723) (78,057,288) CASH USED IN FINANCING ACTIVITIES Loans obtained ...... 1,650,000 308,688,824 Repayment of loans — Principal ...... (70,827,762) (224,703,844) Payment of interest ...... (105,626,295) (37,271,254) Net collections (payments) of financial instruments ...... 5,481,971 (6,796,629) Financial advances...... — (48,596,728) Payment of fees on bank and financial debt restructuring ...... — (24,158,238) Sellers financing ...... (5,695,973) (3,096,546) Reserve account ...... (14,379,385) — Payment of dividends ...... (18,000,000) — Payments to minority shareholders ...... (3,301,578) (410,284) Cash used in financing activities ...... (210,699,022) (36,344,699) FINANCING AND HOLDING RESULTS GENERATED BY CASH AND CASH EQUIVALENTS ...... 6,792,116 8,288,786 Net Increase in cash flow ...... 82,828,900 43,539,789 Cash and cash equivalents at the beginning of the year ...... 381,242,555 487,052,926 Cash and cash equivalents at period end(1) ...... 464,071,455 530,592,715 (1) It includes: Cash and banks ...... 321,424,341 173,138,757 Investments with maturities of less than three months ...... 142,647,114 357,453,958 The accompanying notes 1 to 9 are an integral part of these consolidated financial statements.

F-8 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of June 30, 2007, 2006 and December 31, 2006 In Argentine Pesos (Ps.) — Note 2.1 to the Parent Company Only Financial Statements, Unless Otherwise Specifically Indicated

NOTE 1 — BASIS FOR THE PREPARATION AND PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements of Grupo Clarín S.A. (hereinafter indistinctively referred to as “Grupo Clarín” or “the Company”) as of June 30, 2007 have been prepared in accordance with Argentine Federation of Professional Councils in Economic Sciences (“FACPCE” for its Spanish acronym) Technical Resolution No. 21, incorporating all companies in which the Company has a direct or indirect controlling interest. Below is a detail of the most relevant subsidiaries consolidated by applying the line-by-line method, together with the direct and indirect interest the Company holds in each subsidiary: As of June 30, December 31, June 30, 2007 2006 2006 Cablevisión S.A. (“Cablevisión”) ...... 60.0% 60.0% (1) Multicanal S.A. (“Multicanal”) ...... 59.1% 59.1% 100.0% Teledigital Cable S.A. (“Teledigital”)...... 60.0% 60.0% — Primera Red Interactiva de Medios Argentinos S.A. (“PRIMA”) ...... 59.1% 59.1% 82.4% Arte Gráfico Editorial Argentino S.A. (“AGEA”) ...... 100.0% 100.0% 100.0% Artes Gráficas Rioplatense S.A. (“AGR”) ...... 100.0% 100.0% 100.0% Editorial La Razón S.A. (“La Razón”) ...... (2) 100.0% 100.0% Arte Radiotelevisivo Argentino S.A. (“ARTEAR”) ...... 99.2% 99.2% 99.2% Inversora de Eventos S.A. (“IESA”)...... 100.0% 100.0% 100.0% Radio Mitre S.A. (“Radio Mitre”) ...... 100.0% 100.0% 100.0% GC Gestión Compartida (“GCGC”) ...... 100.0% 100.0% 100.0% Primera Red Interactiva de Medios Americanos Internacional S.A. (“PRIMA Internacional”) ...... 100.0% 100.0% 82.0% Clarín Global S.A. (“Clarín Global”)...... 100.0% 100.0% 100.0% Grupo Clarín Services LLC (“GC Services”) ...... 100.0% 100.0% 100.0% Vistone LLC (“Vistone”) ...... 100.0% 100.0% 100.0%

(1) Non-consolidated company as of June 30, 2006. (2) Company merged with AGEA as from January 1, 2007. Furthermore, the proportional consolidation method was applied to those subsidiaries where Grupo Clarín exercises common control (either directly or indirectly). The most significant of such companies are Papel Prensa S.A.I.C.F. y de M. (“Papel Prensa”), Tele Red Imagen S.A. (“TRISA”), Televisión Satelital Codificada S.A. (“TSC”), Ideas del Sur S.A. (“Ideas del Sur”), Pol-ka Producciones S.A. (“Pol-ka”) and La Capital Cable S.A. Finally, the Company recorded in its consolidated financial statements, applying the equity method, its holding of long-term investments on which it exerts significant influence, either directly or indirectly, being Medios de Comunicación (CIMECO) S.A. (“CIMECO”) the most relevant of those.

F-9 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The financial statements used for consolidation purposes bear the same closing date as the consolidated financial statements, comprise the same periods and have been prepared under similar accounting policies as those used by the Company, which are described in the notes to the parent company only financial statements or, as the case may be, adjusted as applicable.

1.1. Summary of Significant Accounting Policies Following is a description of the most significant accounting policies applied in the preparation of the consolidated financial statements in addition to those discussed in Note 2.2 to the parent company only financial statements. a) Trade Receivables, Net Trade receivables have been valued as of each period-end or year-end at their estimated realization value net, where applicable, of an allowance for doubtful accounts, which was considered to be sufficient to absorb future losses from uncollectible of receivables. b) Inventories Inventories have been valued at the latest purchase price, latest production cost, replacement or reproduction cost, as applicable. The value of these assets does not exceed their estimated recoverable value. The criterion followed by certain subsidiaries to expense these items is as follows: • Film rights: The cost of programs, series and soap operas is fully expensed against the cost of sales on the exhibition date or upon expiry of exhibition rights, whichever occurs first. The remaining film rights (films) are amortized on a decreasing-balance basis, based on the number of showings granted by those rights. Rights related to features, series and single programs acquired in perpetuity for broadcasting by the Volver channel are expensed against the cost of sales over seven years, with a grace period of four years. They are subsequently amortized on a decreasing basis over the next three years. • Programs: In-house production cost is fully expensed against the cost of sales after broadcasting of the chapter or program. Programs purchased, co-production and in-house production on which the Company has perpetuity rights are expensed against the cost of sales over eight years, with a grace period of three years. Subsequently, they are amortized on a straight-line basis over the following five years. • Events: The cost of events is fully expensed against the cost of sales at the time of broadcasting. c) Other Assets Deferred charges have been valued at the amounts actually disbursed, while real property has been valued at acquisition cost. The value of these assets does not exceed their recoverable value.

F-10 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Investments subject to restrictions on disposition denominated in foreign currency have been valued at face value plus interest accrued as of each period-end or year-end. d) Long-Term Investments Long-term investments over which the Company does not exert significant influence have been valued at cost. Long-term investments in Radio Mitre have been carried at zero value, based on Management’s expectations for its subsidiaries. e) Property, Plant and Equipment and Intangible Assets Improvements that extend the lives of the assets have been capitalized. Other repair and maintenance expenses have been expensed as incurred. Intangible assets have been valued at acquisition cost, restated as set forth in Note 2.1 to the parent company only financial statements, net of the related accumulated amortization. Intangible assets are amortized on a straight line basis, taking into account their estimated useful lives. Subscriber portfolio has been valued based on the estimated cash flows for such portfolios and amortized on a straight line basis, taking into account the estimated useful lives and subscriber portfolio turnover, between 7 and 10 years. The book value of intangible assets does not exceed their estimated recoverable value. f) Derivatives Receivables and liabilities generated by derivatives have been valued at their estimated fair value. Changes in fair value have been recognized as result for the period. g) Allowances • For doubtful accounts: comprises doubtful accounts estimated by Management at period-end or year-end, based on the opinion of legal counsel, where appropriate. • For inventories, property, plant and equipment and obsolescence of materials: determined based on the estimates of each company’s management, where appropriate, regarding the future consumption of potentially obsolete or slow-moving assets. • For contingencies: estimated based on the evaluation of existing claims at the end of each period or year, according to the reports of the legal counsel, where applicable. h) Foreign Exchange Differences Pursuant to Professional Council in Economic Sciences of the City of Buenos Aires (“CPCE- CABA” for its Spanish acronym) Resolution MD No. 3/02, foreign exchange differences occurring on or after January 6, 2002 arising from the devaluation of the Argentine currency and other associated effects related to liabilities denominated in foreign currency as of such date must be charged to the cost of assets acquired or built through such financing, provided such link is direct (the “direct method”). As an alternative criterion, companies may opt to give a similar treatment to exchange differences arising from indirect financing (the “indirect method”).

F-11 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Subsequently, the CPCECABA issued Resolution CD No. 87/03 which suspended that accounting treatment of foreign exchange differences and required exchange differences to be charged to income for the period as from July 29, 2003. In that sense, AGEA has capitalized exchange differences in its goodwill as of December 31, 2002, which were determined in accordance with the direct method. The residual value of such capitalizations as of June 30, 2007 and December 31, 2006 amounts to approximately 22.7 million. Furthermore, AGR has capitalized exchange differences in its property, plant and equipment, Intangible assets and Goodwill, determined in accordance with the indirect method. The residual value of such capitalizations amounts to approximately 1.6 million and 2.4 million, respectively. i) Revenue Recognition Sales of cable or Internet services subscriptions were recognized as revenues for the period in which the services were rendered. Advertising sales revenues were recognized for the period in which advertising is published (printing media and Internet) or broadcast (cable, television and radio). j) Barter Transactions The Company sells advertising spaces in exchange for goods or services. These barter transactions were booked at the value of the goods or services received. Revenues were booked when the advertisement was made, and the goods or expenses were booked when the goods were received or the services were used. The goods or services owed to the Company for the advertisements made are shown as trade receivables. The advertisements to be made in exchange for the goods and services provided to the Company are shown as accounts payable.

1.2. Additional Consolidated Cash Flow Statements Information In the periods ended June 30, 2007 and 2006, the following significant transactions were carried out, which did not have an impact on consolidated cash and cash equivalents: As of June 30, June 30, 2007 2006 Interest paid from the reserve account — Note 4.a) ...... 25,296,777 —

F-12 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTE 2 — BREAKDOWN OF MAIN ACCOUNTS As of June 30, 2007 December 31, 2006 a) Short-term investments Current Financial instruments ...... 79,816,976 55,558,418 Securities ...... 13,749,826 — Mutual funds ...... 44,816,538 9,220,018 Other...... 4,263,774 17,363,568 142,647,114 82,142,004 b) Trade receivables, net Current Trade receivables ...... 558,665,309 544,242,165 Allowance for doubtful accounts ...... (84,463,477) (83,634,001) 474,201,832 460,608,164 Non-Current Trade receivables ...... 9,122,729 9,756,215 Allowance for doubtful accounts ...... (15,000) (15,000) 9,107,729 9,741,215 c) Other receivables, net Current Taxcredits...... 29,387,374 26,708,273 Court-ordered and guarantee deposits ...... 8,964,248 8,212,920 Prepaid expenses ...... 15,042,839 11,147,999 Advance payments ...... 21,476,402 20,894,478 Dividends receivable ...... 4,787,353 4,787,355 Relatedparties...... 2,818,243 41,878,665 Other receivables ...... 10,723,655 9,843,189 Other...... 25,726,905 27,258,717 Allowance for other doubtful accounts...... (2,564,481) (2,479,663) 116,362,538 148,251,933 Non-Current Net deferred tax assets ...... 49,003,404 45,419,228 Taxcredits...... 99,861,338 87,364,293 Guarantee deposits ...... 165,774 192,343 Prepaid expenses ...... 3,666,448 3,811,809 Transmission rights to be accrued ...... 128,867 1,606,325 Loans granted ...... 1,419,003 1,372,267 Advances to personnel ...... 848,024 524,281 Derivatives...... 5,385,868 6,963,398 Other...... 5,106,472 7,042,434 Allowance for other doubtful accounts...... (3,367,522) (3,211,823) 162,217,676 151,084,555 d) Inventories Current Raw materials and supplies ...... 90,902,832 91,019,419 Products-in-process...... 827,441 1,838,890 Finished goods ...... 11,134,837 7,684,403 Film products and rights ...... 51,907,835 43,617,712 Other...... 3,546,566 4,147,337 Subtotal ...... 158,319,511 148,307,761 Advances to suppliers ...... 16,975,262 4,709,646 Allowance for impairment of inventories ...... (483,315) (312,641) 174,811,458 152,704,766 Non-Current Raw materials and supplies ...... 2,209,269 2,092,843 Other...... 4,573,195 4,602,310 Film products and rights ...... 26,366,110 26,155,027 33,148,574 32,850,180 e) Investment in unconsolidated affiliates CIMECO ...... 71,304,884 68,223,619 Other investments...... 8,553,935 4,476,686 Advances for future acquisitions of investments ...... 13,007,007 12,938,007 Allowance for investment impairment ...... (13,185,448) (13,116,448) 79,680,378 72,521,864

F-13 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) f) Property, Plant and Equipment, Net Net Book Value as Net Book Value as Main Account of June 30, 2007 of December 31, 2006(1) Real property ...... 344,011,142 351,810,372 Furniture and fixtures ...... 8,025,072 8,387,306 Telecommunication, audio and video equipment...... 13,238,120 28,670,375 External network and broadcasting equipment...... 455,754,167 554,563,362 Computer equipment and software ...... 46,495,829 45,113,287 Technical equipment...... 20,923,598 6,582,224 Workshop machinery ...... 63,923,796 72,044,911 Tools ...... 6,495,502 7,337,039 Spare parts ...... 3,492,210 3,677,042 Installations ...... 127,408,424 13,215,306 Vehicles ...... 12,222,411 13,894,273 Plots ...... 3,813,166 3,924,432 Leased assets ...... 5,303 5,309 Other materials and equipments...... 240,594,445 194,370,354 Works-in-progress ...... 76,963,493 60,518,548 Leasehold improvements ...... 3,916,574 4,447,708 Advances to suppliers ...... 2,327,402 3,311,322 Subtotal ...... 1,429,610,654 1,371,873,170 Allowance for property, plant and equipment impairment and obsolescence of materials...... (25,493,459) (29,147,324) Total as of June 30, 2007 ...... 1,404,117,195 Total as of December 31, 2006...... 1,342,725,846

(1) It includes the amount of 447,709,863 arising from the acquisition and consolidation of companies.

F-14 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) g) Intangible Assets, Net Net Book Value as Net Book Value as Main Account of June 30, 2007 of December 31, 2006(1) Organizational expenses, pre-operating costs and licenses ...... 6,391,819 8,286,378 Editing and exploitation rights ...... 38,749,019 40,623,735 Network acquisition rights...... 1,510,754 1,618,665 Subscriber portfolio acquired ...... 976,895,450 1,029,291,621 Trademarks and patents ...... 2,549,756 935,960 Deferred charges ...... 2,966,530 3,366,484 Other ...... 1,390,389 2,833,241 Subtotal ...... 1,030,453,717 1,086,956,084 Allowance for intangible assets impairment ...... (292,451) (396,840) Total as of June 30, 2007 ...... 1,030,161,266 Total as of December 31, 2006...... 1,086,559,244

(1) It includes the amount of 267,457,037 arising from the acquisition and consolidation of companies. h) Goodwill Net Book Value Impairment Balances as of Balances as of Main Account Before Impairment Allowance June 30, 2007 December 31, 2006 Comercializadora de Produtos Gráficos Brasileiros Ltda. . . . 19,913,038 — 19,913,038 19,947,800 Telecor S.A.C.I. (“Telecor”) . . . . 39,173,062 — 39,173,062 39,173,062 Teledifusora Bahiense S.A. (“Telba”)...... 3,774,071 — 3,774,071 3,774,071 Patagonik Film Group S.A. . . . . 6,197,435 — 6,197,435 6,197,435 Cablevisión ...... 741,521,336 — 741,521,336 748,609,297 Teledigital ...... 201,910,249 — 201,910,249 201,910,249 Pol-ka ...... 16,130,769 (6,850,727) 9,280,042 9,280,042 Multicanal and subsidiaries . . . . 2,195,374,234 (746,572,936) 1,448,801,298 1,442,395,735 Primera Red Interactiva de Medios Argentinos S.A. (“PRIMA”) ...... 2,272,319 — 2,272,319 2,272,319 Other ...... 3,285,248 — 3,285,248 2,596,275 Total as of June 30, 2007 . . . . . 3,229,551,761 (753,423,663) 2,476,128,098 Total as of December 31, 2006 ...... 3,229,579,948 (753,423,663) 2,476,156,285

F-15 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of June 30, 2007 December 31, 2006 i) Accounts payable Current Suppliers ...... 432,076,554 417,185,185 Related parties...... 26,416,412 20,254,300 458,492,966 437,439,485 Non-Current Suppliers ...... 13,152,316 10,640,522 13,152,316 10,640,522 j) Short-term and long-term debt Current Bank overdraft ...... 4,775,431 5,707,822 Financial loans ...... 318,071,094 300,349,298 Negotiable obligations ...... 98,396,304 59,307,498 Accrued Interest...... 23,069,264 52,643,707 Acquisition of equipment ...... 3,693,659 — Related parties...... — 2,500,000 448,005,752 420,508,325 Non-Current Financial loans ...... 91,800,851 174,979,771 Negotiable obligations ...... 1,963,990,103 1,998,550,151 Measurement at fair value ...... (94,282,690) (115,671,576) 1,961,508,264 2,057,858,346 k) Other liabilities Current Related parties...... 993,381 6,171,009 Sellers financing...... 36,876,073 41,171,557 Dividends payable ...... 3,930,395 15,026,649 Advances from clients ...... 52,271,941 50,514,512 Other ...... 22,424,988 23,579,273 116,496,778 136,463,000 Non-Current Sellers financing...... 854,300,768 850,590,278 Derivatives ...... 840,290 — Net deferred tax liabilities ...... 169,663,112 156,104,142 Guarantee deposits ...... 1,714,219 1,697,806 Other ...... 1,044,985 2,054,071 1,027,563,374 1,010,446,297

F-16 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTE 3 — SEGMENT INFORMATION The Company is mainly engaged in media and entertainment activities, which are carried out through the companies in which it holds a participating interest. Based on the nature, clients, and risks involved, the following business segments have been identified, which are closely related to the way in which the Company’s management assesses its business performance: • Cable television & Internet access: it is basically comprised by the operations of its subsidiary Cablevisión together with its subsidiaries, mainly Multicanal, Teledigital and PRIMA. • Printing & publishing: it is basically comprised by the operations of its subsidiary AGEA and its subsidiaries AGR, Tinta Fresca Ediciones S.A., Papel Prensa and its equity interest in CIMECO. • Broadcasting and programming: it is basically comprised by the operations of its subsidiaries ARTEAR, IESA and Radio Mitre, and their respective subsidiaries, including Telecor, Telba, Radio Televisión Río Negro Sociedad del Estado LU 92 Canal 10 — UTE, and the companies under common control, such as Pol-Ka, Ideas del Sur, TRISA and TSC. Additionally, the Company is engaged in other related business, which was included under “Other”. These segments fundamentally include the Company’s own operations (particular to a holding company) and those carried out by its (directly or indirectly) subsidiaries GCGC, PRIMA Internacional and Clarín Global.

F-17 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

There follows the information as of June 30, 2007 and 2006 and as of December 31, 2006 for each of the business segments identified by the Company: Cable Television Printing & Broadcasting and & Internet Access Publishing Programming Other Deletions Total INFORMATION ARISING FROM CONSOLIDATED INCOME STATEMENTS AS OF JUNE 30, 2007 Net sales to third parties ...... 1,215,997,695 478,814,732 276,756,223 21,694,433 — 1,993,263,083 Intersegment net sales ...... 2,949,846 45,540,819 78,182,778 43,240,933 (169,914,376) — Net sales ...... 1,218,947,541 524,355,551 354,939,001 64,935,366 (169,914,376) 1,993,263,083 Cost of sales (excluding depreciation and amortization) . . (520,717,230) (264,365,09) (233,530,839) (21,578,388) 76,797,966 (963,393,585) Subtotal ...... 698,230,311 259,990,457 121,408,162 43,356,978 (93,116,410) 1,029,869,498 Expenses (excluding depreciation and amortization) Selling expenses ...... (145,079,095) (73,023,901) (29,494,969) (6,548,236) 50,801,919 (203,344,282) Administrative expenses ...... (134,167,245) (61,389,569) (36,912,841) (19,780,828) 42,314,491 (209,935,992) Depreciation of property, plant and equipment ...... (112,217,305) (17,842,259) (7,009,267) (1,158,398) — (138,227,229) Amortization of intangible assets . . (54,612,041) (1,672,565) (1,485,488) (7,597) — (57,777,691) Depreciation of other investments . . — (69,993) — — — (69,993) Financing and holding results Generated by assets ...... (3,120,488) 9,731,263 (2,831,007) 27,620,059 (40,705,127) (9,305,300) Generated by liabilities ...... (145,784,577) (23,560,800) (5,429,887) (49,764,715) 40,705,127 (183,834,852) Equity in earnings (losses) from unconsolidated affiliates, net .... 2,941,418 2,546,557 797,195 (1,662,982) — 4,622,188 Other income (expense), net ..... (5,691,066) 544,290 (976,562) (4,185,079) — (10,308,417) Income for the period before income tax, tax on assets and minority interest ...... 100,499,912 95,253,480 38,065,336 (12,130,798) — 221,687,930 Income tax and tax on assets . . . . (30,749,283) (33,622,276) (13,460,566) (7,652,974) — (85,485,099) Minority interest ...... (32,101,791) — (594,842) 3,850 — (32,692,783) Net income (loss) for the period . . . 37,648,838 61,631,204 24,009,928 (19,779,922) — 103,510,048

INFORMATION ARISING FROM CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2007 Total Assets ...... 4,997,617,347 1,016,122,976 597,258,047 518,534,219 (640,602,972) 6,488,929,617 Total Liabilities ...... 3,164,896,142 648,261,337 373,477,394 917,335,468 (640,602,972) 4,463,367,369 ADDITIONAL CONSOLIDATED INFORMATION AS OF JUNE 30, 2007 Acquisition of property, plant and equipment ...... 177,836,928 14,961,105 6,306,872 980,556 — 200,085,461 Acquisition of intangible assets . . . . — 1,092,601 141,844 — — 1,234,445 Non-cash expenses ...... (14,036,008) 229,319 (3,503,229) (416,667) — (17,726,585)

F-18 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Cable Television Printing & Broadcasting and & Internet Access Publishing Programming Other Deletions Total INFORMATION ARISING FROM CONSOLIDATED INCOME STATEMENTS AS OF JUNE 30, 2006 Net sales to third parties ...... 434,025,949 446,995,891 250,554,415 9,921,908 — 1,141,498,163 Intersegment net sales ...... 4,081,570 16,363,929 28,762,246 31,656,820 (80,864,565) — Net sales ...... 438,107,519 463,359,820 279,316,661 41,578,728 (80,864,565) 1,141,498,163 Cost of sales (excluding depreciation and amortization) . . (219,605,301) (242,285,209) (192,058,262) (11,667,486) 27,113,551 (638,502,707) Subtotal ...... 218,502,218 221,074,611 87,258,399 29,911,242 (53,751,014) 502,995,456 Expenses (excluding depreciation and amortization) Selling expenses ...... (65,568,606) (44,977,370) (25,533,593) (4,205,048) 23,416,206 (116,868,411) Administrative expenses ...... (47,302,533) (54,816,890) (31,904,117) (13,478,650) 30,334,808 (117,167,382) Depreciation of property, plant and equipment ...... (41,206,172) (17,347,737) (6,997,390) (933,786) — (66,485,085) Amortization of intangible assets . . (2,895,475) (1,868,711) (228,993) (122,440) — (5,115,619) Depreciation of other investments . . — (78,019) — (118,350) — (196,369) Financing and holding results Generated by assets ...... 18,900,533 (1,067,446) (659,548) 5,000,239 — 22,173,778 Generated by liabilities ...... (187,670,171) (28,620,985) (4,214,841) (39,087,124) — (259,593,121) Equity in earnings (losses) from unconsolidated affiliates, net .... 355,858 2,005,592 (713,389) 14,377,970 — 16,026,031 Other income (expense), net ..... 1,153,149 (834,929) 1,022,216 (2,805,522) — (1,465,086) Income for the period before income tax, tax on assets and minority interest ...... (105,731,199) 73,468,116 18,028,744 (11,461,469) — (25,695,808) Income tax and tax on assets . . . . 42,602,481 (27,187,613) (6,554,010) 1,740,093 — 10,600,951 Minority interest ...... (2,689,795) — (265,834) — — (2,955,629) Net income (loss) for the period . . . (65,818,513) 46,280,503 11,208,900 (9,721,376) — (18,050,486)

INFORMATION ARISING FROM CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2006 Total Assets ...... 4,955,393,637 973,256,081 553,607,304 434,506,716 (530,049,674) 6,386,714,064 Total Liabilities ...... 3,113,127,203 632,653,517 334,585,519 946,820,720 (530,049,674) 4,497,137,285 ADDITIONAL CONSOLIDATED INFORMATION AS OF JUNE 30, 2006 Acquisition of property, plant and equipment ...... 68,278,174 29,280,502 8,104,392 681,270 (24,161,989) 82,182,349 Acquisition of intangible assets . . . . — 778,855 — — — 778,855 Non-cash expenses ...... (3,293,208) 9,748,813 (4,385,803) (556,082) — 1,513,720

F-19 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTE 4 — COMMITMENTS AND CONTINGENCIES a) Restrictions, surety and guarantees IESA has contractual restrictions on the transfer of its equity interest in TRISA and Tele Net Image Corp. Furthermore, TRISA’s equity interest in Torneos y Competencias S.A. (Uruguay) is pledged as collateral for a credit line. AGEA, TRISA, Cablevisión and Multicanal have financial indebtedness outstanding, involving certain restrictions, including but not limited to, the distribution of dividends. Pursuant to the terms and conditions of Cablevisión’s outstanding Negotiable Obligations issued on October 7, 2005 (see Note 5), as of June 30, 2007, Cablevisión holds 33.6 million in a reserve account to guarantee the payment of interest on the agreed-upon terms. Should Cablevisión default, either partially or totally, on the payment of amounts due under the Negotiable Obligations above- mentioned, the trustee shall promptly apply the funds deposited in the reserve account the amounts to settle principal or interest and cure the default. To the extent Cablevisión has not defaulted on its obligations under the Negotiable Obligations issued on October 7, 2005, it may instruct the Trustee to transfer amounts deposited for the sole purpose of applying them to service debt or to pay the purchase or redemption price of such Negotiable Obligations, acquired in the over-the-counter market or redeemed by Cablevisión. Furthermore, pursuant to the terms and conditions of the Negotiable Obligations issued by Multicanal on July 20, 2006, such subsidiary set up a reserve account, which amounted to 14.4 million as of June 30, 2007. Such funds are restricted to the payment of interest and principal of the above securities. b) Pending authorizations from the Federal Broadcasting Committee (“COMFER”) Authorizations regarding the elimination of signal distribution modems by Multicanal, share transfers in its favor and company reorganizations are pending with the COMFER. Furthermore, the requests for transfer of licenses filed in favor of Cablevisión related to certain acquisitions and reorganization processes, including the acquisitions of Multicanal and Hicks, Muse, Tate & Furst, LA Argentina Cable Company, LLC (“Hicks LLC”) (Teledigital) mentioned in Note 10 to the parent company only financial statements and in Note 7, are also pending approval by the COMFER. While the subsidiaries expect to obtain such approvals, no assurance can be given that the COMFER will grant them. c) Broadcasting licenses Broadcasting licenses are granted for an initial period of 15 years, allowing for a one-time extension of 10 years. Applicable legislation sets forth that the COMFER shall grant the extension, provided it can be proved that the licensee has complied with the effective applicable legislation, bidding terms and conditions and undertakings in their proposals during the first period of the license in question. On May 24, 2005, Decree 527/05 provided for a 10-year-suspension of the terms then effective of broadcasting licenses or its extensions, subject to certain conditions. Calculation of the terms shall be automatically resumed upon expiration of the suspension term. The Decree requires that

F-20 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) companies seeking to rely on the extension subject to it submit for the COMFER’s approval, within 2 years of the date of the Decree: i) a programming project contributing to the preservation of the national culture and the education of the population; and ii) a project to invest in technology. All the broadcasting services licensee subsidiaries have submitted both projects in due time and form. ARTEAR and its subsidiaries Telecor and Telba have obtained the COMFER’s approval of the projects submitted. The projects submitted by Radio Mitre, as well as Cablevisión, Multicanal and its subsidiaries are still pending approval from the COMFER. Although no assurance can be given, these subsidiaries expect that their respective licenses will be timely extended or renewed. Additionally, the COMFER notified Televisora La Plata S.A., a Cablevisión’s subsidiary, of an alleged breach of the terms and conditions of its broadcasting license. The COMFER indicated that it may impose penalties, including fines or even the revocation of such broadcasting license. Although no assurance can be given as to the final outcome of this matter, the subsidiary and its legal counsel consider that the probability that it will have a significant adverse impact on Cablevisión’s financial- economic situation is remote. d) Antitrust considerations The National Committee for the Defense of Competition (“CNDC” for its Spanish acronym) received several complaints against Cablevisión, Multicanal and their subsidiaries prior to the increase of our ownership interest in Cablevisión in September 26, 2005, alleging, among other issues, divisions of areas among these companies, imposition of predatory prices, price discrimination among areas, minimum pricing for the trading of channels and other anti-competitive practices. Although no assurance can be given as to the final outcome of the above-mentioned cases, Cablevisión, Multicanal and its legal counsel believe, based on the available information, that the probability of these issues having a significant adverse impact on the financial-economic situation of these companies is remote. e) Other regulatory matters Multicanal and Cablevisión In January 2006, the Government of the City of Buenos Aires enacted Act 1,877, which provides for a 15-year-term to regularize the authorization to install cable television networks in the thorough- fare on a single-column. It also provides for a one-year-term in order to remove posts in the area known as “historical part of town”. Finally, the new Act sets forth a 3-year-term for regularizing on a single column basis the avenues of the City of Buenos Aires. The related works have already been scheduled and budgeted to be executed in the forthcoming years. Furthermore, the Government of the City of Mar del Plata enacted Ordinance No. 9163, governing the installation of cable television networks. Such ordinance was amended and restated by Ordinance No. 15981 dated February 26, 2004, providing for a term due December 31, 2007 for cable companies to convert their cable networks. f) Commitments to make capital contributions to subsidiaries Fintelco S.A. (“Fintelco”) reported negative balance in its shareholders’ equity as of November 30, 2006. Under the Argentine Business Associations Act, this event could bring about its dissolution due to capital loss, unless the shareholders agree to its total or partial repayment or a capital increase. Cablevisión and Multicanal hold each 50% of Fintelco’s capital stock. In March 2007, both companies

F-21 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) made irrevocable contributions to Fintelco. in the amount of 12.4 million each, in order to restore the financial position of such company. g) Claims brought by the COMFER ARTEAR On December 9, 2002, ARTEAR adhered to the payment facilities regime established by Executive Power Decree No. 2362/02 to comply with fines already imposed or that could be imposed due to infringement of effective broadcasting regulations between January 1, 2001 and October 31, 2002, inclusive, and opted to recognize the total amount to be settled by granting advertising seconds in favor of the COMFER. In addition, between November 1, 2002 and June 30, 2007, the COMFER applied fines to ARTEAR under the new regime in effect, amounting to 1.2 million, which have been provisioned. ARTEAR has appealed the decisions imposing those fines.

Radio Mitre Radio Mitre records an outstanding balance to be settled with advertising in favor of TELAM, arising from fines imposed by the COMFER.

Cablevisión The COMFER gave Cablevisión notice of 415 administrative summary proceedings for alleged infringements of the Broadcasting Law, occurring between November 1, 2002 and June 30, 2007. Cablevisión replied to such proceedings. The COMFER has rendered decisions in more than 231 of these summary proceedings, imposing fines in the amount of approximately 1.5 million. Cablevisión appealed such penalties and the rest of the summary proceedings are pending of resolution.

Multicanal The COMFER has initiated summary administrative proceedings against Multicanal for infringements of regulations regarding the content of programming. The COMFER has ruled on some of these summary proceedings and as of the date of these financial statements, it imposed fines in the amount of 0.2 million, which are still outstanding and may not be challenged before this organism. As regards the rest of the summary proceedings, Multicanal has presented its defense and appealed those fines that are not as yet final before this organism. h) Lawsuits and /or Claims CIMECO Argentine Tax Authorities (“AFIP” for its Spanish acronym) sent CIMECO a notice challenging the income tax assessment for the fiscal periods 2000, 2001 and 2002. In such communication, the AFIP challenged mainly the deduction of interest and exchange differences in the tax returns filed for those years. Even though such challenge does not generate final tax liabilities for the above periods, CIMECO would have had to reduce the accumulated tax loss amounts that were used to offset taxable income in subsequent years. In the event AFIP’s position prevailed, CIMECO’s contingency as of June 30, 2007 would amount to approximately 12.3 million for tax and 5.6 for interest.

F-22 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

CIMECO presented its defense before the AFIP. It was dismissed by the tax authorities, which issued an official assessment and imposed the respective penalties. Due to the above dismissal, CIMECO, pursuant to section 76 of the Tax Proceedings Act, appealed such resolution before the Tax Court on August 15, 2007. CIMECO and its legal and tax advisors believe it has sound grounds to defend its position, for which it believes AFIP’s challenge shall not prevail. Accordingly, it has not booked an allowance as of June 30, 2007 for the impact such challenge might have on CIMECO.

ARTEAR There has been a recent dispute between broadcast TV operators and the National Customs Administration (“ANA” for its Spanish acronym) in connection with the import value of film materials. As a consequence of the criterion followed by the broadcast TV operators, ARTEAR paid other taxes which, if ANA’s position prevails, should not have been paid. Since the amount of taxes paid exceeds those claimed by the ANA, in the opinion of the subsidiary and its legal advisors, this situation would not have a material economic adverse impact and, therefore, no provision has been recorded.

TRISA The Argentine Association of Songwriters and Composers (“SADAIC” for its Spanish acronym) filed a claim against TRISA, a company in which IESA holds 50% interest and exercises control jointly with Torneos y Competencias S.A., for the payment of royalties on musical works used in TyC Sports programs, which are broadcast nationwide via satellite. The claim is equivalent to 1% on TRISA’s gross sales since 1993. In August 2006, TRISA reached a settlement with SADAIC with respect to the claim. The agreement contemplates a payment of a 0.3% royalty over TRISA’s turnover as from June 2006, payable monthly. In addition, the parties agreed on the payment of a lump sum to discharge any and all amounts allegedly owed to TRISA for the whole period elapsed through May 2006. As of the date of these financial statements, TRISA has fulfilled all the obligations arising from such settlement.

GCGC During the year ended December 31, 2005, GCGC recorded a provision amounting to approximately 2.3 million based on a potential claim that could arise from different interpretations made by the AFIP of Act No. 25,250 and application assumptions. Although GCGC and its legal advisors consider that the original interpretation was technically correct and duly supported, following a conservative criterion, such subsidiary decided to set up a provision. During the year ended December 31, 2006, the subsidiary voluntarily paid 2.3 million for differences between its original calculations and the various interpretations of the AFIP of Act No. 25,250, plus the related interest and fines. GCGC reserves the right to apply for a refund of amounts paid.

F-23 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) through 1998. As of June 30, 2007, the restated amounts are estimated at approximately 13 million. Cablevisión appealed such ruling. On June 6, 2006, Cablevisión obtained a preliminary injunction pursuant to which the AFIP shall refrain from claiming the VAT payment mentioned above. Cablevisión and its legal counsel consider that it may be possible to obtain a favorable judicial resolution and, therefore, that the probability of this issue having a significant adverse impact on Cablevisión’s financial-economic situation is remote. In January 2007, Cablevisión and Multicanal were served with an injunction issued by a provincial court in the province of San Luis, at the request of Grupo Radio Noticias S.R.L. (hereinafter, “Grupo Radio Noticias”). Such company alleged being the owner of a broadcast radio station that would arguably be harmed by the transactions involving Cablevisión, Multicanal, Holding Teledigital Cable S.A. (“Holding Teledigital”) and PRIMA, and the Company that would be consummated in September 2006. Pursuant to such injunction, Cablevisión, Multicanal and its controlling shareholders and subsidiaries, and certain regulatory agencies shall, among other things, refrain from carrying out or authorizing, respectively, certain corporate operations, including, but not limited to, mergers, acquisitions and issuance of securities. Cablevisión and Multicanal appealed such injunction, but yet no decision has been rendered as of the date of these financial statements. Furthermore, a direct request for the case to be transferred to the Superior Court of the Province of San Luis was filed, which was considered unfounded pursuant to the resolution referred to below. Pursuant to the request for dismissal due to lack of jurisdiction filed by the Company in the case entitled “Multicanal S.A. and other versus/ CONADECO Decree 527/5 and Other over/ proceeding to decide on a legal issue” (whereby the CNDC was ordered to assume, in exercise of its legal and regulatory power, pre-judicial intervention in relation to the acquisition of Cablevisión’s capital stock, in the event it were under its jurisdiction), the Supreme Court of Justice determined that the San Luis Court lacked jurisdiction and adjudicated jurisdiction with respect to the proceedings “Grupo Radio Noticias” to the Federal Administrative Court in Buenos Aires. Pursuant to this ruling, such file is subject to the jurisdiction of the Federal Administrative Court No. 2, Secretariat No. 4. On July 19, 2007, the Federal Administrative Court No. 2 indicated that the preliminary injunction issued by San Luis Court is not binding upon the Company and Multicanal and ruled that the previous preliminary injunction imposed on the Company is legally binding on any public or private entity that has any legal interest in the merger subject to CNDC assessment. Even though the Company cannot give assurance that it will prevail as to the claims filed by Grupo Radio Noticias, it considers such claims to be unfounded.

F-24 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As a result of the revocation of the preliminary injunction mentioned above, on December 12, 2001, Multicanal was served notice of the filing of a claim by Supercanal Holding S.A. for damages caused by the granting of the preliminary injunction that was subsequently revoked. It has been claimed that the suspension of the effects of the meeting held on January 25, 2000 resulted in the default by Supercanal Holding S.A. on its outstanding financial debt. Multicanal answered the complaint and rejected the liability attributed to it based on the fact that the default had taken place before the date of the meeting that was suspended by the preliminary injunction, according to documentation provided by the plaintiff itself. Furthermore, the suspension of the meeting did not prevent the capitalization of Supercanal Holding S.A. through other means. Based on de jure and de facto records of the case, Multicanal believes that the claim filed should be rejected in its entirety, and the legal costs should be borne by the plaintiff. There is no certainty that Multicanal will obtain an economic or financial gain as a result of these actions. i) Other undertakings ARTEAR Upon ARTEAR acquisition of its subsidiary Telecor in 2000, it maintains an irrevocable put option of 755,565 common, nominative, non-endorsable shares, representing 14.815% of the capital stock and votes of Telecor, agreed in favor of the sellers, for a 16-year term as from March 16, 2010 at a price of USD3 million and an irrevocable call option of such shares agreed in favor of ARTEAR, and the latter at 26 years as from March 16, 2000 for USD4.8 million, which will be adjusted at a nominal annual rate of 5% as from April 16, 2016.

NOTE 5 — BORROWINGS Besides the disclosures in Note 7 to the financial statements, consolidated Loans include, mainly, the following:

AGEA On January 28, 2004, AGEA issued 10-year Series C Negotiable Obligations in the amount of USD30.6 million, which accrue interest at an incremental rate (2% from December 17, 2003 to January 28, 2008; 3% from January 29, 2008 to January 28, 2012; and 4% from January 29, 2012 up to the total repayment of the bonds), payable semiannually. Principal is due in full at maturity on January 28, 2014. As of June 30, 2007, the outstanding principal amounts to 94.6 million and accrued and unpaid interest totals 0.8 million. Furthermore, on January 25, 2006, AGEA issued Series D Negotiable Obligations in the amount of 300 million, which accrue interest at a variable rate equal to the sum of the CER variation for the period, plus a 4.25% margin, payable semiannually commencing June 15, 2006. Principal will be repaid in 8 equal and consecutive semiannual installments as from June 15, 2008. As of June 30, 2007, the outstanding principal amounts to 300 million and outstanding accrued and unpaid interest totals 1.1 million.

TRISA TRISA holds USD11.6 million, under a loan with First Overseas Bank Limited payable in 16 semiannual installments, the first one of which was due on June 28, 2004. The agreed-upon interest rate is Libor plus 3%. As of June 30, 2007, the outstanding principal totaled USD6.5 million.

F-25 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Radio Mitre As of June 30, 2007, Radio Mitre holds loans and bank overdraft, having an aggregate principal amount outstanding of approximately 4.7 million, of which 1.7 million are repaid in monthly installments. Such loans accrue interest at an average fixed rate of 13%.

Vistone As of June 30, 2007, Vistone holds short-term financial debts for a total principal amount of USD79.9 million, which accrue interest at Libor plus 0.75%.

Cablevisión On October 7, 2005, Cablevisión concluded the financial debt restructuring of approximately USD755 million principal amount out of the USD796 million debt subject to restructuring, through the issuance of 7-year Negotiable Obligations for a total amount of USD150,077,436, which accrue interest at an annual rate of 6% for the first 5 years and 7% for the remaining 2 years, and 10-year “Step up” Negotiable Obligations for a total amount of USD235,121,316, which accrue interest at an annual incremental rate of 3% up to 12%. Furthermore, it made available to all creditors approximately 142,800,000 under the cash buyback option. Finally, in accordance with the resolution of the Extraordinary Shareholders’ Meeting and pursuant to the capital option, the Company increased its capital stock by 39,465,500, through the issuance of 39,465,500 Class B shares, with a par value of 1 each and one voting right per share, with additional paid-in capital. Cablevisión also completed the restructuring of certain debts held with public sector banks for a total amount of approximately 39 million, out of which, on June 11, 2007, it repaid an original principal amount of 17 million restated applying the CER, plus interest accrued as of repayment date. After October 7, 2005, the holders of approximately USD20.9 of Cablevisión’s financial debt subject to the APE entered into exchange agreements and received their consideration in exchange for the irrevocable discharge of all their claims under the refinanced debt. On October 7, 2005 and September 29, 2006, Cablevisión repaid USD6,732,569 and USD28,084,054 of the 7-year Negotiable Obligations, respectively. As of June 30, 2007, out of the total amount of Negotiable Obligations issued by Cablevisión, USD881,141 and USD14,963,121 principal amount of 7-year and 10-year Negotiable Obligations, respectively, account for the consideration that, under the APE, is applicable to those creditors who had not executed exchange agreements up to such date and are being held in escrow pending final confirmation of the APE.

Multicanal During the year ended December 31, 2002, Multicanal suspended payments on its financial debt as a result of the economic situation in Argentina. In 2003, Multicanal submitted to its creditors a proposal for the restructuring of its financial debt through an APE, comprising three options: a cash buyback option at 30 cents per USD1, a 10-year bond exchange option and a combined exchange option (including 7-year bonds and common shares). Each of these options was subject to a ceiling. On December 13, 2003, Multicanal announced that the required majority of affected creditors had consented to the restructuring set forth in the APE.

F-26 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On June 29, 2006, Multicanal’s Board of Directors approved the issuance of 15 million registered non-endorsable Class A common shares at a par value of 1 each and entitled to 5 voting rights per share. The difference between the funds contributed by the Company (USD15 million) and the nominal value of the shares issued was allocated to paid-in capital.

On July 7, 2006, in contemplation of the completion of its APE, Multicanal approved a capital increase from 386,635,103 to 594,911,263. The new shares were offered to the holders that exercised or were deemed to have exercised the combined option in exchange for the cancellation of USD181.9 million of outstanding debt. Multicanal issued 208,276,160 Class C common shares at a par value of 1 each and entitled to 1 vote per share. Therefore, the direct holding of the Company in Multicanal decreased to 45.13%. Together with its indirect holding, the Company’s interest in Multicanal was 65%.

On July 20, 2006, after having obtained the authorizations from the Argentine Securities and Exchange Commission (CNV) and the Buenos Aires Stock Exchange, Multicanal delivered to its Exchange Agent: a) 10-year Series A Negotiable Obligations for USD80,325,000, which accrue interest at an annual rate of 2.5% until the fourth year as from their issuance, 3.5% as from the fourth year and up to the eighth year, and 4.5% as from the eighth year and up to maturity; and 7-year Series B Negotiable Obligations for USD142,966,475, out of which USD139,869,850 accrue interest at an annual rate of 7% and 3,096,625 accrue interest at three-month Libor plus 1.325%, in order for the Exchange Agent, in its capacity as such, to deliver them to the holders entitled to receive them according to their options under the APE, b) aggregate interest accrued on those securities from December 10, 2003, until June 19, 2006 and c) purchase price for the old bonds and interest accrued thereon from December 10, 2003 until July 19, 2006 to those who opted for the cash option.

Effective July 20, 2006, after having exchanged the securities and paid the cash amount mentioned above, Multicanal’s entire debt subject to the APE was discharged. Accordingly, Multicanal booked the repayment of the existing debt and the effects of its restructuring, which resulted in a gain of 1,246.5 million for the year ended December 31, 2006.

On September 20, 2006, Multicanal repaid all of its Series B Negotiable Obligations (floating interest rate, 7-year maturity) in the amount of USD3,096,625 plus accrued interest as of such date. Furthermore, on September 27 and 28, 2006, the Company repurchased Series B Negotiable Obligations (fixed rate bonds, 7-year maturity) for a nominal value of USD34,144,281 plus accrued interest as of such dates.

On October 13, 2006, the Argentine Court confirmed the completion of Multicanal’s APE.

NOTE 6 — DERIVATIVE FINANCIAL INSTRUMENTS

The amounts of 5.4 million and 0.8 million are included under Other non-current receivables and Other non-current liabilities, respectively. These figures represent the net amounts of certain outstanding interest rate and exchange rates swap agreements, relating to a nominal value of approximately 152 million, whereby one of the Company’s subsidiaries transfers to or receives from the counterparts, the net position resulting from swapping a 152 million payment obligation accruing interest at a variable Ps. rate into a USD obligation accruing interest at a fixed rate.

These transactions generated a gain of 4.7 million as of June 30, 2007. The swap agreements, executed in January 2006, are effective until December 2011.

F-27 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTE 7 — ACQUISITION AND REORGANIZATION OF COMPANIES

In addition to the transactions detailed in Note 10 to the financial statements, on September 26, 2006 the following transactions were carried out:

• Vistone purchased Cablevisión’s Class B shares in cash. These shares account for a 1.66% participating interest in the capital stock of the latter.

• VLG Argentina LLC (“VLG”) increased its participating interest in Cablevisión by 11.312%.

• Cablevisión executed share purchase agreements whereby it acquired 100% interest in Hicks LLC, indirect controlling company of Teledigital, for a cash payment of approximately USD70 million. Teledigital provides cable television services in several provinces of Argentina. Additionally, on September 28 and 29, 2006, Cablevisión made irrevocable capital contributions to Hicks LLC in the amount of 76,410,880, which were allocated to the repayment of such debts.

• Cablevisión acquired a 98.54% interest in Multicanal’s capital stock, including 65% interest from the Company as described in Note 10.b) to the financial statements. Cablevisión’s debt with third parties amounts to 280.8 million, has the same characteristics as those described in the above Note and its payment is subordinated to the repayment of the Negotiable Obligations issued by Cablevisión in October, 2005.

• Multicanal acquired 100% of PRIMA’s capital stock.

As a result of these transactions, the Company became the holder of indirect interests, accounting for 60% of Cablevisión’s and Teledigital’s capital stock, and of 59.12% of Multicanal’s and 60% of PRIMA’s capital stock.

On October 4, 2006, the Company and the parties to the above-mentioned transactions requested CNDC’s approval of the acquisition. On November 6, 2006, the CNDC notified the Company about its first request for additional information, which was submitted on February 26, 2007. On May 22, 2007, the CNDC sent another request for information, which was submitted on July 2, 2007.

On July 30, 2007, the CNDC notified the Company about the completion of the first stage of the operation review procedure (form F-1), and requested the parties to submit form F-2 with additional information about the effects of the transactions on the competition in the relevant markets. Even though the Company believes that the transactions subject to the CNDC’s approval comply with the requirements for obtaining the approval in accordance with the local Antitrust Act, it cannot be ascertained whether such approval will be granted, or that the CNDC will not impose conditions for its approval, including annulling the operations or transferring certain assets to third parties or the non- approval of one or more transactions. On the other hand, the Company may not ensure that affected third parties will not challenge CNDC’s decision or those aspects related to any of the conditions that the CNDC may impose.

On August 22, 2006, ARTEAR acquired a 30% interest in Ideas del Sur’s capital stock, a TV programming producer. The transaction cost amounted to USD6.5 million, out of which USD2 million were settled in cash and the outstanding balance through the assumption of debts.

On December 22, 2006, Multicanal sold 3% of PRIMA’s capital stock to a Cablevisión’s subsidiary. On March 27, 2007 Cablevisión acquired such interest.

F-28 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On December 26, 2006, Hicks LLC transferred to Cablevisión 100% of the equity interest the former held in Holding Teledigital. In March 2007, Cablevisión transferred to a subsidiary 2% of the equity interest in Holding Teledigital.

On December 28, 2006, Vistone acquired 18% of PRIMA Internacional’s capital stock for the amount of USD15.1 million.

Mergers

On December 22, 2006, AGEA and its subsidiary La Razón approved a merger, whereby AGEA would be the absorbing company and would continue La Razón’s operations. The above merger became effective on January 1, 2007. Furthermore, on March 27, and April 26, 2007, AGEA Board of Directors and the Shareholders’ Meeting, respectively approved the Preliminary Merger Commitment between such company and La Razón and the consolidated merger balance sheet as of December 31, 2006.

On December 29, 2006, Cablevisión and its subsidiary Cablevisión Federal S.A. approved a merger, whereby Cablevisión would be the absorbing company and would continue Cablevisión Federal S.A.’s operations. The above merger became effective on January 1, 2007. Furthermore, on March 29, 2007, Cablevisión Board of Directors approved the Preliminary Merger Commitment between such company and Cablevisión Federal S.A.

Joint ventures

On November 8, 2006, AGEA executed an agreement with S.A. La Nación to set up a joint venture, for the purposes of the joint organization, execution and exploitation of stockbreeding shows. AGEA holds a 50% participating interest in this joint venture. The first show carried out by the joint venture took place from March 14 through March 17, 2007.

NOTE 8 — AGREEMENTS EXECUTED WITH THE ARGENTINE SOCCER ASSOCIATION (“AFA”)

On June 22, 2007 TRISA and TSC executed supplementary agreements with AFA applicable from the 2007/2008 until the 2013/2014 soccer seasons for broadcasting the Argentine soccer first division official tournament matches (in the case of TSC) and National B and metropolitan first B categories (in the case of TRISA). Under such agreements, TRISA and TSC expanded their services in exchange for a new programming schedule that basically implies the live broadcasting of all soccer matches of each season.

NOTE 9 — SUBSEQUENT EVENTS

On July 4, 2007 ARTEAR acquired 100% of the shares of capital stock of Bariloche TV S.A. The price for the acquisition of Bariloche TV S.A. capital stock was approximately USD1.1 million.

In August 2007 AGEA incorporated a new company, in which it holds 51% interest. Such subsidiary acquired a classified advertisements Internet portal dedicated to the purchase and sale of automobiles and motorcycles, partially financed with a loan granted by the Company.

F-29 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Upon closing, the Company subscribed, through one of its subsidiaries, options with a third party over a participating interest in one of its affiliates in the Printing and Publishing segment. These options, which are not subject to certain terms set forth in the respective agreements, would involve, if executed, payments to be made by the Company in the amount of approximately USD64 million. On August 27, the Company indirectly increased its equity interest in CIMECO from 33.33% to 50% for a total amount of USD18 million paid in cash. On August 28, 2007, the Company made an irrevocable contribution to CIMECO, thus acquiring a 50% indirect interest for a total amount of USD6 million. Such affiliate thus repaid a debt arising from a recent acquisition.

F-30 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733

EXHIBIT F Consolidated COST OF SALES For the Six-Month Periods Ended June 30, 2007 and 2006 In Argentine Pesos (Ps.) — Note 2.1 to the Parent Company Only Financial Statements As of June 30, June 30, 2007 2006 Inventories at the beginning of the year ...... 181,110,526 173,857,720 Purchases for the period ...... 206,717,132 173,282,357 Production expenses — Exhibit H Consolidated ...... 765,899,997 481,027,082 Holding gains ...... 1,134,015 2,938,403 Inventories at the end of the period ...... (191,468,085) (192,602,855) Cost of sales ...... 963,393,585 638,502,707

F-31 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733

EXHIBIT H Consolidated INFORMATION REQUIRED BY SECTION 64, SUBSECTION b) OF ACT No. 19,550 For the Six Month Periods Ended June 30, 2007 and 2006 In Argentine Pesos (Ps.) — Note 2.1 to the Parent Company Only Financial Statements Production Selling Administrative Total as of Total as of Item Expenses Expenses Expenses June 30, 2007 June 30, 2006 Fees for services ...... 31,318,668 14,045,312 45,984,957 91,348,937 37,969,060 Salaries and Social Security ...... 248,817,105 63,811,599 98,078,971 410,707,675 254,309,580 Advertising and promotion expenses ...... 73,435 47,669,469 131,591 47,874,495 32,668,907 Taxes, rates and contributions ...... 34,170,726 28,985,430 7,503,759 70,659,915 27,460,515 Doubtful accounts ...... — 11,199,132 — 11,199,132 (7,577,809) Travel expenses...... 9,437,967 3,058,529 2,906,086 15,402,582 14,595,232 Maintenance expenses . . . . . 50,091,189 2,624,225 15,891,901 68,607,315 49,330,826 Distribution expenses ...... 2,423,683 4,098,795 5,778 6,528,256 6,960,567 Communication expenses . . . 3,259,542 1,390,449 3,174,615 7,824,606 3,519,717 Contingencies ...... 3,784,485 131,669 2,611,299 6,527,453 5,944,089 Stands assembly ...... 875,588 — — 875,588 1,053,350 Stationery and office supplies ...... 641,316 497,090 4,827,793 5,966,199 3,236,046 Commissions...... 639,628 18,053,467 12,717,942 31,411,037 17,426,995 Productions and co- productions ...... 67,685,749 460,005 1,010,199 69,155,953 48,449,304 Printing expenses ...... 26,591,499 34,162 90,518 26,716,179 20,988,599 Rights ...... 203,515,189 — — 203,515,189 132,485,237 Services and satellites...... 41,444,962 196,673 1,772,530 43,414,165 33,563,334 Non-computable VAT ...... 5,353,133 — — 5,353,133 4,727,066 Rentals ...... 23,543,223 850,096 3,600,470 27,993,789 14,175,599 Other expenses ...... 12,232,910 6,238,180 9,627,583 28,098,673 13,776,661 Total as of June 30, 2007 . . . 765,899,997 203,344,282 209,935,992 1,179,180,271 Total as of June 30, 2006 . . . 481,027,082 116,868,411 117,167,382 715,062,875

F-32 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 BALANCE SHEETS As of June 30, 2007 and December 31, 2006 In Argentine Pesos (Ps.) — Note 2.1

As of June 30, December 31, 2007 2006 ASSETS CURRENT ASSETS Cash and banks — Note 3.a) ...... 17,169,742 13,011,513 Other investments — Exhibit D...... 13,502,797 9,130,760 Other receivables, net — Note 3.b) ...... 30,157,612 42,305,098 Total current assets ...... 60,830,151 64,447,371 NON-CURRENT ASSETS Other receivables, net — Note 3.b) ...... 338,147,974 355,302,129 Investments — Exhibit C ...... 1,889,323,050 1,811,570,666 Property, plant and equipment, net — Exhibit A ...... 830,430 845,250 Total non-current assets ...... 2,228,301,454 2,167,718,045 Total assets ...... 2,289,131,605 2,232,165,416

LIABILITIES CURRENT LIABILITIES Accounts payable — Note 3.c) ...... 1,866,422 2,268,366 Short-term debt and current portion of long-term debt — Note 7 . . . 71,085,247 45,583,415 Salaries and Social Security payable ...... 3,001,518 7,430,419 Taxes payable — Note 3.d) ...... 3,845,834 9,172,591 Dividends payable ...... — 11,077,731 Other liabilities — Note 3.e) ...... 14,379,065 15,688,123 Total current liabilities ...... 94,178,086 91,220,645 NON-CURRENT LIABILITIES Long-term debt — Note 7 ...... 67,980,000 116,280,000 Other liabilities — Note 3.e) ...... 487,503,491 489,469,103 Total non-current liabilities ...... 555,483,491 605,749,103 Total liabilities ...... 649,661,577 696,969,748 SHAREHOLDERS’ EQUITY (as per corresponding statements)...... 1,639,470,028 1,535,195,668 Total liabilities and shareholders’ equity ...... 2,289,131,605 2,232,165,416

The accompanying Notes 1 to 12 and Exhibits A, C, D, E, G and H are an integral part of these financial statements.

F-33 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 STATEMENTS OF OPERATIONS For the Six-Month Periods Ended June 30, 2007 and 2006 In Argentine Pesos (Ps.) — Note 2.1 As of June 30, June 30, 2007 2006 Equity in earnings (losses) from affiliates and subsidiaries — Note 3.f) . . 99,941,054 (20,956,391) Management fees ...... 51,278,099 21,702,270 Administrative expenses — Exhibit H ...... (15,874,092) (13,328,137) Depreciation of property, plant and equipment — Exhibit A ...... (196,342) (132,190) Depreciation of other investments ...... — (118,350) Amortization of intangible assets...... — (109,993) Financing and holding results Generated by assets Exchange differences and restatements...... 189,970 575,333 Taxes...... (1,024,291) (395,741) Interest ...... 22,685,587 3,140,530 Generated by liabilities Exchange differences and restatements...... (13,425,549) (3,924,959) Interest ...... (30,572,728) (6,399,961) Other expenses, net ...... (3,547,753) (747,099) Income for the period before income tax ...... 109,453,955 (20,694,688) Income tax — Note 9 ...... (5,943,907) 2,644,202 Net income (loss) for the period ...... 103,510,048 (18,050,486) Basic net income/(loss) per common share...... 0.45 (0.08) Diluted net income/(loss) per common share — Note 4 ...... 0.38 (0.07)

The accompanying Notes 1 to 12 and Exhibits A, C, D, E, G and H are an integral part of these financial statements.

F-34 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY For the six-month periods ended June 30, 2007 and 2006 In Argentine Pesos (Ps.) — Note 2.1 Inflation Cumulative Total Capital Adjustment on Paid-in Special Translation Accumulated Shareholders’ Stock Capital Stock Capital(1) Reserves Subtotal Adjustment Deficit Equity Balances as of December 31, 2005 . . . 270,261,524 309,885,253 1,364,811,675 21,671,615 1,966,630,067 (352,489) (1,303,009,145) 663,268,433 Cumulative translation adjustment for the period...... — — — — — 892,913 — 892,913 Net loss for the period . . . — — — — — — (18,050,486) (18,050,486) Balances as of June 30, 2006 ...... 270,261,524 309,885,253 1,364,811,675 21,671,615 1,966,630,067 540,424 (1,321,059,631) 646,110,860 Balances as of December 31, 2006 . . . 270,261,524 309,885,253 1,364,811,675 21,671,615 1,966,630,067 1,903,783 (433,338,182) 1,535,195,668 Cumulative translation adjustment for the period...... — — — — — 764,312 — 764,312 Net income for the period...... — — — — — — 103,510,048 103,510,048 Balances as of June 30, 2007 ...... 270,261,524 309,885,253 1,364,811,675 21,671,615 1,966,630,067 2,668,095 (329,828,134) 1,639,470,028

(1) Includes 333,636,239 corresponding to Class “A” and “B” preferred shares (Note 4).

The accompanying Notes 1 to 12 and Exhibits A, C, D, E, G and H are an integral part of these financial statements.

F-35 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733

STATEMENTS OF CASH FLOWS For the Six-Month Periods Ended June 30, 2007 and 2006 In Argentine Pesos (Ps.) — Note 2.1 June 30, June 30, 2007 2006 CASH PROVIDED BY OPERATING ACTIVITIES Net income (loss) for the period ...... 103,510,048 (18,050,486) Incometax...... 5,943,907 (2,644,202) Accruedinterest...... 7,887,141 3,259,431 Adjustments to reconcile net income / (loss) for the period to cash provided by operating activities: Depreciation of property, plant and equipment ...... 196,342 132,190 Amortization of intangible assets ...... — 109,993 Depreciation of other investments ...... — 118,350 Equity in earnings (losses) from affiliates and subsidiaries ...... (99,941,054) 20,956,391 Setting up of provisions ...... 2,752 5,505 Exchange differences and restatements ...... 13,235,579 3,349,626 Changes in assets and liabilities: Other receivables ...... (7,980,885) (2,650,221) Accounts payable ...... (401,944) 2,873,692 Salaries and Social Security payable ...... (4,428,901) (2,181,388) Taxespayable...... (1,013,093) 1,215,678 Other liabilities ...... (6,768,694) (1,323,877) Tax on assets payments ...... (4,313,664) (284,648) Cash provided by operating activities ...... 5,927,534 4,886,034 CASH PROVIDED BY INVESTING ACTIVITIES Capital contributions in subsidiaries ...... (3,827,750) (46,901,476) Dividends collected ...... 50,390,004 8,643,128 Proceeds from the disposal of long-term investments ...... — 42,338,268 Collection for proceeds from the disposal of long-term investments ...... 440,421 — Proceeds from the disposal of other investments...... — 23,975,623 Acquisition of other investments ...... — (14,699,247) Acquisition of property, plant and equipment...... (181,522) (248,227) Collection of interest ...... 23,293,105 77,069 Cash provided by investing activities ...... 70,114,258 13,185,138 CASH USED IN FINANCING ACTIVITIES Payment of loans ...... (24,800,000) (12,280,000) Payment of interest ...... (24,901,496) (6,466,175) Payment of dividends and restatements ...... (18,000,000) — Cash used in financing activities ...... (67,701,496) (18,746,175) FINANCING AND HOLDING GAINS (LOSSES) GENERATED BY CASH AND CASH EQUIVALENTS ...... 189,970 779,272 Net Increase in cash flow...... 8,530,266 104,269 Cash and cash equivalents at the beginning of the year ...... 22,142,273 1,060,565 Cash and cash equivalents at period end(1) ...... 30,672,539 1,164,834 (1) It includes: Cashandbanks...... 17,169,742 685,866 Investments with original maturities of less than three months ...... 13,502,797 478,968

The accompanying Notes 1 to 12 and Exhibits A, C, D, E, G and H are an integral part of these financial statements.

F-36 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE FINANCIAL STATEMENTS As of June 30, 2007, 2006 and December 31, 2006 In Argentine Pesos (Ps.) — Note 2.1, unless otherwise specifically indicated

NOTE 1 — THE COMPANY Grupo Clarín is a holding company that operates in the Media industry. Its operating income and cash flows derive from the operations of its subsidiaries in which, directly or indirectly, participates. These operations include cable television and Internet access services, newspaper and other printing and publishing activities, broadcast television, radio operations and television content production, on-line and new media services, and other media related activities. A substantial portion of its revenues is generated in Argentina. Through controlled companies and joint ventures, it is engaged in primarily in the following business segments: • Cable television and Internet access, consisting of the largest cable network in Latin America in terms of subscribers, operated by its subsidiary Cablevisión and its subsidiaries Multicanal and Teledigital Cable S.A. (“Teledigital”), with operations in Argentina and neighbouring countries, and the provision of high-speed Internet access mainly through its brands FiberTel and Flash. • Printing and publishing, consisting of national and regional newspapers, sports daily and magazine publishing as well as commercial printing. Diario Clarín, the flagship national newspaper, is the newspaper with the second largest circulation in the Spanish-speaking world. The sports daily Olé is the only newspaper of its kind in the Argentine market. The evening newspaper La Razón is the largest free newspaper in Argentina. The children’s magazine Genios is the children magazine in Argentina with the highest circulation. AGR is its printing company. • Broadcasting and programming, consisting of the broadcast television station with the highest share of prime time audience (Canal 13) and the AM/FM radio broadcast stations (Radio Mitre and La 100), as well as the production of television, film and radio programming content, including cable television signals and sports programming; and • Other, consisting principally of digital and Internet content and horizontal portals as well as its subsidiary GCGC, its share service center.

NOTE 2 — BASIS FOR THE PREPARATION AND PRESENTATION OF THE FINANCIAL STATEMENTS The Company’s financial statements have been prepared in accordance with generally accepted accounting standards effective in the City of Buenos Aires, Argentine, and in accordance with the Argentine Securities and Exchange Commission (CNV) rules. Such standards have been applied consistently to the information presented for comparative purposes. In order to properly understand the financial position and the changes in the results of the Company and its subsidiaries, the Company’s management recommends that the financial statements should be read together with the consolidated financial statements, which are presented as supplementary information and are an integral part of the financial statements. Certain reclassifications had been made over the comparatives figures so they can be consistent to the disclosure of the amounts of the present fiscal period. In August 2005, the CPCECABA approved Resolution CD No. 93/2005, whereby it introduced some changes to its accounting standards, as a result of the agreement entered into with the FACPCE

F-37 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE FINANCIAL STATEMENTS — (Continued) for the harmonization of Argentina’s professional accounting standards. Such Resolution has become effective for the Company since January 1, 2006. The CNV, through General Resolutions No. 485/05 and 487/06 issued on December 29, 2005 and January 26, 2006, respectively, adopted the new accounting standards issued by the CPCECABA, with certain amendments, effective for the years beginning as from January 1, 2006. The main changes arising from the application of the new standards that have had a significant effect on the Company’s financial statements are the following: the disclosure of certain additional information related to deferred taxes and the recognition of the cumulative translation adjustment as an integral part of shareholders’ equity.

2.1. Presentation of Financial Statements In Constant Argentine Pesos These financial statements have been prepared in constant currency, pursuant to the restatement method set forth by FACPCE’s Technical Resolution No. 6, whereby the effects of the changes in the currency purchasing power are to be comprehensively recognized during inflationary periods. Furthermore, it establishes that the adjustment for inflation shall not be applied during monetary stability periods.

2.2. Summary of Significant Accounting Policies The significant accounting policies applied to the preparation of these financial statements are detailed below: a) Cash and Banks • In local currency: at face value. • In foreign currency: translated at the exchange rates prevailing at the end of each period or year for the settlement of these transactions. Foreign exchange differences were charged to income for each period. The respective breakdown is shown in Exhibit G. b) Other Investments • Valued at face value plus accrued interest, where applicable, and translated to the exchange rate prevailing at the end of each period or year. Foreign exchange differences were charged to income for each period. The respective breakdown is shown in Exhibit D. c) Other receivables, Net and Liabilities • In local currency: valuation has been determined by calculating the discounted value of cash flows to be generated by such receivables and liabilities, except for deferred tax assets and liabilities which have not been discounted. Such receivables and liabilities which discounted value does not materially differ from their face value have been valued at the transaction face value. • In foreign currency: have been valued as mentioned above, taking into account the exchange rates prevailing as of each period end. Foreign exchange differences were charged to income for each period. The respective breakdown is disclosed in Exhibit G. Accounts receivable and liabilities include the accrued portion of the respective financing gains (losses) as of each period end. Documented debts were restated applying the CER established by Executive Power Decree No. 214.

F-38 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

The caption “Other receivables, net” is net of the allowance for doubtful accounts, which is determined as of each period end, based on the individual analysis of the several receivables comprising the item; of the allowance for unrecoverable guarantee deposits, which includes the portion of such deposits estimated to be used in pending lawsuits and other expenses eventually incurred (see Note 8), and of the valuation allowance on deferred tax net assets (see Note 9). The changes in such allowances are disclosed in Exhibit E. d) Long-term investments In Affiliates and Subsidiaries — Goodwill Long-term investments in subsidiaries and affiliates were valued by applying the equity method as established by FACPCE Technical Resolution No. 21 (“TR 21”). The accounting criteria used by the subsidiaries and affiliates are similar to those used by the Company; in those cases in which they differed, the corresponding adjustments were made. A breakdown of the Company’s interest in these companies is shown in Exhibit C. The financial statements of foreign companies considered as integrated were translated pursuant to the provisions of TR 18. Accordingly, amounts measured in foreign currency were translated to Argentine pesos, applying the exchange rate prevailing on the date in which purchasing power each amount measured was stated. The financial statements of non-integrated foreign companies, which are indirectly controlled by the Company, have been translated to Argentine pesos, pursuant to the provisions of TR 18, applying one of the methods applicable to non-integrated companies (current exchange rate). The resulting translation differences as of June 30, 2007 and 2006 were allocated to the Statements of Changes in Shareholders’ Equity, under “Cumulative translation adjustment”. Goodwill is the difference between the cost and the fair market value of acquired and identifiable net assets. Goodwill was restated following the guidelines of Note 2.1. The goodwill generated by recent acquisitions is a preliminary estimate, since the Company and its subsidiaries are in the process of compiling the evidence necessary to better estimate the fair market value of assets and liabilities identifiable at the time of acquisition. Therefore, these values may be modified in the future, as permitted by the prevailing accounting standards. The Company amortized Goodwill over a 20-year period until December 31, 2002. As from January 1, 2003, the Company ceased to apply such amortization criterion and adopted the one established by the prevailing accounting standards, since it considered goodwill with an indefinite useful life as being directly related to the business of the respective investments. The Company periodically assesses the goodwill recoverable value, based on the projected discounted cash flows and other information available as of the date of each financial statement. The carrying value of long-term investments and goodwill, net of the booked allowances, does not exceed their recoverable value as of each period end. e) Property, Plant and Equipment Property, plant and equipment and other investments have been valued at acquisition cost, restated as set forth in Note 2.1, net of the respective accumulated depreciation as of each period end. These assets are depreciated on a straight line basis, applying rates that are sufficient to extinguish their values at the end of their estimated useful lives.

F-39 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

The value of these assets does not exceed their recoverable value. Changes in property, plant and equipment are shown in Exhibit A. f) Shareholders’ Equity

Capital stock has been maintained at face value. As stated in Note 2.1, the restatement adjustment is shown under the item Inflation Adjustment on Capital Stock.

The other shareholders’ equity accounts are stated at their historical value, restated as set forth in Note 2.1.

The balances of the shareholders’ equity accounts do not reflect the potential effect of the options related to preferred stock described in Note 4, until a decision is made as to such options.

The preferred stock dividends mentioned in Note 4 shall be accrued, if applicable, once the Company reports positive retained earnings. g) Income Statement Accounts

The charges for consumption and depreciation of non-monetary assets were calculated based on the adjusted amounts of such assets, as indicated in Note 2.1. The other income statement accounts are stated at face values. h) Income Tax and Tax On Assets

The Company accounts for income tax using the deferred tax method. Such method consists of recognizing the tax effects of the temporary differences between the accounting and tax valuation of assets and liabilities and the subsequent charge to income in the years where such differences are reversed. Furthermore, it provides for the possibility of using tax losses in the future. In conformity with the CPCECABA standards, deferred tax assets and liabilities have not been discounted. The differences arising from restating the historical cost of property, plant and equipment in constant currency, the deduction of which is not recognized for tax purposes, have been considered as permanent differences. Therefore, no deferred taxes should be recognized. As of June 30, 2007, the Company’s property, plant and equipment balances were not adjusted for inflation.

The Company has examined the recoverable value of deferred assets, based on its business plans and has booked a valuation allowance, in order for the deferred tax asset net position to reflect the probable recoverable value. The changes in such allowance are shown in Exhibit E. Note 9 contains further information on deferred taxes.

Tax on assets is supplementary to income tax. While income tax is levied on the taxable income for the year, tax on assets is imposed on the potential income from certain productive assets at the rate of 1%. Therefore, the Company’s tax liability shall be equal to the higher of both taxes. However, if tax on assets exceeds income tax in any given fiscal year, the excess may be creditable against any excess of income tax over tax on assets in any of the following ten years.

Tax on assets balance has been capitalized under Other non-current receivables, since the Company has estimated, based on its current business plans, that the amounts paid for this tax will be recoverable within the statute of limitations.

F-40 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

2.3. Use of Estimates The preparation of the financial statements in conformity with professional accounting standards effective in the City of Buenos Aires, Argentina, requires Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses for each period. Actual results could differ from these estimates.

2.4. Additional Cash Flow Statements Information In the periods ended on June 30, 2007 and 2006, the following significant transactions were carried out and did not have an impact on consolidated cash and cash equivalents: As of June 30, June 30, 2007 2006 Capitalization of receivables held with subsidiaries ...... 15,000,838 — Distribution of unpaid subsidiaries dividends at closing ...... 4,000,000 98,223,981

NOTE 3 — BREAKDOWN OF THE ACCOUNTS Balance Sheets As of June 30, December 31, 2007 2006 a) Cash and banks Petty cash ...... 46,327 46,327 Banks accounts ...... 17,123,415 12,965,186 17,169,742 13,011,513

F-41 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

As of June 30, December 31, 2007 2006 b) Other receivables, net Current Related parties ...... 27,390,165 39,988,060 Tax credits ...... 2,550,371 29,976 Advances to personnel ...... 95,886 2,200,364 Other ...... 121,190 86,698 30,157,612 42,305,098 Non-Current Related parties — Note 10 ...... 297,659,811 313,101,070 Net deferred tax assets — Note 9 ...... 15,285,818 21,229,725 Tax on assets ...... 25,120,626 20,860,419 Guarantee deposits — Note 8 ...... 361,560 388,004 Allowance for unrecoverable guarantee deposits — Exhibit E ...... (279,841) (277,089) Other ...... 845,206 845,206 Allowance for doubtful accounts — Exhibit E ...... (845,206) (845,206) 338,147,974 355,302,129 c) Accounts payable Suppliers...... 649,768 1,039,196 Related parties ...... 1,216,654 1,229,170 1,866,422 2,268,366 d) Taxes payable Tax on assets ...... 2,372,432 4,114,731 VAT payable ...... 655,188 370,071 Turnover tax ...... 136,460 — Other ...... 681,754 4,687,789 3,845,834 9,172,591 e) Other liabilities Current Sellers financing — Note 10 and Exhibit G ...... 12,042,512 10,995,097 Related parties ...... — 76,887 Other ...... 2,336,553 4,616,139 14,379,065 15,688,123 Non-Current Investment in affiliates — Exhibit C ...... — 6,698,656 Sellers financing — Note 10 and Exhibit G ...... 487,503,491 482,770,447 487,503,491 489,469,103

F-42 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Statements of Operations As of June 30, June 30, 2007 2006 f) Equity in earnings (losses) from affiliates and subsidiaries AGEA ...... 65,365,640 26,137,013 ARTEAR ...... 9,090,087 3,095,287 IESA ...... 16,419,641 9,093,141 Radio Mitre...... (1,737,440) (1,099,825) GCGC ...... (383,663) 1,414,564 PRIMA Internacional...... 1,120,984 (1,821,027) Multicanal ...... — (42,067,849) Other ...... 10,065,805 (15,707,695) 99,941,054 (20,956,391)

NOTE 4 — PREFERRED SHARES The main terms and conditions of the preferred shares, which refer to dividends payments, the preference among the different classes of preferred shares and between them and common shares, and its redemption, according to the Company’s by-laws and the respective documents and agreements are as follows: a. On December 27, 1999 two classes of preferred shares were issued: “A” and “B” (“preferred shares”). Those preferred shares accrue an annual dividend of 7%, payable quarterly as from the quarter ended on March 31, 2003. The Company can pay 5% of that dividend in cash, and the remaining 2% in kind. If, in any given year, the Company fails to pay dividends in cash, the annual dividend will be increased to 9% on a cumulative basis, until the Company pays them. The Company’s shareholders’ meetings held on August 29, 2005 and July 13, 2007 approved the following decisions, among others: (a) the waiver by the holders of preferred shares of their right to collect the total preferred dividends accrued before January 1, 2005; (b) the suspension of dividends between that date and June 30, 2008; and (c) the extension to June 30, 2008 of the date when, subject to compliance with certain conditions, the mandatory conversion of preferred shares into common shares takes place. If these conditions are not met within the agreed-upon terms, suspended dividends will be considered as accrued. b. Preferred shares may be redeemed until December 27, 2009 (“redemption date”), at 12.117792 times (“Payment Preference”) the face value of the shares as determined by the Board of Directors’ resolution dated December 27, 1999, plus accrued and unpaid dividends. Class “A” preferred shares will have redemption preference over Class “B” preferred shares. If the shares are not redeemed at the redemption date, the annual dividend will be increased to 13%, 50% of which may be payable in cash and 50% in kind. c. Subject to compliance with certain conditions, class “A” preferred shares may be converted into class “C” common shares, and class “B” preferred shares into class “B” common shares. The terms and conditions for the issuance establish a Conversion Price as well as an adjustment to the Conversion Price subject to certain assumptions. In both cases, these prices are agreed-upon based on the subscription price of the shares, plus amounts due corresponding to unpaid and recognized dividends. d. The right to redeem such preferred shares may only be exercised by the Company.

F-43 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

e. In the event of liquidation or merger of the Company, preferred shares have certain preferential rights to receive an amount equivalent to the “Payment Preference” per share plus the amount of quarterly dividends and accumulated unpaid dividends. f. In accordance with the terms and conditions for the issuance of preferred shares set forth in the Company’s by-laws and until such time as the Company has carried out an Initial Public Offering of Shares or until January 1, 2010, whichever takes place first, the Company is subject to certain restrictions on the payment of dividends to the holders of common shares. Basically, those restrictions establish that: (i) the Company can only pay dividends to holders of common shares as from the end of fiscal year 2002; (ii) the payment of dividends to the holders of common shares is subordinated to the preferential and priority rights of the holders of preferred shares established in the terms and conditions for the issuance of those shares; (iii) subject to the restriction stated in paragraph (i) above, the maximum distribution of dividends to the holders of common shares amounts to USD40 million per each year; (iv) in addition to the distributions mentioned above, after the year ended December 31, 2003, the Company may distribute additional earnings to the holders of outstanding common shares for up to a total of USD60 million on one or more occasions. g. If at the redemption date, the Company has not redeemed all the preferred shares, it will be unable to declare or pay distribution of dividends on common shares in excess of USD15 million per year. h. After the Initial Public Offering of shares and, if that event has not taken place before the redemption date; as from January 1, 2010, provided that the Company has redeemed all its preferred shares, any decision related to dividends and distribution of profits on common shares will be exclusively subject to the approval of the Company’s Board of Directors and Shareholders’ meeting, following the majorities established by law. i. The paid-in-capital that resulted from the issuance of class “C” common shares and class “A” preferred shares amounting to 333,636,239 is appropriated to a “Class “A” and Class “B” Preferred shares Paid-in-capital Reserve”, which will be irrevocably appropriated as follows: (a) to the payment of dividends in shares, even if no profits or insufficient profits are generated, to the holders of preferred shares, in accordance with the terms and conditions for the issuance and the preference of class “A” preferred shares established in the Sixth section of the by-laws, and (b) in the first place, with preference, to the payment of class “A” preferred shares and/or common shares to be delivered as a result of the conversion of class “A” preferred shares and, in the second place and in a subordinate category, if a reserve remains after all class “A” preferred shares have been converted, to the payment of class “B” preferred shares and/or common shares to be delivered through the conversion of class “B” preferred shares, which must be issued in accordance with the terms and conditions for issuance established by section Sixth of the by-laws. See Note 12 for subsequent events that would affect preferred stock.

F-44 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

NOTE 5 — TRANSACTIONS WITH RELATED PARTIES

The following table details the transactions carried out by the Company its related parties for the six-month periods ended June 30, 2007 and 2006:

As of June 30, June 30, Company Item 2007 2006 Subsidiaries AGEA ...... Management fees 12,103,657 10,800,000 Sale of long-term investments — 42,338,268 ARTEAR...... Management fees 5,400,000 4,800,000 Other expenses (25,312) — Services — (259) IESA...... Management fees 1,800,000 1,500,000 Services — (15,110) Other expenses (1,579) — Radio Mitre ...... Management fees 420,000 360,000 Interest income 26,247 — GCGC ...... Services (420,617) (325,187) PRIMA Internacional ...... Interest income 45,535 — Indirectly controlled AGR ...... Management fees 2,431,844 1,800,000 Other expenses (631) — Sale of long-term investments — 18,086,000 Printing services — (12,095) Impripost Tecnologías S.A...... Management fees 750,000 450,000 Primera Red Interactiva de Medios . . . Management fees — 336,000 Internet communication services (68,889) (73,749) Cablevisión ...... Management fees 28,372,598 — Interest income 22,277,976 — Multicanal ...... Reimbursed expenses — 2,405 Teledeportes Paraguay S.A...... Management fees — 273,420 Affiliates CIMECO ...... Management fees — 1,382,850

NOTE 6 — RESTRICTIONS ON RETAINED EARNINGS

The Company’s by-laws sets forth that realized and liquid profits should be appropriated as follows: (i) in accordance with the Argentine Business Associations Act, 5% until reaching 20% of the capital stock to the legal reserve; (ii) to pay for the Board of Directors’ and Statutory Auditing Committee’s fees; (iii) to dividends on preferred shares, giving priority to unpaid accumulated dividends; and (iv) the balance, in whole or in part, to an additional stake in preferred shares and dividends on common shares or to voluntary reserves or to a provision or to a new account, or as otherwise determined by the Shareholders’ meeting.

See Note 4 for additional restrictions related to terms and conditions for issuance of preferred shares.

F-45 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

NOTE 7 — FINANCIAL LOANS 7.1. Debt Transfer The Company held a debt with Telefónica Internacional de España S.A. in the principal amount of USD89,027,741, plus the agreed-upon interest. On November 21, 2000, Telefónica Internacional de España S.A. notified the Company of the assignment of such receivable to Telefónica Media S.A. On September 29, 2003, the parties agreed upon a fair readjustment under Section 8 of Decree 214/02, setting the sale price at USD36 million (this amount embraced all concepts). Out of that total, the amount of USD6 million was paid within 7 days from execution of the settlement agreement. The balance of USD30 million would be paid in 5 annual, consecutive and equal installments of USD6 million each, falling due on August 31, 2004, 2005, 2006, 2007 and 2008, respectively. The balances shall accrue interest to be paid every six month. Such interest is calculated at (a) a 3.5% annual rate or (b) at LIBOR + a 0.75% annual spread, whichever is higher at the beginning of each interest period. Such debt was collaterized by an original pledge on Multicanal’s common shares. On Septem- ber 26, 2006, the Company agreed upon with Telefónica de Contenidos S.A. Unipersonal (former Telefónica Media S.A.) to substitute the existing pledge on the remaining pledged shares by a new pledge on 49,828 common shares of IESA, which are owned by the Company. Upon payment of the fourth installment, the release of the pledge on one third of the total amount of new pledged shares shall take place automatically and as a matter of law. Upon payment of the fifth installment and the related interest, the release of the pledge on the remaining new pledged shares shall take place automatically and as a matter of law. As of June 30, 2007 and December 31, 2006, the Company owed principal and interest in the amounts of 37,080,000 and 36,720,000, and 790,428 and 718,605, respectively. As of the date of these financial statements, the Company has made all due and payable payments.

F-46 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

In March 2006, the Company paid the first installment of the loan for USD4 million. In August 2006, the Company executed an addendum to such refinancing agreement, whereby Chase reimbursed the USD4 million paid by the Company and the repayment of principal was rescheduled as follows: Payment Date Repayment of Principal March 17, 2007 ...... USD 8 million March 17, 2008 ...... USD 16 million March 17, 2009 ...... USD 16 million Furthermore, the agreement sets forth several commitments and restrictions, including but not limited to: i) the creation and maintenance of a reserve account for the amount of interest to be paid quarterly, ii) indebtedness restrictions; and iii) restrictions on the creation of encumbrances. After June 30, 2007, under a new addenda to the refinancing agreement, the guarantees timely granted by the Company’s shareholders have ceased to be in effect. The balances of USD54 and USD40 million that Raven owed to the Company were condoned by means of the agreements dated February 6 and May 4, 2004, respectively. Subsequently the Company, the sole Raven’s shareholder, decided to wind up and liquidate that company at the Board’s meeting held on July 31, 2004. As of June 30, 2007 and December 31, 2006, the Company owed principal and interest in the amounts of 98,880,000 and 122,400,000, and 651,619 and 361,610, respectively. As of the date of these financial statements, the Company has made all due and payable payments.

7.3. Other Loans As of June 30, 2007 and December 31, 2006, the Company owed 1,663,200 for a loan granted by one of its subsidiaries.

NOTE 8 — COMMITMENTS AND CONTINGENCIES As of June 30, 2007 and December 31, 2006, and in accordance with the contract entered into to sell its equity interest in Activa Anticipar A.F.J.P. S.A., the Company holds a guarantee deposit amounting to USD26,793 (net of provisions) recoverable under certain conditions and within specified terms (provided by Jupenhold S.A., a company absorbed by Grupo Clarín) to cover potential liabilities and the payment of all ongoing lawsuits, and to guarantee labor and social security obligations arising before the date of that sale. The amount of the deposit does not limit the amount of the Company’s guarantees. The Company estimates that the guarantee fund is sufficient, based on the legal advisors’ opinion. The Company has executed guarantees with the banks involved in the swap contracts specified in Note 7 to the consolidated financial statements in order to fully, unconditionally and irrevocably guarantee the timely payment of all obligations arising from said contracts. In October 2003, the Company approved a USD15 million contribution in favor of its subsidiary Multicanal, to be paid in and applied to the Cash Option Payment set forth in the APE (see Muticanal in Note 5 to the consolidated financial statements). To that end, in December 2003, the Company

F-47 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE FINANCIAL STATEMENTS — (Continued) entered into a trust agreement with JPMorgan Chase Bank and made a deposit in that entity for that amount. The contribution was made in fiscal year 2006.

NOTE 9 — INCOME TAX The following table shows the breakdown of net deferred tax assets as of June 30, 2007 and December 31, 2006, respectively (amounts stated in thousands of Argentine Pesos): As of June 30, December 31, 2007 2006 Assets Tax loss carryforward ...... 24,898 28,903 Specific tax loss ...... 51,822 51,822 Other investments...... 8,633 8,633 Other receivables ...... 314 316 Subtotal...... 85,667 89,674 Allowance for deferred tax asset — Exhibit E ...... (70,381) (68,444) Net deferred tax assets ...... 15,286 21,230

As of June 30, 2007, the Company’s net deferred tax assets amount to approximately 15.3 million. This figure represents the temporary differences and the tax losses the Company’s management estimates to be recoverable, based on its current business plans.

F-48 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

There follows the reconciliation between the income tax charged to income for the six-month period ended June 30, 2007 and 2006 and the income tax liability that would result from applying the current tax rate on income before income and assets taxes and the income tax liability assessed for each period (amounts stated in thousands of Argentine Pesos): As of June 30, June 30, 2007 2006 Income tax assessed at the current tax rate (35%) on income before income tax ...... (38,309) 7,243 Permanent differences: Equity in earnings (losses) from affiliates and subsidiaries ...... 34,979 (7,335) Tax result arising from the disposal of long-term investments and other investments ...... — (4,692) Other ...... (677) (354) Subtotal ...... (4,007) (5,138) Changes in the valuation allowance of net deferred tax asset — Exhibit E . . . . (1,937) 7,782 Income tax charge ...... (5,944) 2,644

Deferred income tax income (expense) for the period...... (5,944) 2,644 Deferred current income tax income (expense) for the period ...... — — Income tax charge ...... (5,944) 2,644

As of June 30, 2007, the Company’s accumulated tax losses amount to approximately 219 million, which calculated at the current tax rate, represent deferred tax assets in the amount of approximately 77 million. There follows the statute of limitations of the accumulated tax losses (amounts stated in thousands of Argentine Pesos): Amount of Tax Loss Year for Expiry Carryforward 2007 ...... 60,960 2008 ...... 67,707 2009 ...... 80,355 2010 ...... 10,178 219,200

F-49 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

NOTE 10 — ACQUISITION AND SALE OF COMPANIES The Company carried out the following transactions by the end of September 2006: a) Sale of its equity interest in PRIMA to PRIMA Internacional for 440,421. The transaction was carried out by issuing corporate debt securities with a 3-year maturity, which accrue interest payable every six months as from March 26, 2007, at a variable rate established by the BADLAR plus a fixed 6% spread, subject to certain ceilings. In the event PRIMA Internacional decides to capitalize such interest, such spread may rise to 8% under certain circumstances. Principal will be repaid in a lump sum on September 26, 2009. b) Sale of its equity interest in Multicanal to Cablevisión for 377.7 million, in exchange for corporate debt securities with a 3-year maturity, which accrue interest payable every six months as from March 26, 2007, at a variable rate established by the BADLAR plus a fixed 6% spread, subject to certain ceilings. In the event Cablevisión decides to capitalize such interest, such spread may rise to 8% under certain circumstances. Principal will be repaid in a lump sum on September 26, 2009. c) Acquisition of a 100% interest in Southtel Holdings S.A. (“SHOSA”) capital stock and votes for USD161.3 million to be paid as follows: i. USD126 million in debt securities, issued for a total amount of USD157.8 million, maturing on September 26, 2009 and accruing interest payable every six month as from March 26, 2007, at 6-month LIBOR plus a 3.75% spread. The original maturity of these securities may be extended until September 26, 2010 or September 26, 2011, under certain circumstances. ii. Delivery of the debt securities issued by Cablevisión mentioned in b) above for an amount of 80.1 million. iii. Delivery of equity securities in the amount of USD9.5 million. d) Acquisition of an 11% interest in VLG capital stock and votes for USD31.8 million, to be paid by means of the remaining corporate debt securities described in c) i. above. The Company regained its 50% interest in VLG through this acquisition. Pursuant to the VLG Operating Agreement executed on September 26, 2006, in case the Company failed to honor any payment due under the above USD157.8 million debt security, Fintech Media LLC (“Fintech”), original holder of such security, shall be empowered to reduce Grupo Clarín’s interest in VLG, which would cause the transfer to Fintech of up to a 25.656% interest the Company holds in Cablevisión capital stock. Furthermore, by the end of December 2006, the Company sold 3% of SHOSA’s shares to a subsidiary for 15 million, in exchange for corporate debt securities under similar conditions as those detailed in items a) and b) of this Note. On March 21, 2007, the Company capitalized the balance of such receivable.

F-50 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

NOTE 11 — TERMS AND INTEREST RATES OF INVESTMENTS, RECEIVABLES AND LIABILITIES

As of June 30, 2007 Other investments Without any established term(1) ...... 13,502,797 Receivables, net(2) Without any established term(3) ...... 43,942,987 To fall due Within three months(3)...... 205,117 Over than six months and up to nine months(3) ...... 11,211,853 Over than two years and up to three years(4) ...... 297,659,811 309,076,781 353,019,768 Liabilities Without any established term(3) ...... 2,197,264 To fall due Within three months(3)...... 13,857,776 Over than three months and up to six months(3) ...... 525,996 Over than six months and up to nine months(3) ...... 1,812,818 Over than nine months and up to twelve months ...... 4,698,985 Over than two years and up to three years(4) ...... 487,503,491 508,399,066 510,596,330 Short-term and long-term debt(5) Without any established term ...... 1,663,200 To fall due Within three months ...... 19,191,619 Over than three months and up to six months ...... 790,428 Over than six months and up to nine months ...... 49,440,000 Over than one year and up to two years ...... 67,980,000 137,402,047 139,065,247

(1) Bearing interest at a variable rate.

(2) Not including 15,285,818 corresponding to net deferred tax assets (see Note 9).

(3) Non-interest bearing.

(4) Bearing interest as detailed in Note 10.

(5) Bearing interest as detailed in Note 7.

F-51 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

NOTE 12 — SUBSEQUENT EVENTS On July 16, 2007 the Company approved the conversion of 5,100,000 Class B common shares at a par value of 1 each and entitled to 1 voting right per share into 5,100,000 Class A common shares at a par value of 1 each and entitled to 5 voting rights per share. On July 20, 2007, Grupo Clarín Shareholders Meeting decided: • To authorize the Company’s public offering and request the authorization of the public offering of all of its capital stock in Argentina and in foreign markets, and the listing in the Buenos Aires Stock Exchange and/or in foreign stock exchanges and/or self-regulated markets. • To increase the capital stock up to 30,000,000, through the issuance of up to 30,000,000 Class B common shares at a par value of 1 each and entitled to 1 voting right per share subject to public offering in Argentina and foreign markets. The Board of Directors shall be empowered to eventually fix the subscription price of the new shares to be issued, as well as the exact amount of the capital stock increase. • To fully modify its bylaws, which shall come into effect as from the date of the resolution regarding the Company’s public offering. Such changes contemplate, among others, changes in the structure and election of the directors and statutory auditing committee, the conversion of preferred stock issued by the Company into common shares and the setup of an auditing committee. During August and September 2007, the Company made contributions to one of its subsidiaries in the amount of approximately USD2.3 million.

F-52 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733

EXHIBIT A PROPERTY, PLANT AND EQUIPMENT, NET As of June 30, 2007 and 2006, and December 31, 2006 In Argentine Pesos (Ps.) — Note 2.1 Historical value Depreciation Net Book Value as of At the At the Beginning of At the End of Beginning of For the At the End of June 30, December 31, Main Account the Year Increases the Period the Year Period the Period 2007 2006 Furniture and fixtures ...... 127,747 7,556 135,303 38,767 5,027 43,794 91,509 88,980 Audio and video equipment. . . . . 19,560 33,064 52,624 18,621 1,784 20,405 32,219 939 Telecommunication equipment. . . . . 34,275 — 34,275 31,262 548 31,810 2,465 3,013 Computer equipment and software ...... 1,514,610 140,902 1,655,512 762,292 188,983 951,275 704,237 752,318 Total as of June 30, 2007 ...... 1,696,192 181,522 1,877,714 850,942 196,342 1,047,284 830,430 845,250 Total as of June 30, 2006 ...... 987,317 248,227 1,235,544 562,736 132,190 694,926 540,618

F-53 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733

EXHIBIT C Page 1 of 2 INVESTMENTS Equity Interest in Other Affiliates as of June 30, 2007 and December 31, 2006 In Argentine Pesos (Ps.) — Note 2.1 Type of Shares Number Par Value Cost Value Book Value(1) Long-term investments AGEA...... Common 141,199,126 $1.00 539,522,170 465,658,800 ARTEAR...... Common 53,186,347 $1.00 152,243,761 152,183,738 IESA...... Common 124,545 $0.10 48,085,768 58,264,253 Radio Mitre ...... Common 20,464,454 $0.01 47,593,113 5,160,306 GCGC ...... Common 6,999,880 $1.00 9,427,041 7,095,890 PRIMA Internacional ...... Common 48,745,147 $1.00 102,175,302 64,582,849 AGR...... Common 1,254,123 $1.00 2,644,874 1,318,546 Clarín Global ...... Common 16,136 $1.00 14,988,883 71,947 PemS.A...... Common 4 $1.00 1 2 GC Minor S.A. (“GC Minor”) ...... Common 66,880 $1.00 359,593 355,799 GC Services ...... — — — 4,710,205 5,026,085 SHOSA ...... Common 123,284,255 $1.00 497,341,592 220,046,295 Goodwill...... 478,116,832 Vistone ...... — — — 71,884,310 212,992,738 VLG...... — — — 97,947,290 44,329,295 Goodwill...... 94,439,518 CV B Holding LLC (“CVB”)...... — — — 38,624,593 70,724,797 Compañía Latinoamericana de Cable S.A. (“CLC”) . . . Common 15,019,838 $1.00 15,019,838 8,955,360 Total as of June 30, 2007 . . 1,642,568,334 1,889,323,050 Total as of December 31, 2006 ...... 1,623,720,746 1,811,570,666

Type of Shares Number Par Value Cost Value Book Value Other non-current liabilities Total as of June 30, 2007...... — — Total as of December 31, 2006.... 19,000 6,698,656

(1) In certain cases the equity value does not correspond with the related shareholders’ equity since: a) equity value was adjusted to the Company’s accounting policies, as required by the professional accounting standards, b) the elimination of goodwill generated by transactions between companies under the Company’s common control, and c) the existence of irrevocable contributions.

F-54 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733

EXHIBIT C Page 2 of 2 INVESTMENTS Equity Interest in Other Affiliates As of June 30, 2007 and December 31, 2006 In Argentine Pesos (Ps.) — Note 2.1 Issuer’s Information As per Financial Statements as of June 30, 2007 Participation Main Business in Capital Income / (Loss) Shareholders’ Activity and Votes Capital For the Period Equity Long-term investments AGEA ...... Printing and Publishing 99.99% 141,199,151 65,591,390 417,604,616 ARTEAR...... Broadcasting services 96.95%(1) 54,859,553 9,421,925 158,411,214 IESA...... Investing and financing 99.98% 12,457 17,900,287 58,275,910 Radio Mitre . . . . Broadcasting services 99.99% 204,645 (1,737,440) 5,160,309 GCGC ...... Services 99.99% 7,000,000 (323,429) 7,096,012 PRIMA Internacional Investing and financing 82.00% 59,445,301 1,287,693 78,680,212 AGR ...... Graphic press 0.90% 138,865,295 5,781,855 154,292,191 Clarín Global . . Telecommunications 0.79% 2,046,662 3,499,541 9,125,637 Pem S.A...... Investing 0.00% 13,558,511 820,061 25,266,209 GC Minor . . . . . Investing and financing 95.00% 70,400 (76,992) 312,294 GC Services . . . Investing and financing 100.00% — 4,081,616 5,026,085 SHOSA...... Investing and financing 97.00% 127,097,171 19,726,196 543,939,042 Vistone ...... Investing 100.00% — 6,013,159 162,717,438 VLG ...... Investing and financing 11.00% — 37,357,310 1,021,902,012 CVB ...... Investing and financing 100.00% — 3,082,375 61,456,937 CLC ...... Investing and financing 99.99% 15,020,838 58,363 15,020,838

(1) % in votes amounts to 99.36%.

F-55 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733

EXHIBIT D OTHER INVESTMENTS As of June 30, 2007 and December 31, 2006 In Argentine Pesos (Ps.) — Note 2.1 Book Value As of June 30, December 31, Main Account and Securities Characteristics 2007 2006 Other current investments: Financial instruments — Exhibit G ...... 382,465 351,097 Financial instruments — Bonds ...... 1,399,200 — Money Market — Exhibit G ...... 11,721,132 8,779,663 Total...... 13,502,797 9,130,760

F-56 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733

EXHIBIT E ALLOWANCES AND PROVISIONS As of June 30, 2007 and 2006, and December 31, 2006 In Argentine Pesos (Ps.) — Note 2.1

Balance at the Balances as of Beginning of Balances as of December 31, the Year Increases Decreases June 30, 2007 2006 DEDUCTED FROM NON- CURRENT ASSETS Other receivables For doubtful accounts . . . 845,206 — — 845,206 845,206 For unrecoverable guarantee deposits . . . 277,089 2,752(1) — 279,841 277,089 Allowance for net deferred tax asset .... 68,443,727 1,937,040(2) — 70,380,767 68,443,727 Investments For goodwill impairment ...... 28,432,495 — — 28,432,495 28,432,495 Total as of June 30, 2007 . . 97,998,517 1,939,792 — 99,938,309 97,998,517 Total as of June 30, 2006 . . 193,203,205 5,505 47,702,499 145,506,211

(1) Charged to the Statements of Operations under Financing and holding results as of June 30, 2007. (2) Charged to the Statements of Operations under Income tax as of June 30, 2007.

F-57 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733

EXHIBIT G FOREIGN CURRENCY ASSETS AND LIABILITIES As of June 30, 2007 and December 31, 2006

Effective Amount in Ps. Amount in Ps. as Foreign Currency Exchange as of June 30, of December 31, Type and Amount Rate 2007 2006 ASSETS CURRENT ASSETS Banks accounts ...... USD 37,968 3.05 115,802 — Other investments Financial instruments...... USD 125,398 3.05 382,465 351,097 Money Market ...... USD 3,842,994 3.05 11,721,132 8,779,663 Total current assets ...... 12,219,399 9,130,760 NON-CURRENT ASSETS Other receivables Guarantee deposits ...... USD 26,793 3.05 81,719 80,915 Total non-current assets ...... 81,719 80,915 Total assets as of June 30, 2007 ...... 12,301,118 Total assets as of December 31, 2006 . . 9,211,675

LIABILITIES CURRENT LIABILITIES Long-term debt...... USD 22,466,682 3.09 69,422,047 43,920,215 Other liabilities ...... USD 3,897,253 3.09 12,042,512 10,995,097 Total current liabilities ...... 81,464,559 54,915,312 NON-CURRENT LIABILITIES Long-term debt...... USD 22,000,000 3.09 67,980,000 116,280,000 Other liabilities ...... USD 157,768,120 3.09 487,503,491 482,770,447 Total non-current liabilities ...... 555,483,491 599,050,447 Total liabilities as of June 30, 2007. . . . . 636,948,050 Total liabilities as of December 31, 2006 . . 653,965,759

USD: United States dollars

F-58 GRUPO CLARIN S.A. Registration with the IGJ: 1.669.733

EXHIBIT H INFORMATION REQUIRED BY SECTION 64, SUBSECTION b) OF ACT No. 19,550 For the Six-Month Periods Ended June 30, 2007 and 2006 In Argentine Pesos (Ps.) — Note 2.1

Administrative Expenses as of Item June 30, 2007 June 30, 2006 Salaries and Social Security ...... 10,300,013 8,973,364 Statutory Auditing Committee’s fees ...... 4,500 1,500 Fees for services ...... 2,707,371 1,933,439 Taxes, rates and contributions...... 1,123,117 956,959 Other personnel expenses ...... 140,539 80,802 General expenses...... 152,635 134,223 IT expenses ...... 35,303 68,809 Maintenance expenses ...... 147,282 571,900 Advertising expenses ...... 113,171 115,640 Legal fees and services ...... 25,416 31,503 Travel expenses ...... 527,987 296,185 Stationery and office supplies ...... 22,151 7,388 Other expenses ...... 574,607 156,425 Total for the period ...... 15,874,092 13,328,137

F-59 LIMITED REVIEW REPORT

To the Shareholders, President and Directors of Grupo Clarín S.A. Piedras 1743 Autonomous City of Buenos Aires CUIT No. 30-70700173-5

1. We have reviewed the balance sheets of Grupo Clarín S.A. as of June 30, 2007, and the related statements of operations, changes in shareholders’ equity and cash flows for the six-month periods ended June 30, 2007 and 2006, and complementary Notes 1 to 12 and Exhibits A, C, D, E, G and H. Furthermore, we have performed a limited review of the consolidated balance sheet of Grupo Clarín S.A. as of June 30, 2007, and the consolidated statements of operations and consolidated cash flows for the six-month periods ended June 30, 2007 and 2006 with its controlled subsidiaries and other legal entities controlled jointly with other companies, which are presented as complementary information. The preparation and issuance of these financial statements are the responsibility of the Company.

2. We conducted our review in accordance with standards established by Technical Resolution No. 7 of the Argentine Federation of Professional Councils of Economic Sciences for limited reviews of financial statements. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries to persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

3. As mentioned in Note 10 to the Parent Company Only Financial Statements and in Note 7 to the Consolidated Financial Statements, in the year ended December 31, 2006 the Company sold its indirect equity interest in the Company Primera Red Interactiva de Medios Argentinos S.A. to Multicanal S.A. and its direct and indirect equity interest in Multicanal S.A. to Cablevisión S.A.; in addition, Grupo Clarín S.A. indirectly purchased the remaining percentage to reach 60% of the interest in the capital stock and voting rights of Cablevisión S.A. These transactions are subject to the pertinent authorities approvals.

4. Based on the work and examinations of the financial statements of the Company and the consolidated financial statements for the years ended December 31, 2006, 2005 and 2004, on which we issued our report on July 19, 2007 with qualifications because of the circumstances described in point 3 of this report, we report that:

a) the June 30, 2007 financial statements of Grupo Clarín S.A. and its consolidated financial statements at those dates, set out in point 1, prepared in accordance with accounting standards prevailing in the Autonomous City of Buenos Aires (Argentina), include all significant facts and circumstances which are known to us and that, in relation to them, we have no further observations to make other than those mentioned in point 3;

b) the comparative information included in the parent company only and consolidated balance sheets and in the complementary notes and exhibits to the attached financial statements, derives from the financial statements of the Company at December 31, 2006.

5. In compliance with current regulations, we report that:

a) The financial statements of Grupo Clarín S.A. and its consolidated financial statements have been recorded in the “Inventory and Balance Sheet” legal book and, insofar as concerns our field of competence, are in compliance with the requirements of Commercial Companies Law and pertinent Comisión Nacional de Valores (Argentine Security Commission) resolutions;

F-60 b) The financial statements of Grupo Clarín S.A. arise from accounting records. As of the date of issuance of these financial statements, the approval of the certification related to Resolution 7/2005, Article 287-I, is still pending; c) As of June 30, 2007, the debt of Grupo Clarín S.A. accrued in its accounting records, in favor of the Local Pension Systems, amounted to $322,462.40, none of which was claimable at that date. Autonomous City of Buenos Aires, September 5, 2007

PRICE WATERHOUSE & CO. SRL

by /s/ Carlos A. Rebay (Partner) Carlos A. Rebay

F-61 GRUPO CLARIN S.A.

Financial Statements as of and for the years ended December 31, 2006, 2005 and 2004

F-62 GRUPO CLARIN S.A. Financial Statements as of and for the Years Ended December 31, 2006, 2005 and 2004

CONTENTS Consolidated Financial Statements Consolidated Balance Sheets ...... F-65 Consolidated Statements of Operations ...... F-66 Consolidated Statements of Cash Flows ...... F-67 Notes to the Consolidated Financial Statements ...... F-69 Parent Company Only Financial Statements Balance Sheets ...... F-92 Statements of Operations ...... F-93 Statements of Changes in Shareholders’ Equity ...... F-94 Statements of Cash Flows ...... F-95 Notes to the Financial Statements ...... F-96 Exhibit A — Property, plant & equipment, net ...... F-110 Exhibit B — Intangible Assets, net...... F-111 Exhibit C — Investments ...... F-112 Exhibit D — Other Investments ...... F-114 Exhibit E — Allowances and Provisions ...... F-115 Exhibit G — Foreign Currency Assets and Liabilities ...... F-116 Exhibit H — Information required under Section 64, b) of Act No. 19,550 ...... F-117 Report of Independent Auditors ...... F-118

F-63 GRUPO CLARIN S.A. Financial Statements as of and for the Years Ended December 31, 2006, 2005 and 2004

In Argentine Pesos (Ps.) — Note 2.1 to the parent company only financial statements Registered office: Piedras 1743, Buenos Aires, Argentina Main corporate business: Investing and financing Date of incorporation: July 16, 1999 Date of registration with the Public Registry of Commerce: • Of the by-laws: August 30, 1999 • Of the latest amendment: April 21, 2004 Registration number with the Inspección General de Justicia (“IGJ”), the Regulatory Authority for non-public companies in Argentina: 1.669.733 Expiration of articles of incorporation: August 29, 2098 Information on Parent company: Name: GC Dominio S.A. Registered office: Piedras 1743, Buenos Aires Information on subsidiaries in Exhibit C CAPITAL STRUCTURE (See Note 12 to the parent company only financial statements) Capital Number of Votes Subscribed, Registered Type per Share and Paid-In Ps. Class “A” Common shares, Ps.1 par value...... 5 70,880,304 Class “B” Common shares, Ps.1 par value...... 1 133,006,887 Class “C” Common shares, Ps.1 par value...... 1 25,112,689 Class “A” Preferred shares, Ps.1 par value ...... 1 20,630,822 Class “B” Preferred shares, Ps.1 par value ...... 1 20,630,822 Total as of December 31, 2006, 2005 and 2004 . . . . . 270,261,524

F-64 GRUPO CLARIN S.A. CONSOLIDATED BALANCE SHEETS As of December 31, 2006, 2005 and 2004 In Argentine Pesos (Ps.) — Note 2.1 to the Parent Company Only Financial Statements

As of December 31, 2006 2005 2004 ASSETS CURRENT ASSETS Cash and banks ...... 299,100,551 175,532,841 286,148,975 Short-term investments — Note 2.a) ...... 82,142,004 311,520,085 94,040,789 Trade receivables, net — Note 2.b) ...... 460,608,164 276,611,408 255,132,169 Other receivables, net — Note 2.c) ...... 148,251,933 108,857,712 102,249,428 Inventories — Note 2.d) ...... 152,704,766 152,197,654 104,748,573 Other assets ...... 65,235,709 8,365,511 6,875,850 Total current assets ...... 1,208,043,127 1,033,085,211 849,195,784 NON-CURRENT ASSETS Trade receivables, net — Note 2.b) ...... 9,741,215 12,124,327 14,472,495 Other receivables, net — Note 2.c) ...... 151,084,555 735,793,668 606,871,539 Inventories — Note 2.d) ...... 32,850,180 34,067,425 28,186,861 Investments in unconsolidated affiliates — Note 2.e)...... 72,521,864 253,909,849 60,433,842 Other long-term investments ...... 7,031,748 54,777,966 17,393,002 Property, plant and equipment, net — Note 2.g) ...... 1,342,725,846 765,693,403 808,900,017 Intangible assets, net — Note 2.h) ...... 1,086,559,244 25,394,203 24,927,677 Subtotal...... 2,702,514,652 1,881,760,841 1,561,185,433 Goodwill — Note 2.f) ...... 2,476,156,285 1,654,659,420 1,648,077,012 Total non-current assets ...... 5,178,670,937 3,536,420,261 3,209,262,445 Total assets ...... 6,386,714,064 4,569,505,472 4,058,458,229

LIABILITIES CURRENT LIABILITIES Accounts payable — Note 2.i) ...... 437,439,485 283,693,952 291,281,126 Short-term debt and current portion of long-term debt — Note 2.j) . . 420,508,325 2,781,551,009 2,241,290,056 Salaries and Social Security payable ...... 118,426,541 78,323,318 57,884,980 Taxespayable...... 177,406,201 118,874,324 60,171,818 Other liabilities — Note 2.k) ...... 136,463,000 82,569,342 61,550,071 Total current liabilities ...... 1,290,243,552 3,345,011,945 2,712,178,051 NON-CURRENT LIABILITIES Accounts payable — Note 2.i) ...... 10,640,522 4,987,241 14,511,121 Long-term debt — Note 2.j) ...... 2,057,858,346 427,792,561 550,224,807 Salaries and Social Security payable ...... 309,668 81,810 — Taxespayable...... 14,759,728 5,875,542 2,003,997 Other liabilities — Note 2.k) ...... 1,010,446,297 20,970,404 32,784,378 Provisions ...... 112,879,172 68,843,761 58,288,218 Total non-current liabilities ...... 3,206,893,733 528,551,319 657,812,521 Total liabilities...... 4,497,137,285 3,873,563,264 3,369,990,572 MINORITY INTEREST ...... 354,381,111 32,673,775 40,312,958 SHAREHOLDERS’ EQUITY...... 1,535,195,668 663,268,433 648,154,699 Total Liabilities, Minority Interest and Shareholders’ Equity. . . . 6,386,714,064 4,569,505,472 4,058,458,229

The accompanying notes 1 to 9 are an integral part of these consolidated financial statements.

F-65 GRUPO CLARIN S.A. CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended December 31, 2006, 2005 and 2004 In Argentine Pesos (Ps.) — Note 2.1 to the Parent Company Only Financial Statements

For the Years Ended December 31, 2006 2005 2004 Net sales ...... 2,811,793,032 1,988,424,640 1,667,332,685 Cost of sales (excluding depreciation and amortization) . . . . (1,491,628,105) (1,088,461,709) (842,196,680) Subtotal ...... 1,320,164,927 899,962,931 825,136,005 Expenses (excluding depreciation and amortization) Selling expenses ...... (289,985,969) (227,545,393) (192,037,190) Administrative expenses...... (320,526,202) (215,668,875) (174,192,254) Expenses subtotal ...... (610,512,171) (443,214,268) (366,229,444) Depreciation of property, plant and equipment(1)...... (169,318,902) (142,722,126) (183,894,855) Amortization of intangible assets ...... (38,882,648) (8,655,321) (11,966,301) Depreciation of other investments ...... (328,050) (274,667) (274,665) Depreciation and amortization subtotal ...... (208,529,600) (151,652,114) (196,135,821) Financing and holding results Generated by assets Interest ...... 28,063,611 13,856,093 8,106,531 Other taxes and expenses ...... (41,541,812) (24,963,785) (21,292,284) Exchange differences ...... 8,174,091 15,554,683 11,234,379 Impairment of investments ...... (161,000) (648,130) (5,789,927) Holding gains on inventories ...... 2,014,852 9,373,425 2,807,884 Effect of financial discounts on assets ...... (1,414,102) 481,153 2,106,697 Inventories impairment ...... (120,000) (158,158) — Holding gains on financial instruments ...... 366,519 — — Others...... (117,046) (431,343) 43,161 Generated by liabilities Interest ...... (276,480,371) (264,791,552) (246,005,217) Exchange differences ...... (16,805,486) (60,303,737) (41,995,348) Income from repurchase and debt restructuring ...... 1,249,944,385 6,118,406 23,281,948 Effect of financial discounts on liabilities ...... (708,718) (2,237,705) 608,648 Fees and other financial expenses...... (14,598,181) (20,344,570) (30,027,443) CER restatement ...... (13,590,505) (14,386,172) (6,596,654) Holding losses on financial instruments ...... (2,957,037) — — Others...... (74,217) 1,648,127 — Equity in earnings (losses) from unconsolidated affiliates and gain on sale of subsidiaries, net ...... 224,673,371 15,214,380 31,409,897 Other income (expense), net ...... 17,486,169 269,444 (10,138,564) Income/(loss) for the year before income tax, tax on assets and minority interest ...... 1,663,277,679 (20,652,892) (19,475,552) Income tax and tax on assets ...... (490,694,643) 35,972,723 15,252,326 Minority interest ...... (302,912,073) (1,745,809) 2,327,028 Net income/(loss) for the year ...... 869,670,963 13,574,022 (1,896,198) (1) Chargeable to: Cost of sales ...... (150,223,445) (125,773,460) (165,879,282) Selling expenses ...... (9,317,275) (10,450,664) (12,006,362) Administrative expenses ...... (9,778,182) (6,498,002) (6,009,211)

The accompanying notes 1 to 9 are an integral part of these consolidated financial statements.

F-66 GRUPO CLARIN S.A. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2006, 2005 and 2004 In Argentine Pesos (Ps.) — Note 2.1 to the Parent Company Only Financial Statements

For the Years Ended December 31, 2006 2005 2004 CASH PROVIDED BY OPERATING ACTIVITIES Net income/(loss) for the year ...... 869,670,963 13,574,022 (1,896,198) Income tax and tax on assets ...... 490,694,643 (35,972,723) (15,252,326) Accrued interest ...... 248,416,760 250,935,459 237,898,686 Adjustments to reconcile net income/(loss) for the year to cash provided by operating activities: Depreciation of property, plant and equipment ...... 169,318,902 142,722,126 183,894,855 Amortization of intangible assets ...... 38,882,648 8,655,321 11,966,301 Depreciation of other investments ...... 328,050 274,667 274,665 (Reversal)/ Setting up of allowances for doubtful accounts . . . . . (2,296,159) (179,948) 15,132,228 Setting up of provision for contingencies ...... 6,408,564 21,994,510 23,851,893 Impairment of investments ...... 161,000 648,130 5,789,927 Exchange difference and other financial results ...... 17,034,872 50,076,815 27,884,035 Equity in (earnings) losses from unconsolidated affiliates and gain on sale of subsidiaries, net ...... (224,673,371) (15,214,380) (31,409,897) Minority interest ...... 302,912,073 1,745,809 (2,327,028) Holding losses on financial instruments ...... 2,590,518 — — Holding gains on inventories ...... (2,014,852) (9,373,425) (2,807,884) (Gains) losses on sale of property, plant and equipment ...... (24,998) (1,289,207) 174,834 Income from repurchase and debt restructuring ...... (1,249,944,385) (6,118,406) (23,281,948) Allowance for impairment in value of inventories ...... 120,000 158,158 — Changes in assets and liabilities: Trade receivables, net ...... (125,209,755) (38,565,512) (30,501,773) Other receivables, net ...... (125,737,911) 22,460,689 3,131,591 Inventories ...... 6,721,455 (42,215,879) (26,524,153) Other assets...... 11,425,993 (1,705,311) (2,692,984) Accounts payable ...... 53,086,095 6,643,948 (50,778,376) Salaries and Social Security payables ...... 17,746,784 19,480,527 6,747,846 Taxespayable...... 55,947,404 15,131,286 (659,569) Other liabilities ...... 138,914,329 13,848,884 9,142,023 Provisions ...... (17,068,783) (15,604,109) (8,685,660) Income tax and tax on assets payments ...... (117,987,226) (43,850,774) (17,550,849) Cash provided by operating activities ...... 565,423,613 358,260,677 311,520,239 CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES Payment for the acquisition of property, plant and equipment ..... (253,586,347) (101,794,923) (68,935,252) Payment for the acquisition of subsidiaries, net of cash acquired . . 15,945,485 (226,858,606) (8,097,107) Payment for the acquisition of other investments...... (14,719,018) — — Payment for the acquisition of intangible assets ...... (2,882,290) (1,597,968) (1,883,978) Collection for proceeds from sale of property, plant and equipment and other investments...... 148,368 3,044,712 12,038,018 Collection for proceeds from the disposal of long-term investments ...... — — 161,280,000 Capital contribution received by subsidiaries ...... 45,750,000 — — Collection of dividends ...... 548,800 2,985,551 2,051,472 Collection of interest ...... 754,478 3,509,859 652,033 Cash (used in) provided by investing activities ...... (208,040,524) (320,711,375) 97,105,186

F-67 GRUPO CLARIN S.A. CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)

For the Years Ended December 31, 2006 2005 2004 CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES Loans obtained ...... 474,329,218 226,465,472 114,932,888 Repayment of loans — Principal ...... (706,526,560) (158,868,437) (525,793,268) Payment of fees on bank and financial debt restructuring...... (32,670,018) — — Net payments for financial instruments...... (9,431,983) — — Payment of debts due to purchase of investments...... — (9,824,050) (9,987,505) Changes in minority interest ...... (1,256,381) (6,897,166) (4,488,037) Payment of interest ...... (196,688,824) (21,802,929) (71,287,781) Cash (used in) provided by financing activities ...... (472,244,548) 29,072,890 (496,623,703) FINANCING AND HOLDING RESULTS GENERATED BY CASH AND CASH EQUIVALENTS ...... 9,051,088 (4,699,408) 4,167,316 (Decrease)/ Increase in cash ...... (105,810,371) 61,922,784 (83,830,962) Increase in funds from acquisitions ...... — 935,719 630 Cash and cash equivalents at the beginning of the year...... 487,052,926 424,194,423(2) 464,020,096 Cash and cash equivalents at the end of the year(1) ...... 381,242,555 487,052,926 380,189,764 (1) It includes: Cash and banks ...... 299,100,551 175,532,841 286,148,975 Investments with maturities of less than three months ...... 82,142,004 311,520,085 94,040,789 (2) It includes funds arising from Vistone LLC consolidation.

The accompanying notes 1 to 9 are an integral part of these consolidated financial statements.

F-68 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2006, 2005 and 2004 In Argentine Pesos (Ps.) — Note 2.1 to the Parent Company Only Financial Statements Unless Otherwise Specifically Indicated

NOTE 1 — BASIS FOR THE PREPARATION AND PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements of Grupo Clarín S.A. (hereinafter indistinctively referred to as “Grupo Clarín” or “the Company”) as of December 31, 2006, 2005 and 2004 have been prepared in accordance with Argentine Federation of Professional Councils in Economic Sciences (“FACPCE” for its Spanish acronym) Technical Resolution No. 21, incorporating all companies in which the Company has, directly or indirectly, a controlling interest by applying the line-by-line consolidation method, except as otherwise expressly indicated. The subsidiaries directly controlled by the Company are as follows: As of December 31, 2006 2005 2004 Arte Gráfico Editorial Argentino S.A. (“AGEA”) ...... X X X Multicanal S.A. (“Multicanal”) ...... (1) X X Primera Red Interactiva de Medios Americanos (PRIMA) Internacional S.A. (“PRIMA Internacional”) ...... X X X Arte Radiotelevisivo Argentino S.A. (“ARTEAR”) ...... X X X Inversora de Eventos S.A. (“IESA”) ...... X X X GC Gestión Compartida S.A. (“GCGC”) ...... X X X Clarín Global S.A. (“Clarín Global”) ...... (1) X X Editorial La Razón S.A. (“La Razón”) ...... (1) X X Radio Mitre S.A. (“Radio Mitre”) ...... X X X Grupo Clarín Services LLC (“GC Services”) ...... X — — Southtel Holdings S.A. (“SHOSA”) ...... X — — Vistone LLC (“Vistone”) ...... X X — VLG Argentina LLC (“VLG”) ...... (2) (2) — CVB Holding LLC (“CVB”) ...... X — — GC Minor S.A. (“GC Minor”)...... X X X Compañía Latinoamericana de Cable S.A. (“CLC”) ...... X — —

(1) Indirectly consolidated subsidiaries as of December 31, 2006. (2) Proportionally consolidated subsidiary as of December 31, 2006, and indirectly and proportionally consolidated as of December 31, 2005. The financial statements used for consolidation purposes bear the same closing date as the consolidated financial statements, comprise the same periods and have been prepared under substantially the same accounting policies as those used by the Company, which are described in the notes to the parent company only financial statements or, as the case may be, adjusted as applicable.

F-69 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) a) Trade Receivables, net

Trade receivables have been valued as of each year-end at their estimated realization value net, where applicable, of an allowance for doubtful accounts, which was considered to be sufficient to absorb future losses from uncollectible receivables. b) Inventories

Inventories have been valued at the latest purchase price, latest production cost, replacement or reproduction cost, as applicable. The value of these assets does not exceed their estimated recoverable value.

The criterion followed by certain subsidiaries to expense these items is as follows:

• Film rights:

The cost of programs, series and soap operas is fully expensed against the cost of sales on the exhibition date or upon expiry of exhibition rights, whichever occurs first.

The remaining film rights are amortized on a decreasing-balance basis, based on the number of showings granted by those rights.

Rights related to features, series and single programs acquired in perpetuity for broadcasting by the Volver channel are expensed against the cost of sales over seven years, with a grace period of four years. They are subsequently amortized on a decreasing basis over the next three years.

• Programs:

In-house production cost is fully expensed against the cost of sales after broadcasting of the chapter or program.

Programs purchased, co-production and in-house production on which the Company has perpetuity rights are expensed against the cost of sales over eight years, with a grace period of three years. Subsequently, they are amortized on a straight-line basis over the following five years.

• Events:

The cost of events is fully expensed against the cost of sales at the time of broadcasting. c) Other Assets

Deferred charges have been valued at the amounts actually disbursed, while real property has been valued at acquisition cost. The value of these assets does not exceed their recoverable value.

Investments subject to restrictions on disposition denominated in foreign currency have been valued at face value plus interest accrued as of each year-end. d) Long-Term Investments

Long-term investments over which the Company does not exert significant influence have been valued at cost.

Long-term investments in Radio Mitre have been carried at zero value, based on Management’s expectations for its subsidiaries.

F-70 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) e) Property, Plant and Equipment and Intangible Assets

Improvements that extend the lives of the assets have been capitalized. Other repair and maintenance expenses have been expensed as incurred.

Intangible assets have been valued at acquisition cost, restated as set forth in Note 2.1 to the parent company only financial statements, net of the related accumulated amortization. Intangible assets are amortized on a straight line basis, taking into account their estimated useful lives. Subscriber portfolio has been valued based on the projected cash flows estimated for such portfolio.

The book value of intangible assets does not exceed their estimated recoverable value. f) Derivatives

Receivables and liabilities generated by derivatives have been valued at their estimated fair value. Changes in fair value have been recognized as result for the year. g) Allowances

• For doubtful accounts: comprises doubtful accounts estimated by Management at year-end, based on the opinion of legal counsel, where appropriate.

• For inventories, property, plant and equipment and obsolescence of materials: determined based on the estimates of each company’s management, where appropriate, regarding the future consumption of potentially obsolete or slow-moving assets.

• For contingencies: estimated based on the evaluation of existing claims at the end of each year, according to the reports of the legal counsel, where applicable. h) Foreign Exchange Differences

Pursuant to Professional Council in Economic Sciences of the City of Buenos Aires (“CPCE- CABA” for its Spanish acronym) Resolution MD No. 3/02, foreign exchange differences occurring on or after January 6, 2002 arising from the devaluation of the Argentine currency and other associated effects related to liabilities denominated in foreign currency as of such date must be charged to the cost of assets acquired or built through such financing, provided such link is direct (the “direct method”). As an alternative criterion, companies may opt to give a similar treatment to exchange differences arising from indirect financing (the “indirect method”).

In that sense, AGEA has capitalized exchange differences in its goodwill as of December 31, 2002, which were determined in accordance with the direct method. The residual value of such capitalizations as of December 31, 2006, 2005 and 2004 amounts to approximately 22.7 million, 37.8 million and 38.4 million, respectively.

Furthermore, Artes Gráficas Rioplatense S.A. (“AGR”) has capitalized exchange differences in its property, plant and equipment, Intangible assets and Goodwill, determined in accordance with the indirect method. The residual value of such capitalizations as of December 31, 2006, 2005 and 2004, amounts to approximately 2.4 million, 3.9 million and 6.0 million, respectively.

F-71 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) i) Circulation and Advertising Sales in Subsidiaries Advertising and circulation sales revenues are presented net of returns, discounts and rebates. j) Barter Transactions The Company sells advertising spaces in exchange for goods or services. These barter transactions were booked at the value of the goods or services received. Revenues were booked when the advertisement was made, and the goods or expenses were booked when the goods were received or the services were used. The goods or services owed to the Company for the advertisements made are shown as trade receivables. The advertisements to be made in exchange for the goods and services provided to the Company are shown as accounts payable.

1.2. Additional Consolidated Cash Flow Statements Information As a result of the financing for the purchases and sales of the companies mentioned in Note 10 to the parent company only financial statements and in Note 8, there was an increase of 858.3 million in the balance of “Other liabilities” as of December 31, 2006. Furthermore, there was a decrease of approximately 560.4 million in Loans, as a result of the capitalization of Multicanal’s debt securities, as disclosed in Note 5 — Multicanal. These transactions did not have an impact on consolidated cash and cash equivalents.

NOTE 2 — BREAKDOWN OF MAIN ACCOUNTS As of December 31, 2006 2005 2004 a) Short-term investments Current Financial instruments ...... 55,558,418 280,244,075 83,485,267 Mutual funds ...... 9,220,018 10,235,278 40,167 Other ...... 17,363,568 21,040,732 10,515,355 82,142,004 311,520,085 94,040,789 b) Trade receivables, net Current Trade receivables ...... 544,242,165 360,554,590 353,070,830 Allowance for doubtful accounts ...... (83,634,001) (83,943,182) (97,938,661) 460,608,164 276,611,408 255,132,169 Non-Current Trade receivables ...... 9,756,215 12,133,327 14,472,495 Allowance for doubtful accounts ...... (15,000) (9,000) — 9,741,215 12,124,327 14,472,495

F-72 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of December 31, 2006 2005 2004 c) Other receivables, net Current Tax credits ...... 26,708,273 12,692,421 16,329,513 Court-ordered and guarantee deposits ...... 8,212,920 13,930,340 17,253,917 Prepaid expenses...... 11,147,999 8,216,470 8,348,222 Advance payments ...... 20,894,478 19,471,978 18,549,619 Related parties...... 41,878,665 18,011,283 10,584,362 Dividends receivable ...... 4,787,355 3,538,300 499,595 Other receivables ...... 9,843,189 5,091,924 7,397,137 Others ...... 27,258,717 28,196,434 23,540,372 Allowance for other doubtful accounts ...... (2,479,663) (291,438) (253,309) 148,251,933 108,857,712 102,249,428 Non-Current Net deferred tax assets ...... 45,419,228 629,370,784 508,736,847 Tax credits ...... 87,364,293 40,924,621 30,849,112 Guarantee deposits ...... 192,343 45,500,903 44,778,420 Prepaid expenses...... 3,811,809 12,481,270 19,847,204 Transmission rights to be accrued ...... 1,606,325 1,901,764 1,477,358 Loans granted ...... 1,372,267 1,299,808 — Advances to personnel ...... 524,281 1,083,408 583,708 Derivatives ...... 6,963,398 — — Others ...... 7,042,434 5,479,696 1,444,096 Allowance for other doubtful accounts ...... (3,211,823) (2,248,586) (845,206) 151,084,555 735,793,668 606,871,539 d) Inventories Current Raw materials and supplies ...... 91,019,419 83,503,424 57,094,777 Products-in-process ...... 1,838,890 1,792,586 1,588,305 Finished goods...... 7,684,403 9,136,170 5,157,740 Film products and rights ...... 43,617,712 43,724,972 38,684,943 Other ...... 4,147,337 1,633,143 217,995 Subtotal ...... 148,307,761 139,790,295 102,743,760 Advances to suppliers ...... 4,709,646 12,600,000 2,039,296 Allowance for impairment of inventories ...... (312,641) (192,641) (34,483) 152,704,766 152,197,654 104,748,573 Non-Current Raw materials and supplies ...... 2,092,843 27,149,710 2,476,329 Other ...... 4,602,310 — — Film products and rights ...... 26,155,027 6,917,715 25,710,532 32,850,180 34,067,425 28,186,861

F-73 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of December 31, 2006 2005 2004 e) Investments in unconsolidated affiliates Compañía Inversora de Medios de Comunicación (CIMECO) S.A. (“CIMECO”) ...... 68,223,619 62,595,341 57,414,600 Other investments ...... 4,476,686 4,812,137 8,506,560 Advances for future acquisitions of investments . . . . . 12,938,007 13,309,460 6,912,000 Cablevisión S.A. (“Cablevisión”) ...... — 186,240,359 — Allowance for investment impairment ...... (13,116,448) (13,047,448) (12,399,318) 72,521,864 253,909,849 60,433,842 f) Goodwill Net Book Value Before Impairment Balance as of December 31, Main Account Impairment Allowance 2006 2005 2004 Comercializadora de Productos Gráficos Brasileros Ltda. . . . 19,947,800 — 19,947,800 — — Telecor S.A.C.I. (“Telecor”) . . . . 39,173,062 — 39,173,062 39,173,062 39,173,062 Teledifusora Bahiense S.A. (“Telba”)...... 3,774,071 — 3,774,071 3,774,071 3,774,071 Patagonik Film Group S.A. . . . . 6,197,435 — 6,197,435 4,114,311 4,114,311 Cablevisión S.A...... 748,609,297 — 748,609,297 — — Teledigital Cable S.A. (“Teledigital”) ...... 201,910,249 — 201,910,249 — — Pol-Ka Producciones S.A. (“Pol- Ka”)...... 16,130,769 (6,850,727) 9,280,042 9,280,042 9,280,042 Multicanal and subsidiaries . . . . 2,160,536,176 (718,140,441) 1,442,395,735 1,592,864,197 1,587,283,544 Primera Red Interactiva de Medios Argentinos S.A. (“PRIMA”) ...... 2,272,319 — 2,272,319 2,272,319 2,272,319 Other ...... 2,596,275 — 2,596,275 3,181,418 2,179,663 Total as of December 31, 2006 ...... 3,201,147,453 (724,991,168) 2,476,156,285 Total as of December 31, 2005 ...... 2,543,859,745 (889,200,325) 1,654,659,420 Total as of December 31, 2004 ...... 2,556,193,805 (908,116,793) 1,648,077,012

F-74 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) g) Property, plant and equipment, net

Cost of Accumulated Net Book Value as of December 31, Main Account Acquisition(1) Depreciation(1) 2006 2005 2004 Real property ...... 570,374,832 (218,564,460) 351,810,372 277,365,700 291,516,715 Furniture and fixtures . . . . . 112,347,557 (103,960,251) 8,387,306 5,442,276 6,658,015 Telecommunication, audio and video equipment . . . . 300,483,653 (271,813,278) 28,670,375 17,311,403 3,553,498 External network and broadcasting equipment . . 3,108,126,843 (2,553,563,481) 554,563,362 227,200,769 278,358,091 Computer equipment and software ...... 369,619,594 (324,506,307) 45,113,287 26,064,184 35,622,027 Technical equipment ...... 35,155,142 (28,572,918) 6,582,224 3,583,315 9,371,518 Workshop machinery...... 679,671,681 (607,626,770) 72,044,911 78,513,343 88,079,932 Tools ...... 34,407,099 (27,070,060) 7,337,039 1,407,923 748,722 Spare parts ...... 24,008,607 (20,331,565) 3,677,042 3,098,431 3,368,262 Installations ...... 104,167,419 (90,952,113) 13,215,306 18,485,754 23,824,088 Vehicles ...... 93,816,140 (79,921,867) 13,894,273 5,096,136 3,824,978 Plots ...... 10,639,531 (6,715,099) 3,924,432 3,510,579 2,755,612 Leased assets ...... 152,697 (147,388) 5,309 6,950 20,232 Other materials and equipments ...... 194,370,354 — 194,370,354 75,338,511 55,967,095 Works-in-progress ...... 60,518,548 — 60,518,548 27,728,866 16,363,972 Leasehold improvements. . . 42,733,688 (38,285,980) 4,447,708 3,273,805 133,216 Advances to suppliers . . . . . 3,311,322 — 3,311,322 7,507,715 2,496,751 Subtotal ...... 5,743,904,707 (4,372,031,537) 1,371,873,170 780,935,660 822,662,724 Allowance for property, plant and equipment impairment and obsolescence of materials ...... (29,147,324) — (29,147,324) (15,242,257) (13,762,707) Total as of December 31, 2006 ...... 5,714,757,383 (4,372,031,537) 1,342,725,846 Total as of December 31, 2005 ...... 3,360,688,540 (2,594,995,137) 765,693,403 Total as of December 31, 2004 ...... 3,270,433,632 (2,461,533,615) 808,900,017

(1) It includes historical value and accumulated depreciation in the amount of 2,171,211,222 and 1,723,501,359, respectively, arising from the acquisition and consolidation of companies as of December 31, 2006.

F-75 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) h) Intangible Assets, net

Cost of Accumulated Net Book Value as of December 31, Main Account Acquisition(1) Amortization(1) 2006 2005 2004 Organizational expenses, pre- operating costs and licenses. . . 42,800,486 (34,514,108) 8,286,378 6,001,719 6,774,532 Editing/exploitation rights ...... 47,107,819 (6,484,084) 40,623,735 4,348,388 3,098,212 Network acquisition rights ...... 4,339,331 (2,720,666) 1,618,665 1,975,015 2,378,200 Subscriber portfolio acquired . . . . 1,057,401,271 (28,109,650) 1,029,291,621 5,789,578 350,179 Trademarks and patents ...... 2,675,777 (1,739,817) 935,960 1,052,820 1,147,274 Deferred charges ...... 5,449,239 (2,082,755) 3,366,484 114,494 125,485 Advances to suppliers ...... — — — 439,416 — Other ...... 28,166,831 (25,333,590) 2,833,241 9,773,622 11,450,634 Subtotal ...... 1,187,940,754 (100,984,670) 1,086,956,084 29,495,052 25,324,516 Allowance for intangible assets impairment ...... (396,840) — (396,840) (4,100,849) (396,839) Total as of December 31, 2006 . . 1,187,543,914 (100,984,670) 1,086,559,244 Total as of December 31, 2005 . . 90,436,238 (65,042,035) 25,394,203 Total as of December 31,2004 . . . 93,917,095 (68,989,418) 24,927,677

(1) Include historical value and accumulated amortization in the amount of 388,691,442 and 121,234,405, respectively, arising from the acquisition and consolidation of companies as of December 31, 2006.

F-76 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Balance as of December 31, 2006 2005 2004 i) Accounts payable Current Suppliers ...... 417,185,185 245,582,428 284,694,403 Related parties ...... 20,254,300 38,111,524 6,586,723 437,439,485 283,693,952 291,281,126 Non-Current Suppliers ...... 10,640,522 3,118,675 6,215,646 Related parties ...... — 1,868,566 8,295,475 10,640,522 4,987,241 14,511,121 j) Short-term and long-term debt Short-term debt and current portion of long- term debt Bank overdraft ...... 5,707,822 257,418 193,832 Financial loans ...... 300,349,298 327,467,128 69,679,523 Negotiable obligations ...... 59,307,498 1,538,791,560 1,513,398,960 Accrued Interest ...... 52,643,707 912,534,903 658,017,741 Related parties ...... 2,500,000 2,500,000 — 420,508,325 2,781,551,009 2,241,290,056 Long-term debt Financial loans ...... 174,979,771 146,530,443 206,549,876 Negotiable obligations ...... 1,998,550,151 301,747,913 366,455,369 Measurement at fair value ...... (115,671,576) (20,485,795) (22,780,438) 2,057,858,346 427,792,561 550,224,807 k) Other liabilities Current Related parties ...... 6,171,009 4,489,780 1,815,223 Sellers financing ...... 41,171,557 12,303,712 9,623,021 Dividends payable ...... 15,026,649 14,473,674 13,338,357 Advances from clients ...... 50,514,512 31,010,539 14,881,477 Other ...... 23,579,273 20,291,637 21,891,993 136,463,000 82,569,342 61,550,071 Non-Current Sellers financing ...... 850,590,278 2,236,718 15,711,541 Net deferred tax liabilities...... 156,104,142 242,386 60,328 Guarantee deposits ...... 1,697,806 1,617,153 — Long-term investments ...... — 13,748,722 11,112,484 Other ...... 2,054,071 3,125,425 5,900,025 1,010,446,297 20,970,404 32,784,378

F-77 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) involved, the following business segments have been identified, which are closely related to the way in which the Company’s management assesses its business performance: • Cable television & Internet access: it is basically comprised by the operations of its subsidiary Cablevisión together with its subsidiaries, mainly Multicanal, Teledigital and PRIMA. • Printing & publishing: it is basically comprised by the operations of its subsidiary AGEA and its subsidiaries AGR, CIMECO, Tinta Fresca Ediciones S.A. (“Tinta Fresca”), Papel Prensa S.A.I.C.F. y de M., La Razón, Ferias y Exposiciones Argentinas S.A. and Oportunidades S.A. • Broadcasting and programming: it is basically comprised by the operations of its subsidiaries ARTEAR, IESA and Radio Mitre, and their respective subsidiaries, including Telba, Radio Televisión Río Negro Sociedad del Estado LU 92 Canal 10 — UTE, and the companies under common control, such as Pol-Ka, Ideas del Sur S.A., Tele Red Imagen S.A. (“TRISA”) and Televisión Satelital Codificada S.A. (“TSC”). Additionally, the Company is engaged in other related business, which were included under “Other”. These segments fundamentally include the Company’s own operations (particular to a holding company) and those carried out by its (directly or indirectly) subsidiaries GCGC and Clarín Global.

F-78 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

There follows the information as of December 31, 2006, 2005 and 2004 for each of the business segments identified by the Company: Cable Television & Broadcasting Internet Printing & and Access Publishing Programming Other Deletions Total INFORMATION ARISING FROM CONSOLIDATED INCOME STATEMENTS AS OF DECEMBER 31, 2006 Net sales to third parties ...... 1,226,309,460 947,247,552 559,404,817 78,831,203 — 2,811,793,032 Intersegment net sales ...... 48,474,550 42,111,043 100,060,949 24,117,553 (214,764,095) — Net sales ...... 1,274,784,010 989,358,595 659,465,766 102,948,756 (214,764,095) 2,811,793,032 Cost of sales (excluding depreciation and amortization) . . (588,742,474) (513,306,404) (454,968,953) (26,008,876) 91,398,602 (1,491,628,105) Subtotal ...... 686,041,536 476,052,191 204,496,813 76,939,880 (123,365,493) 1,320,164,927 Expenses (excluding depreciation and amortization) Selling expenses...... (178,687,981) (103,065,779) (50,185,834) (8,225,007) 50,178,632 (289,985,969) Administrative expenses ...... (174,124,724) (110,974,392) (70,659,039) (32,850,830) 68,082,783 (320,356,202) Depreciation of property, plant and equipment ...... (115,707,061) (35,622,297) (15,988,620) (2,000,924) — (169,318,902) Amortization of intangible assets ...... (34,798,158) (2,580,385) (1,316,759) (187,346) — (38,882,648) Depreciation of other investments ...... — (156,036) — (172,014) — (328,050) Financing and holding results Generated by assets ...... 4,904,240 87,106 (7,111,874) 16,508,377 (19,122,736) (4,734,887) Generated by liabilities ...... 1,001,081,365 (49,120,604) (5,453,484) (40,730,202) 18,952,795 924,729,870 Equity in earnings (losses) from unconsolidated affiliates and gain on sale of subsidiaries, net ...... 254,091,313 (25,365,788) (102,587) (3,949,567) — 224,673,371 Other income (expense), net . . . . 11,501,040 (3,977,734) 2,892,641 1,796,203 5,274,019 17,486,169 Income for the year before income tax, tax on assets and minority interest ...... 1,454,301,570 145,276,282 56,571,257 7,128,570 — 1,663,277,679 Income tax and tax on assets . . (415,773,903) (64,817,688) (19,969,225) 9,866,173 (490,694,643) Minority interest ...... (301,993,864) 68,428 (1,198,748) 212,111 — (302,912,073) Net income for the year ...... — 80,527,022 35,403,284 17,206,854 — 869,670,963 INFORMATION ARISING FROM CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2006 Total Assets ...... 4,955,393,637 973,256,081 553,607,304 434,506,716 (530,049,674) 6,386,714,064 Total Liabilities...... 3,113,127,203 632,653,517 334,585,519 946,820,720 (530,049,674) 4,497,137,285 ADDITIONAL CONSOLIDATED INFORMATION AS OF DECEMBER 31, 2006 Acquisition of property, plant and equipment ...... 224,430,307 44,500,416 17,278,575 1,529,705 (34,152,656) 253,586,347 Acquisition of intangible assets . . . 14,364,252 2,679,644 35,770,509 — — 52,814,405 Non-cash expenses ...... (20,929,065) 11,756,098 4,956,756 16,194 — (4,232,405)

F-79 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Cable Television & Broadcasting Internet Printing & and Access Publishing Programming Other Deletions Total INFORMATION ARISING FROM CONSOLIDATED INCOME STATEMENTS AS OF DECEMBER 31, 2005 Net sales to third parties ...... 733,894,382 798,921,729 443,999,881 11,608,648 — 1,988,424,640 Intersegment net sales ...... 8,891,031 28,110,728 55,422,761 48,209,918 (140,634,438) — Net sales ...... 742,785,413 827,032,457 499,422,642 59,818,566 (140,634,438) 1,988,424,640 Cost of sales (excluding depreciation and amortization) . . (395,794,280) (416,385,976) (314,674,979) (19,179,276) 57,572,802 (1,088,461,709) Subtotal ...... 346,991,133 410,646,481 184,747,663 40,639,290 (83,061,636) 899,962,931 Expenses (excluding depreciation and amortization) Selling expenses...... (106,286,095) (101,106,688) (53,140,812) (3,550,876) 36,539,078 (227,545,393) Administrative expenses ...... (85,931,323) (96,031,301) (53,721,058) (26,507,751) 46,522,558 (215,668,875) Depreciation of property, plant and equipment ...... (90,065,103) (38,544,662) (12,399,035) (1,713,326) (142,722,126) Amortization of intangible assets ...... (5,858,058) (1,829,004) (727,116) (241,143) — (8,655,321) Depreciation of other investments ...... — (156,036) — (118,631) — (274,667) Financing and holding results Generated by assets ...... 13,532,461 3,293,173 (4,628,649) 866,953 — 13,063,938 Generated by liabilities ...... (303,191,178) (20,000,236) (2,359,528) (28,746,261) — (354,297,203) Equity in earnings (losses) from unconsolidated affiliates and gain on sale of subsidiaries, net ...... 7,860,226 777,859 (271,439) 6,847,734 — 15,214,380 Other income (expense), net . . . . 4,763,084 (696,399) 1,083,799 (4,881,040) — 269,444 Income for the year before income tax, tax on assets and minority interest ...... (218,184,853) 156,353,187 58,583,825 (17,405,051) — (20,652,892) Income tax and tax on assets . . 118,197,673 (62,256,888) (19,877,432) (90,630) — 35,972,723 Minority interest ...... (141,581) (643,777) (922,515) (37,936) — (1,745,809) Net (loss) income for the year. . . . (100,128,761) 93,452,522 37,783,878 (17,533,617) — 13,574,022 INFORMATION ARISING FROM CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2005 Total Assets ...... 3,336,085,132 757,249,323 474,719,843 111,741,980 (110,290,806) 4,569,505,472 Total Liabilities...... 2,702,517,166 535,836,152 289,419,710 456,081,042 (110,290,806) 3,873,563,264 ADDITIONAL CONSOLIDATED INFORMATION AS OF DECEMBER 31, 2005 Acquisition of property, plant and equipment ...... 72,128,951 17,348,490 11,341,282 976,200 — 101,794,923 Acquisition of intangible assets . . . 896,859 — 661,189 39,920 — 1,597,968 Non-cash expenses ...... (15,073,740) (1,010,521) (6,284,090) (252,499) — (22,620,850)

F-80 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Cable Television & Broadcasting Internet Printing & and Access Publishing Programming Other Deletions Total INFORMATION ARISING FROM CONSOLIDATED INCOME STATEMENTS AS OF DECEMBER 31, 2004 Net sales to third parties ...... 632,836,030 703,075,993 324,856,730 6,563,932 — 1,667,332,685 Intersegment net sales ...... 10,033,983 29,022,301 91,776,138 51,085,163 (181,917,585) — Net sales ...... 642,870,013 732,098,294 416,632,868 57,649,095 (181,917,585) 1,667,332,685 Cost of sales (excluding depreciation and amortization) . . (306,762,511) (361,263,476) (250,932,717) (15,292,291) 92,054,315 (842,196,680) Subtotal ...... 336,107,502 370,834,818 165,700,151 42,356,804 (89,863,270) 825,136,005 Expenses (excluding depreciation and amortization) Selling expenses ...... (82,179,572) (99,090,269) (46,601,959) (2,017,440) 37,852,050 (192,037,190) Administrative expenses ...... (78,531,509) (79,638,302) (47,604,013) (20,429,650) 52,011,220 (174,192,254) Depreciation of property, plant and equipment ...... (116,028,708) (54,227,309) (12,082,289) (1,556,549) — (183,894,855) Amortization of intangible assets ...... (7,369,415) (2,954,602) (1,408,878) (233,406) — (11,966,301) Depreciation of other investments ...... — (156,036) — (118,629) — (274,665) Financing and holding results Generated by assets...... 13,180,240 (11,188,936) (7,332,228) 2,557,365 — (2,783,559) Generated by liabilities ...... (273,012,030) (6,710,178) (970,096) (20,041,762) — (300,734,066) Equity in earnings (losses) from unconsolidated affiliates and gain on sale of subsidiaries, net. . . . . 1,533,494 26,944,162 (159,875) 3,092,116 — 31,409,897 Other income (expense) net . . . . . (3,574,385) (1,259,216) (3,028,254) (2,276,709) — (10,138,564) Income for the year before income tax, tax on assets and minority interest ...... (209,874,383) 142,554,132 46,512,559 1,332,140 — (19,475,552) Income tax and tax on assets . . . 65,906,396 (26,009,600) (17,239,813) (7,404,657) — 15,252,326 Minority interest ...... 1,587,961 1,123,129 (244,295) (139,767) — 2,327,028 Net (loss) income for the year . . . . (142,380,026) 117,667,661 29,028,451 (6,212,284) — (1,896,198) INFORMATION ARISING FROM CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2004 Total Assets ...... 2,907,636,818 693,194,612 407,724,536 114,599,620 (64,697,357) 4,058,458,229 Total Liabilities ...... 2,392,316,325 567,206,642 244,954,580 230,210,382 (64,697,357) 3,369,990,572 ADDITIONAL CONSOLIDATED INFORMATION AS OF DECEMBER 31, 2004 Acquisition of property, plant and equipment ...... 43,375,535 11,343,231 12,659,235 4,557,251 (3,000,000) 68,935,252 Acquisition of intangible assets . . . 1,786,879 — 88,268 8,831 — 1,883,978 Non-cash expenses ...... (1,536,099) (22,325,952) (18,922,976) (237,613) — (43,022,640)

NOTE 4 — COMMITMENTS AND CONTINGENCIES a) Restrictions, Surety and Guarantees

IESA has contractual restrictions on the transfer of its equity interest in TRISA and Tele Net Image Corp.

Furthermore, TRISA’s equity interest in Torneos y Competencias S.A. (Uruguay) is pledged as collateral for a credit line.

F-81 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

AGEA, TRISA, Cablevisión and Multicanal have financial indebtedness outstanding involving certain restrictions, including but not limited to, the distribution of dividends. Pursuant to the terms and conditions of Cablevisión’s outstanding Negotiable Obligations issued on October 7, 2005 (see Note 5), as of December 31, 2006, Cablevisión holds 56,838,603 in a reserve account to guarantee the payment of interest on the agreed-upon terms. Should Cablevisión default, either partially or totally, on the payment of amounts due under the Negotiable Obligations above-mentioned, the trustee shall promptly apply the funds deposited in the reserve account the amounts to settle principal or interest and cure the default. To the extent Cablevisión has not defaulted on its obligations under the Negotiable Obligations issued on October 7, 2005, it may instruct the Trustee to transfer amounts deposited for the sole purpose of applying them to service debt or to pay the purchase or redemption price of such Negotiable Obligations, acquired in the over-the-counter market or redeemed by Cablevisión. b) Pending Authorizations from the Federal Broadcasting Committee (“COMFER”) Authorizations regarding the elimination of signal distribution modems by Multicanal, share transfers in its favor and company reorganizations are pending with the COMFER. Furthermore, the requests for transfer of licenses filed in favor of Cablevisión related to certain acquisitions and reorganization processes, including the acquisitions of Multicanal and Hicks, Muse, Tate & Furst, LA Argentina Cable Company, LLC (“Hicks LLC”) (Teledigital) mentioned in Note 10 to the parent company only financial statements and in Note 8, are also pending approval by the COMFER. While the subsidiaries expect to obtain such approvals, no assurance can be given that the COMFER will grant them. c) Broadcasting Licenses Broadcasting licenses are granted for an initial period of 15 years, allowing for a one-time extension of 10 years. Applicable legislation sets forth that the COMFER shall grant the extension, provided it can be proved that the licensee has complied with the effective applicable legislation, bidding terms and conditions and undertakings in their proposals during the first period of the license in question. On May 24, 2005, Decree 527/05 provided for a 10-year-suspension of the terms then effective of broadcasting licenses or its extensions, subject to certain conditions. Calculation of the terms shall be automatically resumed upon expiration of the suspension term. The Decree requires that companies seeking to rely on the extension subject to it submit for the COMFER’s approval, within 2 years of the date of the Decree, proposals to make broadcasting tune available for programming, contributing to the preservation of the national culture and the education of the population. ARTEAR, its subsidiaries Telecor and Telba, as well as Cablevisión, Multicanal and their subsidiaries, and Radio Mitre hold broadcasting licenses and have submitted proposals. Although no assurance can be given, these subsidiaries expect that their respective licenses will be timely extended or renewed. On November 5, 2004, the COMFER notified Cablevisión, among other issues, that the requests submitted by the subsidiary aiming to validate some changes of shareholders and directors already introduced had not been approved by such Committee, which would mean an infringement of the broadcasting law and would render null the decisions made at the Shareholders’ Meetings. Even though, based on the available information and the respective reports of its legal counsel, the notice

F-82 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) would not be legally binding upon the subsidiary, Cablevisión took the necessary steps and brought legal actions and defenses, as appropriate.

Additionally, the COMFER notified Televisora La Plata S.A., a Cablevisión’s subsidiary, of an alleged breach of the terms and conditions of its broadcasting license. The COMFER indicated that it may impose penalties, including fines or even the revocation of such broadcasting license. Although no assurance can be given as to the final outcome of this matter, the subsidiary and its legal counsel consider that the probability that it will have a significant adverse impact on Cablevisión’s financial- economic situation is remote. d) Antitrust Considerations

The National Committee for the Defense of Competition (“CNDC” for its Spanish acronym) received several complaints against Cablevisión, Multicanal and their subsidiaries prior to the increase of our ownership interest in Cablevisión in September 26, 2005 alleging, among other issues, divisions of areas among these companies, imposition of predatory prices, price discrimination among areas, minimum pricing for the trading of channels and other anti-competitive practices.

Although no assurance can be given as to the final outcome of the above-mentioned cases, Cablevisión, Multicanal and its legal counsel believe, based on the available information, that the probability of these issues having a significant adverse impact on the financial- economic situation of these companies is remote.

As of the date of these financial statements, Cablevisión’s acquisitions of Multicanal and Hicks LLC mentioned in Note 8, were pending approvals from the CNDC. e) Other Regulatory Matters

Multicanal and Cablevisión

In January 2006, the Government of the City of Buenos Aires enacted Act 1,877, which provides for a 15-year-term to regularize the authorization to install cable television networks in the thorough- fare on a single-column. It also provides for a one-year-term in order to remove posts in the area known as “historical part of town”. Finally, the new Act sets forth a 3-year-term for regularizing on a single column basis the avenues of the City of Buenos Aires. The related works have already been scheduled and budgeted to be executed in the forthcoming years.

Furthermore, the Government of the City of Mar del Plata enacted Ordinance No. 9163, governing the installation of cable television networks. Such Ordinance was amended and restated by Ordinance No. 15981 dated February 26, 2004, providing for a term due December 31, 2007 for cable companies to convert their cable networks. f) Commitments to Make Capital Contributions to Subsidiaries

Fintelco S.A. (“Fintelco”) reported negative balance in its shareholders’ equity as of November 30, 2006. Under the Argentine Business Associations Act, this event could bring about its dissolution due to capital loss, unless the shareholders agree to its total or partial repayment or a capital increase. Cablevisión and Multicanal hold each 50% of Fintelco’s capital stock. Both companies have undertaken to make the required contributions in that same proportion to settle the liabilities of Fintelco’s and its subsidiaries when due.

F-83 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) g) Claims Brought by the COMFER ARTEAR On December 9, 2002, ARTEAR adhered to the payment facilities regime established by Executive Power Decree No. 2362/02 to comply with fines already imposed or that could be imposed due to infringement of effective broadcasting regulations between January 1, 2001 and October 31, 2002, inclusive, and opted to recognize the total amount to be settled by granting advertising seconds in favor of the COMFER. In addition, between November 1, 2002 and December 31, 2006, the COMFER applied fines to ARTEAR under the new regime in effect, amounting to 551,000, which have been provisioned. ARTEAR has appealed the decisions imposing those fines.

Radio Mitre As of December 31, 2006, 2005 and 2004, Radio Mitre records an outstanding balance to be settled with advertising in favor of TELAM, arising from fines imposed by the COMFER.

Cablevisión The COMFER gave Cablevisión notice of 376 administrative summary proceedings for alleged infringements of the Broadcasting Law, occurring between November 1, 2002 and December 31, 2006. Cablevisión replied to such proceedings. The COMFER has rendered decisions in more than 231 of these summary proceedings, imposing fines in the amount of 1,036,954. Cablevisión appealed such penalties and the rest of the summary proceedings are pending of resolution.

Multicanal Multicanal applied to obtain the benefits for several payment facilities regimes to comply with fines applied for alleged infringements of broadcasting regulations. As a result of these filings, the amounts determined by the COMFER were settled by assigning advertising seconds in favor of the Media Secretariat of the Presidency and the COMFER, to be applied to the broadcasting of general interest campaigns organized by the National Government. The COMFER has initiated summary administrative proceedings against Multicanal for infringements of regulations regarding the content of programming that took place commencing November 1, 2002, and imposed fines in the amount of 186,926. Although Multicanal appealed those fines, there is no certainty that it will obtain a favorable result. Likewise, the COMFER issued resolutions notifying several broadcasting licensees absorbed by Multicanal of the rejection of the exemption application filed under the terms of Resolution No. 393/93 and demanded settlement of the unpaid amount plus interest. Multicanal believes that there are matters of fact and of law in favor of those companies that would lead the COMFER to review its position, but there is no certainty that it will rule in favor of Multicanal. h) Lawsuits and or Claims ARTEAR There has been a recent dispute between broadcast TV operators and the National Customs Administration (“ANA” for its Spanish acronym) in connection with the import value of films. Under the criterion followed by the broadcast TV operators, ARTEAR paid other taxes which, if ANA’s position prevails, should not have been paid. Since the amount of taxes paid exceeds those claimed by the

F-84 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

ANA, in the opinion of the subsidiary and its legal advisors, this situation would not have a material economic impact and, therefore, no provision has been recorded.

TRISA The Argentine Association of Songwriters and Composers (“SADAIC” for its Spanish acronym) filed a claim against TRISA, a company in which IESA holds a 50% interest and exercises control jointly with Torneos y Competencias S.A., for the payment of royalties on musical works used in TyC Sports programs, which are broadcast nationwide via satellite. The claim is equivalent to 1% on TRISA’s gross sales since 1993. In August 2006, TRISA reached a settlement with SADAIC with respect to the claim. The agreement contemplates a payment of a 0.3% royalty over TRISA’s turnover as from June 2006, payable monthly. In addition, the parties agreed on the payment of a lump sum to discharge any and all amounts allegedly owed to TRISA for the whole period elapsed through May 2006. As of the date of these financial statements, TRISA has fulfilled all the obligations arising from such settlement.

GCGC During the year ended December 31, 2005, GCGC recorded a provision amounting to approximately 2.3 million based on a potential claim that could arise from different interpretations made by the Argentine Tax Authorities (“AFIP” for its Spanish acronym) of Act No. 25,250 and application assumptions. Although GCGC and its legal advisors consider that the original interpretation was technically correct and duly supported, following a conservative criterion, such subsidiary decided to set up a provision. As of the date of these financial statements, the subsidiary voluntarily paid approximately 2.2 million for differences between its original calculations and the various interpretations of the AFIP of Act No. 25,250, plus the related interest and fines. GCGC reserves the right to apply for a refund of amounts paid.

Cablevisión On April 20, 2005, Cablevisión was served notice of the ruling from the National Tax Court, which provided for the confirmation of AFIP’s official assessment concerning the alleged failure to pay Value Added Tax (“VAT”) on sales of advertising in magazines for certain periods of the years 1996 through 1998. As of December 31, 2006, the restated amounts are estimated at approximately 13 million. Cablevisión appealed such ruling. On June 6, 2006, Cablevisión obtained a preliminary injunction pursuant to which the AFIP shall refrain from claiming the VAT payment mentioned above. Cablevisión and its legal counsel consider that it may be possible to obtain a favorable judicial resolution and, therefore, that the probability of this issue having a significant adverse impact on Cablevisión’s financial-economic situation is remote.

F-85 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

22 million for potential damages that could be assessed against the defendant, should the complaint be dismissed. The remedy was granted against the issue of a surety bond. The Court of Appeals revoked the preliminary injunction. Multicanal filed an extraordinary appeal against that resolution, claiming it is both “arbitrary” and “damaging to the institution”. On October 1, 2004, Multicanal was served notice of the dismissal of its extraordinary appeal. As a result of the revocation of the preliminary injunction mentioned above, on December 12, 2001, Multicanal was served notice of the filing of a claim by Supercanal Holding S.A. for damages caused by the granting of the preliminary injunction that was subsequently revoked. It has been claimed that the suspension of the effects of the meeting held on January 25, 2000 resulted in the default by Supercanal Holding S.A. on its outstanding financial debt. Multicanal answered the complaint and rejected the liability attributed to it based on the fact that the default had taken place before the date of the meeting that was suspended by the preliminary injunction, according to documentation provided by the plaintiff itself. Furthermore, the suspension of the meeting did not prevent the capitalization of Supercanal Holding S.A. through other means. Based on de jure and de facto records of the case, Multicanal believes that the claim filed should be rejected in its entirety, and the legal costs should be borne by the plaintiff. There is no certainty that Multicanal will obtain an economic or financial gain as a result of these actions.

NOTE 5 — BORROWINGS Besides the disclosures in Note 7 to the financial statements, consolidated Loans include, mainly, the following:

AGEA On January 28, 2004, AGEA issued 10-year Series C Negotiable Obligations in the amount of USD 30.6 million, which accrue interest at an incremental rate (2% from December 17, 2003 to January 28, 2008; 3% from January 29, 2008 to January 28, 2012; and 4% from January 29, 2012 up to the total repayment of the bonds), payable semiannually. Principal is due in full at maturity on January 28, 2014. As of December 31, 2006, the outstanding principal amounts to 93.6 million and accrued and unpaid interest totals 0.8 million. Furthermore, on January 25, 2006, AGEA issued Series D Negotiable Obligations in the amount of 300 million, which accrue interest at a variable rate equal to the sum of the CER variation for the period, plus a 4.25% margin, payable semiannually commencing June 15, 2006. Principal will be repaid in 8 equal and consecutive semiannual installments as from June 15, 2008. As of December 31, 2006, the outstanding principal amounts to 300 million and accrued and unpaid interest totals 1.7 million.

IESA As of December 31, 2006, IESA holds, with one of its subsidiaries on which it holds a 50% interest, a short-term loan in the amount of 5 million. Such loan accrues interest at an annual 8% fixed rate. Interest accrued and unpaid as of December 31, 2006 totals 0.4 million.

TRISA TRISA, a company in which IESA holds 50% interest and exercises control jointly with Torneos y Competencias S.A., holds USD 11.6 million, under a loan with First Overseas Bank Limited payable in 16 semiannual installments, the first one of which was due on June 28, 2004. The agreed-upon

F-86 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) interest rate is Libor plus 3%. As of December 31, 2006, the outstanding principal totaled USD7.3 million.

Radio Mitre As of December 31, 2006, Radio Mitre holds loans having an aggregate principal amount outstanding of approximately 4.1 million, of which 2.6 million are repaid in monthly installments. Such loans accrue interest at an average fixed rate of 13%.

Vistone As of December 31, 2006, Vistone holds short-term financial debts for a total principal amount of USD79.9 million, which accrue interest at Libor plus 0.75%.

Cablevisión The suspension of convertibility coupled with the subsequent devaluation of the Argentine peso against the US dollar had a severe impact on Cablevisión’s cash-generating capacity. Therefore, Cablevisión failed to make principal or interest payments of its debt denominated in USD. In 2003, Cablevisión submitted to its creditors a proposal to restructure its financial debt through an Acuerdo Preventivo Extrajudicial (out-of-court restructuring agreement established by Argentine Law, APE for its Spanish acronym). On October 7, 2005, holders of 94.76% of Cablevisión’s financial debt subject to the APE entered into exchange agreements with Cablevisión, which enabled Cablevisión to complete the restructuring of approximately USD 755 million (out of approximately USD 796 million), on the terms set forth in the APE. Cablevisión issued and made available to all holders of debt, subject to the APE, 7-year Negotiable Obligations for a total amount of USD 150,077,436, which accrue interest at an annual rate of 6% for the first 5 years, and 7% for the remaining 2 years, and 10-year Negotiable Obligations set up for a total amount of USD 235,121,316, which accrue interest at an annual incremental rate of 3% in cash to 12%. Furthermore, it made available to all creditors approximately USD 142,800,000 under the cash buyback option. Finally, in accordance with the resolution of the Extraordinary Shareholders’ Meeting and pursuant to the capital option, the Company increased its capital stock by 39,465,500, through the issuance of 39,465,500 Class B shares, with a par value of 1 each and one voting right per share, with additional paid-in capital. After October 7, 2005, the holders of (approximately USD 20.8 million) of Cablevisión’s financial debt subject to the APE entered into exchange agreements and received their consideration in exchange for the irrevocable discharge of all their claims under the refinanced debt. Therefore, as of the date of these financial statements, the restructuring of approximately USD 776 million principal amount of debt subject to Cablevisión’s APE has been completed. Additionally, Cablevisión restructured approximately 39 million of its debt with public sector banks. As of December 31, 2006, out of the total amount of Negotiable Obligations issued by Cablevisión in October 2005, USD 889,090 and USD 14,975,573 principal amount of 7-year and 10-year Negotiable Obligations, respectively, account for the consideration that, under the APE, is applicable to those creditors who had not executed exchange agreements up to such date and are being held in escrow pending final confirmation of the APE. On October 7, 2005 and September 29, 2006, Cablevisión repaid USD6,732,569 and USD28,084,054 of the 7-year Negotiable Obligations, respectively.

F-87 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Multicanal

During the year ended December 31, 2002, Multicanal suspended payments on its financial debt as a result of the economic situation in Argentina.

In 2003, Multicanal submitted to its creditors a proposal for the restructuring of its financial debt through an APE, comprising three options: a cash buyback option at 30 cents per USD1, a 10-year bond exchange option and a combined exchange option (including 7-year bonds and common shares). Each of these options was subject to a ceiling. On December 13, 2003, Multicanal announced that the required majority of affected creditors had consented to the restructuring set forth in the APE.

On July 20, 2006, after having obtained the authorizations from the Argentine Securities and Exchange Commission (CNV) and the Buenos Aires Stock Exchange, Multicanal delivered to its Exchange Agent: a) 10-year Series A Negotiable Obligations for USD80,325,000, which accrue interest at an annual rate of 2.5% until the fourth year as from their issuance, 3.5% as from the fourth year and up to the eighth year, and 4.5% as from the eighth year and up to maturity; and 7-year Series B Negotiable Obligations for USD142,966,475, out of which USD139,869,850 accrue interest at an annual rate of 7% and USD 3,096,625 accrue interest at three-month Libor plus 1.325%, in order for the Exchange Agent, in its capacity as such, to deliver them to the holders entitled to receive them according to their options under the APE, b) aggregate interest accrued on those securities from December 10, 2003 until June 19, 2006, and c) purchase price for the old bonds and interest accrued thereon from December 10, 2003 until July 19, 2006 to those who opted for the cash option.

Effective July 20, 2006, after having exchanged the securities and paid the cash amount mentioned above, Multicanal’s entire debt subject to the APE was discharged. Accordingly, Multicanal booked the effects of its restructuring, which resulted in a gain of 1,246,496,775 for the year ended December 31, 2006.

On October 13, 2006, the Argentine Court confirmed the completion of Multicanal’s APE.

F-88 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTE 6 — OTHER LIABILITIES

In addition to the debts incurred from the acquisition of equity interests disclosed in the financial statements and in Note 8, other consolidated liabilities mainly include ARTEAR’s debt arising from the restructuring agreements executed in March and October 2003 for the acquisition of Telecor.

In the first case, the agreed-upon outstanding balance amounted to a nominal value of USD 4.3 million, payable in six annual and consecutive installments. The agreement sets forth that the sixth installment amounting to USD 1 million shall become automatically discharged without any payment thereof by ARTEAR upon the payment in full of the first five installments. As of December 31, 2006, ARTEAR owes the fifth installment, which will fall due in 2007.

Regarding the debt incurred in the acquisition of Telecor, the original principal amount was USD 4.2 million. As of December 31, 2006, ARTEAR had repaid USD 3.3 million. The outstanding balance is USD 0.8 million.

Furthermore, upon execution of this agreement, the term, price and payment method of an irrevocable put option of 755,565 common, nominative, non-endorsable shares, representing 14.815% of the capital stock and votes of Telecor, agreed in favor of the sellers, and the term of the irrevocable call option of those shares agreed in favor of ARTEAR were amended, the former having been set at 16 years as from March 16, 2010 at a price of USD3 million, and the latter at 26 years as from March 16, 2000 for USD4.8 million, which will be adjusted at a nominal annual rate of 5% as from April 16, 2016.

NOTE 7 — DERIVATIVE FINANCIAL INSTRUMENTS

The amounts of 6.96 million and 0.02 million are included under Other non-current receivables and Other non-current liabilities, respectively. These figures represent the net amounts of certain outstanding interest rate and exchange rates swap agreements, relating to a nominal value of approximately 152 million, whereby one of the Company’s subsidiaries transfers to or receives from the counterparts the net position resulting from swapping a 152 million payment obligation accruing interest at a variable Ps. rate into a USD obligation accruing interest at a fixed rate.

These transactions generated a loss of 2.5 million for 2006. The swap agreements, executed in January 2006, are effective until December 2011.

NOTE 8 — ACQUISITION AND REORGANIZATION OF COMPANIES

In addition to the transactions detailed in Note 10 to the financial statements, on September 26, 2006 the following transactions were carried out:

• Vistone purchased Cablevisión’s Class B shares in cash. These shares account for a 1.66% participating interest in the capital stock of the latter.

• VLG increased its participating interest in Cablevisión by 11.312%.

• Cablevisión executed share purchase agreements whereby it acquired 100% interest in Hicks LLC, indirect controlling company of Teledigital, for a cash payment of approximately USD 70 million. Teledigital provides cable television services in several provinces of Argentina. Additionally, on September 28 and 29, 2006, Cablevisión made irrevocable capital contributions to Hicks LLC in the amount of 76,410,880, which were allocated to the repayment of such debts.

F-89 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

• Multicanal acquired 100% of PRIMA’s capital stock.

On August 22, 2006, ARTEAR acquired a 30% interest in Ideas del Sur S.A.’s capital stock, a TV programming producer. The transaction cost amounted to USD 6.5 million, out of which USD2 million were settled in cash and the outstanding balance through the assumption of debts.

On December 22, 2006, Multicanal sold 3% of PRIMA’s capital stock to a Cablevisión’s subsidiary.

On December 26, 2006, Cablevisión purchased from Hicks LLC 100% of the equity interest the latter held in Holding Teledigital Cable S.A.

On December 28, 2006, Vistone acquired 18% of PRIMA Internacional’s capital stock for the amount of USD15.1 million.

As of the date of these financial statements, some of the above transactions are subject to administrative approvals.

Mergers

Joint Ventures

On November 8, 2006, AGEA executed an agreement with S.A. La Nación to set up a joint venture, for the purposes of the joint organization, execution and explotation of stockbreeding shows. AGEA holds a 50% participating interest in this joint venture. The first show carried out by the joint venture took place from March 14 through March 17, 2007.

NOTE 9 — SUBSEQUENT EVENTS

On January 10, 2007, Cablevisión was served notice of a preliminary injunction issued concerning the case entitled “Grupo Radio Noticias S.R.L. vs/ Cablevisión and others over preliminary injunction” pending before the Civil, Commercial, Mining and Labor Court of the City of Concarán, Province of San Luis, in charge of Dr. Rubén Ángel Alonso (Deputy).

F-90 GRUPO CLARIN S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Pursuant to such preliminary injunction, the subsidiary shall, among other things, refrain from carrying out certain corporate transactions and submit certain information to the Court. Cablevisión appealed such injunction. On February 15, 2007 the appeal was approved.

Subsequently, the Company filed a motion of incompetence in the case entitled “Multicanal S.A. and other vs. Conadeco”, which is pending before the Federal Administrative Court No. 2, Secretariat No. 4 which was filed in order to solve the incompetence of the Civil, Commercial, Mining and Labor Court established by said precautionary measure. After the case was referred to the Supreme Court, the Concarán Civil Court was declared incompetent and was ordered to refer the related proceedings to Court No. 2 Secretariat 4. This Court indicated that the injunction is not binding upon Grupo Clarín and Multicanal.

Furthermore, on March 27, 2007, Cablevisión purchased 3% of PRIMA’s capital stock from one of its subsidiaries. Additionaly, on July 4, 2007 ARTEAR acquired 100% of Bariloche TV S.A. capital stock. The price for the acquisition of Bariloche TV S.A. capital stock was about USD 1.1 million.

F-91 BALANCE SHEETS As of December 31, 2006, 2005 and 2004 In Argentine Pesos (Ps.) — Note 2.1 As of December 31, 2006 2005 2004 ASSETS CURRENT ASSETS Cash and banks — Note 3.a) ...... 13,011,513 550,496 3,648,305 Other investments — Exhibit D ...... 9,130,760 510,069 5,426,380 Other receivables, net — Note 3.b) ...... 42,305,098 4,157,438 7,223,615 Total current assets...... 64,447,371 5,218,003 16,298,300 NON-CURRENT ASSETS Other receivables, net — Note 3.b) ...... 355,302,129 72,686,196 73,161,392 Investments — Exhibit C ...... 1,811,570,666 792,424,917 773,225,338 Other long-term investments — Exhibit D ...... — 9,892,319 10,010,950 Property, plant and equipment, net — Exhibit A...... 845,250 424,581 310,155 Intangible assets, net — Exhibit B ...... — 164,989 384,973 Total non-current assets ...... 2,167,718,045 875,593,002 857,092,808 Total assets ...... 2,232,165,416 880,811,005 873,391,108 LIABILITIES CURRENT LIABILITIES Accounts payable — Note 3.c) ...... 2,268,366 3,049,665 3,146,604 Short-term debt and current portion of long-term debt — Note 7 ...... 45,583,415 33,785,494 18,968,524 Salaries and Social Security payable ...... 7,430,419 4,654,895 3,575,139 Taxes payable — Note 3.d) ...... 9,172,591 1,119,644 1,727,166 Dividends payable...... 11,077,731 11,077,731 11,077,731 Other liabilities — Note 3.e) ...... 15,688,123 10,222,698 7,272,812 Total current liabilities ...... 91,220,645 63,910,127 45,767,976 NON-CURRENT LIABILITIES Long-term debt — Note 7 ...... 116,280,000 145,440,000 172,840,000 Other liabilities — Note 3.e) ...... 489,469,103 8,192,445 6,628,433 Total non-current liabilities...... 605,749,103 153,632,445 179,468,433 Total liabilities ...... 696,969,748 217,542,572 225,236,409 SHAREHOLDERS’ EQUITY (as per corresponding statements) ...... 1,535,195,668 663,268,433 648,154,699 Total Liabilities and Shareholders’ Equity ...... 2,232,165,416 880,811,005 873,391,108

The accompanying Notes 1 to 12 and Exhibits A, B, C, D, E, G and H are an integral part of these financial statements.

F-92 STATEMENTS OF OPERATIONS For the Years Ended December 31, 2006, 2005 and 2004 In Argentine Pesos (Ps.) — Note 2.1 For the Years Ended December 31, 2006 2005 2004 Equity in earnings (losses) from affiliates and subsidiaries — Note 3.f) ...... 876,455,854 22,494,667 8,367,424 Loss on sale of subsidiaries, net — Note 10 ...... (17,409,087) — — Management fees ...... 45,290,777 35,948,441 36,741,240 Administrative expenses — Exhibit H...... (30,666,102) (26,310,828) (20,326,163) Depreciation of property, plant and equipment — Exhibit A ...... (288,206) (180,918) (197,994) Amortization of intangible assets — Exhibit B ...... (164,989) (219,984) (219,984) Depreciation of other investments — Exhibit D...... (172,014) (118,631) (118,629) Financing and holding results — Generated by assets Interest ...... 15,497,200 195,279 3,683,711 Taxes ...... (1,046,807) (614,442) (677,220) Exchange differences and restatements ...... 113,264 804,556 (112,259) — Generated by liabilities Interest ...... (25,636,119) (10,727,948) (8,423,380) Exchange differences and restatements ...... 2,043,262 (4,081,527) (6,889,620) Loss from debt renegotiation...... — — (4,528,927) Other expense, net ...... (4,203,609) (2,715,790) (2,296,867) Income for the year before income tax ...... 859,813,424 14,472,875 5,001,332 Income tax — Note 9...... 9,857,539 (898,853) (6,897,530) Net income/(loss) for the year ...... 869,670,963 13,574,022 (1,896,198) Basic net income/(loss) per common share ...... 3.80 0.06 (0.01) Diluted net income/(loss) per common share — Note 4 . . 3.22 0.05 (0.01)

The accompanying Notes 1 to 12 and Exhibits A, B, C, D, E, G and H are an integral part of these financial statements.

F-93 STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY For the Years Ended December 31, 2006, 2005 and 2004 In Argentine Pesos (Ps.) — Note 2.1 Shareholders’ Contributions Retained Earnings Inflation Cumulative Total Capital Adjustment on Paid-in Special Translation Accumulated Shareholders’ Stock Capital Stock Capital(1) Reserves Subtotal Adjustment Deficit Equity Balances as of December 31, 2003 . . . 270,261,524 309,885,253 1,364,811,675 21,671,615 1,966,630,067 2,598,226 (1,314,686,969) 654,541,324 Cumulative translation adjustment ...... — — — — — (4,490,427) — (4,490,427) Net loss for the year . . . . — — — — — — (1,896,198) (1,896,198) Balances as of December 31, 2004 . . . 270,261,524 309,885,253 1,364,811,675 21,671,615 1,966,630,067 (1,892,201) (1,316,583,167) 648,154,699 Cumulative translation adjustment ...... — — — — — 1,539,712 — 1,539,712

F-94 Net income for the year . . — — — — — — 13,574,022 13,574,022 Balances as of December 31, 2005 . . . 270,261,524 309,885,253 1,364,811,675 21,671,615 1,966,630,067 (352,489) (1,303,009,145) 663,268,433 Cumulative translation adjustment ...... — — — — — 2,256,272 — 2,256,272 Net income for the year . . — — — — — — 869,670,963 869,670,963 Balances as of December 31, 2006 . . . 270,261,524 309,885,253 1,364,811,675 21,671,615 1,966,630,067 1,903,783 (433,338,182) 1,535,195,668

(1) Includes 333,636,239 corresponding to Class “A” and “B” preferred shares (Note 4).

The accompanying Notes 1 to 12 and Exhibits A, B, C, D, E, G and H are an integral part of these financial statements. STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2006, 2005 and 2004 In Argentine Pesos (Ps.) — Note 2.1 For the Years Ended December 31, 2006 2005 2004 CASH PROVIDED BY OPERATING ACTIVITIES Net income/(loss) for the year...... 869,670,963 13,574,022 (1,896,198) Income tax ...... (9,857,539) 898,853 6,897,530 Accrued interest ...... 10,138,919 10,532,669 4,739,669 Adjustments to reconcile net income/(loss) for the year to cash provided by operating activities: Depreciation of property, plant and equipment ...... 288,206 180,918 197,994 Amortization of intangible assets...... 164,989 219,984 219,984 Depreciation of other investments ...... 172,014 118,631 118,629 Equity in (earnings) losses from affiliates and subsidiaries ...... (876,455,854) (22,494,667) (8,367,424) Loss on sale of subsidiaries, net ...... 17,409,087 — — Setting up of provisions ...... 2,753 4,840 102,711 Exchange differences and restatements ...... (2,156,526) 3,276,971 7,001,879 Gain from financial debt renegotiation ...... — — 4,528,927 Loss on sale of property, plant and equipment ...... — — 183,431 Changes in assets and liabilities: Other receivables, net...... (14,735,815) 2,555,638 (3,375,750) Accounts payable ...... (781,299) 773,578 (8,061,874) Salaries and Social Security payable ...... 2,775,524 1,079,757 (472,549) Taxes payable ...... 8,052,947 (607,523) 298,561 Other liabilities ...... 2,578,488 (865,632) 7,544,714 Tax on assets payments ...... (228,532) — — Cash provided by operating activities ...... 7,038,825 9,248,039 9,660,234 CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES Collection of dividends ...... 116,605,216 14,772,489 13,286,582 Collection for proceeds from the disposal of long-term investments ...... 42,338,268 2,672,998 — Collection for proceeds from sale of property, plant and equipment and other investments ...... 49,086,002 — 3,000,000 Capital contributions in subsidiaries ...... (137,875,548) — (61,341,932) Payment for the acquisition of property, plant and equipment...... (708,875) (295,344) (217,773) Payment for the acquisition of other investments ...... (14,699,247) — (837,741) Payment for the acquisition of subsidiaries, net of cash acquired ...... — (4,336,200) — Collection of interest ...... — 91,091 3,147,419 Cash provided by (used in) investing activities...... 54,745,816 12,905,034 (42,963,445) CASH USED IN FINANCING ACTIVITIES Loans obtained...... 12,392,000 2,358,506 115,690,000 Repayment of loans ...... (30,898,000) (20,137,609) (141,138,225) Payment of debts due to purchase of investments ...... (8,939,025) (5,436,637) (1,861,385) Payment of interests ...... (13,778,335) (7,146,732) (4,697,629) Cash used in investing activities...... (41,223,360) (30,362,472) (32,007,239) FINANCING AND HOLDING RESULTS GENERATED BY CASH AND CASH EQUIVALENTS ...... 520,927 195,279 748,646 Net Increase /(Decrease) in cash...... 21,081,708 (8,014,120) (64,561,804) Cash and cash equivalents at the beginning of the year. . 1,060,565 9,074,685 73,636,489 Cash and cash equivalents at the end of the year(1) ...... 22,142,273 1,060,565 9,074,685

(1) It includes: Cash and banks...... 13,011,513 550,496 3,648,305 Investments with original maturities of less than three months...... 9,130,760 510,069 5,426,380

The accompanying Notes 1 to 12 and Exhibits A, B, C, D, E, G and H are an integral part of these financial statements.

F-95 NOTES TO THE FINANCIAL STATEMENTS As of December 31, 2006, 2005 and 2004 In Argentine Pesos (Ps.) — Note 2.1, Unless Otherwise Specifically Indicated

NOTE 1 — THE COMPANY Grupo Clarín is a holding company that operates in the Media industry. Its operating income and cash flows derive from the operations of its subsidiaries in which, directly or indirectly, participates. These operations include cable television and Internet access services, newspaper and other printing and publishing activities, broadcast television, radio operations and television content production, on-line and new media services, and other media related activities. A substantial portion of its revenues is generated in Argentina. Through controlled companies and joint ventures, it is engaged in primarily in the following business segments: Cable Television and Internet Access, consisting of the largest cable network in Latin America in terms of subscribers, operated by its subsidiary Cablevisión and its subsidiaries Multicanal and Teledigital Cable S.A. (“Teledigital”), with operations in Argentina and neighbouring countries, and the provision of high-speed Internet access mainly through its brands FiberTel and Flash; Printing and Publishing, consisting of national and regional newspapers, sports daily and magazine publishing as well as commercial printing. Diario Clarín, the flagship national newspaper, is the newspaper with the second largest circulation in the Spanish-speaking world. The sports daily Olé is the only newspaper of its kind in the Argentine market. The evening newspaper La Razón is the largest free newspaper in Argentina. The children’s magazine Genios is the children magazine in Argentina with the highest circulation. AGR is its printing company; Broadcasting and Programming, consisting of the broadcast television station with the highest share of prime time audience (Canal 13) and the AM/FM radio broadcast stations (Radio Mitre and La 100 ), as well as the production of television, film and radio programming content, including cable television signals and sports programming; and Other, consisting principally of digital and Internet content and horizontal portals as well as its subsidiary GCGC, its share service center.

NOTE 2 — BASIS FOR THE PREPARATION AND PRESENTATION OF THE FINANCIAL STATEMENTS The Company’s financial statements have been prepared in accordance with generally accepted accounting standards effective in the City of Buenos Aires, Argentine Republic, and in accordance with the Argentine Securities and Exchange Commission (CNV) rules. Such standards have been applied consistently to the information presented for comparative purposes. In order to properly understand the financial position and the changes in the results of the Company and its subsidiaries, the Company’s management recommends that the financial statements should be read together with the consolidated financial statements, which are presented as supplementary information and are an integral part of the financial statements. Certain reclassifications had been made over the comparatives figures so they can be consistent to the disclosure of the amounts of the present fiscal year. In August 2005, the CPCECABA approved Resolution CD No. 93/2005, whereby it introduced some changes to its accounting standards, as a result of the agreement entered into with the FACPCE for the harmonization of Argentina’s professional accounting standards. Such Resolution has become effective for the Company since January 1, 2006. The CNV, through General Resolutions No. 485/05 and 487/06 issued on December 29, 2005 and January 26, 2006, respectively, adopted

F-96 NOTES TO THE FINANCIAL STATEMENTS — (Continued) the new accounting standards issued by the CPCECABA, with certain amendments, effective for the years beginning as from January 1, 2006. The main changes arising from the application of the new standards that have had a significant effect on the Company’s financial statements are the following: a) the disclosure of certain additional information related to deferred taxes; and b) the recognition of the cumulative translation adjustment as an integral part of shareholders’ equity.

2.1. Presentation of Financial Statements in Constant Argentine Pesos These financial statements have been prepared in constant currency, pursuant to the restatement method set forth by FACPCE’s Technical Resolution No. 6, whereby the effects of the changes in the currency purchasing power are to be comprehensively recognized during inflationary periods. Furthermore, it establishes that the adjustment for inflation shall not be applied during monetary stability periods.

2.2. Summary of Significant Accounting Policies The significant accounting policies applied to the preparation of these financial statements are detailed below: a) Cash and Banks • In Local Currency: at face value. • In Foreign Currency: translated at the exchange rates prevailing at the end of each year for the settlement of these transactions. Foreign exchange differences were charged to income for each year. The respective breakdown is shown in Exhibit G. b) Other Investments (except for real property) • Valued at face value plus accrued interest, where applicable, and translated to the exchange rate prevailing at the end of each year. Foreign exchange differences were charged to income for each year. The respective breakdown is disclosed in Exhibits D and G. c) Other Receivables, Net and Liabilities • In Local Currency: valuation has been determined by calculating the discounted value of cash flows to be generated by such receivables and liabilities, except for deferred tax assets and liabilities which have not been discounted. Such receivables and liabilities which discounted value does not materially differ from their face value have been valued at the transaction face value. • In Foreign Currency: have been valued as mentioned above, taking into account the exchange rates prevailing as of each year end. Foreign exchange differences were charged to income for each year. The respective breakdown is shown in Exhibit G. Accounts receivable and liabilities include the accrued portion of the respective financing gains (losses) as of each year end. Documented debts were restated applying the CER established by Executive Power Decree No. 214. The caption “Other receivables, net” is net of the allowance for doubtful accounts, which is determined as of each year end, based on the individual analysis of the several receivables comprising the item; of the allowance for unrecoverable guarantee deposits, which includes the portion of such deposits estimated to be used in pending lawsuits and other expenses eventually

F-97 NOTES TO THE FINANCIAL STATEMENTS — (Continued) incurred (see Note 8), and of the valuation allowance on deferred tax net assets (see Note 9). The changes in such allowances are disclosed in Exhibit E. d) Long-term Investments in Affiliates and Subsidiaries — Goodwill

Long-term investments in subsidiaries and affiliates were valued by applying the equity method as established by FACPCE Technical Resolution No. 21 (“TR 21”), based on the audited financial statements of such subsidiaries and affiliates as of December 31, 2006, 2005 and 2004.

The accounting criteria used by the subsidiaries and affiliates are similar to those used by the Company; in those cases in which they differed, the corresponding adjustments were made. A breakdown of the Company’s interest in these companies is shown in Exhibit C.

The financial statements of foreign companies considered as integrated were translated pursuant to the provisions of TR 18. Accordingly, amounts measured in foreign currency were translated to Argentine pesos, applying the exchange rate prevailing on the date in which purchasing power each amount measured was stated.

The financial statements of non-integrated foreign companies, which are indirectly controlled by the Company, have been translated to Argentine pesos, pursuant to the provisions of TR 18, applying one of the methods applicable to non-integrated companies (current exchange rate). The resulting translation differences as of December 31, 2006, 2005 and 2004 were allocated to the Statements of Changes in Shareholders’ Equity, under “Cumulative translation adjustment”.

Goodwill is the difference between the cost and the fair market value of acquired and identifiable net assets. Goodwill was restated following the guidelines of Note 2.1.

The goodwill generated by recent acquisitions is a preliminary estimate, since the Company and its subsidiaries are in the process of compiling the evidence necessary to better estimate the fair market value of assets and liabilities identifiable at the time of acquisition. Therefore, these values may be modified in the future, as permitted by the prevailing accounting standards.

The Company amortized Goodwill over a 20-year period until December 31, 2002. As from January 1, 2003, the Company ceased to apply such amortization criterion and adopted the one established by the prevailing accounting standards, since it considered goodwill with an indefinite useful life as being directly related to the business of the respective investments.

The Company periodically assesses the goodwill recoverable value, based on the projected cash flows and other information available as of the date of each financial statement.

The carrying value of long-term investments and goodwill, net of the booked allowances, does not exceed their recoverable value as of each year end. e) Property, Plant and Equipment and other Investments (real property)

Property, plant and equipment and other investments have been valued at acquisition cost, restated as set forth in Note 2.1, net of the respective accumulated depreciation as of each year end.

These assets are depreciated on a straight line basis, applying rates that are sufficient to extinguish their values at the end of their estimated useful lives.

The value of these assets does not exceed their recoverable value. Changes in property, plant and equipment and other investments (real property) are shown in Exhibits A and D, respectively.

F-98 NOTES TO THE FINANCIAL STATEMENTS — (Continued) f) Intangible Assets Intangible assets have been valued at acquisition cost, restated as set forth in Note 2.1, net of the respective accumulated amortization. These assets are amortized on a straight line basis, taking into account their estimated useful lives. Intangible assets have been fully amortized as of December 31, 2006. Changes in intangible assets are shown in Exhibit B. g) Shareholders’ Equity Capital stock has been maintained at face value. As stated in Note 2.1, the restatement adjustment is shown under the item Inflation Adjustment on Capital Stock. The other shareholders’ equity accounts are stated at their historical value, restated as set forth in Note 2.1. The balances of the shareholders’ equity accounts do not reflect the potential effect of the options related to preferred stock described in Note 4, until a decision is made as to such options. The preferred stock dividends mentioned in Note 4 shall be accrued, if applicable, once the Company reports positive retained earnings. h) Income Statement Accounts The charges for consumption, depreciation and amortization of non-monetary assets were calculated based on the adjusted amounts of such assets, as indicated in Note 2.1. The other income statement accounts are stated at face values. i) Income Tax and Tax on Assets The Company accounts for income tax using the deferred tax method. Such method consists of recognizing the tax effects of the temporary differences between the accounting and tax basis of assets and liabilities and the subsequent charge to income in the years where such differences are reversed. Furthermore, it provides for the possibility of using tax losses in the future. In conformity with the CPCECABA standards, deferred tax assets and liabilities have not been discounted. The differences arising from restating the historical cost of property, plant and equipment in constant currency, the deduction of which is not recognized for tax purposes, have been considered as permanent differences. Therefore, no deferred taxes should be recognized. As of December 31, 2006, the Company’s property, plant and equipment balances were not adjusted for inflation. The Company has examined the recoverable value of deferred assets, based on its business plans and has booked a valuation allowance, in order for the deferred tax asset net position to reflect the probable recoverable value. The changes in such allowance are shown in Exhibit E. Note 9 contains further information on deferred taxes. Tax on assets is supplementary to income tax. While income tax is levied on the taxable income for the year, tax on assets is imposed on the potential income from certain productive assets at the rate of 1%. Therefore, the Company’s tax liability shall be equal to the higher of both taxes. However, if tax on assets exceeds income tax in any given fiscal year, the excess may be creditable against any excess of income tax over tax on assets in any of the following ten years. Tax on assets balance has been capitalized under the caption Other non-current receivables, since the Company has estimated, based on its current business plans, that the amounts paid for this tax will be recoverable within the statute of limitations.

F-99 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

2.3. Use of Estimates The preparation of the financial statements in conformity with professional accounting standards effective in the City of Buenos Aires, Argentina, requires Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses for each year. Actual results could differ from these estimates.

2.4. Additional Cash Flow Statements Information The increase of 313.1 million in the caption Other non-current receivables and the increase of 485.9 million in the caption Other non-current liabilities accounted for in the year ended December 31, 2006 are attributable to the financing for the acquisition and sale of the companies mentioned in Note 10. Furthermore, in June 2006 the Company made capital contributions to Multicanal in the amount of USD15 million, using funds that were deposited in a trust in December 2003. These transactions had no impact on cash and cash equivalents.

NOTE 3 — BREAKDOWN OF THE ACCOUNTS As of December 31, 2006 2005 2004 a) Cash and banks Cash ...... — 14,950 — Petty cash ...... 46,327 15,977 24,988 Bank accounts ...... 12,965,186 519,569 3,623,317 13,011,513 550,496 3,648,305 b) Other receivables, net Current Related parties ...... 39,988,060 2,535,619 6,704,196 Tax credits ...... 29,976 233,503 171,755 Advances to personnel ...... 2,200,364 — 42,189 Others ...... 86,698 1,506,316 432,475 Allowance for doubtful accounts — Exhibit E ...... — (118,000) (127,000) 42,305,098 4,157,438 7,223,615 Non-Current Related parties — Note 10 ...... 313,101,070 — — Net deferred tax assets — Note 9 ...... 21,229,725 11,372,186 12,271,203 Tax on assets ...... 20,860,419 16,383,901 16,693,346 Guarantee deposits — Note 8 ...... 388,004 45,204,445 44,528,483 Allowance for unrecoverable guarantee deposits — Exhibit E...... (277,089) (274,336) (331,640) Others 845,206 845,206 845,206 Allowance for doubtful accounts — Exhibit E ...... (845,206) (845,206) (845,206) 355,302,129 72,686,196 73,161,392 c) Accounts payable Suppliers ...... 1,039,196 1,199,135 2,021,165 Related parties ...... 1,229,170 1,326,547 1,125,439 Others ...... — 523,983 — 2,268,366 3,049,665 3,146,604

F-100 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

As of December 31, 2006 2005 2004 d) Taxes payable Tax on assets ...... 4,114,731 166,755 378,738 VAT payable ...... 370,071 220,069 446,021 Others ...... 4,687,789 732,820 902,407 9,172,591 1,119,644 1,727,166 e) Other liabilities Current Sellers financing — Note 10 and Exhibit G ...... 10,995,097 7,525,046 4,819,645 Related parties ...... 76,887 — — Others ...... 4,616,139 2,697,652 2,453,167 15,688,123 10,222,698 7,272,812 Non-Current Equity investees — Exhibit C ...... 6,698,656 8,192,445 239,600 Sellers financing — Note 10 and Exhibit G ...... 482,770,447 — 6,388,833 489,469,103 8,192,445 6,628,433 f) Equity in earnings (losses) from affiliates and subsidiaries AGEA ...... 307,761,260 63,976,127 79,664,018 ARTEAR ...... 12,543,115 28,460,286 16,589,428 IESA...... 21,484,213 8,398,142 12,367,119 Radio Mitre...... 1,370,063 947,811 (425,409) GCGC ...... 1,017,547 (2,428,620) 1,322,640 PRIMA Internacional...... 6,805,186 (7,884,085) (11,310,787) Multicanal ...... 493,511,588 (62,697,679) (89,300,769) Other ...... 31,962,882 (6,277,315) (538,816) 876,455,854 22,494,667 8,367,424

F-101 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

b. Preferred shares may be redeemed until December 27, 2009 (“redemption date”), at 12.117792 times (“Payment Preference”) the face value of the shares as determined by the Board of Directors’ resolution dated December 27, 1999, plus accrued and unpaid dividends. Class “A” preferred shares will have redemption preference over Class “B” preferred shares. If the shares are not redeemed at the redemption date, the annual dividend will be increased to 13%, 50% of which may be payable in cash and 50% in kind. c. Subject to compliance with certain conditions, class “A” preferred shares may be converted into class “C” common shares, and class “B” preferred shares into class “B” common shares. The terms and conditions for the issuance establish a Conversion Price as well as an adjustment to the Conversion Price subject to certain assumptions. In both cases, these prices are agreed-upon based on the subscription price of the shares, plus amounts due corresponding to unpaid and recognized dividends. d. The right to redeem such preferred shares may only be exercised by the Company. e. In the event of liquidation or merger of the Company, preferred shares have certain preferential rights to receive an amount equivalent to the “Payment Preference” per share plus the amount of quarterly dividends and accumulated unpaid dividends. f. In accordance with the terms and conditions for the issuance of preferred shares set forth in the Company’s by-laws and until such time as the Company has carried out an Initial Public Offering of Shares or until January 1, 2010, whichever takes place first, the Company is subject to certain restrictions on the payment of dividends to the holders of common shares. Basically, those restrictions establish that: (i) the Company can only pay dividends to holders of common shares as from the end of fiscal year 2002; (ii) the payment of dividends to the holders of common shares is subordinated to the preferential and priority rights of the holders of preferred shares established in the terms and conditions for the issuance of those shares; (iii) subject to the restriction stated in paragraph (i) above, the maximum distribution of dividends to the holders of common shares amounts to USD40 million per each year; (iv) in addition to the distributions mentioned above, after the year ended December 31, 2003, the Company may distribute additional earnings to the holders of outstanding common shares for up to a total of USD60 million on one or more occasions. g. If at the redemption date, the Company has not redeemed all the preferred shares, it will be unable to declare or pay distribution of dividends on common shares in excess of USD15 million per year. h. After the Initial Public Offering of shares and, if that event has not taken place before the redemption date; as from January 1, 2010, provided that the Company has redeemed all its preferred shares, any decision related to dividends and distribution of profits on common shares will be exclusively subject to the approval of the Company’s Board of Directors and Shareholders’ meeting, following the majorities established by law. i. The paid-in-capital that resulted from the issuance of class “C” common shares and class “A” preferred shares amounting to 333,636,239 is appropriated to a “Class “A” and Class “B” Preferred shares Paid-in-capital Reserve”, which will be irrevocably appropriated as follows: (a) to the payment of dividends in shares, even if no profits or insufficient profits are generated, to the holders of preferred shares, in accordance with the terms and conditions for the issuance and the preference of class “A” preferred shares established in the Sixth section of the by-laws, and (b) in the first place, with preference, to the payment of class “A” preferred shares and/or common shares to be delivered as a result of the conversion of class “A” preferred shares and, in the second place and in a subordinate category, if a reserve remains after all class “A” preferred shares have been converted, to the payment of class “B” preferred shares and/or

F-102 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

common shares to be delivered through the conversion of class “B” preferred shares, which must be issued in accordance with the terms and conditions for issuance established by section Sixth of the by-laws. This amount is included within “Additional Paid-in-Capital” in the Company’s Shareholders’ Equity.

NOTE 5 — TRANSACTIONS WITH RELATED PARTIES The following table details the transactions carried out by the Company its related parties for the years ended December 31, 2006, 2005 and 2004: For the Years Ended December 31, Company Item 2006 2005 2004 Subsidiaries AGEA ...... Management fees 21,600,000 19,200,000 16,400,000 Sale of long-term investments 42,338,268 — — ARTEAR ...... Management fees 11,600,000 8,400,000 13,433,840 Other expenses (5,347) — — Advertising purchases — (14,198) — Services — — (13,527) IESA ...... Management fees 3,450,000 2,800,000 2,700,000 Services (14,985) (23,290) (20,117) Loan interest — — 270,507 Radio Mitre ...... Management fees 720,000 600,000 600,000 GCGC ...... Services (669,503) (501,489) (349,140) Sale of buildings — — 5,100,000 Other income — — 80,000 Multicanal ...... Management fees 956,384 — — Disposal of other investments 31,000,000 — — Reimbursed expenses 2,406 — — Services — — (5,370) PRIMA Internacional ...... Sale of long-term investments 440,521 — — CLC ...... Sale of long-term investments 15,000,838 — —

F-103 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

For the Years Ended December 31, Company Item 2006 2005 2004 Indirectly controlled companies AGR ...... Management fees 3,765,823 3,000,000 2,200,000 Disposal of other investments 18,086,000 — — Printing services (40,197) (44,199) (19,229) Acquisition of real property — — (2,700,000) Impripost Tecnologías S.A. . . . Management fees 900,000 400,000 — TRISA ...... Maintenance expenses (23,167) — — PRIMA...... Management fees 504,000 672,000 672,000 Services (163,448) (134,676) (130,232) Teledeportes Paraguay S.A. . . Management fees 411,720 876,441 735,400 Tinta Fresca ...... Loans plus interest — 25,275 453,536 Cablevisión ...... Interest income 12,224,207 — — Sale of long-term investments 377,739,883 — — Affiliates CIMECO ...... Management fees 1,382,850 — —

NOTE 6 — RESTRICTIONS ON RETAINED EARNINGS The Company’s by-laws sets forth that realized and liquid profits should be appropriated as follows: (i) in accordance with the Argentine Business Associations Act, 5% until reaching 20% of the capital stock to the legal reserve; (ii) to pay for the Board of Directors’ and Statutory Auditing Committee’s fees; (iii) to dividends on preferred shares, giving priority to unpaid accumulated dividends; and (iv) the balance, in whole or in part, to an additional stake in preferred shares and dividends on common shares or to voluntary reserves or to a provision or to a new account, or as otherwise determined by the Shareholders’ meeting. See Note 4 for additional restrictions related to terms and conditions for issuance of preferred shares.

F-104 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Media S.A.) to substitute the existing pledge on the remaining pledged shares by a new pledge on 49,828 common shares of IESA, which are owned by the Company. Upon payment of the fourth installment, the release of the pledge on one third of the total amount of new pledged shares shall take place automatically and as a matter of law. Upon payment of the fifth installment and the related interest, the release of the pledge on the remaining new pledged shares shall take place automatically and as a matter of law. As of December 31, 2006, 2005 and 2004, the Company owed principal and interest in the amounts of 36,720,000 and 54,540,000, and 71,520,000 and in the amounts of 718,605, 889,032 and 870,252, respectively. As of the date of these financial statements, the Company has made all due and payable payments.

7.2. Financial Loans On July 26, 2001, the subsidiary Raven Media Investments LLC executed a loan agreement with JP Morgan Chase Bank (“Chase”) in the amount of USD194.8 million. During fiscal year 2004, Chase assigned to the Company its rights under the loan agreement executed with Raven for up to USD75 million, as a result of the settlement of certain guarantees. Furthermore, in February 2004, Raven and DirecTV Latin America LLC (“DTVLA”), among other companies, executed an agreement whereby Raven received USD56million as payment of the receivable arising from the acceleration of the put option under the “Put Agreement”. Then, Raven partially settled its debts with Chase and the Company. Thus, the unpaid balances amounted to USD40 million and USD54 million, respectively. In May 2004, Chase transferred its receivable with Raven, assigning to the Company the balance of such receivable in exchange for the payment of an equivalent amount. The remaining balance of the price referred to above (USD40 million) was refinanced through an agreement between the Company and Chase on May 3, 2004. Such agreement sets forth the accrual of interest at LIBOR plus a 2% spread, payable quarterly and the annual repayment of the remaining principal on an annual basis. In March 2006, the Company paid the first installment of the loan for USD4 million. In August 2006, the Company executed an addendum to such refinancing agreement, whereby Chase reimbursed the USD4 million paid by the Company and the repayment of principal was rescheduled as follows: Repayment of Payment Date Principal March 17, 2007 ...... USD 8 million March 17, 2008 ...... USD 16 million March 17, 2009 ...... USD 16 million Furthermore, the agreement sets forth several commitments and restrictions, including but not limited to: i) the creation and maintenance of a reserve account for the amount of interest to be paid quarterly, ii) indebtness restrictions; and iii) restrictions on the creation of encumbrances. In the event shareholders are unable to maintain the guarantees granted under the agreement, the respective debt portion may become due and payable. The balances of USD54 and USD40 million that Raven owed to the Company were condoned by means of the agreements dated February 6 and May 4, 2004, respectively.

F-105 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Subsequently the Company, the sole Raven’s shareholder, decided to wind up and liquidate that company at the Board’s meeting held on July 31, 2004. As of December 31, 2006, 2005 and 2004, the Company owed principal and interest in the amounts of 122,400,000, 121,200,000, and 119,200,000 and in the amounts of 361,610, 280,113 and 185,422, respectively. As of the date of these financial statements, the Company has made all due and payable payments.

7.3. Other Loans As of December 31, 2006 and 2005, the Company owed 1,663,200 for a loan granted by one of its subsidiaries. Moreover, as of December 31, 2005 the Company’s bank debts amounted to 0.6 million. Such debts were related to bank overdrafts.

NOTE 8 — COMMITMENTS AND CONTINGENCIES As of December 31, 2006, 2005 and 2004 and in accordance with the contract entered into to sell its equity interest in Activa Anticipar A.F.J.P. S.A., the Company holds a guarantee deposit amounting to USD26,793 (net of provisions) recoverable under certain conditions and within specified terms (provided by Jupenhold S.A., a company absorbed by Grupo Clarín) to cover potential liabilities and the payment of all ongoing lawsuits, and to guarantee labor and social security obligations arising before the date of that sale. The amount of the deposit does not limit the amount of the Company’s guarantees. The Company estimates that the guarantee fund is sufficient, based on the legal advisors’ opinion. The Company has executed guarantees with the banks involved in the swap contracts specified in Note 7 to the consolidated financial statements in order to fully, unconditionally and irrevocably guarantee the timely payment of all obligations arising from said contracts. In October 2003, the Company approved a USD15 million contribution in favor of its subsidiary Multicanal, to be paid in and applied to the Cash Option Payment set forth in the APE (see Muticanal in Note 5 to the consolidated financial statements). To that end, in December 2003, the Company entered into a trust agreement with JPMorgan Chase Bank and made a deposit in that entity for that amount. The contribution was made in fiscal year 2006.

NOTE 9 — INCOME TAX The following table shows the breakdown of net deferred tax assets as of December 31, 2006, 2005 and 2004, respectively (amounts stated in thousands of Argentine Pesos): As of December 31, 2006 2005 2004 Assets Tax loss carryforward ...... 28,903 60,990 57,658 Specific tax loss...... 51,822 52,690 52,690 Other receivables...... 316 356 1,065 Other investments ...... 8,633 — — Deferral exchange gain and losses ...... — 1,987 3,975 Subtotal ...... 89,674 116,023 115,388 Allowance for deferred tax asset — Exhibit E ...... (68,444) (104,651) (103,117) Net deferred tax assets ...... 21,230 11,372 12,271

F-106 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

As of December 31, 2006, the Company’s net deferred tax assets amount to approximately 21 million. This figure represents the temporary differences and the tax losses the Company’s management estimates to be recoverable, based on its current business plans. There follows the reconciliation between the income tax charged to income for the years ended December 31, 2006, 2005 and 2004 and the income tax liability that would result from applying the current tax rate on income before income and assets taxes and the income tax liability assessed for each year (amounts stated in thousands of Argentine Pesos): For the Years Ended December 31, 2006 2005 2004 Income tax assessed at the current tax rate (35%) on income before income tax ...... (300,935) (5,066) (1,750) Permanent differences: Equity in earnings (losses) from affiliates and subsidiaries ...... 306,760 7,873 2,929 Loss on sale of subsidiaries, net ...... (6,093) — — Tax result arised from the disposal of long-term investments and other investments...... (23,564) (423) 17,223 Non-deductible expenses...... — — (3,293) Other ...... (2,517) (1,749) (4,849) Subtotal ...... (26,349) 635 10,260 Changes in the valuation allowance of net deferred tax asset — Exhibit E ...... 36,207 (1,534) (17,158) Income tax charge ...... 9,858 (899) (6,898) Changes in the deferred tax position ...... (9,858) 899 6,898 Income tax determined for the year ...... — — —

As of December 31, 2006, the Company’s accumulated tax losses amount to approximately 230.6 million, which calculated at the current tax rate, represent deferred tax assets in the amount of approximately 80.7 million. There follows the statute of limitations of the accumulated tax losses (amounts stated in thousands of Argentine Pesos): Amount of Tax Year of Expriry Loss Carryforward 2007 ...... 72,405 2008 ...... 67,707 2009 ...... 80,355 2010 ...... 10,176 230,643

F-107 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

capitalize such interest, such spread may rise to 8% under certain circumstances. Principal will be repaid in a lump sum on September 26, 2009. b) Sale of its equity interest in Multicanal to Cablevisión for 377.7 million, in exchange for corporate debt securities with a 3-year maturity, which accrue interest payable every six months as from March 26, 2007, at a variable rate established by the BADLAR plus a fixed 6% spread, subject to certain ceilings. In the event Cablevisión decides to capitalize such interest, such spread may rise to 8% under certain circumstances. Principal will be repaid in a lump sum on September 26, 2009. c) Acquisition of a 100% interest in SHOSA capital stock and votes for USD161.3 million to be paid as follows: i. USD126 million in debt securities, issued for a total amount of USD157.8 million, maturing on September 26, 2009 and accruing interest payable every six month as from March 26, 2007, at 6-month LIBOR plus a 3.75% spread. The original maturity of these securities may be extended until September 26, 2010 or September 26, 2011, under certain circumstances. ii. Delivery of the debt securities issued by Cablevisión mentioned in b) above for an amount of 80.1 million. iii. Delivery of equity securities in the amount of USD9.5 million. d) Acquisition of an 11% interest in VLG capital stock and votes for USD31.8 million, to be paid by means of the remaining corporate debt securities described in c) i. above. The Company regained its 50% interest in VLG through this acquisition. Furthermore, by the end of December 2006, the Company sold 3% of SHOSA’s shares to a subsidiary for 15 million, in exchange for corporate debt securities under similar conditions as those detailed in items a) and b) of this Note.

NOTE 11 — TERMS AND INTEREST RATES OF INVESTMENTS, RECEIVABLES AND LIABILITIES As of December 31, 2006 Other investments (except for buildings) Without any stablished term(1) ...... 9,130,760 Receivables, net(2) Without any stablished term(3) ...... 60,977,484 To become due Within three months(3) ...... 2,298,948 Over two years and up to three years(4) ...... 313,101,070 315,400,018 376,377,502

F-108 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

As of December 31, 2006 Liabilities(5) Without any stablished term(3) ...... 12,146,869 To fall due Within three months(3) ...... 17,992,813 Over than three months and up to six months(3) ...... 11,382,818 Over than six months and up to nine months(3) ...... 4,114,730 Over than two years and up to three years(4) ...... 482,770,447 516,260,808 528,407,677 Short-term and long-term debt(6) Without any stablished term ...... 1,663,200 To fall due Within three months ...... 24,841,610 Over than six months and up to nine months...... 19,078,605 Over than one year and up to two years ...... 67,320,000 Over than two years and up to three years ...... 48,960,000 160,200,215 161,863,415

(1) Bearing interest at a variable rate. (2) Not including 21,229,725 corresponding to net deferred tax assets (see Note 9). (3) Non-interest bearing. (4) Bearing interest as detailed in Note 10. (5) Not including Other non-current liabilities for 6,698,656 (See Exhibit C). (6) Bearing interest as detailed in Note 7.

NOTE 12 — SUBSEQUENT EVENTS At year-end, the Company owed outstanding dividends to shareholders in the amount of 11.1 million, which had been approved before December 31, 1999. After year-end, the Company executed an agreement with such shareholders providing for the settlement of the outstanding balance plus a restatement of approximately 18 million, which was approved by the Board of Directors’ Meeting held on June 13, 2007 and ratified by the Shareholders’ Meeting held on July 13, 2007. Additionally, on July 16, 2007 the Company approved the conversion of 5,100,000 Class B common shares at a par value of 1 each and entitled to 1 voting right per share into 5,100,000 Class A common shares at a par value of 1 each and entitled to 5 voting rights per share. On March 21, 2007, the Company made a capital contribution in the amount of 15 million in its subsidiary CLC, through the capitalization of a receivable origined in the sale of participating interests (See Note 10). During May and June 2007, the subsidiaries AGEA and ARTEAR distributed dividends to the Company in the amount of 35 and 19.5 million, respectively. As of the date of these financial statements, AGEA dividends are pending collection in the amount of 4 million.

F-109 EXHIBIT A

PROPERTY, PLANT AND EQUIPMENT, NET For the Years Ended December 31, 2006, 2005 and 2004 In Argentine Pesos (Ps.) — Note 2.1

Historical Value At the Beginning At the End Main account of the Year Increases Decreases of the Year Furniture and fixtures ...... 56,886 70,861 — 127,747 Audio and video equipment ...... 18,504 1,056 — 19,560 Telecommunication equipment ...... 32,205 2,070 — 34,275 Computer equipment and software...... 879,722 634,888 — 1,514,610 Total as of December 31, 2006 ...... 987,317 708,875 — 1,696,192 Total as of December 31, 2005 ...... 691,973 295,344 — 987,317 Total as of December 31, 2004 ...... 6,065,790 217,773 5,591,590 691,973

Net Book Value as of Depreciation December 31, At the At the End Beginning of For the of the Main Account the Year Retirements Year Year 2006 2005 2004 Furniture and fixtures . . . 29,753 — 9,014 38,767 88,980 27,133 12,722 Audio and video equipment...... 17,773 — 848 18,621 939 731 4,432 Telecommunication equipment...... 26,479 — 4,783 31,262 3,013 5,726 7,124 Computer equipment and software ...... 488,731 — 273,561 762,292 752,318 390,991 285,877 Total as of December 31, 2006 ...... 562,736 — 288,206 850,942 845,250 Total as of December 31, 2005 ...... 381,818 — 180,918 562,736 424,581 Total as of December 31, 2004 ...... 491,983 308,159 197,994 381,818 310,155

F-110 EXHIBIT B

INTANGIBLE ASSETS, NET For the Years Ended December 31, 2006, 2005 and 2004 In Argentine Pesos (Ps.) — Note 2.1

Net Book Value as of Historical Value Amortization December 31, At the Beginning of the Year At the At the End and at Beginning of For the of the Main Account Year-end the Year Year Year 2006 2005 2004 Pre-operating costs . . . . 1,099,921 934,932 164,989 1,099,921 — 164,989 384,973 Total as of December 31, 2006 . . 1,099,921 934,932 164,989 1,099,921 — Total as of December 31, 2005 . . 1,099,921 714,948 219,984 934,932 164,989 Total as of December 31, 2004 . . 1,099,921 494,964 219,984 714,948 384,973

F-111 EXHIBIT C INVESTMENTS

Equity Interest in Other Affiliates As of December 31, 2006, 2005 and 2004 In Argentine Pesos (Ps.) — Note 2.1 Type of Shares Number Par Value Cost Value Book Value(1) Long-term investments AGEA ...... Common 141,199,126 Ps. 1.00 539,522,170 435,894,911 ARTEAR ...... Common 53,186,347 Ps. 1.00 152,243,761 162,483,655 IESA ...... Common 124,545 Ps. 0.10 48,085,768 41,622,423 Radio Mitre ...... Common 20,464,464 Ps. 0.01 47,593,113 6,897,746 GCGC ...... Common 6,999,880 Ps. 1.00 9,427,041 7,479,553 PRIMA Internacional . . . . Common 48,745,147 Ps. 1.00 102,175,302 63,412,286 AGR ...... Common 1,254,123 Ps. 1.00 2,644,874 1,343,610 Clarín Global ...... Common 16,136 Ps. 1.00 14,988,883 71,319 Pem S.A...... Common 4 Ps. 1.00 1 2 GC Minor ...... Common 16,880 Ps. 1.00 145,843 213,233 GC Services ...... — — — 10,910,205 6,981,121 SHOSA ...... Common 127,097,171 Ps. 1.00 497,341,592 199,584,886 Goodwill ...... 481,505,837 Vistone ...... — — — 62,070,310 200,513,784 VLG ...... — — — 97,947,290 40,200,857 Goodwill ...... 95,106,300 CVB...... — — — 38,624,593 68,259,143 Total as of December 31, 2006...... 1,623,720,746 1,811,570,666 Total as of December 31, 2005...... 1,454,457,502 792,424,917 Total as of December 31, 2004...... 1,450,121,296 773,225,338 Other non-current liabilities CLC ...... Common 19,000 Ps. 1.00 19,000 6,698,656 Total as of December 31, 2006...... 19,000 6,698,656 Total as of December 31, 2005...... 2,940 8,192,445 Total as of December 31, 2004...... 3,000 239,600

(1) In certain cases the equity investment in other companies does not correspond with the related shareholders’ equity since: a) the equity investment value was determined following the Compa- ny’s accounting policies, as required by the professional accounting standards, b) the elimination of goodwill generated by transactions between companies under the Company’s common control, and c) the existence of irrevocable contributions.

F-112 EXHIBIT C

INVESTMENTS Equity Interest in Other Affiliates As of December 31, 2006, 2005 and 2004 In Argentine Pesos (Ps.) — Note 2.1 Issuer’s Information As per Financial Statements as of December 31, 2006 Participation Income/ Main Business in Capital (Loss) for Shareholders’ Activity and Votes Capital the Year Equity Long-term investments AGEA...... Printing and Publishing 99.99% 141,199,151 84,319,644 387,614,977 ARTEAR...... Broadcasting services 96.95%(1) 54,859,553 12,944,405 169,004,569 IESA...... Investing and financing 99.98% 12,457 20,010,556 40,153,391 Radio Mitre ...... Broadcasting services 99.99% 204,645 1,376,072 6,897,749 GCGC ...... Services 99.99% 7,000,000 957,324 7,419,441 PRIMA Internacional.... Investing and financing 82.00% 59,445,301 30,422,946 77,332,056 AGR...... Graphic press 0.90% 138,865,295 14,234,845 157,010,336 Clarín Global ...... Telecommunications 1.54% 1,046,662 3,792,622 5,626,096 PemS.A...... Investing 0.00% 13,558,511 1,366,460 24,446,148 GC Minor ...... Investing and financing 99.29% 70,400 51,554 162,224 GC Services...... Investing and financing 100.00% — (2,122,648) 7,144,469 SHOSA ...... Investing and financing 97.00% 127,097,171 31,056,250 524,212,846 Vistone ...... Investing 100.00% — 94,752,717 146,890,279 VLG...... Investing and financing 11.00% — 39,685,334 984,544,702 CVB...... Investing and financing 100.00% — 19,749,969 58,374,562 CLC...... Investing and financing 95.00% 20,000 (58,363) (38,363)

(1) % in votes amounts to 99.36%.

F-113 EXHIBIT D

OTHER INVESTMENTS For the Years Ended December 31, 2006, 2005 and 2004 In Argentine Pesos (Ps.) — Note 2.1 Book Value as of December 31, Main Account and Securities Characteristics 2006 2005 2004 Other current investments: Financial instruments — Exhibit G ...... 351,097 316,564 2,720,830 Money Market — Exhibit G ...... 8,779,663 193,505 2,252,014 Loans granted to subsidiaries...... — — 453,536 Total ...... 9,130,760 510,069 5,426,380

Historical Value At the Beginning of At the End Main Account the Year Increases Decreases of the Year Other long-term investments: Buildings for sale ...... 10,495,355 14,699,247 25,194,602 — Total as of December 31, 2006 ...... 10,495,355 14,699,247 25,194,602 —

Total as of December 31, 2005 ...... 10,495,355 — — 10,495,355

Total as of December 31, 2004 ...... 7,834,055 2,661,300 — 10,495,355

Net Book Value as of Depreciation December 31, At the At the Beginning For the End of Main Account of the Year Year Decreases the Year 2006 2005 2004 Other long-term investments: Buildings for sale ...... 603,036 172,014 775,050 — — 9,892,319 10,010,950 Total as of December 31, 2006 ...... 603,036 172,014 775,050 — —

Total as of December 31, 2005 ...... 484,405 118,631 — 603,036 9,892,319 Total as of December 31, 2004 ...... 365,776 118,629 — 484,405 10,010,950

F-114 EXHIBIT E

ALLOWANCES AND PROVISIONS For the Years Ended December 31, 2006, 2005 and 2004 In Argentine Pesos (Ps.) — Note 2.1 Balance as of December 31, Balance at the Beginning Increases Decreases 2006 2005 2004 DEDUCTED FROM CURRENT ASSETS Other receivables For doubtful accounts . . . . 118,000 — 118,000 — 118,000 127,000 Total current assets ...... 118,000 — 118,000 — 118,000 127,000 DEDUCTED FROM NON- CURRENT ASSETS Other receivables For doubtful accounts . . . . 845,206 — — 845,206 845,206 845,206 For unrecoverable guarantee deposits . . . . 274,336 2,753(1) — 277,089 274,336 331,640 Allowance for net deferred tax asset ...... 104,651,002 — 36,207,275(2) 68,443,727 104,651,002 103,116,653 Investments and goodwill For goodwill impairment . . 87,314,661 — 58,882,166(3) 28,432,495 87,314,661 87,314,661 Total non-current assets . . . . 193,085,205 2,753 95,089,441 97,998,517 193,085,205 191,608,160 Total as of December 31, 2006 ...... 193,203,205 2,753 95,207,441 97,998,517 Total as of December 31, 2005 ...... 191,735,160 1,539,189 71,144 193,203,205 Total as of December 31, 2004 ...... 176,203,207 18,105,159 2,573,206 191,735,160

(1) Charged to the Statements of Operations under Financing and holding results. (2) Charged to the Statements of Operations under Income tax. (3) Related to dilution transactions and sale of interests in subsidiaries.

F-115 EXHIBIT G

FOREIGN CURRENCY ASSETS AND LIABILITIES As of December 31, 2006, 2005 and 2004

Foreign Currency Effective Type and Exchange Amount in Ps. as of December 31, Amount Rate 2006 2005 2004 ASSETS CURRENT ASSETS Cash and banks Bank accounts ...... USD — — — 15,522 53,473 Other investments Financial instruments ...... USD 116,257 3,02 351,097 316,564 2,720,830 Money Market ...... USD 2,907,173 3,02 8,779,663 193,505 2,252,014 Other receivables Related parties ...... USD — — — — 73,500 Total current assets...... 9,130,760 525,591 5,099,817 NON-CURRENT ASSETS Other receivables Guarantee deposits ...... USD 26,793 3,02 80,915 44,930,109 44,196,843 Total non-current assets ...... 80,915 44,930,109 44,196,843 Total assets as of December 31, 2006...... 9,211,675

Total assets as of December 31, 2005...... 45,455,700 Total assets as of December 31, 2004...... 49,296,660

LIABILITIES CURRENT LIABILITIES Short-term debt and current portion of long-term debt...... USD 14,353,011 3,06 43,920,215 31,426,988 18,968,524 Other liabilities ...... USD 3,593,169 3,06 10,995,097 — — Total current liabilities ...... 54,915,312 31,426,988 18,968,524 NON-CURRENT LIABILITIES Long-term debt ...... USD 38,000,000 3,06 116,280,000 145,440,000 172,840,000 Other liabilities ...... USD 157,768,120 3,06 482,770,447 — — Total non-current liabilities ...... 599,050,447 145,440,000 172,840,000 Total liabilities as of December 31, 2006...... 653,965,759 Total liabilities as of December 31, 2005...... 176,866,988 Total liabilities as of December 31, 2004...... 191,808,524 USD: United States dollars

F-116 EXHIBIT H

INFORMATION REQUIRED BY SECTION 64, SUBSECTION b) OF ACT No. 19,550 For the Years Ended December 31, 2006, 2005 and 2004 In Argentine Pesos (Ps.) — Note 2.1 Administrative Expenses For the Years Ended December 31, Description 2006 2005 2004 Salaries and Social Security(1) ...... 19,588,155 18,804,118 13,657,508 Statutory Auditing Committee’s fees ...... 3,000 3,000 3,000 Fees for services ...... 4,550,233 3,545,754 2,811,989 Taxes, rates and contributions ...... 1,777,200 1,235,730 1,392,747 Other personnel expenses ...... 224,082 352,605 204,456 General expenses ...... 309,041 272,149 240,566 IT expenses ...... 163,861 119,164 158,856 Maintenance expenses ...... 850,942 278,981 247,111 Advertising expenses ...... 257,405 297,952 269,237 Legal fees and services ...... 848,070 21,299 76,086 Travel expenses ...... 754,936 670,195 660,258 Stationery and office supplies ...... 24,209 41,168 47,384 Bank expenses ...... 16,073 12,076 22,934 Other expenses ...... 1,298,895 656,637 534,031 Total for the year ...... 30,666,102 26,310,828 20,326,163

(1) It includes fees for technical and administrative services to Directors in the amount of 4,889,581, 6,886,710 and 4,152,108 for the years ended December 31, 2006, 2005 and 2004, respectively.

F-117 REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders, President and Directors of Grupo Clarín S.A. Piedras 1743 Autonomous City of Buenos Aires CUIT No. 30-70700173-5

1. We have audited the accompanying balance sheets of Grupo Clarín S.A. as of December 31, 2006, 2005 and 2004, and the related statements of operations, statements of changes in shareholders’ equity and statements of cash flows for the years then ended, and complementary Notes 1 to 12 and Exhibits A, B, C, D, E, G and H. Furthermore, we have audited the consolidated balance sheets of Grupo Clarín S.A. as of December 31, 2006, 2005 and 2004, and the consolidated statements of operations and consolidated cash flows with its controlled subsidiaries and other legal entities controlled jointly with other companies for the years then ended, which are presented as complementary information. The preparation and issuance of these financial statements are the responsibility of the Company. Our responsibility is to express an opinion on the financial statements based on our audit.

2. We conducted our audits in accordance with auditing standards generally accepted in Argentina. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and to form an opinion on the reasonableness of the relevant information contained in those financial statements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by Management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

3. As mentioned in Note 10 to the Parent Company Only Financial Statements and in Note 8 to the Consolidated Financial Statements, in the year ended December 31, 2006 the Company sold its indirect equity interest in the Company Primera Red Interactiva de Medios Argentinos S.A. to Multicanal S.A. and its direct and indirect equity interest in Multicanal S.A. to Cablevisión S.A.; in addition, Grupo Clarín S.A. indirectly purchased the remaining percentage to reach 60% of the interest in the capital stock and voting rights of Cablevisión S.A. These transactions are subject to the pertinent authorities approvals.

4. In our opinion, subject to the effect on the financial statements of possible adjustments and reclassifications of the December 31, 2006 financial statements that might be required as a result of the outcomes of the situation described in point 3:

a) the financial statements of Grupo Clarín S.A. present fairly, in all material respects, its financial position as of December 31, 2006, 2005 and 2004, the results of its operations, changes in its shareholders’ equity and cash flows for the years then ended, in accordance with professional accounting standards in effect in the Autonomous City of Buenos Aires (Argentina).

b) the consolidated financial statements of Grupo Clarín S.A. with its controlled subsidiaries and other legal entities controlled jointly with other companies, present fairly, in all material respects, its consolidated financial position as of December 31, 2006, 2005 and 2004, the consolidated results of its operations and consolidated cash flows for the years then ended, in accordance with professional accounting standards in effect in the Autonomous City of Buenos Aires (Argentina).

5. In compliance with current regulations, we report that:

a) The financial statements of Grupo Clarín S.A. and its consolidated financial statements have been recorded in the “Inventory and Balance Sheet” legal book and, insofar as concerns

F-118 our field of competence, are in compliance with the requirements of Commercial Companies Law and pertinent Comisión Nacional de Valores (Argentine Security Commission) resolutions; b) The financial statements of Grupo Clarín S.A. arise from accounting records carried in all formal respects in accordance with local legal requirements; c) As of December 31, 2006, the debt of Grupo Clarín S.A. accrued in its accounting records, in favor of the Local Pension Systems, amounted to $267,496, which was not claimable at that date.

Autonomous City of Buenos Aires, July 19, 2007

PRICE WATERHOUSE & CO SRL

by /s/ Carlos A. Rebay (Partner) Carlos A. Rebay

F-119 CABLEVISIÓN S.A. Consolidated Financial Statements as of December 31, 2006 and 2005 and for the years then ended

F-120 CABLEVISIÓN S.A. INDEX Consolidated Balance Sheet ...... F-123 Consolidated Statement of Income ...... F-124 Consolidated Statement of Cash Flows ...... F-125 Notes and Exhibits to the Consolidated Financial Statements...... F-126 Balance Sheet ...... F-139 Statement of Income ...... F-140 Statement of Changes in Shareholders’ Equity ...... F-141 Statement of Cash Flows ...... F-142 Notes and Exhibits to the Financial Statements ...... F-143 Report of Independent Accountants on Financial Statements ...... F-171

F-121 Legal Address: Cuba 2370 — Autonomous City of Buenos Aires

Main Company’s business: Cable television networks operator — Telecommunication services.

Financial Statements For the Years Initiated January 1st 2004, 2005 and 2006 and Ended December 31, 2004, 2005 and 2006. REGISTRATION DATE IN THE SUPERINTENDENCY OF CORPORATIONS: By laws: August 29, 1979 Latest modification of By laws: November 7, 2005

Registration number in the Superintendency of Corporations: 67.673

By laws expiration date: August 29, 2078

F-122 CONSOLIDATED BALANCE SHEET At December 31, 2006 and 2005

2006 2005 $ CURRENT ASSETS Cash and banks...... 207,783,077 64,836,278 Investments ...... 4,309,163 223,660,050 Trade receivables (Note 5.a) ...... 100,489,348 35,807,181 Other receivables (Note 5.b) ...... 76,268,119 23,468,482 Other assets ...... 56,838,603 53,856,000 Inventories ...... 1,032,274 — Total current assets ...... 446,720,584 401,627,991 NON-CURRENT ASSETS Other receivables (Note 5.b) ...... 127,887,423 153,775,390 Investments ...... 9,347,190 — Property, plant and equipment (Note 6) ...... 999,339,565 432,216,611 Intangible assets (Note 7) ...... 474,239,564 32,016,962 Subtotal non-current assets ...... 1,610,813,742 618,008,963 Goodwill (Note 7)...... 2,884,593,245 2,103,223,946 Total non-current assets ...... 4,495,406,987 2,721,232,909 Total assets ...... 4,942,127,571 3,122,860,900 CURRENT LIABILITIES Accounts payable (Note 5.c) ...... 267,900,052 86,726,982 Bank and financial debt (Note 5.d) ...... 159,611,039 127,472,474 Payroll and social security charges ...... 44,434,209 15,521,529 Taxes payable ...... 55,716,554 23,476,140 Other payables ...... 11,925,787 2,276,404 Total current liabilities ...... 539,587,641 255,473,529 NON-CURRENT LIABILITIES Accounts payable ...... 4,523,695 4,335,509 Bank and financial debt (Note 5.d) ...... 2,445,722,010 1,067,406,622 Taxes payable ...... 12,689,662 10,636,190 Other payables ...... 1,093,478 4,530,000 Reserves (Exhibit E) ...... 74,148,596 63,297,166 Total non-current liabilities ...... 2,538,177,441 1,150,205,487 Total liabilities ...... 3,077,765,082 1,405,679,016 MINORITY INTEREST IN SUBSIDIARIES ...... 37,174,129 1,477,832 SHAREHOLDERS’ EQUITY ...... 1,827,188,360 1,715,704,052 Total liabilities, minority interest in subsidiaries and shareholders’ Equity ...... 4,942,127,571 3,122,860,900

The accompanying notes and exhibits are an integral part of these consolidated financial statements.

F-123 CONSOLIDATED STATEMENT OF INCOME For the Years Ended December 31, 2006 and 2005

2006 2005 $ REVENUES FROM SERVICES (Note 5.e)...... 1,372,115,145 883,469,385 COST OF SERVICES RENDERED (Exhibit F)...... (701,998,029) (491,818,202) Gross income ...... 670,117,116 391,651,183 SELLING EXPENSES (Exhibit H) ...... (162,186,436) (92,160,246) ADMINISTRATIVE EXPENSES (Exhibit H) ...... (159,877,455) (86,498,014) OTHER EXPENSES (Exhibit H)...... (27,598,163) (4,530,000) Sub-total ...... 320,455,062 208,462,923 FINANCIAL RESULTS Generated by liabilities Exchange differences ...... (2,960,630) 7,458,954 Interest...... (110,837,170) (325,630,559) Restatement (CER) ...... (5,447,078) (7,303,903) Loss on measurement of liabilities at present value ...... (29,393,555) (4,913,731) Tax on debits and credits in financial transactions...... (16,744,039) (10,000,707) Generated by assets Exchange differences ...... (2,516,737) 3,729,478 Holding loss on inventories ...... (383,090) — Interest...... 18,018,637 11,190,002 Bank expenses...... (1,491,025) (734,644) Result of financial restructuring...... 12,063,892 2,021,296,491 Amortization of deferred charges ...... — (4,063,058) RESULT OF LONG-TERM INVESTMENTS ...... 735,804 — OTHER INCOME, NET ...... 11,103,393 3,702,291 Net income before income tax and tax on minimum notional income and minority interest in subsidiaries . . . 192,603,464 1,903,193,537 INCOME TAX AND MINIMUM NOTIONAL INCOME TAX (Note 9) . . (82,993,984) 138,609,717 MINORITY INTEREST IN SUBSIDIARIES ...... (2,162,173) (78,123) Net income for the year ...... 107,447,307 2,041,725,131 Net earnings per share ...... 0.54 42.81 Quantity of common shares...... 197,327,500 47,692,048

The accompanying notes and exhibits an integral part of these consolidated financial statements.

F-124 CONSOLIDATED STATEMENT OF CASH FLOWS(1) For the Years Ended December 31, 2006 and 2005 2006 2005 $ CASH PROVIDED BY OPERATIONS Net income ...... 107,447,307 2,041,725,131 Adjustments to reconcile the net income for the year to net cash flows provided by operations: Depreciation of property, plant and equipment ...... 152,446,865 126,697,362 Amortization of intangible assets ...... 20,425,038 — Amortization of deferred charges ...... — 4,063,058 Reserves ...... 4,852,008 9,670,463 Doubtful accounts...... 5,208,281 1,726,390 Minority interest ...... 2,162,173 78,123 Accrued interest, net...... 96,403,415 321,214,410 Financial results ...... 27,296,914 2,917,389 Result of long-term investments ...... (735,804) — Result of financial restructuring ...... (12,063,892) (2,021,296,491) Holding loss on inventories ...... 383,090 — Accrued income tax and minimum notional income tax...... 82,993,984 (138,609,717) Changes in assets and liabilities Trade receivables ...... (9,749,570) (4,215,841) Other receivables ...... (12,801,709) (6,912,327) Inventories ...... 10,820,707 — Accounts payable ...... 63,757,460 (34,766,791) Payroll and social security taxes...... 3,471,133 2,919,701 Taxes payable ...... 18,908,630 5,376,658 Bank and financial debt...... 15,734,767 — Other payables and reserves ...... (21,066,096) (3,921,262) Temporary exchange rate differences from foreign subsidiaries ...... (1,360,467) — Collection of interest, net...... 12,468,000 9,972,117 Income tax and minimum notional income tax paid ...... (26,984,680) (7,472,280) Net cash provided by operations ...... 540,017,554 309,166,093 CASH USED IN INVESTMENT ACTIVITIES Acquisition of companies and increase in intangible assets ...... (231,265,604) — Acquisition of property, plant and equipment and materials ...... (196,001,473) (114,298,049) Net cash used in investment activities...... (427,267,077) (114,298,049) CASH USED IN FINANCING ACTIVITIES Settlement of loans — Principal and interest ...... (227,444,937) (437,188,522) Capital contributions ...... — 157,850,000 Payment of fees related to the bank and financial restructuring of Multicanal . . (488,410) — Increase in minority interest in subsidiaries ...... 748,168 — Setting up of reserve account ...... — (53,856,000) Net cash used in financing activities ...... (227,185,179) (333,194,522) Financial and holding results provided by funds ...... 1,862,196 (3,500,000) Net decrease in cash ...... (112,572,506) (141,826,478) Increase in cash due to acquisitions ...... 36,168,418 — Cash at the beginning of year ...... 288,496,328 430,322,806 Cash at end of year ...... 212,092,240 288,496,328

(1) The Company considers all highly liquid investments with original maturity of three months or less to be cash equivalents.

The accompanying notes and exhibits are an integral part of these consolidated financial statements.

F-125 NOTES AND EXHIBITS TO THE CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2006 and 2005

NOTE 1 — CHANGES IN THE COMPANY’S STRUCTURE AND ACQUISITION OF COMPANIES A series of changes occurred in the ownership of the Company’s capital stock, whereby, as of the date of issuance of these consolidated financial statements (i) Grupo Clarín S.A. (“Clarín”), through VLG Argentina LLC, Southtel Holdings S.A., CV B Holding LLC and Vistone LLC, holds approximately 60% of the Company’s voting stock; and (ii) Fintech Advisory Inc. (“Fintech”), through Fintech Media LLC, and the latter directly and through VLG Argentina LLC, holds approximately 40% of the voting stock. Furthermore, on September 26, 2006 the Company acquired: (i) 100% of the capital stock of Hicks, Muse, Tate & Furst — LA Argentina Cable Company LLC (“Hicks LLC”), which indirectly controls Teledigital Cable S.A. and (ii) the 98,54% of the capital stock of Multicanal S.A. (“Multicanal”). In addition, on December 26, 2006, Hicks LLC transferred to the Company the 100% of the capital stock of Holding Teledigital Cable S.A.

NOTE 2 — MULTICANAL DEBT REESTRUCTURING PROCESS In 2003, Multicanal submitted to its creditors a proposal to restructure its financial debt. The restructuring proposal was set forth in Multicanal’s out-of-court reorganization agreement (Acuerdo Preventivo Extrajudicial: “Multicanal’s APE”), which comprised three options: a cash repurchase option at 30 cents per US dollar (“Cash option”), an exchange option for Notes payable in 10 years (“Par option”) and an exchange option for Notes payable in 7 years and Class “C” shares (“Combined option”). Based on the approvals from the holders of all Series of Notes obtained as of December 10, 2003, and the support of creditor banks, on December 13, 2003, Multicanal announced that the required majority of creditors had approved the restructuring contained in Multicanal’s APE. On April 14, 2004, Commercial Court No. 4, Clerk’s Office No. 8 (the “Argentine Court”), dismissed the objections filed and confirmed Multicanal’s APE (the “Approving Decision”). On October 4, 2004, Courtroom A of the Commercial Court of Appeals ratified the confirmation of Multicanal’s APE and, in April 2005, the Argentine Supreme Court dismissed the petition for denied appeal filed against the dismissal by the Court of Appeals of the extraordinary appeal. To implement the capital increases approved by the Shareholders’ Meeting held on May 7, 2004, on July 7, 2006, Multicanal’s Board of Directors increased the capital stock from $386,635,103 to $594,911,263. Such increase was in an amount equal to the principal amount of the old debt offered by holders entitled to the Combined option for the new shares, of which 208,276,160 Class “C” common book-entry shares, par value $1, and entitled to one vote per share, were issued and delivered to Raymond James Argentina Sociedad de Bolsa S.A. as custodian for the corporate creditors entitled to receive these shares under the Multicanal’s APE. In connection with such capital increase, Multicanal booked an issuance premium of $352,152,422. The following bonds were issued pursuant to Multicanal’s APE: a) Series A Notes Step Up Notes for US$80,325,000 (10-year Notes), accruing interest at an annual rate of 2.5% from the bondholders meeting dated December 10, 2003, through the fourth year after the issue date, at 3.5% from the fourth year through the eighth year and at 4.5% from the eighth year until maturity, b) Series B Notes for US$139,869,850 (7-year fixed-rate Notes), accruing interest at an annual rate of 7% and c) Series B Notes for US$3,096,025 (7-year floating-rate Notes), accruing interest at three-month LIBOR plus a 1.325% margin. On July 20, 2006, after obtaining the authorizations from the BCBA (Buenos Aires Stock Exchange) and the Comisión Nacional de Valores (Argentine National Securities Commission “CNV”),

F-126 NOTES AND EXHIBITS TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Multicanal delivered to JP Morgan Chase Bank as exchange agent: a) the 10-year Notes, the 7-year fixed-rate Notes and the 7-year floating-rate Notes for further delivery-in its capacity as exchange agent- to the holders entitled to receive them according to the elections made under the APE, b) interest accrued on the 10-year Notes and the 7-year fixed-rate Notes and the 7-year floating-rate Notes until June 19, 2006, and c) amounts due (including interest accrued through July 19, 2006, to Multicanal’s creditors that chose the Cash option pursuant to Multicanal’s APE.

Consequently, effective as of July 20, 2006, after the bonds and shares were delivered and the cash payment was made, all of Multicanal’s debt subject to its APE was extinguished and settled.

Under the 10-year Notes and the 7-year fixed-rate and 7-year floating-rate Notes, Multicanal is subject to certain covenants, including: (i) limitation on the issuance of guarantees by subsidiaries; (ii) limitations on certain mergers, and sale of assets under certain conditions, (iii) limitation on incurring debt, (iv) limitation on capital expenditure, (v) excess cash sweeps to prepay outstanding 7-year Notes, (vi) limitation on transactions with shareholders and affiliates, (vii) limitation on the issuance and sale of significant subsidiaries’ shares.

On September 20, 2006 and December 18, 2006, two meetings were held by the holders of 7-year fixed-rate Notes to consider certain amendments to the covenants originally assumed by Multicanal under such Notes, approving the amendments proposed by Multicanal.

On September 20, 2006, Multicanal made a voluntary prepayment of all 7-year floating rate Notes for US$3,096,025 plus interest accrued to that date. In addition, on September 27 and 28, 2006, Multicanal repurchased Series “B” Notes 7-year fixed-rate Notes for a face value of US$34,144,281 plus interest accrued to those dates, booking a gain of US$104,278.

Multicanal recorded an income before taxes of $1,246,496,775 for the year ended December 31, 2006 as a result of the consummation of its financial restructuring.

As a result of the steps described above, Multicanal requested the Argentine Court to issue a ruling declaring the APE as fulfilled. On October 13, 2006, the Argentine Court ruled that Multicanal’s APE was fulfilled pursuant to section 59, penultimate paragraph, Law No. 24,522. Multicanal provided evidence to the Argentine Courts of the publication of notices instructed by it in its APE fulfillment resolution, thus finally closing the file.

NOTE 3 — BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS

1. Generally Accepted Accounting Principles

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in force in the City of Buenos Aires and C.N.V. regulations and are presented in Argentine pesos.

In accordance with CNV regulations, the Company presents its consolidated financial statements preceding its unconsolidated financial statements.

These consolidated financial statements do not include the additional disclosures required by the US Securities and Exchange Commission (“SEC”) or US GAAP.

Under F.A.C.P.C.E. (Argentine Federation of Professional Councils in Economic Sciences) Technical Resolution No. 21, the Company has consolidated its financial statements at December 31, 2006 with the financial statements of Multicanal S.A., Hicks LLC, Holding Teledigital Cable S.A., Televisora La Plata S.A., Cablepost S.A., Construred S.A. and Cablevisión Federal S.A. at Decem- ber 31, 2006, and Fintelco S.A. as of November 30, 2006.

F-127 NOTES AND EXHIBITS TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The direct and indirect interests in the companies subject to consolidation as of December 31, 2006 and 2005 are as follows: % Interest (Direct and Indirect)(1) Company 31.12.2006 31.12.2005 Multicanal S.A.(2) ...... 98,54 — Hicks LLC(2)...... 100,00 — Holding Teledigital Cable S.A.(2) ...... 100,00 — Cablevisión Federal S.A...... 99,99 99,99 Televisora La Plata S.A...... 70,00 70,00 Construred S.A.(3) ...... 99,99 99,99 Cablepost S.A...... 99,99 99,99 Fintelco S.A...... 100,00 50,00(4)

(1) Interest in capital stock. (2) See Note 2.a) to the unconsolidated financial statements. (3) See Note 2.b) to the unconsolidated financial statements. (4) Proportionally consolidated.

2. Additional Information in the Statement of Cash Flows During the years ended December 31, 2006 and 2005, the following transactions were consummated without any impact on the Company’s cash flows: December 31, 2006 2005 $ Acquisition of companies financed with debt ...... 902,315,708 — Capitalization of bank and financial debt as established in the APE...... — 173,700,000 902,315,708 173,700,000

NOTE 4 — CRITICAL ACCOUNTING POLICIES The financial statements of the subsidiaries were prepared based on criteria consistent with those followed by the Company in preparing its financial statements. Below are the main accounting policies for the captions from the subsidiaries and not included in Note 3 to the unconsolidated financial statements.

4.1. Intangible Assets Intangible assets basically represent exploitation and concession rights and the purchased subscribers and were valued at acquisition cost restated following the guidelines indicated in Note 3.3. to the unconsolidated financial statements, net of accumulated amortization. In addition, in relation to acquisitions mentioned in Note 2.a) to the unconsolidated financial statements, the Company assigned the cost value of subscribers based on their estimated future cash flows. The value thus determined was valued net of accumulated amortization. Amortization was calculated by the straight-line method based on the estimated useful lives.

F-128 NOTES AND EXHIBITS TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The aggregate value of these assets does not exceed their estimated recoverable value at the end of the year.

4.2. Investments The foreign subsidiaries were mostly considered as non-integrated foreign entities for purposes of their classification under Technical Resolution No. 18, as they have an autonomous financial and economic organization. Consequently, the assets and liabilities of those non-integrated foreign subsidiaries were converted into Argentine pesos at the year-end exchange rate. Exchange differences generated by the conversion were recorded under Temporary Exchange Differences in the Statement of Changes in Shareholders’ Equity, and amounted to $4,037,001 at December 31, 2006.

4.3. Business Segments The services and products provided by the Company and its subsidiaries correspond to a single business segment, considering their nature, the risk of those services, the distribution processes and the unified customer base.

NOTE 5 — BREAKDOWN OF MAIN BALANCE SHEET AND STATEMENT OF INCOME CAPTIONS Below is a breakdown of the main captions: a) Trade Receivables: 2006 2005 $ Ordinary...... 132,985,784 46,994,896 Notes receivable ...... 2,288,017 2,050,725 Related parties (Note 8)...... 2,565,583 — Less: Allowance for doubtful accounts (Exhibit E) ...... (37,350,036) (13,238,440) 100,489,348 35,807,181 b) Other Receivables: 2006 2005 $ Current Attachments in aid of execution...... 7,244,530 749,756 Prepaid expenses ...... 6,121,336 6,290,209 Tax credits ...... 6,625,476 1,659,421 Related parties (Note 8) ...... 23,951,566 8,151,163 Advances to suppliers ...... 8,322,454 480,474 Dividends receivable ...... 4,784,691 — Other ...... 20,556,958 8,228,757 Less: Allowance for doubtful accounts (Exhibit E) ...... (1,338,892) (2,091,298) 76,268,119 23,468,482

F-129 NOTES AND EXHIBITS TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2006 2005 $ Non-current Deferred tax asset, net (Note 9) ...... 82,108,420 155,405,447 Tax credits ...... 58,445,587 21,956,691 Prepaid expenses ...... 3,811,809 2,800,679 Related parties (Note 8) ...... — 2,893,642 Other debtors ...... 5,818,712 59,577 Less: Allowance for doubtful accounts (Exhibit E) ...... (937,942) (7,771,192) Less: Allowance for doubtful recovery of deferred tax asset, net (Note 9 and Exhibit E) ...... (21,359,163) (21,569,454) 127,887,423 153,775,390 c) Accounts Payable:

2006 2005 $ Current Suppliers ...... 112,502,203 28,613,633 Accruals ...... 85,115,299 32,964,656 Related parties (Note 8) ...... 70,282,550 25,148,693 267,900,052 86,726,982 d) Bank and Financial Debt:

2006 2005 $ Current Under restructuring process ...... 105,811,135(1) 112,639,039 Interest payable to related companies (Note 8) ...... 36,665,975 — For purchase of equipment ...... 3,572,881 3,380,987 Accrued interest ...... 13,271,616 11,452,448 Other...... 289,432 — 159,611,039 127,472,474 Non-current Short and Long term Notes(2) ...... 1,024,466,800 1,093,415,783 Related parties (Note 8) ...... 902,315,708 — Bank loans and loans from purchase of equipment . . . . . 47,068,390 47,412,399 Measurement of financial debt at present value ...... (97,864,615) (73,421,560) Multicanal’s negotiable obligations ...... 569,314,741 — Other...... 420,986 — 2,445,722,010 1,067,406,622

(1) Including US$20.9 million in principal related to series 5, 9 and 10 Notes, plus interest. See Note 9.a) to the unconsolidated financial statements.

F-130 NOTES AND EXHIBITS TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(2) Net of Notes related to the consideration which, under the APE, is applicable to creditors that had not entered into exchange agreements at December 31, 2006 and 2005, respectively. See Note 9.a) to the unconsolidated financial statements. e) Revenue From Services:

2006 2005 $ Subscribers ...... 1,279,763,295 852,394,450 Advertising ...... 21,733,288 15,037,307 Installations and additional outlets ...... 70,618,562 16,037,628 1,372,115,145 883,469,385

NOTE 6 — PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment comprise:

Residual Residual Main Original Accumulated Value at Value at Depreciation Account Value Depreciation 31.12.06 31.12.05 Rates $ Buildings ...... 234,803,424 (84,079,693) 150,723,731 40,734,229 2% Improvements to leased buildings . . . 26,576,943 (25,972,788) 604,155 994,324 33% Machinery and equipment ...... 165,090,434 (150,051,033) 15,039,401 25,168,380 10% Furniture and fixtures...... 64,591,376 (59,174,599) 5,416,777 2,158,641 10% Hardware ...... 233,967,994 (203,973,332) 29,994,662 11,502,764 33% Automobiles ...... 89,196,021 (76,572,128) 12,623,893 4,503,317 20% Tools ...... 34,332,696 (26,997,014) 7,335,682 7,476,590 20% Cables, cable laying and assets under loan for use ...... 2,851,005,775 (2,401,704,585) 449,301,190 205,303,953 7% - 33% Internet installation and equipment . . . . 206,379,205 (101,969,201) 104,410,004 66,804,348 10% - 33% Amplifiers ...... 44,999,073 (44,791,944) 207,129 255,864 20% Networks ...... 10,639,531 (6,715,099) 3,924,432 — — Adaptors and other assets ...... 5,742,790 (5,097,751) 645,039 863,498 10% Work in progress . . . . 50,056,273 — 50,056,273 6,378,315 — Warehouse material ...... 194,370,354 — 194,370,354 72,669,245 — Allowance for obsolescence of materials (Exhibit E) ...... (25,313,157) — (25,313,157) (12,596,857) — Total 2006 ...... 4,186,438,732 (3,187,099,167) 999,339,565 — Total 2005 ...... 1,949,973,804 (1,517,757,193) — 432,216,611

F-131 NOTES AND EXHIBITS TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Consolidated depreciation of property, plant and equipment for the years ended December 31, 2006 and 2005 amounted to $152,446,865 and $126,697,362, respectively.

NOTE 7 — INTANGIBLE ASSETS Residual Residual Main Original Accumulated Value at Value at Account Value Depreciation 31.12.06 31.12.05 $ Goodwill Televisora La Plata S.A...... 13,928,507 (3,827,189) 10,101,318 10,101,318 Multicanal ...... 544,079,149 — 544,079,149 — Teledigital...... 201,910,249 — 201,910,249 — Prima...... 35,364,700 — 35,364,700 — Merged companies...... 2,978,619,524 (888,201,625) 2,090,417,899 2,090,417,899 Other ...... 3,567,752 (847,822) 2,719,930 2,704,729 Sub-total ...... 3,777,469,881 (892,876,636) 2,884,593,245 2,103,223,946 Intangible assets Subscriber’s portfolio purchase. . 448,380,963 (16,821,893) 431,559,070 — Trademarks ...... 32,016,962 (4,319,170) 27,697,792 32,016,962 Pre-operating costs ...... 21,705,539 (14,444,752) 7,260,787 — Exploitation rights...... 9,896,347 (5,325,746) 4,570,601 — Concessions ...... 1,967,276 (1,954,777) 12,499 — Network acquisition rights . . . . . 4,339,331 (2,720,666) 1,618,665 — Others ...... 24,334,921 (22,814,771) 1,520,150 — Sub-total ...... 542,641,339 (68,401,775) 474,239,564 32,016,962 Total 2006 ...... 4,320,111,220 (961,278,411) 3,358,832,809 — Total 2005 ...... 3,103,416,965 (968,176,057) — 2,135,240,908

Amortization of consolidated intangible assets for the year ended December 31, 2006 amounted to $20,425,038.

F-132 NOTES AND EXHIBITS TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTE 8 — BALANCES AND TRANSACTIONS WITH RELATED PARTIES Balances and transactions with related parties for the years ended December 31, 2006 and 2005 are as follows: Parent company or company exercising significant influence: 31.12.2006 31.12.2005 Debtor Debtor Amount (Creditor) Amount (Creditor) Item/Operation For the Year Balance For the Year Balance $ Other receivables ...... — 2,568,213 — — Accounts payable ...... — (35,967,976) — — Financial debt — principal payable...... — (375,159,811) — — Financial debt — interest payable ...... — (15,244,775) — — Consultancy services ...... (19,871,505) — — — Interest income ...... 102,455 — — — Acquisition of companies...... (375,159,811) — — — Interest on debt from acquisition of companies ...... (15,244,775) — — — Other related companies: 31.12.2006 31.12.2005 Amount Debtor Amount Debtor Item/Operation For the Year (Creditor) Balance For the Year (Creditor) Balance $ Trade receivables ...... — 2,565,583 — — Other receivables ...... — 21,383,353 — 11,044,805 Accounts payable ...... — (34,314,574) — (25,148,693) Financial debt — principal payable ...... — (527,155,897) — — Financial debt — interest payable ...... — (21,421,200) — — Sale of advertising ...... 221,067 — — — Sale of services ...... 3,400,000 — — — Sale of interest in corporations...... 2,325,000 — — — Other sales ...... 1,702,832 — — — Acquisition of companies...... (527,155,897) — — — Interest on debt from acquisition of companies ...... (21,421,200) — — — Programming costs ...... (117,016,897) — (99,402,590) — Publishing and distribution of magazines ...... (2,752,883) — — — Consultancy services ...... (1,886,537) — — — Purchase of advertising ...... (3,117,340) — — — Other purchases ...... (816,774) — — —

F-133 NOTES AND EXHIBITS TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTE 9 — ADDITIONAL INFORMATION ON DEFERRED TAX The breakdown of deferred tax balances at December 31, 2006 and 2005 is as follows: 2006 2005 $ Deferred tax assets: Trade receivables and other receivables ...... 15,867,525 5,804,671 Provisions...... 13,015,771 8,037,865 Tax loss carryforwards ...... 231,506,290 115,730,529 Reserves for contingencies...... 24,840,764 21,350,835 Exchange differences ...... — 20,311,958 Other timing differences ...... 2,748,883 — 287,979,233 171,235,858

Deferred tax liability: Property, plant and equipment, net ...... (16,247,619) 9,867,135 Customer relationship ...... (151,554,032) — Bank and financial debt ...... (34,252,615) (25,697,546) Other timing differences ...... (3,816,547) — (205,870,813) (15,830,411) Sub-total deferred tax assets, net ...... 82,108,420 155,405,447 Allowance for doubtful recovery of deferred tax asset, net (Exhibit E) ...... (21,359,163) (21,569,454) Total deferred tax assets, net ...... 60,749,257 133,835,993

F-134 NOTES AND EXHIBITS TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The reconciliation of income tax charged to income for the years ended December 31, 2006 and 2005, and the income tax expense at the statutory tax rate on income before taxes is as follows: 2006 2005 $ Income tax expense at statutory tax rate (35%) on income before tax ...... 67,411,212 666,117,738 Permanent differences: Results of minority interest ...... 756,761 — Notional interest ...... 1,488,392 1,182,590 Adjustment for inflation of property, plant and equipment and other assets, net ...... 36,522,045 22,971,917 Subtotal ...... 106,178,410 690,272,245 Net decrease in provision ...... (15,581,529) (820,747,537) Recovery of minimum notional income tax ...... (7,771,192) (8,185,499) 82,825,689 (138,660,791) Income tax ...... 82,825,689 (138,660,791) Minimum notional income tax ...... 168,295 51,074 Total ...... 82,993,984 (138,609,717)

Below is a breakdown of the maturity of tax loss carryforwards estimated at December 31, 2006 (nominal values): Expiry Total $ 2007 ...... 80,542,305 2008 ...... 15,979,132 2009 ...... 344,573,998 2010 ...... 217,849,945 2011 ...... 2,501,163 661,446,543

F-135 EXHIBIT E Consolidated

RESERVES For the Years Ended December 31, 2006 and 2005 2006 2005 At the Incorporated Beginning of Through Year Acquisition Increases Decreases At Year-end At Year-end $ DEDUCTED FROM ASSETS Trade receivables For doubtful accounts ...... 13,238,440 25,311,692 5,080,825(1) (6,280,921)(2) 37,350,036 13,238,440 Other receivables: For other doubtful accounts ...... 9,862,490 241,020 127,456(1) (7,954,132)(3) 2,276,834 9,862,490 For doubtful recoverability of deferred tax assets ...... 21,569,454 15,371,238 — (15,581,529)(4) 21,359,163 21,569,454 Inventories: For impairment of inventories. . . . . — 432,641 — — 432,641 — Property, plant and equipment: For obsolescence of materials . . . . 12,596,857 11,034,869 1,872,920(5) (191,489) 25,313,157 12,596,857 Total 2006 ...... 57,267,241 52,391,460 7,081,201 (30,008,071) 86,731,831 — Total 2005 ...... 882,802,490 — 3,851,213 (829,386,462) — 57,267,241 INCLUDED IN LIABILITIES For contingencies ...... 63,297,166 22,582,900 2,979,088 (14,710,558) 74,148,596 63,297,166 Total 2006 ...... 63,297,166 22,582,900 2,979,088 (14,710,558) 74,148,596 — Total 2005 ...... 67,292,006 — 7,944,452 (11,939,292) — 63,297,166

(1) Recorded under “Doubtful accounts” in Exhibit H. (2) Mainly corresponding to the application of the provision for write-off of subscribers. (3) Includes $7.8 million corresponding to the recovery of the provision for minimum notional income tax expensed under Income tax in the statement of income. (4) See Note 9. (5) Recorded under “Maintenance of property, plant and equipment and network expenses” in Exhibit H.

F-136 EXHIBIT F Consolidated

COST OF GOODS SOLD AND SERVICES PROVIDED For the Years Ended December 31, 2006 and 2005

Total at Total at 31.12.06 31.12.05 $ Incorporation through acquisition of companies ...... 10,872,610 — Materials ...... 838,361 — Resale merchandise ...... 10,034,249 — Purchases and cost of service for the year ...... 701,952,185 491,818,202 Purchases ...... 4,164,472 — Cost of Services (Consolidated Exhibit H) ...... 697,787,713 491,818,202 Add/(less): Holding result ...... (383,090) — Transfer to property, plant and equipment ...... (8,978,761) — Material ...... (341,986) — — Resale merchandise...... (8,636,775) — Less: Inventories at year-end ...... (1,464,915) Resale merchandise(1) ...... (1,464,915) — Cost of goods sold and services rendered...... 701,998,029 491,818,202

(1) Excluding the provision for obsolescence of material amounting to $432,641.

F-137 EXHIBIT H Consolidated

Information Required by Sect. 64, Sub-section I, Paragraph b) of Law No. 19550 For the Years Ended December 31, 2006 and 2005 2006 2005 Cost of Services Selling Administrative Other Item Rendered Expenses Expenses Expenses Total Total Salaries, wages and social security charges ...... 116,387,451 42,193,726 62,601,629 — 221,182,806 128,039,305 Programming costs...... 302,222,132 — — — 302,222,132 207,804,270 Severance costs...... 5,829,634 2,177,016 5,127,452 — 13,134,102 2,071,877 Public utilities and assessments ...... 40,617,900 18,903,724 5,104,236 — 64,625,860 42,633,912 Electricity and fuel ...... 5,762,652 337,792 680,226 — 6,780,670 6,074,872 Representation expenses . . 106,879 390,157 421,503 — 918,539 294,971 Other personnel expenses ...... 4,638,578 2,347,861 3,833,111 — 10,819,550 3,874,682 Maintenance of property, plant and equipment and network expenses ...... 21,174,082 2,115,081 5,414,999 — 28,704,162 24,163,527 Rental ...... 16,529,672 772,745 2,159,048 — 19,461,465 13,172,136 Depreciation of property, plant and equipment . . . . 138,988,820 12,997,556 460,489 — 152,446,865 126,697,362 Amortization of intangible assets ...... — — — 20,425,038 20,425,038 — Fees for services ...... 586,924 3,013,414 47,159,418 — 50,759,756 29,298,093 Fees to directors and syndics...... — — 1,622,897 — 1,622,897 1,189,833 Advertising and promotion. . 21,799 24,315,582 103,419 — 24,440,800 9,406,222 Participation plan ...... — — — 7,173,125 7,173,125 4,530,000 Office expenses ...... 27,584 96,387 4,415,369 — 4,539,340 3,336,000 Correspondence and messenger services . . . . — 836,387 52,598 — 888,985 783,124 Production of magazine . . . 3,354,597 18,490,176 229,914 — 22,074,687 14,399,407 Data transfer costs ...... 30,733,632 839,825 — — 31,573,457 16,442,590 Doubtful accounts...... — 5,208,281 — — 5,208,281 1,726,390 Credit card expenses and commissions ...... 1,492,551 23,413,193 6,167,315 — 31,073,059 19,207,421 Lawsuits and contingencies ...... 1,134,088 — — — 1,134,088 7,414,452 Miscellaneous ...... 8,178,738 3,737,533 14,323,832 — 26,240,103 12,446,016 Total 2006 ...... 697,787,713 162,186,436 159,877,455 27,598,163 1,047,449,767 — Total 2005 ...... 491,818,202 92,160,246 86,498,014 4,530,000 — 675,006,462

F-138 BALANCE SHEET At December 31, 2006 and 2005 2006 2005 $ CURRENT ASSETS Cash and banks...... 129,145,334 48,333,728 Investments ...... — 223,660,050 Trade receivables (Note 4.a) ...... 37,561,263 32,249,057 Other receivables (Note 4.b) ...... 32,770,168 41,485,112 Other assets (Note 4.c) ...... 56,838,603 53,856,000 Total current assets ...... 256,315,368 399,583,947 NON-CURRENT ASSETS Other receivables (Note 4.b) ...... 102,635,769 150,124,077 Investments (Note 4.d)...... 424,860,309 24,653,724 Property, plant and equipment (Note 4.e) ...... 420,372,093 412,542,426 Intangible assets (Exhibit B)...... 27,697,792 32,016,962 Subtotal non-current assets ...... 975,565,963 619,337,189 Goodwill (Exhibit B) ...... 2,846,508,615 2,100,519,217 Total non-current assets ...... 3,822,074,578 2,719,856,406 Total assets ...... 4,078,389,946 3,119,440,353 CURRENT LIABILITIES Accounts payable (Note 4.f) ...... 124,790,922 81,529,307 Bank and financial debt (Note 4.g) ...... 161,240,243 136,627,094 Payroll and social security charges ...... 15,679,715 13,847,843 Taxes payable ...... 24,884,738 21,526,205 Other payables (Note 4.h) ...... 628,195 628,240 Total current liabilities ...... 327,223,813 254,158,689 NON-CURRENT LIABILITIES Accounts payable ...... 3,097,731 4,335,509 Bank and financial debt (Note 4.g) ...... 1,860,742,373 1,067,406,622 Taxes payable ...... 8,795,132 10,199,967 Other payables (Note 4.h) ...... 12,414,673 16,297,630 Reserves (Exhibit E) ...... 38,927,864 51,337,884 Total non-current liabilities ...... 1,923,977,773 1,149,577,612 Total liabilities ...... 2,251,201,586 1,403,736,301 SHAREHOLDERS’ EQUITY (as per respective statement) ...... 1,827,188,360 1,715,704,052 Total liabilities and shareholders’ equity ...... 4,078,389,946 3,119,440,353

The accompanying notes and exhibits are an integral part of these financial statements.

F-139 STATEMENT OF INCOME For the Years Ended December 31, 2006 and 2005

2006 2005 $ REVENUES FROM SERVICES (Note 4.i) ...... 1,032,554,157 841,479,761 COST OF SERVICES RENDERED (Exhibit H) ...... (519,675,756) (462,440,016) Gross income ...... 512,878,401 379,039,745 SELLING EXPENSES (Exhibit H) ...... (113,266,321) (89,319,778) ADMINISTRATIVE EXPENSES (Exhibit H) ...... (117,745,913) (83,190,781) OTHER EXPENSES (Exhibit H)...... (11,492,295) (4,530,000) Sub-total ...... 270,373,872 201,999,186 FINANCIAL RESULTS Generated by liabilities Exchange differences ...... (9,295,803) 7,483,174 Tax on debits and credits in financial transactions...... (12,256,151) (9,455,316) Restatement (CER) ...... (5,374,176) (7,303,903) Interest (Note 4.j) ...... (99,110,406) (325,519,524) Loss on measurement of liabilities at present value ...... (34,696,981) (4,913,731) Generated by assets Exchange differences ...... 2,585,618 3,462,633 Interest (Note 4.j) ...... 17,070,738 11,181,608 Bank expenses...... (692,647) (734,644) Result of financial restructuring (Note 4.k) ...... 12,063,892 2,021,296,491 Amortization of deferred charges ...... — (4,063,058) RESULT OF LONG-TERM INVESTMENTS (Exhibit C) ...... 15,289,105 (382,571) OTHER INCOME, NET ...... 5,342,836 7,439,287 Net income before income tax ...... 161,299,897 1,900,489,632 INCOME TAX AND MINIMUM NOTIONAL INCOME TAX (Note 5) . . (53,852,590) 141,235,499 Net income for the year...... 107,447,307 2,041,725,131

The accompanying notes and exhibits an integral part of these financial statements.

F-140 STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY For the Years Ended December 31, 2006 and 2005

2006 2005

Shareholders’ Temporary Contributions Legal Retained Translation Share Capital Premium Sub-Total Reserve Earnings(1) Differences Total Total $ Balances at beginning of period ...... 197,327,500 134,234,500 331,562,000 — 1,384,142,052 — 1,715,704,052 (657,571,079) Increase in Share capital as approved by the Regular Shareholders’ Meeting held on October 3, 2005 . . . — — — — — — — 157,850,000 Increase in Share capital as approved by the Extraordinary Shareholders’ Meeting held on October 7, 2005 . . . — — — — — — — 173,700,000 Distribution of earnings as approved by the Regular Shareholders’ Meeting held on April 20, 2006 to legal reserve . .... — — —39,465,500 (39,465,500) — — — Temporary translation differences...... — — — — — 4,037,001 4,037,001 — Net income for the year ...... — — — — 107,447,307 — 107,447,307 2,041,725,131 Balances at year end ...... 197,327,500 134,234,500 331,562,000 39,465,500 1,452,123,859 4,037,001 1,827,188,360 1,715,704,052

(1) In accordance with the Argentine Corporations Law, 5% of the net and realized profit for the year must be appropriated by resolution of shareholders to a legal reserve until such reserve equals 20% of the Company’s outstanding capital.

The accompanying notes and exhibits are an integral part of these financial statements.

F-141 STATEMENT OF CASH FLOWS(1) For the Years Ended December 31, 2006 and 2005 2006 2005 $ CASH PROVIDED BY OPERATIONS Net income ...... 107,447,307 2,041,725,131 Adjustments to reconcile the net income for the year to net cash flows provided by operations: Result of long-term investments ...... (15,289,105) 382,571 Depreciation of property, plant and equipment ...... 121,212,196 120,776,515 Amortization of intangible assets ...... 4,319,170 — Amortization of deferred charges ...... — 4,063,058 Reserves ...... (12,410,020) 7,359,811 Doubtful accounts ...... 2,585,343 1,623,240 Accrued interest, net ...... 85,368,979 321,111,819 Financial results ...... 37,785,294 2,617,389 Result of financial restructuring ...... (12,063,892) (2,021,296,491) Accrued income tax and minimum notional income tax...... 53,852,590 (141,235,499) Changes in assets and liabilities Trade receivables ...... (7,816,549) (3,442,703) Other receivables ...... 13,034,749 (6,314,630) Accounts payable ...... 35,263,095 (34,153,089) Payroll and social security taxes ...... 1,831,872 2,939,367 Taxes payable ...... 5,408,779 5,556,445 Other payables and reserves ...... (5,005,705) (2,775,711) Collection of interest, net(2)...... 12,468,000 10,074,708 Minimum notional income tax paid ...... (3,455,081) (5,616,645) Net cash provided by operations...... 424,537,022 303,395,286 CASH USED IN INVESTMENT ACTIVITIES Acquisition of companies ...... (217,551,616) — Irrevocable capital contributions in subsidiaries ...... (77,010,880) — Acquisition of property, plant and equipment and materials, net. . . (132,430,690) (108,800,722) Net cash used in investment activities ...... (426,993,186) (108,800,722) CASH USED IN FINANCING ACTIVITIES Settlement of loans — Principal and interest ...... (123,006,731) (437,188,522) Capital contributions ...... — 157,850,000 Setting up of reserve account ...... — (53,856,000) Related parties, net...... (19,430,414) 1,693,451 Net cash used in financing activities ...... (142,437,145) (331,501,071) Financial and holding results provided by funds ...... 2,044,865 (3,200,000) Net decrease in cash ...... (142,848,444) (140,106,507) Cash at the beginning of year ...... 271,993,778 412,100,285 Cash at end of year ...... 129,145,334 271,993,778

(1) See Note 3.5. p). (2) Mainly related with interest gain from time deposits.

The accompanying notes and exhibits are an integral part of these financial statements.

F-142 NOTES TO THE FINANCIAL STATEMENTS At December 31, 2006 and 2005

NOTE 1 — COMPANY’S BUSINESS The Company was organized on April 5, 1979, to engage in the business of installing, operating and developing supplementary broadcasting services. The main business of the Company and certain of its subsidiaries consists of operating cable television networks in the several locations in Argentina, Paraguay and Uruguay. On February 18, 2003, a Special Shareholders’ Meeting approved the amendment to the Company’s corporate purpose, adding as one of its permitted operations the provision of telecommunication services and the possibility of increasing its capital five-fold without amending its bylaws.

NOTE 2 — ACQUISITION OF COMPANIES AND COMPANY’S REORGANIZATION PROCESSES On September 26, 2006, Grupo Clarín S.A. (“Clarín”) and Fintech Advisory Inc. (“Fintech”), increased their ownership in the Company’s capital stock to approximately 60% y 40%, respectively. On the same date, Cablevisión acquired 100% of the capital stock of Hicks, Muse, Tate & Furst — La Argentina Cable Company LLC (“Hicks LLC”), the indirect controlling company of Teledigital Cable S.A., a cable TV provider operating in various Argentine provinces, from Hicks Muse Tate & Furst Group (“HMTF”), one of the former indirect shareholders of the Company, and a 98.54% holding of ordinary shares of Multicanal S.A. (“Multicanal”) from Clarín and Fintech. Immediately before the acquisition of Multicanal by Cablevisión, Multicanal had acquired 100% of the capital stock of Primera Red Interactiva de Medios Argentinos (Prima) S.A. (“Prima”) from Clarín. Cablevisión paid approximately US$70,000,000 in cash for Teledigital Cable S.A. and agreed to pay $824,815,708 on September 26, 2009 for the capital stock of Multicanal acquired from Clarín and Fintech. Furthermore, Cablevisión made irrevocable capital contributions to Holding Teledigital S.A. amounting to $76,410,880 to allow the repayment of the outstanding bank debt and debt from the purchase of cable systems. Multicanal agreed to pay $77,500,000 to Clarín on September 26, 2009 for the capital stock of Prima. On December 22, 2006 Multicanal sold 3% of Prima to a related company. Subsequently, on December 26, 2006 Hicks LLC transferred to the Company 100% of the shares it held in Holding Teledigital Cable S.A. Those acquisitions are subject to the applicable administrative approvals. At the date of issue of these financial statements, the Company had made the filings required to obtain the approval of the National Commission for the Defense of Competition. b) From August 1997 through July 1998, the Company carried out an extensive program to acquire companies engaged in the operation of cable television networks in Argentina, such as Televisora La Plata S.A., Fintelco S.A., UIH Group and Mandeville Argentina S.A. On April 1, July 1 and July 3, 1998, three corporate reorganization processes were effected whereby the Company absorbed most of these interests. As of the date of issuance of these consolidated financial statements, such reorganization processes had been approved by the Comisión Nacional de Valores (“C.N.V.”) On May 14 and May 30, 2001, two of these reorganizations were registered with the Public Registry of Commerce of the City of Buenos Aires, while the files related to Fintelco S.A. and Video Cable Comunicación S.A. relating to the spin-off-merger effected on July 1, 1998 are still pending. Management is not aware of any events or circumstances that could indicate that the pending registration will not be effected.

F-143 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

In addition, the Regular and Special Shareholders’ Meeting held on March 28, 2003, approved the preliminary merger and spin-off-merger agreement whereby the Company absorbed Fibertel S.A. and certain assets, liabilities and shareholders’ equity spun-off from Construred S.A. As of the issuance date of these consolidated financial statements, such corporate reorganization has been accepted by the C.N.V. and is pending registration with the related authorities. Management is not aware of any events or circumstances that may indicate that the pending approvals and registration will not be fulfilled.

NOTE 3 — CRITICAL ACCOUNTING POLICIES The following is a summary of significant accounting policies applied by the Company in the preparation of these financial statements.

3.1. Preparation and Presentation of Financial Statements. These financial statements have been prepared in accordance with generally accepted accounting principles in force in the City of Buenos Aires and C.N.V. regulations and are presented in Argentine pesos. Certain figures contained in the consolidated financial statements for the year ended Decem- ber 31, 2005 have been reclassified for comparative purposes.

3.2. Unifying Accounting Standards The unified professional accounting standards approved in August 2005 by the Professional Council in Economic Sciences of the City of Buenos Aires (“C.P.C.E.C.A.B.A.”) through Resolution CD No. 93/2005 and, approved with certain amendments by the C.N.V. through its General Resolutions No. 485/05 and 487/06, became effective for fiscal year 2006. The amendments most relevant to the Company are as follows: a) In the comparison between the book value of property, plant and equipment and certain intangible assets and their recoverable value, the comparison against the nominal value of the expected net cash flows is eliminated and an impairment allowance is required to be booked whenever the present value of the expected net cash flows (and the net realizable value) is lower than the book value. b) The difference between the inflation-adjusted book value of property, plant and equipment (and other non-monetary assets) and their tax base is defined as a temporary difference that results in the recognition of a deferred tax liability; however, it may still be considered as a permanent difference provided that certain supplementary information is disclosed. c) The segregation of the financial components implied in trading transactions and the discount of nontrading and financial receivables and liabilities must be made upon their initial measurement, and the exceptions based on the existence of a context of economic stability or the current nature of the receivable and liability balances are eliminated. d) The temporary differences resulting from the conversion of financial statements, from the recognition of income (loss) related to the net investment in nonintegrated entities and from the measurement of derivative instruments identified as an effective hedging will no longer be disclosed as accounts between liabilities and shareholders’ equity and they will be transferred to shareholders’ equity; and, e) For any issues not contemplated in general or specific accounting standards that cannot be resolved by applying the accounting standards’ Conceptual Framework, the International

F-144 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Financial Reporting Standards and the interpretations approved by the International Accounting Standards Board, effective for the fiscal year in which they are applied, will be alternatively applicable. Management has elected to continue considering the difference between the inflation-adjusted book value of property, plant and equipment and its tax base as a permanent difference (see Note 5). The application of such accounting standards does not significantly impact on the Company’s financial statements as of December 31, 2006.

3.3. Recognition of the Effects of Inflation Professional accounting standards establish that financial statements should be stated in constant Argentine pesos. Within a context of monetary stability, the nominal currency is used as constant currency, within a inflationary or deflationary context, the financial statements should be stated in the peso purchasing power as of the date of such financial statements, recognizing the effect of changes in I.P.I.M. (domestic wholesale price index) published by the INDEC (Argentine Institute of Statistic and Censuses), as required by the restatement method set forth in F.A.C.P.C.E. Technical Resolution No. 6. The Company’s financial statements recognize the effects of changes in currency purchasing power only through February 28, 2003, as required by Decree No. 664/2003 and C.N.V. General Resolution No. 441. Under Argentine GAAP, the restatement method should have been discontinued only from October 1, 2003. The effects of not recognizing the variations in currency purchasing power, through this last date, were not significant regarding these financial statements.

3.4. Use of Estimates The preparation of the consolidated financial statements at a specific date requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s management makes estimates to calculate, at a specific moment, the allowance for doubtful accounts, the depreciation, amortization and impairment of assets, the provision for contingencies and income taxes. Actual results could differ from those estimates.

3.5. Valuation Criteria The principal valuation criteria used in the preparation of these consolidated financial statements are as follows: a) Cash and Banks Cash on hand and bank balances were recorded at nominal value. b) Current Investments Time deposits were valued according to the amount deposited at the time of the transaction plus accrued interest at year end. c) Trade Receivables and Accounts Payable Trade receivables and accounts payable were valued at nominal value. The values thus obtained do not significantly differ from those that would have been obtained had current accounting standards been applied. Such current standards establish that the valuation should be made at the estimated

F-145 NOTES TO THE FINANCIAL STATEMENTS — (Continued) cash value at the time of the transaction plus interest and implicit financial components accrued based on the internal rate of return determined at such time. Trade receivables are presented net of an allowance for doubtful accounts, which is considered to be sufficient to absorb future losses due to uncollectible receivables. d) Other Receivables and Payables Sundry receivables and payables were valued at nominal value plus financial results at year end, if applicable. The values thus obtained do not significantly differ from those that would have been obtained had current accounting standards been applied. Such current standards establish that the valuation should be made based on the best estimate of the amount receivable and payable, respectively, discounted using a rate reflecting the time value of money and the specific risks of the transaction estimated at the time of incorporation to assets and liabilities, respectively. The minimum notional income tax asset and the deferred tax asset were valued at their nominal value. e) Other Assets Corresponds to restricted fixed term deposits in foreign currency (see Note 12), valued at nominal value plus accrued interest at year end. f) Non-current Investments Long-term investments in controlled companies, as detailed in Exhibit C, have been valued according to the equity method of accounting following the procedure established by Technical Pronouncment No. 21 of the FACPCE, on the basis of the financial statements issued by them. In valuing the investments in recently acquired companies (see Note 2.a) the market value of the identifiable net assets has been considered at the percentage of participation. The accounting standards used by the controlled companies on the basis of which the equity value was calculated are similar to those described in this note. In the cases where they differed, the pertinent adjustments have been made. As from enactment of Law No. 25063, cash and in-kind dividends to be received by the Company on its investments in other companies in excess of the accumulated taxable income reported by those companies at the moment of their distribution, shall be subject to an income tax withholding rate of 35% as a full and final payment. The Company has not recognized any charge for this tax because it estimates that the dividends on profits recorded according to the equity method of accounting will not be subject to that tax. g) Property, Plant and Equipment Were valued at acquisition cost restated following the guidelines indicated in Note 3.3., net of the related accumulated depreciation, calculated from the date on which the asset was acquired or first put into operation, as applicable. Depreciation is calculated in accordance with the straight-line method based on its remaining estimated useful life. Materials have been valued at acquisition cost restated following the guidelines indicated in Note 3.3., net of the allowance for obsolescence. The value of property, plant and equipment, taken as a whole, does not exceed the estimated recoverable value considering their economic use.

F-146 NOTES TO THE FINANCIAL STATEMENTS — (Continued) h) Foreign Currency Assets and liabilities denominated in foreign currency were valued at year-end exchange rates. i) Goodwill (i) Acquired and/or merged companies through December 31, 2002: related to the excess of the acquisition cost of merged operations and companies under Section 33, Law No. 19550 over the equity book value as of acquisition date, restated as indicated in Note 3.3., net of the related accumulated amortization through December 31, 2002. (ii) Multicanal and Hicks LLC: related to the recent acquisitions described in Note 2.a) and represent the difference between the cost and the estimated current value of such companies’ net identifiable assets at the time of the purchase. As these transactions are recent, based on Technical Resolution No. 21 the Company is compiling evidence to review such assessment, specially in connection with the property, plant and equipment. The Company estimates that the final assessment will not have a significant impact on the consolidated financial statements. According to Argentine GAAP, the Company has not amortized goodwill since January 1, 2003, since it is considered to have an indefinite useful life. The Company periodically performs an impairment test analysis on goodwill based on estimates and assumptions available as of the date of the consolidated financial statements. The value of goodwill, taken as a whole, does not exceed its estimated recoverable value at year-end. j) Intangible Assets Intangible assets have been valued at acquisition cost restated following the guidelines indicated in Note 3.3., net of accumulated amortization. Amortization was calculated by the straight-line method based on the estimated useful lives. The aggregate value of these assets does not exceed their estimated recoverable value at the end of the year. k) Liabilities Resulting from Debt Restructuring Liabilities resulting from debt restructuring were valued at the accounting measurement based on the best possible estimate of the amount payable, discounted using a rate that takes into account market evaluations on the time value of money and the specific debt risks at the time of the initial measurement. By virtue of this regulation, the lower value of the liability thus discounted at the initial time regarding its nominal value was booked in the offset account “Measurement of financial debt at present value”. As the time to make principal and interest payments approaches, the offset account is being gradually reversed with charge to financial income/expense of each period. l) Allowances and Reserves • Deductible from assets For doubtful accounts: it has been set up to reduce the valuation of trade receivables from services and other receivables (including net deferred tax asset) at their probable recoverable value on the basis of an analysis of doubtful accounts. For obsolescence of materials: it has been set up to reduce the valuation of network materials at their probable recoverable value based on their future expected use. • Included in non-current liabilities

F-147 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

They have been set up for contingent situations that could result in obligations for the Company. To estimate such amounts, the possibility of such occurrences has been considered, taking into account Management’s expectations and the opinion of its legal advisors. m) Income tax and Minimum Notional Income Tax The Company determines income tax by applying the deferred tax method. Such method consists of recognizing the tax effect of the temporary differences between the book and tax valuation of assets and liabilities, and the subsequent charge to income for the years in which they are reversed, considering also the possibility of using tax loss carryforwards in the future. Temporary differences determine income tax asset or liability balances when their future reversal decreases or increases the tax assessed, respectively. Should the Company carry tax losses forward, deducting them from future taxable income or should the deferred income tax resulting from temporary differences be an asset, such receivables would be recognized as long as their use is estimated as probable. Deferred income tax is recognized for all temporary differences between book and tax valuation of assets and liabilities, except as follows, as provided by professional accounting standards: a) differences originated in goodwill values whose book amortization is not allowed for tax purposes; b) differences originated in investments in subsidiaries, when the parent company is able to control the reversal of the temporary difference and such reversal is unlikely in the foreseeable future. Moreover, the Company continues to consider the difference between the inflation-adjusted book value of property, plant and equipment and their tax base as a permanent difference. In addition, the Company determines the minimum notional income tax by applying the rate of 1% to certain income-generating assets as of each year-end.. This tax supplements the income tax. The Company’s tax liability for each fiscal year shall be the higher of both taxes. However, should minimum notional income tax exceed income tax in a given fiscal year, such excess may be computed as payment on account of any income tax in excess of minimum notional income tax that may be generated in any of the ten subsequent years. The Company capitalized the minimum notional income tax accrued in the year and payed in previous years under Other receivables. The Company estimates that those receivables could be computed as payment on account of income tax in future years. n) Shareholders’ Equity These accounts have been restated in constant currency except for the “Share Capital” account which has been expressed in its original nominal value. The premium account may be applied to offset accumulated losses or to increase capital at the discretion of the shareholders. These amounts cannot be distributed in the form of cash dividends.

ñ) Statement of Income Accounts • Revenues from services were credited to income as accrued, based on the month on which the services were rendered. • Expenses were charged to expense as accrued. • Charges for consumption of non-monetary assets, valued at cost, were computed based on the restated amounts of such assets, following the method described in Note 3.3.

F-148 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

• The following items are disclosed collectively under financial income (expense): (a) income from financial restructuring, (b) exchange differences deriving from assets and liabilities in foreign currency; (c) financial income and expenses; (d) gains and losses from measurement of assets and liabilities at present value; and (e) deferred costs amortization. o) Earnings per Share The earnings per share have been calculated on the basis of the weighted average of the number of outstanding shares of common stock during each year. p) Cash Equivalents The Company considers all highly liquid investments with original maturity of three months or less to be cash equivalents.

3.6. Additional Information in the Statement of Cash Flows During the years ended December 31, 2006 and 2005, the following transactions were consummated without any impact on the Company’s cash flows: December 31, 2006 2005 $ Acquisition of companies financed with debt ...... 824,815,708 — Capitalization of bank and financial debt as established in the APE...... — 173,700,000 824,815,708 173,700,000

NOTE 4 — BREAKDOWN OF MAIN BALANCE SHEET AND STATEMENT OF INCOME CAPTIONS Below is a breakdown of the main captions at December 31, 2006 and 2005: a) Trade Receivables: 2006 2005 $ Ordinary ...... 46,932,015 42,539,503 Notes receivable...... 2,254,638 2,050,725 Less: Allowance for doubtful accounts (Exhibit E) ...... (11,625,390) (12,341,171) 37,561,263 32,249,057

F-149 NOTES TO THE FINANCIAL STATEMENTS — (Continued) b) Other Receivables:

2006 2005 $ Current Attachments in aid of execution ...... 803,153 749,756 Prepaid expenses ...... 2,046,073 6,290,209 Tax credits...... 565,206 1,502,324 Related parties (Note 8) ...... 27,065,500 26,474,805 Advances to suppliers ...... 2,100,292 446,379 Other ...... 1,169,469 7,952,164 Less: Allowance for doubtful accounts (Exhibit E) ...... (979,525) (1,930,525) 32,770,168 41,485,112 Non-current Deferred tax asset, net (Note 5)...... 73,651,071 151,327,833 Minimum notional income tax ...... 28,600,869 21,956,691 Prepaid expenses ...... 3,265,131 2,888,578 Less: Allowance for doubtful accounts (Exhibit E) ...... — (7,771,192) Less: Allowance for doubtful recovery of deferred tax asset, net (Note 5 and Exhibit E) ...... (2,881,302) (18,277,833) 102,635,769 150,124,077 c) Other Assets:

2006 2005 $ Reserve account(1) ...... 56,838,603 53,856,000

(1) Restricted assets. See Note 12. d) Investments:

2006 2005 $ Long-term investments (Exhibit C) ...... 424,860,309 24,653,724 424,860,309 24,653,724 e) Property, Plant and Equipment:

2006 2005 $ Fixed assets residual value (Exhibit A) ...... 433,940,340 425,139,283 Less: Allowance for obsolescence of materials (Exhibit E). . . (13,568,247) (12,596,857) 420,372,093 412,542,426

F-150 NOTES TO THE FINANCIAL STATEMENTS — (Continued) f) Accounts Payable:

2006 2005 $ Current Suppliers ...... 28,016,665 26,397,738 Accruals ...... 43,459,825 30,672,795 Related parties (Note 8) ...... 53,314,432 24,458,774 124,790,922 81,529,307 g) Bank and Financial Debt:

2006 2005 $ Current Under restructuring process ...... 105,811,135(1) 112,639,039 For purchase of equipment ...... 3,572,881 3,380,987 Accrued interests ...... 12,160,029 11,452,448 Interest payable from Multicanal’s acquisition debt...... 33,516,730 — Related parties(Note 8) ...... 6,179,468 9,154,620 161,240,243 136,627,094 Non-current Short and Long term Notes(2) ...... 1,024,466,800 1,093,415,783 Related parties (Note 8) ...... 824,815,708 — Bank loans and loans from purchase of equipment . . . . . 47,068,390 47,412,399 Measurement of financial debt at present value ...... (35,608,525) (73,421,560) 1,860,742,373 1,067,406,622

(1) Including US$20.9 million in principal related to series 5, 9 and 10 Notes, plus interest. See Note 9.a).

2006 2005 $ Current Acquisition related debt...... 459,941 450,475 Other ...... 168,254 177,765 628,195 628,240 Non-current Interest in subsidiaries (Exhibit C) ...... 12,414,673 11,767,630 Compensation plan(Note 6.f) ...... — 4,530,000 12,414,673 16,297,630

F-151 NOTES TO THE FINANCIAL STATEMENTS — (Continued) i) Revenue from Services: Gain/(Loss) 2006 2005 $ Subscribers ...... 996,327,607 811,248,346 Advertising ...... 16,306,592 14,193,787 Installations and additional outlets ...... 19,919,958 16,037,628 1,032,554,157 841,479,761 j) Interests: 2006 2005 $ Generated by liabilities Financial interest ...... (94,887,871) (320,471,317) Comercial interest...... (3,557,257) (4,069,990) Tax interest...... (665,278) (978,217) (99,110,406) (325,519,524) Generated by assets ...... 17,070,738 11,181,608 Gain interest...... 17,070,738 11,181,608 k) Result of Financial Restructuring: 2006 2005 $ Forgiveness of principal ...... 3,040,050 695,720,616 Forgiveness of accrued interest ...... 7,411,192 1,025,366,406 Forgiveness of punitive interest ...... 1,612,650 249,323,700 Effect of initial measurement of financial debt at present value ...... — 78,553,157 Sub-total ...... 12,063,892 2,048,963,879

2006 2005 $ Less: Accelerated amortization of deferred charges (Exhibit B) ...... — (12,567,231) Related expenses and other, net ...... — (15,100,157) 12,063,892 2,021,296,491

F-152 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

NOTE 5 — ADDITIONAL INFORMATION ON DEFERRED TAX The breakdown of deferred tax balances at December 31, 2006 and 2005 is as follows: 2006 2005 Deferred tax assets: Trade receivables and other receivables ...... 4,941,980 5,434,353 Provisions ...... 13,015,771 8,037,865 Tax loss carryforwards ...... 47,217,678 115,591,450 Reserves for contingencies...... 13,478,387 17,821,894 Property, plant and equipment, net ...... 11,157,316 9,867,135 Exchange differences ...... — 20,272,682 89,811,132 177,025,379 Deferred tax liability: Bank and financial debt ...... (12,462,984) (25,697,546) Other timing differences ...... (3,697,077) — (16,160,061) (25,697,546) Sub-total deferred tax assets, net ...... 73,651,071 151,327,833 Allowance for doubtful recovery of deferred tax asset, net (Exhibit E)...... (2,881,302) (18,277,833) Total deferred tax assets, net ...... 70,769,769 133,050,000

The reconciliation of income tax charged to income for the years ended December 31, 2006 and 2005, and the income tax expense at the statutory tax rate on income before taxes is as follows: 2006 2005 $ Income tax expense at statutory tax rate (35%) on income before tax ...... 56,454,964 665,171,371 Permanent differences: Result of long-term investments ...... (5,351,187) 133,900 Notional interest ...... 1,118,004 755,688 Adjustment for inflation of property, plant and equipment and other assets, net ...... 24,798,532 21,771,700 Subtotal ...... 77,020,313 687,832,659 Net decrease in provision ...... (15,396,531) (820,882,659) Recovery of minimum notional income tax ...... (7,771,192) (8,185,499) Income tax ...... 53,852,590 (141,235,499)

Below is a breakdown of the maturity of tax loss carryforwards estimated at December 31, 2006 (nominal values): Expire Total 2009 ...... 134,907,650 Total ...... 134,907,650

At December 31, 2006, the deferred tax liability related to the fixed asset inflation adjustment not recorded by the Company arise to approximately $27 million, and its estimated reversal periods are: $7 million in 2007, $6 million in 2008 and $14 million from 2009 onwards.

F-153 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

NOTE 6 — LEGAL AND ADMINISTRATIVE PROCESSES AND OTHER COMMITMENTS a) The Company was notified by the COMFER that 376 summary proceedings were brought against it for alleged violations of the Broadcasting Law between November 1, 2002 and December 31, 2006. The Company has filed the corresponding defenses. The COMFER has resolved 231 of these summary proceedings, applying fines totaling $1,036,954. These fines were appealed by the Com- pany, while decision in the remaining summary proceedings is pending. With respect to Multicanal, as of the date of these consolidated financial statements, the COMFER brought administrative summary proceedings due to violations to the legal regulations regarding broadcasting contents and imposed fines totaling $186,926. At the date of these financial statements, the COMFER demanded payment of $55,359 through a warning letter corresponding to fines, regarding which a favorable ruling for the COMFER was issued. Although no assurance can be given with respect to the final decision to be rendered in these cases, according to the Company, its subsidiary and its legal counsel, the likelihood that such proceedings would have a material effect on Cablevision S.A.’s and its subsidiary’s economic and financial condition is remote. In addition, the COMFER notified Televisora La Plata S.A. (a subsidiary of Cablevisión) of an alleged violation to the terms of its broadcasting license. The COMFER had indicated that it may impose penalties ranging from fines to a possible revocation of such broadcasting license. While no assurance can be given as to the outcome of such proceedings, in the opinion of the Company, its legal counsel and Televisora La Plata S.A., based on the information available, the likelihood that the above mentioned proceeding would have a material effect on the financial condition of the Company is remote. On November 5, 2004, the Company received a letter from the COMFER (Note No. 000506-COMFER (Interv.)/04) whereby, among other issues, such agency advised the Company that: (i) the requests filed by Cablevisión S.A. aimed at validating some shareholder and director changes that had already taken place were not approved by such Committee, which would infringe Radio Broadcasting Law sections 47 and 48 nullifying the decisions that may have been adopted by the Shareholders’ Meetings; and (ii) the license held by the Company would inevitably expire on March 31, 2006. Although, on the basis of the information available and the related reports from its legal counsel, the notification would have no legal effects on the Company, the Company took the applicable measures, actions, and legal defenses. Moreover, Decree No. 527/2005 suspended the computation of the terms of the radio broadcasting licenses and extensions thereof provided for in section 41 of the Radio Broadcasting Law, for a ten-year term as from May 24, 2005. The computation of the terms will automatically restart upon the end of the suspension term. b) At November 30, 2006, Fintelco S.A. had a negative shareholders’ equity. Under the Argentine Corporations Law, this could result in its dissolution and mandatory capital stock reduction, unless their shareholders agree its total or partial restoration or a capital increase. The Company and Multicanal each hold 50% of the equity of Fintelco S.A., and, in that proportion, they agreed to make the contributions required to pay the liabilities of Fintelco S.A. and of its subsidiaries when due. The Company will adopt the necessary measures to correct this situation. c) The CNDC initiated three legal actions following complaints filed by other cable television companies under Law No. 25,156 alleging an improper refusal by Dayco Holdings Ltd. (“Dayco”), a subsidiary of Fintelco, to sell rights to broadcast South American qualifying football matches for the Korea/Japan 2002 World Cup. On February 14, 2003, the CNDC served the Company notice of the complaint in one of the legal actions to provide explanations. The Technical Coordination Head of the Ministry of Economy and Production resolved that the proceedings related to one of the actions above should be closed. Although Dayco submitted the answers required and the Company did the same on March 10, 2003, the CNDC has not made any material decision.

F-154 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Also, the CNDC has brought an action relating to complaints made by a cable operator under Law No. 25,156 in connection with an allegation of dumping by Cablevisión Federal S.A. in the city of Salta. Both the Company and Cablevisión Federal S.A. submitted the documentation requested and filed responses rejecting the claim.

Additionally, under the law mentioned in the prior paragraph, the Company and Multicanal were served with a filing by a cable operator alleging: (i) the market division between the companies in the cities of Paraná and Santa Fe; (ii) the imposition of predatory prices by these companies in those zones in which they compete or can be expected to compete with the claimant in the near future; and (iii) price discrimination between different zones of such cities resulting from the issues mentioned in the preceding points. The Company and Multicanal filed answers rejecting such allegations.

These proceedings by the CNDC may result in fines under Law No. 25,156, for which an appeal may be filed. The amount of the fines may be based on: (i) the loss incurred by the persons affected by the allegedly improper activity; (ii) the benefit obtained by all the persons involved in the improper activity; and (iii) the value of the assets involved belonging to the persons mentioned in (ii) above at the time the alleged infringement was committed. At present, there is no consistent criteria as to the option to be chosen.

Given the characteristics of these matters, although the final decision on these cases cannot be determined, in the opinion of the Company, its legal counsel, Multicanal, Cablevisión Federal S.A. and Fintelco S.A., based on the information available, the likelihood that these matters might have a material effect on the Company’s economic and financial condition is remote.

d) In 2003, ELP Investments filed a criminal complaint in Argentina against certain individuals related to the Hicks, Muse, Tate & Furst (“HMT&F”) Group, including some who were directors of the Company. The criminal complaint, which was filed by a person that is not a shareholder or creditor of Cablevisión S.A., challenged certain Company transactions. Although the Company believes that the party filing the complaint was not entitled to do so, and that the allegations by ELP Investments were false or wrongly presented, the court handling this case ordered searches at the Company’s offices, as well as the seizure of certain of the Company’s corporate books. On June 27, 2003, the criminal court appointed an informational intervenor to gather information at the Company’s offices regarding the case within a forty-five day period. On September 16, 2003, this period was extended for forty five additional days. The Company and the directors affected by the complaint have each denied the allegations and have offered supporting evidence and the Company appealed the court’s appointment of the informational intervenor. On October 21, 2003, Courtroom IV of the Criminal Court of Appeals declared null all the decisions made and actions taken by the judges. The litigation, however, continued through the filing of remedies before the highest criminal court (Cámara de Casación Penal) and the Supreme Court of Justice. So far, the Supreme Court of Justice has not accepted any of the appeals. However, on November 1, 2006, the Argentine Supreme Court decided to request Court- room II of the Cámara de Casación Penal to send the file and notify the Attorney General.

e) On April 20, 2005, the Company was advised of a ruling issued by the Federal Administrative Tax Court, which decided to confirm the assessment by the AFIP (Federal Public Revenue Adminis- tration) in connection with the alleged failure to pay VAT related to advertising on the Company’s magazine for certain periods of the years 1996 through 1998. The amounts adjusted as of December 31, 2006 are estimated at approximately $13 million.

The Company appealed against the AFIP’s ruling. On June 6, 2006, the Company obtained an injunction whereby the AFIP was ordered to refrain from demanding payment of such VAT from the Company. According to the Company and its legal counsel, it is possible that a decision favorable to the Company could be obtained in court and, consequently, the likelihood that this issue might have a material effect on its financial and economic condition is deemed remote.

F-155 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

f) On December 15, 2005, the Board of Directors of Cablevisión S.A. approved a compensation plan for certain executive officers, based on the increase in the Company’s value (“the Plan”). The Plan had a limited duration and defined the basis, events and criteria for the assessment and payment of such compensation.

The Company recognized its obligation under the Plan upon the accrual of rights to receive payment by the participants. The charge to income for the years ended December 31, 2006 and 2005 amounts to approximately $7.2 million and $4.5 million, respectively. In October, 2006, the Company settled the Plan definitely by paying the obligations recorded. g) On December 12, 1997, Multicanal entered into two agreements for the acquisition of 14 cable systems (13 in Paraguay and 1 in Clorinda, Argentina). The closing of the transaction was scheduled for November 15, 1997, and was subject to the seller’s compliance with certain conditions, including obtaining various regulatory approvals from the government of Paraguay, which were ultimately not obtained. Multicanal made an advance payment of US$2,300,000 on account of the total price and the seller issued a promissory note for the amount received, i.e. US$2,300,000 and pledged the shares corresponding to certain TV systems in favor of Multicanal to guarantee compliance with the conditions for the closing of the transaction. As a result of the seller’s failure to meet its obligations the final agreement was not signed. As a result of the seller’s non-compliance, Multicanal demanded payment of the promissory note, but the seller brought a claim demanding compliance with the agreement signed on December 12, 1997, reserving the right to determine the amount of damages, and an injunction which was resolved by the Paraguayan court in favor of the plaintiff. This measure prevented collection by Multicanal of the promissory note amounting to US$2,300,000. As the complaint was filed without the seller having paid court fees, Multicanal asked the intervening judge to demand payment of court fees on the amount of the contract from the plaintiff. The Court accepted the petition and suspended the procedural terms. In view of the plaintiff’s failure to pay court fees after having been demanded payment, Multicanal requested the lifting of the preliminary injunction, the termination of the lawsuit and the filing of the case. The judge did not end the case but accepted the lifting of the preliminary injunction, a ruling that was confirmed by the Court of Appeals on Civil and Commercial matters, Chamber 4. Confirmation by the Court of Appeals is final. The file was sent back to the original Court, where the proceeding will be continued. Multicanal cannot assure that following the lifting of the preliminary injunction it will be able to collect the amount due.

h) On September 7, 2001, Multicanal signed a Trust Agreement under which the minority shareholders transferred all of their equity interests in Tres Arroyos Televisora Color S.A., representing 38.58% of the stock capital, in favor of the trustee, Mr. José María Sáenz Valiente (h) (the “Trustee”). Multicanal was appointed the trust beneficiary so that the stock in trust is gradually transferred to it if Multicanal pays $42,876 per month to the Trustee over a 10-year period. The trust will be revoked if Multicanal were to fail to pay the consecutive monthly installments.

Additionally, on the same date, a beneficial interest in the mentioned shares was set up in favor of Multicanal for the earlier of 10 years or the life of the Trust.

In accordance with the minutes of the shareholders’ meeting of Tres Arroyos Televisora Color S.A. dated April 27, 2005, Multicanal resolved to capitalize irrevocable capital contributions, thus increasing the capital stock of Tres Arroyos Televisora Color S.A. from $24,000 to $3,121,153, represented by 3,121,153 common shares of nominal value $1 each and entitled to one vote per share.

F-156 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

On June 9, 2005 an Addendum to the Trust Agreement was executed, amending the clauses referring to the transfer of shares in accordance with the resolved capital increase. Under the terms of the Trust Agreement and its Addendum, as of December 31, 2006 the Trustee has made the stock transfers, and consequently Multicanal is the holder of 2,579,238 shares representing 82.64% of the voting capital stock of the company and the Trustee is the legal owner of the remaining 541,915 shares representing 17.36% of the remaining voting capital stock of the company. i) On October 12, 2005, after obtaining the approval of the National Telecommunications Commission of Paraguay (or Conatel), Mutlicanal completed the share exchange agreed on Septem- ber 22, 2005 between Multicanal, as holder of shares of Cable Visión Comunicaciones S.A.E.C.A. (or CVC) and Televisión Dirigida S.A.E.C.A. (“TVD”), and Mrs. Claudia Pedrozo Bogado, Mrs. María Elena Bogado Silva and Mrs. Francisca Bogado de Pedrozo (the “Pedrozo Shareholders”), as holders of 100% of the capital stock of Consorcio Multipunto Multicanal S.A. (or CMM). As a result, Mutlicanal (i) acquired 62.93% of the capital stock and votes of CMM and in consideration thereof (ii) assigned to the Pedrozo Shareholders 30% of the capital stock and votes of CVC and TVD. The exchange will allow the companies to integrate their operations and implement common policies. j) Mutlicanal brought various claims against Supercanal Holding S.A. and its subsidiaries (the “Supercanal Group”), including an action to declare resolutions adopted during the Extraordinary Shareholders’ Meeting of Supercanal Holding S.A. on January 25, 2000 to reduce capital stock of Supercanal Holding S.A. to $12,000 and subsequently increase capital to $83,012,000 null and void. The Court issued an injunction requested by Mutlicanal but required that Mutlicanal post bond for $22,000,000 for potential damages that could be assessed against the defendant, should the complaint be dismissed. The remedy was granted against the issue of a surety bond. The Court of Appeals revoked the injunction. Mutlicanal filed an extraordinary appeal against that resolution, claiming it is both “arbitrary” and “damaging to the institution”. On October 1, 2004, Mutlicanal was notified of the dismissal of its extraordinary appeal. Other legal actions were initiated, claiming the suspension of: i) the last five Ordinary Sharehold- ers’ Meetings of Supercanal Holding S.A. and ii) the guarantees granted by Supercanal S.A. on bank loans exclusively in favor of the group controlling Supercanal. Holding S.A. (Grupo Uno S.A. and affiliated companies). In addition, a claim for dissolution and liquidation of Supercanal Holding S.A. was brought jointly with the action for removal of all the members of the Board of Directors and the Supervisory Committee, and the dissolution of Supercanal Capital N.V. Supercanal Holding S.A. and other companies of the Supercanal Group filed for bankruptcy proceedings with the National Court of First Instance on Commercial Matters No. 20, Secretariat No. 40, and the procedures began on April 19, 2000. As a result of the revocation of the preliminary injunction mentioned above, on December 12, 2001 Multicanal was notified of the filing of a claim by Supercanal Holding S.A. for damages caused by the granting of the preliminary injunction that was subsequently revoked. It has been claimed that the suspension of the effects of the meeting held on January 25, 2000 resulted in the cessation of payments by Supercanal Holding S.A. Multicanal answered the complaint and rejected the liability attributed to it based on the fact that the cessation of payment had taken place before the date of the meeting that was suspended by the preliminary injunction, according to documentation provided by the plaintiff itself. Furthermore, the suspension of the meeting did not prevent capitalization of Multicanal through other means. Based on the record of the case, Multicanal considers that the claim filed should be rejected in its entirety, and the legal costs should be borne by the plaintiff. The record is in the discovery period.

F-157 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

No assurance can be provided that Multicanal will obtain an economic or financial gain as a result of these actions. At present, as a result of the ancillary jurisdiction of the bankruptcy proceedings of Supercanal Holding S.A., all the claims are brought in the abovementioned Court.

NOTE 7 — CAPITAL SOCIAL At December 31, 2006 the Company’s share capital is $197.327.500 and has been fully subscribed, issued, paid in and registered. The following table shows the Company’s shareholders as of December 31, 2006. As of December 31, 2006 Shareholders Number of Shares % of Share Capital Southtel Holdings S.A(1)...... 56,609,313 28.7 VLG Argentina, LLC(2) ...... 101,252,687 51.3 Fintech Media LLC(3) ...... 28,304,317 14.3 Vistone LLC(4) ...... 3,277,197 1.7 CV B Holding LLC(5) ...... 7,883,139 4.0 Others ...... 847 — Total ...... 197,327,500 100.0

(1) Class A Shares, controlled by Clarín. (2) Class A Shares, controlled by Clarín and Fintech. (3) Class B Shares. (4) Class B Shares, controlled by Clarín. (5) Class B Shares, controlled by Clarín. On April 20, 2006, the ordinary Shareholders’s meeting decided to appropriate the 2005 fiscal year net income to set up Legal Reserve for $39.465.500 and the remaining balance to Retained Earnings.

F-158 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Subsidiaries:

31.12.2006 31.12.2005 Amount for the Debtor (Creditor) Amount for the Debtor (Creditor) Item/Operation Year Balance Year Balance $ Other receivables...... — 10,992,884 — 16,246,413 Accounts payable...... — (160,519) — — Financial debt ...... — (6,179,468) — (9,154,620) Magazine distribution ...... (2,276,673) — (1,916,868) — Connection services ...... (8,295,556) — (10,893,820) — Other purchases ...... (682,224) — — — Services rendered ...... 9,429,455 — 7,615,029 —

Other related companies:

31.12.2006 31.12.2005 Amount for the Debtor (Creditor) Amount for the Debtor (Creditor) Item/Operation Year Balance Year Balance $ Other receivables...... — 13,504,403 — 10,228,392 Accounts payable...... — (17,185,938) — (9,083,096) Financial debt — principal payable ...... — (527,155,897) — — Financial debt — interest payable ...... — (21,421,200) — — Sales and services rendered. . . — — 2,320,966 — Programming costs ...... (93,355,027) — (88,109,961) — Acquisition of companies . . . . . (527,155,897) — — — Interest on debt from acquisition of companies ...... (21,421,200) — — —

NOTE 9 — FINANCIAL DEBT RESTRUCTURING PROCESS a) Financial Debt Restructuring Process

On October 7, 2005, Cablevisión completed the restructuring process of financial debt totaling an amount of US$754,618,951 (principal), out of the total debt subject to restructuring totaling US$796,379,951 (principal), through a) the payment in cash of approximately US$142,800,000, b) the issue of i) Short-Term Notes having an aggregate principal amount of US$150,077,436, divided into Series called First Series or Series “A” and Second Series or Series “B”, payable in seven years, with a 6% interest rate for the first five years and 7% for the remaining two years; and ii) Long-Term Notes having an aggregate principal amount of US$235,121,316, distributed in three Series called First Series or Series “A”, Second Series or Series “B” and Third Series or Series “C”, due in ten years, payable in three equal annual installments as from the eighth year, with an interest rate increasing from 3% to 12%, c) the approval of a $39,465,500 capital stock increase and issuance of 39,465,500 Class “B” shares, in consideration for the full, total, and definitive settlement of all the claims and rights of any nature on and against Cablevisión or its assets by those creditors taking part in the restructuring. The terms of Cablevisión’s debt restructuring are set forth in an out-of-court settlement (APE) filed for judicial confirmation on May 14, 2004 and confirmed in the first instance on July 5, 2005. Cablevisión also completed the restructuring of certain debts with official banks for approximately $39,000,000.

F-159 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

After October 7, 2005, holders of approximately US$20.8 million principal amount of Existing Debt, in accordance with the terms of Cablevisión’s APE if finally judicially confirmed, executed agreements accepting the terms of the restructuring of Cablevisión and received cash, new notes and/or Class B shares of Cablevisión as consideration for the full and definitive discharge of the Company’s obligations. Cablevisión has been a party to significant lawsuits with respect to its APE and the judicial confirmation of Cablevisión’s APE is pending. However, more than 97% of the creditors of Cablevisión affected by the terms of the APE irrevocably and voluntarily accepted the terms of the APE. Cablevisión was able to restructure its financial debt although final judicial confirmation of the APE is pending. Therefore, even if Cablevisión’s APE is not judicially confirmed, only existing debt subject to APE having an aggregate principal amount of approximately US$20.9 million would be remain outstanding. If those claims, together with accrued interest, were successfully enforced against Cablevisión in conformity with their original terms, they would give rise to payments (net of amounts placed in escrow by Cablevisión for such creditors before final confirmation of its APE) for approximately US$18.7 million at December 31, 2006. Out of the total amount of notes described above, as of December 31, 2006, Short-Term and Long-Term Notes totaling US$889,090 and US$14,975,573, respectively, have been considered as consideration under the APE for the creditors who did not execute any Exchange Agreements as of such date. On October 7, 2005 and September 29, 2006, as established in the General Terms and Conditions of the APE, the Company repaid US$6,732,569 and US$28,084,054 in principal amount of the Short-Term Notes, respectively. The Company recorded a gain of $12,063,892 and $2,021,296,491 for the years ended December 31, 2006 and 2005, respectively, as a result of the financial restructuring. In accordance with C.N.V. regulations, the Company informed that the funds related with the issuance of the new notes were used to settle pre-existing indebtedness. As a result of the issuance of the notes, the Company is subject to restrictions on certain operations by the Company and its subsidiaries for so long as the notes are outstanding, such as: selling, transferring or otherwise disposing of all or part of its operations or properties, imposing encumbrances or guarantees on its assets, financial indebtedness, amounts to be invested in property, plant and equipment, certain payments (including payments of dividends), corporate reorganization transactions and disposal of licenses, franchises and other rights owned by the Company. In addition, the Company is required to repay notes under the Program with any excess cash. If the Company is unable to comply with the above mentioned restrictions, the holders of such notes and other financial creditors may declare an event of default and accelerate repayment of the outstanding financial indebtedness. The Company has complied with all covenants set forth in the Program. b) Companies’ Acquisition As mentioned in Note 2, on September 26, 2006, the Company entered into stock purchase agreements, whereby it acquired a 98.54% interest in the capital stock of Multicanal. The payment terms regarding Multicanal’s acquisition price were agreed with the selling shareholders in the related purchase agreement at a 3-year term and with an interest at the BADLAR rate plus a margin, provided that under no circumstance will the interest rate exceed an amount equal to the Reference Stabilization Coefficient (“CER”) plus 6 percentage points. In addition, the payment obligations of such acquisition price were documented in debt securities having an aggregate principal amount of

F-160 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

$824,815,708. The payment of such debt securities is expressly subordinated to the Short-Term and Long-Term Notes issued by the Company. c) Legal Processes Abroad Related to the Restructuring On September 1, 2004, Cablevisión S.A. filed ancillary legal proceedings in US Bankruptcy Courts in the Southern District of New York seeking recognition of its main APE procedure, under section 304, Chapter 11, of the US Federal Code (the “Petition under section 304”). The Company requested the suspension of (i) the continuation of certain legal actions brought against Cablevisión S.A. in the United States, in particular the above mentioned legal action filed by SHl Company LLC, and (ii) the commencement of any procedures similar to such legal actions or other procedures against Cablevisión S.A. or the assets thereof aimed at collecting or recovering on its debt in the United States or that may prevent Cablevisión S.A. from continuing and concluding the restructuring pursuant to the APE procedure. On November 5, 2004, SHL withdrew the above mentioned claims under “SHL Company LLC v. Cablevisión S.A”. (Case No. 04 Civ 2424 — WJM) filed originally with the court of New Jersey, U.S.A. and, on November 9, 2004, the Bankruptcy Court granted a Temporary Restrictive Order to suspend any action filed against Cablevisión S.A. in the United States. On May 5, 2005, November 3, 2005, December 7, 2005, May 11, 2006, September 22, 2006 and February 15, 2007, the Bankruptcy Court extended the Temporary Restrictive Order under similar terms and conditions until June 15, 2007.

NOTE 10 — REGULATORY FRAMEWORK The installation and operation of cable television services in Argentina are governed by the Broadcasting Law and other related regulations. Cable television companies in Argentina are required to obtain a nonexclusive license from the COMFER to be able to broadcast their signal. Additionally, other approvals are required, including municipal approvals. Licenses are granted for an initial 15-year term, and upon expiration, they may be extended for another 10 years. A license extension is subject to COMFER’s approval, which is subject to COMFER determining that the terms and conditions under which the original license had been granted were complied with. The Company and its related subsidiaries have licenses to render cable television services. Some of the Company’s licenses, even the license granted originally (the original extension term of which would expire on March 31, 2006), were extended for the ten-year period previously mentioned. Consequently, once such term expires, the Company will have to request new licenses to continue rendering cable broadcasting services in the areas of the licenses that have expired. Decree No. 527/05 dated May 20, 2005 suspended for a ten-year term as from May 24, 2005, the computation of the duration of the broadcasting service licenses or the extensions thereof under section 41 of the Broadcasting Law. The computation of such duration will be automatically resumed once the suspension period expires. On November 20, 2002, the COMFER issued Resolution No. 830/ 02, adopting a new system to impose penalties for violations to Broadcasting Law. Such resolution classifies each violation as a minor or severe infringement. The first two minor violations in each calendar year are sanctioned with warnings and orders to comply. Minor infringements are subject to incremental fines. Severe infringements, such as the broadcast of obscene programs or installing and operating a cable system illegally, are subject to incremental fines that may lead, in the case of multiple severe infringements, to the revocation of the license. The status of proceedings initiated by the COMFER is disclosed in note 6.a). If the license expires or its extension is denied and it is not possible to obtain another license in the area, the Company will no longer be able to operate in such area. Although it is not possible to assure it, the Company estimates that its licenses will be extended or renewed in due time.

F-161 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Pursuant to COMFER Resolution No. 870/93, licenses may be transferred with COMFER’s approval, subject to certain regulatory conditions. As of the date of issuance of these financial statements, applications for the transfer of licenses made by the Company pursuant to the above mentioned resolution and in connection with the business acquisition and reorganization processes described in note 1 were pending approval by the COMFER.

NOTE 11 — CONTRACT WITH SHAREHOLDERS a) Management Agreement Based on certain agreements signed by the Company, which were subsequently amended, until March 17, 2005, a management fee totaling $4,000,000 was accrued in favor of VLG and HMT&F. Until October 6, 2005 management fees have accrued under the original terms of the agreements. As from October 7, 2005, management fees have accrued at a rate equal to the lesser of US$4,000,000 per annum or 2% of the Company’s annual consolidated operating cash flow. Effective September 26, 2006, HMT&F assigned to Fintech Media LLC all of its claims against from the Company and the rights to render services and to receive payments from the Company in consideration for the management and technical assistance services. After that date, Fintech Media LLC and VLG waived their claim against Cablevisión. b) Technical Assistance Contract Cablevisión is party to a technical assistance contract with Clarín and Fintech Advisory, Inc. (“Fintech Advisory”) effective as of September 26, 2006, whereby Clarín and Fintech Advisory agreed to provide assistance to the Company with the administrative, financial and operating integration of Cablevisión, Multicanal, Teledigital, Prima and their respective subsidiaries. Under this agreement, it was agreed that an initial payment would be made to Clarín for US$5,654,722 and to Fintech Advisory for US$4,345,278 corresponding to technical assistance provided in 2006. As from January 1, 2007 Clarín will be paid an annual fee in an amount equal to 1.8% of the consolidated operating cash flows and Fintech Advisory will be paid an annual fee in an amount equal to 1.2% of the consolidated operating cash flow, plus additional costs and other taxes and per diem. In both cases, the annual rate will be payable in quarterly installments. The contract will expire in January 2010 or upon completion of the integration of the companies, whichever is earlier, unless it has been previously rescinded or automatically extended under its terms.

NOTE 12 — RESTRICTED ASSETS On December 27, 2005, in accordance with the terms and conditions of the new Notes, the Company set up a reserve account and transferred US$18,000,000 to such account. In the event of a failure by Cablevisión to make an interest payment in part or in full on a timely basis, on any of the new Notes, the trustee will promptly draw on any funds that may be on deposit in the reserve account to the extent required to cover such payment shortfall, pro rata among the new Notes entitled to benefit from the reserve account, with respect to which an interest payment was not made in full on a timely basis. As long as the Company is not in default, it may ask the trustee to apply amounts deposited exclusively to the payment of interest or principal on debt of the Company, or the purchase or redemption price of new Notes, acquired privately in the market or redeemed directly by the Company or through any agent or broker in accordance with the terms and conditions for the issuance of the Notes. The drawing by the trustee on the reserve account will not give rise to a Default or an Event of Default under the terms and conditions of the new Notes.

F-162 NOTES TO THE FINANCIAL STATEMENTS — (Continued)

After the amendment on December 15, 2006 of certain commitments assumed in relation to the issue of outstanding negotiable obligations, amounts previously recorded as long-term investments will be recorded as Other assets. At December 31, 2006, the amount deposited in the reserve account amounted to $56,838,603.

NOTE 13 — CORPORATE REORGANIZATION On December 29, 2006, the Company’s Board of Directors authorized its Chairman to carry out procedures for the merger through acquisition of Cablevisión Federal S.A. In order to carry out the merger, Cablevisión will be the absorbing company, continuing with the activities and operations of Cablevisión Federal S.A., and therefore, the absorbed company will be dissolved. The corporate reorganization will take effect on January 1, 2007, as from which date the operations of the absorbed company should be considered as carried out by the absorbing company. The financial statements that will be used for the merger will be those prepared by the companies at December 31, 2006.

NOTE 14 — SUBSEQUENT EVENTS In January 2007, Cablevisión was served notice of a preliminary injunction issued by the Civil, Commercial, Mining and Labor Court of the City of Concarán, Province of San Luis. Pursuant to such preliminary injunction, the Company and certain regulatory agencies shall, among other things, refrain from carrying out or authorizing, respectively, certain corporate operations and submit certain information to the Court. The appeal filed by Cablevisión was granted on February 15, 2007. Furthermore, the Company filed a direct request for the case to be transferred to the Superior Court of the Province of San Luis. Subsequently, the Company filed a motion of incompetence in the case entitled “Multicanal S.A. and other vs. Conadeco”, which is pending before the Federal Administrative Court No. 2, Secretariat No. 4 which was filed in order to solve the incompetence of the Civil, Commercial, Mining and Labor Court established by said precautionary measure. After the case was referred to the Supreme Court, the Concarán Civil Court was declared incompetent and was ordered to refer the related proceedings to Court No. 2 Secretariat 4. This Court indicated that the injunction is not binding upon Grupo Clarín and Multicanal.

F-163 EXHIBIT A PROPERTY, PLANT AND EQUIPMENT For the Years Ended December 31, 2006 and 2005

2006 2005 Original Value Accumulated Depreciation At the At the Beginning Beginning Depreciation Residual Residual Main Account of Year Increases Decreases Transfers At Year-End of Year Rates Increases Decreases At Year-End Value Value $%$ Buildings ...... 53,374,907 64,005 — 94,837 53,533,749 16,067,058 2 1,077,662 — 17,144,720 36,389,029 37,307,849 Improvements to leased buildings . . . . . 25,719,724 102,632 — 69,264 25,891,620 24,771,242 33 775,157 — 25,546,399 345,221 948,482 Machinery and equipment . . . . 155,380,008 1,463,238 — 898,417 157,741,663 133,666,995 10 9,207,042 — 142,874,037 14,867,626 21,713,013 Furniture and fixtures ...... 16,087,642 585,925 — 26,809 16,700,376 13,787,275 10 650,787 — 14,438,062 2,262,314 2,300,367 Hardware ...... 71,758,497 3,471,971 — 1,346,871 76,577,339 60,296,818 33 7,693,844 — 67,990,662 8,586,677 11,461,679 Internet

F-164 installation and equipment. . . 149,348,257 29,291,378 — 20,813,043 199,452,678 86,092,777 10-33 12,786,073 — 98,878,850 100,573,828 63,255,480 Automobiles . . . 44,494,465 173,800 (228,860) 4,268,214 48,707,619 39,997,188 20 2,059,176 (228,860) 41,827,504 6,880,115 4,497,277 Tools ...... 15,458,324 702,065 — 32,213 16,192,602 8,244,927 20 2,418,247 — 10,663,174 5,529,428 7,213,397 Cables, cable laying and assets under loan for use . . 963,795,712 22,414,047 — 21,629,361 1,007,839,120 783,502,098 10-20 72,917,805 — 856,419,903 151,419,217 180,293,614 Amplifiers ...... 44,999,073 — — — 44,999,073 44,743,209 20 48,735 — 44,791,944 207,129 255,864 Adaptors . . . . . 3,611,475 — — — 3,611,475 3,611,475 10 — — 3,611,475 — — Goods in loan and restitution basis ...... 119,058,607 2,958,685 (3,291,504) 14,935,096 133,660,884 101,555,016 33 11,461,790 (3,291,504) 109,725,302 23,935,582 17,503,591 Other ...... 2,131,315 — — — 2,131,315 1,370,397 10 115,878 — 1,486,275 645,040 760,918 Work in progress . . . . 6,378,315 6,323,265 (47,997) (9,370,352) 3,283,231 — — — — — 3,283,231 6,378,315 Materials at warehouse, in transit and advances to suppliers(1) . . 71,249,437 73,872,060 (11,361,821) (54,743,773) 79,015,903 — — — — — 79,015,903 71,249,437 Total 2006 . . . . 1,742,845,758 141,423,071 (14,930,182) — 1,869,338,647 1,317,706,475 — 121,212,196 (3,520,364) 1,435,398,307 433,940,340 — Total 2005 . . . . 1,634,225,856 126,248,666 (17,628,764) — 1,742,845,758 1,196,987,152 — 120,776,515 (57,192) 1,317,706,475 — 425,139,283

(1) Decreases correspond to materials consumptions included in “Maintenance of property, plant and equipment and network expenses” in Exhibit H. EXHIBIT B

GOODWILL AND INTANGIBLE ASSETS For the Years Ended December 31, 2006 and 2005

2006 2005 Original Value Accumulated Amortization At the At the Beginning Beginning Residual Residual Main Account of Year Increases At Year-End of Year Increases At Year-End Value Value $ Goodwill Acquired and/or merged companies through

F-165 12/31/02(1) . . . . 2,992,548,031 — 2,992,548,031 892,028,814 — 892,028,814 2,100,519,217 2,100,519,217 Acquired companies after 12/31/02 ...... — 745,989,398 745,989,398 — — — 745,989,398 — Sub-total . . . . . 2,992,548,031 745,989,398 3,738,537,429 892,028,814 — 892,028,814 2,846,508,615 2,100,519,217 Intangible Assets Trademarks . . . . . 32,016,962 — 32,016,962 — 4,319,170 4,319,170 27,697,792 32,016,962 Sub-total . . . . . 32,016,962 — 32,016,962 — 4,319,170 4,319,170 27,697,792 32,016,962 Total 2006 . . . . 3,024,564,993 745,989,398 3,770,554,391 892,028,814 4,319,170 896,347,984 2,874,206,407 — Total 2005 . . . . 3,099,860,474 — 3,099,860,474 950,694,006 16,630,289(2) 967,324,295 — 2,132,536,179

(1) Originated in the acquisition of the following companies: Televisora Belgrano S.A., Oeste Cable Color S.A., Cable Ríos de los Deltas S.A., Fintelco S.A., Merlo Visión S.A., Mandeville Group, UIH Group, Sistemas Córdoba and other. See Note 2. (2) Includes $12,567,231 included under “Financial Results — Amortization of deferred charges” (Note 4.k). EXHIBIT C

INVESTMENTS IN OTHER COMPANIES For the Years Ended December 31, 2006 and 2005

2006 2005 Issuer Information Results of Latest Financial Statements Issued Characteristics of the Shares Investment at Long-Term Net income Nominal Equity Investments Book Book Company’s Share of the Shareholders’ % of Share Company Class Value Quantity Method (1) Values(2) Value Business Date Capital Year (1) Equity Capital $ $ Subsidiaries Cable television Cablevisión Federal S.A. . . Ordinary 1 499,999 24,862,609 3,650,790 24,862,609 21,137,081 networks operator 12/31/2006 500,000 3,651,156 24,865,096 99.99% Construction of communication Construred S.A...... Ordinary 1 93,371 (872,932) (946,147) (872,932) 73,214 networks 12/31/2006 93,375 (946,186) (872,969) 99.996% Cable television Televisora La Plata S.A. . . Ordinary 1000 2,800 3,690,137 237,501 3,690,137 3,443,429 networks operator 12/31/2006 4,000,000 339,287 5,271,625 70.00% Distribution of Cablepost S.A...... Ordinary 1 11,999 198,165 668 198,165 (402,444) correspondence 12/31/2006 12,000 669 198,185 99.99% Cable television Multicanal S.A...... Ordinary 1 586,251,082 310,757,173 19,222,870 310,757,173 — networks operator 12/31/2006 594,911,263 790,701,459 1,305,792,210 98.54% Hicks, Muse, Tate & Furst — LA Argentina F-166 Cable Company . . . . . Ordinary US$ 1 122,771,834 — — — — Holding 12/31/2006 12,000 (285,894) — 100.00% Holding Teledigital . . . . . Cable television Cable S.A...... Ordinary 1 45,787,746 85,352,225 (6,700,023) 85,352,225 — networks operator 12/31/2006 45,787,747 20,155,819 180,477,984 100.00% Holding of cable television Fintelco S.A...... Ordinary 1 3,304,405 (11,541,741) (176,554) (11,541,741) (11,365,186) companies 11/30/2006 6,608,810 (353,110) (23,083,482) 50.00%(3) Total 2006 ...... 15,289,105 412,445,636 — Total 2005 ...... (382,571) — 12,886,094

(1) Gain/(Loss).

(2) Negative investments are disclosed in Non-current Other payables (Note 4.h).

(3) The Company owns the remaining 50% indirectly through Multicanal S.A. EXHIBIT E

RESERVES For the Years Ended December 31, 2006 and 2005

2006 2005 At the Beginning At At of Year Increases Decreases Year-End Year-End $ DEDUCTED FROM ASSETS Trade receivables For doubtful accounts ...... 12,341,171 2,504,343(1) (3,220,124)(2) 11,625,390 12,341,171 Other receivables: For other doubtful accounts ...... 9,701,717 81,000(1) (8,803,192)(4) 979,525 9,701,717 For doubtful recoverability of deferred tax assets...... 18,277,833 — (15,396,531)(5) 2,881,302 18,277,833 Property, plant and equipment: For obsolescence of materials ...... 12,596,857 1,280,420(3) (309,030) 13,568,247 12,596,857 Total 2006 ...... 52,917,578 3,865,763 (27,728,877) 29,054,464 Total 2005 ...... 878,196,907 3,333,600 (828,612,929) — 52,917,578 INCLUDED IN LIABILITIES For contingencies ...... 51,337,884 — (12,410,020) 38,927,864 51,337,884 Total 2006 ...... 51,337,884 — (12,410,020)(6) 38,927,864 Total 2005 ...... 56,494,768 5,649,451 (10,806,335)(7) — 51,337,884

(1) Included under “Doubtful accounts” in Exhibit H. (2) Mainly corresponding to the application of the provision for write-off of subscribers. (3) Recorded under “Maintenance of property, plant and equipment and network expenses” in Exhibit H. (4) Includes $7,8 million corresponding to the recovery of the provision for minimum notional income tax expended under Income tax in the statement of income. (5) See Note 5. (6) Included in Other income, net in the statement of income. (7) Corresponds to payments and applications made during the year.

F-167 EXHIBIT G

FOREIGN CURRENCY ASSETS AND LIABILITIES For the Years Ended December 31, 2006 and 2005

2006 2005 Amount in Amount in Amount in Amount in Foreign Exchange Argentine Foreign Argentine Item Currency(1) Rate(2) Pesos Currency(1) Pesos ASSETS CURRENT ASSETS Cash and banks ...... 18,260,433 3.022 55,183,029 504,806 1,510,380 Investments — time deposits ...... — — — 74,752,691 223,660,050 Other receivables ...... 14,797 3.022 44,717 25,098 75,093 Other assets...... 18,808,274 3.022 56,838,603 18,000,000 53,856,000 Total assets ...... 37,083,504 112,066,349 93,282,595 279,101,523

LIABILITIES CURRENT LIABILITIES Accounts payable ...... 6,408,043 3.062 19,621,428 5,714,612 17,326,704 Bank and financial debt . . 35,763,340 3.062 109,507,347 41,950,358 127,193,488 Total current liabilities . . 42,171,383 129,128,775 47,664,970 144,520,192 NON-CURRENT LIABILITIES Accounts payable ...... — — — 468,144 1,419,414 Bank and financial debt . . 339,146,447 3.062 1,005,256,906(3) 366,354,701 1,039,853,914(3) Total non-current liabilities ...... 339,146,447 1,005,256,906 366,822,845 1,041,273,328 Total liabilities ...... 381,317,830 1,134,385,681 414,487,815 1,185,793,520

(1) US dollars. (2) Buyer/seller exchange rate in force at year end. (3) Net of approximately $33.2 million and $70.9 million corresponding to the effect of measurement of financial debt at present value at December 31, 2006 and 2005, respectively.

F-168 EXHIBIT H

Information Required by Sect. 64, Sub-section I, Paragraph b) of Law No. 19550 For the Years Ended December 31, 2006 and 2005

2006 2005 Cost of Services Selling Administrative Other Item Rendered Expenses Expenses Expenses Total Total $ Programming costs . . . . . 220,475,984 — — 220,475,984 193,261,635 Depreciation of property, plant and equipment . . . 109,091,040 12,121,156 — 121,212,196 120,776,515 Salaries, wages and social security charges ...... 86,129,451 24,280,309 54,990,262 165,400,022 121,744,430 Severance costs...... 5,758,449 1,623,335 3,676,543 11,058,327 2,071,877 Public utilities and assessments ...... 35,079,625 11,000,714 2,423,886 48,504,225 40,204,871 Fees for services ...... 427,909 2,053,958 40,308,934 42,790,801 28,847,909 Fees to directors and syndics ...... — — 1,586,318 1,586,318 1,189,883 Credit card expenses and commissions...... — 20,708,308 1,321,807 22,030,115 17,983,005 Maintenance of property, plant and equipment and network expenses. . 19,386,148 2,245,810 5,086,331 26,718,289 23,418,371 Data transfer costs ...... 20,764,763 — — 20,764,763 16,442,590 Production of magazine . . — 19,152,257 — 19,152,257 15,439,748 Amortization of intangible assets ...... — — — 4,319,170 4,319,170 — Rental ...... 11,535,705 485,036 1,098,513 — 13,119,254 12,364,999 Doubtful accounts ...... — 2,585,343 — — 2,585,343 1,623,240 Advertising and promotion ...... — 14,254,826 — — 14,254,826 9,228,538 Electricity and fuel ...... 5,172,255 281,086 636,606 — 6,089,947 5,472,453 Other personnel expenses ...... 2,047,931 389,589 882,344 — 3,319,864 3,874,682 Office expenses ...... — — 3,303,672 — 3,303,672 3,076,255 Lawsuits ...... — — — — — 5,119,451 Correspondence and messenger services . . . — 836,387 — — 836,387 742,403 Participation plan ...... — — — 7,173,125 7,173,125 4,530,000 Representation expenses ...... — 174,959 — — 174,959 294,971 Miscellaneous ...... 3,806,496 1,073,248 2,430,697 — 7,310,441 11,772,749 Total 2006...... 519,675,756 113,266,321 117,745,913 11,492,295 762,180,285 — Total 2005...... 462,440,016 89,319,778 83,190,781 4,530,000 — 639,480,575

F-169 EXHIBIT I

BREAKDOWN BY MATURITY OF INVESTMENTS, RECEIVABLES AND LIABILITIES For the Years Ended December 31, 2006 and 2005

ASSETS LIABILITIES Bank and Other Financial Other Term Assets(4) Receivables(1) Debt(2)(5) Payables(3) $ Without maturity date ...... 56,838,603 96,925,448 112,392,425 39,004,702 With a maturity date • Past due — Up to three months ...... — 16,224,724 — 12,615,395 — From three to six months ...... — 5,408,241 — 413,890 — From six to nine months...... — — — 185,991 — From nine to twelve months ...... — — — 112,647 — More than one year ...... — — — 350,980 — More than three years ...... — — — 2,172,409 Total past due ...... — 21,632,965 — 15,851,312 • Not yet due — Up to three months ...... — 30,682,729 34,415,154 100,374,015 — From three to six months...... — 10,227,577 12,638,596 10,132,368 — From six to nine months ...... — — 891,439 308,339 — From nine to twelve months . . . — — 902,629 312,834 — From one to two years ...... — 13,674,686 5,590,696 1,641,293 — From two to three years ...... — 13,674,686 867,442,120 1,687,169 — More than three years ...... — 1,635,326 987,709,557 8,564,401 Total not yet due ...... — 69,895,004 1,909,590,191 123,020,419 Total with a maturity ...... — 91,527,969 1,909,590,191 138,871,731 Total...... 56,838,603 188,453,417(6) 2,021,982,616 177,876,433

(1) Approximately 1% accrues interest at a rate of 11% per annum. (2) Including accrued interests at December 31, 2006. (3) Does not include reserves and non-current other payables. (4) Accrues interest at a variable rate. The average weighted rate is approximately 3% per annum. (5) Approximately 94% accrues interest at a variable rate. Financial results are approximately 11%. (6) Does not include allowances deductible from assets.

F-170 REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENTS

To the Shareholders, President and Directors of Cablevisión Sociedad Anónima Cuba 2370 Autonomous City of Buenos Aires CUIT: 30-57365208-4

1. We have audited the accompanying balance sheet of Cablevisión S.A. at December 31, 2006 and 2005, and the related statements of income, changes in shareholders’ equity and cash flows for the years then ended, and the complementary notes and exhibits, which have been submitted by the Company for our consideration. We have also audited the consolidated balance sheet of Cablevisión S.A. and its subsidiaries at December 31, 2006 and 2005, and the related consolidated statements of income and cash flows for the years then ended. The preparation and issuance of these financial statements are the responsibility of the Company’s management. Our responsibility is to issue an opinion on the financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards in effect in Argentina. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and to form an opinion about the reasonableness of the relevant information included in those statements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Manage- ment, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

3. As mentioned in Note 2 a) during the year the Company acquired Multicanal S.A. and Teledigital Cable S.A. Those acquisitions are subject to the approval of the National Commission for the Defense of Competition.

4. In our opinion, subject to the effect on the financial statements of possible adjustments and reclassifications that might be required as a result of the outcomes of the situation described in paragraph 3.:

a) the financial statements of Cablevisión S.A. present fairly, in all material respects, its financial position at December 31, 2006 and 2005, and the results of its operations, changes in shareholders’ equity and cash flows for the years then ended, in accordance with accounting principles generally accepted in the Autonomous City of Buenos Aires (Argentina).

b) the consolidated financial statements of Cablevisión S.A. and its subsidiaries present fairly, in all material respects, its consolidated financial position at December 31, 2006 and 2005, and the consolidated results of its operations, and cash flows for the years then ended, in accordance with accounting principles generally accepted in the Autonomous City of Buenos Aires.

Autonomous City of Buenos Aires, July 19, 2007

PRICE WATERHOUSE & CO. S.R.L.

by /s/ Carlos A. Pace (Partner) Carlos A. Pace

F-171 ANNEX A

OPERATING AND FINANCIAL REVIEW — U.S. GAAP

CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004

CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2007 AND 2006

A-1 OPERATING AND FINANCIAL REVIEW — U.S. GAAP The following discussion should be read in conjunction with the financial statements and related notes included elsewhere in this Annex A. The financial statements included in this Annex A have been prepared in accordance with U.S. GAAP (which differ in certain respects from Argentine GAAP and the regulations of the CNV) in connection with the admission of the GDRs on the Official List and to trading on the Regulated Market of the London Stock Exchange. All references herein, other than to the consolidated financial statements, included in this Annex A, are to sections of the Offering Circular. The Offering Circular, including this Annex A, contains forward looking statements that reflect our plans, estimates and beliefs. Our actual results of operations could differ materially from those discussed in the forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements”. The discussion of our results of operations and financial condition set forth below for 2006, 2005 and 2004 and the six-month periods ended 30 June 2007 and 2006 relates to the Company and its consolidated subsidiaries, and only includes Cablevisión and Teledigital for any period ending any date on or after 26 September 2006 and only as from. In July 2006, our ownership interest in Multicanal decreased from 100% to 65% as a result of the capitalization of U.S.$182.0 million of outstanding debt pursuant to the terms of Multicanal’s APE. In September 2006, through the Cablevisión Acquisition, we increased our ownership interest in Cablevisión to 60%. Cablevisión, in turn acquired 100% of Holding Teledigital and 98.5% of Multicanal, who in turn acquired from us 100% of Prima. See “Business Description — Cable Television and Internet Access — Summary of Ownership Changes and Recent Acquisitions”.

Selected Consolidated Financial Information The following tables set forth selected consolidated financial and other operating information of the Company as of and for the years ended 31 December 2006, 2005 and 2004, as of 30 June 2007 and 2006, and for the six months ended 30 June 2007 and 2006. The selected financial information as of and for the years ended 31 December 2006, 2005 and 2004 was extracted from, and should be read in conjunction with, the Company’s audited consolidated financial statements and related notes included in this Annex A. The selected financial information as of 30 June 2007 and for the six-month periods ended 30 June 2007 and 2006 was extracted from, and should be read in conjunction with, the unaudited interim financial statements and related notes included in this Annex A. Results of operations for the six month period ended 30 June 2007 are not indicative of results for the full year ending 31 December 2007 or for any other interim period or for any future financial year. In the opinion of the Company’s management, the interim financial data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim period. The Independent Accountants have issued an opinion on the audited consolidated financial statements of the Company included in this Annex A. Additionally, in connection with the unaudited interim financial statements of the Company included in this Annex A, the Independent Accountants have issued a limited review report. Our audited financial statements contained in this Annex A have been prepared in accordance with U.S. GAAP, which differs in certain significant respects from Argentine GAAP and CNV regulations. Financial Statements prepared in accordance with Argentine GAAP and CNV regulations are set forth in the Offering Circular. Solely for the convenience of the reader, Peso amounts as of and for the year ended 31 December 2006 and as of and for the six-month period ended 30 June 2007 have been translated into U.S. dollars at the selling rate for U.S. dollars quoted by Banco Nación on 31 December 2006 and on 30 June 2007 of Ps.3.06 to U.S.$1.00 and Ps.3.09 to U.S.$1.00, respectively. The selling rate

A-2 for U.S. dollars quoted by Banco Nación on 31 July 2007 was Ps.3.12 to U.S.$1.00. The U.S. dollar equivalent information should not be construed to imply that the Peso amounts represent, or could have been or could be converted into, U.S. dollars at such rates or any other rate. See “Exchange Rate Information”. In accordance with the Argentine Corporate Law, we may pay dividends in Pesos out of retained earnings, if any, as set forth in our audited unconsolidated financial statements prepared in accordance with Argentine GAAP and CNV regulations. However, we conduct our operations through our subsidiaries and our ability to declare or pay dividends depends on us receiving dividends from our subsidiaries. Under the terms of the financial debt of certain of our subsidiaries, they are subject to restrictions in their ability to distribute dividends under certain circumstances. See “Operating and Financial Review — Liquidity and capital resources — Indebtedness”. This selected consolidated financial and other information should be read in conjunction with “Presentation of Financial and Other Information” and “Operating and Financial Review — U.S. GAAP”.

Statement of Operations Data Six Months Ended Year Ended 31 December 30 June 2004 2005 2006 2006 2006 2007 2007 (Millions) (Millions) Ps. Ps. Ps. U.S.$ Ps. Ps. U.S.$ (Unaudited) Net sales...... 1,571.2 1,847.6 2,560.5 836.8 1,058.2 1,895.5 613.4 Cost of sales (excluding depreciation and amortization)...... (796.1) (1,002.1) (1,309.6) (428.0) (589.4) (917.2) (296.8) Selling expenses (excluding depreciation and amortization . . . . . (182.6) (214.4) (275.4) (90.0) (107.8) (192.1) (62.2) Administrative expenses (excluding depreciation and amortization) . . . . . (167.0) (200.2) (294.1) (96.1) (113.2) (206.6) (66.9) Depreciation of property, plant and equipment ...... (88.2) (72.4) (112.8) (36.8) (40.4) (112.9) (36.5) Amortization of intangible assets . . . . . (5.4) (3.9) (23.8) (7.8) (2.6) (37.2) (12.0) Depreciation of other investments . . . . (0.1) (0.1) (0.2) (0.1) (0.2) 0.0 0.0 Operating income ...... 331.7 354.5 544.7 178.0 204.5 429.5 139.0 Financial results, net ...... 284.1 (305.3) 939.1 306.9 (200.7) (174.0) (56.3) Equity in earnings from unconsolidated affiliates ...... 48.3 51.9 32.0 10.5 20.1 20.4 6.6 Gain on sale of subsidiaries, net . . . . . — — 6.0 2.0 — — — Income before income tax, tax on assets and minority interest ...... 664.1 101.2 1,521.8 497.3 23.9 275.9 89.3 Income tax and tax on assets (expense) benefit ...... 98.2 (28.1) (174.6) (57.1) 205.8 (80.2) (26.0) Minority interest...... (2.2) (3.1) (38.4) (12.6) (4.0) (44.3) (14.3) Net income ...... 760.2 70.0 1,308.7 427.7 225.7 151.4 49.0

A-3 Balance Sheet Data As of 31 December As of 30 June 2004 2005 2006 2006 2006 2007 2007 (Millions) (Millions) Ps. Ps. Ps. U.S.$ Ps. Ps. U.S.$ (Unaudited) ASSETS Current assets Cash and cash equivalents ...... 381.4 449.4 326.9 106.8 483.0 404.0 130.8 Trade receivables, net ...... 234.6 242.0 410.6 134.2 332.6 442.9 143.3 Other receivables, net ...... 160.6 393.7 321.6 105.1 667.1 263.8 85.4 Inventories ...... 80.9 123.4 126.0 41.2 168.6 154.3 50.0 Other assets ...... 0.9 2.0 2.6 0.9 2.3 4.7 1.5 Total current assets ...... 858.4 1,210.5 1,187.7 388.1 1,653.7 1,269.9 411.0 Trade receivables, net ...... 0.2 0.4 0.3 0.1 0.4 0.0 0.0 Other receivables, net ...... 370.8 203.1 280.6 91.7 198.3 284.0 91.9 Inventories ...... 17.2 21.3 19.7 6.4 23.1 19.7 6.4 Investments in unconsolidated affiliates ...... 174.0 387.6 235.7 77.0 465.2 244.1 79.0 Other long-term investments ...... 9.4 47.0 3.3 1.1 17.9 3.2 1.0 Property, plant and equipment, net . . . 398.9 416.9 1,025.3 335.1 461.7 1,107.3 358.4 Intangible assets, net ...... 12.6 17.7 577.6 188.8 16.1 543.4 175.9 Goodwill...... 1,147.4 1,156.6 2,909.0 950.7 1,155.6 2,905.3 940.2 Total assets ...... 2,988.8 3,461.0 6,239.3 2,039.0 3,992.2 6,376.9 2,063.7

LIABILITIES Current Liabilities Accounts payable...... 270.3 264.4 404.9 132.3 332.5 436.6 141.3 Short-term debt and current portion of long-term debt ...... 2,283.0 2,783.6 432.3 141.3 2,965.5 464.8 150.4 Salaries and social security payable . . 55.3 74.2 110.3 36.1 69.5 107.5 34.8 Taxes payable ...... 57.3 112.3 168.9 55.2 79.2 179.6 58.1 Other liabilities ...... 65.4 77.2 120.6 39.4 108.6 112.5 36.4 Total current liabilities ...... 2,731.3 3,311.7 1,237.0 404.2 3,555.3 1,301.0 421.0 Accounts payable...... 19.9 6.6 10.6 3.5 9.7 13.1 4.3 Long-term debt ...... 638.6 473.2 2,360.0 771.2 529.9 2,248.4 727.6 Taxes payable ...... 2.0 5.6 14.5 4.7 4.7 17.8 5.8 Other liabilities ...... 31.0 17.1 988.4 323.0 23.7 982.6 318.0 Provisions ...... 40.5 49.6 99.4 32.5 46.4 100.7 32.6 Minority interest ...... 34.1 28.2 669.5 218.8 32.0 711.9 230.4 Total Shareholders’ Equity (Deficit) ...... (508.5) (431.1) 860.0 281.1 (209.5) 1,001.4 324.1 Total liabilities and Shareholders’ Equity (Deficit) ...... 2,988.8 3,461.0 6,239.3 2,039.0 3,992.2 6,376.9 2,063.7

Non-GAAP Data See “Summary Consolidated Financial and Other Information” and “Selected Consolidated Financial Information”.

Overview See “Operating and Financial Review — Overview”.

A-4 The Argentine Economy See “Operating and Financial Review — The Argentine Economy”.

Factors Affecting the Comparability of Historical Results of Operations and Financial Condition On 28 January 2004, our subsidiaries AGEA and AGR completed their financial debt restructuring process through the exchange of the underlying securities for the new Negotiable Obligations stated in a private agreement celebrated with all of its bondholders by the end of December 2003. Under U.S. GAAP, this situation generated a non-recurrent gain before tax of Ps.525.6 million in 2004, which was recorded under Financial Results, Net for the year then ended. Our cable television and Internet access operations have gone through important transformations in recent years: • In 2005, we acquired a minority interest in Cablevisión, which we recorded under Investments in unconsolidated affiliates, and accounted for our equity portion of Cablevisión’s net income (loss) under Equity in earnings (losses) from unconsolidated affiliates. • On 20 July 2006, our subsidiary Multicanal completed the restructuring of its financial indebtedness pursuant to the terms of the Multicanal APE. The Multicanal APE provided, among other things, for the exchange of approximately U.S.$182.0 million of outstanding debt for shares representing approximately 35% of Multicanal’s total capital and the discharge of approximately U.S.$125.0 million of outstanding debt for a cash payment of U.S.$37.5 million. After giving effect to the Multicanal APE, Multicanal’s outstanding financial debt decreased from U.S.$526.4 million to U.S.$223.3 million. The consummation of Multicanal’s APE generated a non-recurrent gain before tax of Ps.1,157.4 million. • On 26 September 2006, through a series of related transactions, we increased our ownership interest in Cablevisión to 60%. Cablevisión simultaneously acquired 100% of Holding Tele- digital and 98.5% of Multicanal, and through Multicanal 100% of the outstanding shares of Prima, 3% of which were subsequently transferred to Univents and later to Cablevision. In 2005 and 2006, inflation rates (as measured by the CPI) accelerated, reaching 12.3% in 2005, and 9.8% in 2006. Although under U.S. GAAP we are not permitted to adjust our financial statements to reflect inflation unless we qualify as an hyperinflationary country, our cost of sales (excluding depreciation and amortization), in particular our labour costs, was affected by the upward pressure on the prices of goods and services. Our future profitability will depend, among other factors, on our ability to increase the prices of our goods and services to offset increases in our cost of sales attributable to inflationary pressures. After its most significant crisis in 2002, the Argentine economy has experienced 61 months of continued growth, with real GDP growing by 8.8% in 2003, 9.0% in 2004, 9.2% in 2005 and 8.5% in 2006. As a result of the impact of the factors described above on our businesses, our results of operations and financial condition for 2004, 2005 and 2006 and for the six-month periods ended 30 June 2006 and 2007 may not be comparable and may not be indicative of our results of operations, financial condition or business prospects after the dates indicated.

A-5 • broadcasting and programming; and

• other related activities.

Substantially all of our operations are located in Argentina, where we generate substantially all of our revenues. We also have operations in Paraguay and Uruguay. We create and acquire media content, develop brand names to associate with it, and manage the outlets distributing the content. We distribute content in a variety of forms and through a variety of outlets, including television networks and stations, Internet services, newspapers, magazines, books and radio stations. Many of our businesses hold leading market positions, and we capitalize on these strong positions when expanding into new markets.

Our operating results are affected by a number of factors, including the number of households subscribing to our cable television and Internet access services, the level of advertising across our various media products, the circulation of newspapers and magazines, the occurrence of major sports and other entertainment events, seasonality, competition, regulatory developments and fluctuations in foreign exchange rates. Our results of operations also reflect general economic and political developments in Argentina. Subscription, advertising and circulation revenues in recent years have increased significantly as the Argentine economy recovered rapidly from its 2001/2002 crisis.

Our revenues are primarily generated in Pesos, while a portion of our expenses and substantially all of our financial liabilities are denominated in U.S. dollars. Accordingly, our results of operations are affected by exchange rate volatility. See “Risk Factors — Risks Related to Investments in a Foreign Corporation — Changes in currency convertibility and Fluctuations in exchange rates may affect our business and revenues”.

Net Sales

Our net sales comprise cable television and Internet access subscription revenue, advertising revenue, circulation revenue, revenues from content rights and co-production, printing services revenue and other revenue. Cable television and Internet access subscription fees are our principal source of revenue. Advertising revenue includes revenues received for advertising placed in our newspapers, magazines, Internet sites and through our cable, broadcast television and radio stations. Circulation revenue includes the cover price revenue received from the sale of newspapers, magazines and other publications. Revenue from content rights and co-production includes fees for programming. Printing services revenue consists mainly of fees received from the printing of magazines, books, leaflets and related products. Other revenue includes sales of digital content.

Cost of Sales (excluding depreciation and amortization)

Our cost of sales (excluding depreciation and amortization) includes salaries, wages and employer contributions, programming rights, production and co-production costs, and paper and printing costs. Programming rights include the cost of licensing third party (including affiliates) programs. Production and co-production costs comprise the production cost of programs produced by our subsidiaries, as well as the cost of programming rights for films. Printing costs include raw materials such as paper and ink, and other direct costs relating to the printing process.

Selling and Administrative Expenses (excluding depreciation and amortization)

Selling and administrative expenses (excluding depreciation and amortization) include overhead costs from various divisions such as our marketing, public relations, warehousing, information systems, finance, accounting and human resources divisions.

A-6 Depreciation and Amortization Depreciation and amortization include charges relating to the depreciation of our tangible property, plant and equipment (including accounts chargeable to cost of sales, and selling and administrative expenses) and the amortization of intangible assets arising primarily from acquisitions.

Proportional Consolidation of Certain Investments Under Argentine GAAP, we are required to proportionally consolidate certain of our minority investments. Proportional consolidation is not permitted under U.S. GAAP. Our audited consolidated financial statements included in this Annex A do not proportionally consolidate Papel Prensa (37% indirect ownership interest), Impripost S.A. (50% indirect ownership interest), TRISA and TSC (50% indirect ownership interest), Polka S.A. (30% indirect ownership interest), Ideas del Sur (30% indirect ownership interest) Patagonik Film Group (50% indirect ownership interest) and La Capital Cable (50% indirect ownership interest). These investments are carried out by the equity method under “Investments in unconsolidated affiliates”, and our share on their net income (loss) is recorded under “Equity in earnings (losses) from unconsolidated affiliates”.

Critical Accounting Policies Our audited consolidated financial statements include our consolidated financial position, results of operations and cash flows. The financial statements included in this Annex A are prepared in conformity with U.S. GAAP. U.S. GAAP requires management to make estimates that affect the reported amounts of assets and liabilities, and the reported amounts of revenues and expenses. We evaluate our estimates, including those related to tangible and intangible assets, bad debts, inventories, provisions and income taxes, on an ongoing basis. We base our estimates on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that the following accounting policies used in preparation of our financial statements prepared in accordance with U.S. GAAP are our critical accounting policies as they require management to make estimates that affect the reported amounts of assets and liabilities, and the reported amounts of revenues and expenses.

Recent Acquisitions Our consolidated financial statements reflect the increase of our ownership interest in Cable- visión to 60% as well as the acquisition by Cablevisión of 98.5% of the outstanding shares of Multicanal and 100% of the outstanding shares of Holding Teledigital, and Multicanal’s acquisition of 100% of the outstanding shares of Prima 3% of which were subsequently transferred to Univents and later to Cablevisión. To date, those transactions have not received any of the regulatory approvals to which they are subject. If such approvals were not forthcoming, or were made subject to material conditions, our future results of operations may be materially adversely affected. See “Risk Factors — Risks Related to Our Business — The legal and regulatory environment that applies to our cable television, telecommunications and Internet and digital content segments may change in a manner which may be disadvantageous to us, or may limit our ability to operate our business — Our acquisition of Cablevision, and its acquisition of Multicanal, Holding Teledigital and Prima are subject to regulatory approval”.

A-7 printing and broadcasting and programming operations involves a wide range of companies and, to a lesser extent, individuals. Generally, we do not require collateral from our customers, although we do require that all advertising agencies, receiver agencies and direct advertisers that are granted financing to sell advertisement in our print media, provide AGEA security with respect to at least 70% of the payment obligations, in general by means of a mortgage or bank guaranty. We invoice most of our cable television and Internet access subscribers in advance. A majority of Argentine cable television subscribers pay their invoices in cash, and we encourage them to pay their monthly invoices by automatic credit card or bank account debits. We seek to enforce a strict disconnection policy. On the third month after non-payment, we discontinue the mailing of bills and the monthly programming magazine to the subscriber and, if payment is not received, we disconnect the subscriber as soon as practicable after the expiration of this period. Our efforts to improve customer retention and collections since 2005 have resulted in a reduction in the lag between invoicing and collection and, accordingly, a decrease in our charges for doubtful accounts. In determining the adequacy of our allowances for doubtful accounts, we analyze, among other things, historic bad debt experience, customer credit-worthiness, current economic trends in Argentina and customer payment history. If the financial condition of our customers deteriorates, and impairs their ability to make payments, additional charges may be required. We believe that the accounting estimate relating to doubtful accounts is a critical accounting estimate because changes in the estimated level of doubtful debts may materially affect net income. The estimate for doubtful accounts is a critical accounting estimate for all of our business segments. Under net bad debt expense as of 31 December 2006 we recorded an income of Ps.2.3 million mainly as a result of recoveries of doubtful accounts in our printing and publishing segment.

Provision for Contingencies We are involved in legal, fiscal and administrative disputes through our normal course of business. The outcome of these claims may have a material impact on our balance sheet as well as on our net income. See “Business Description — Legal Proceedings”. Our management estimates the potential outcome of these claims based on the most objective evidence on hand from our advisors until a final resolution is reached. Due to the uncertain nature of these issues, these estimates change as additional information becomes available and could result in material changes to the financial statements in subsequent periods. As of 31 December 2006, we had reserved Ps.99.4 million for pending disputes.

Accounting for Acquisitions We account for acquisitions under the purchase method of accounting. We allocate the total value of consideration paid to the underlying net assets acquired, based on their respective estimated fair values determined by using primarily internal valuations. We use various methods to determine the fair value of assets and liabilities acquired including discounted cash flows, external market values and others. Goodwill generated by recent acquisitions is a preliminary estimate, since we are in the process of compiling the evidence necessary to better estimate the fair market value of assets and liabilities identifiable at the time of acquisition. Therefore, the value of goodwill and the assets and liabilities so identified may be modified in the future, as permitted by the prevailing accounting standards. We believe that the valuation assumptions underlying each of these valuation methods are based on the current information available including discount rates, cash flow assumptions, market risk rates and others. We consider our accounting policy for valuation of acquisitions critical because the judgments made in determining the estimated fair value and expected useful lives assigned to each class of assets and liabilities acquired can impact the value of the asset or liability, including the impact on deferred taxes, the respective amortization periods and ultimately net income. Therefore, the use of other valuation methods, as well as other assumptions underlying these valuation methods, could impact the determination of the financial position and results of operations.

A-8 Subscriber Portfolio Valuation We determine the useful life of the acquired subscriber portfolios on the basis of the churn rate of the acquired portfolio. We believe that this determination constitutes a critical accounting policy because a determination of the estimated useful life of a subscriber portfolio based on other criteria may result in a material different valuation and, accordingly, a different rate of depreciation with its related impact on our net income.

Impairment of Long-Lived Assets and Goodwill Under U.S. GAAP, goodwill should be tested for impairment at least annually. The impairment test for goodwill is a two step process. The first step is a comparison of the fair value of the reporting unit with its carrying amount, including goodwill. If this step reflects impairment, then the loss would be measured as the excess of recorded goodwill over its implied fair value. Implied fair value is the excess of the fair value of the reporting unit over the fair value of all recognized and unrecognized assets and liabilities. Management has reviewed our long-lived assets, primarily property and equipment to be held and used in the business, long-term investments and goodwill for the purposes of determining and measuring impairment. No significant impairment for long-lived assets has been accrued under U.S. GAAP. We believe that the accounting estimate related to this asset impairment is a “critical accounting estimate” because (1) it is highly susceptible to change from period to period, since it requires management to make assumptions about future revenues and costs; and (2) recognising an impairment has a material impact on the assets reported on our balance sheet as well as our net loss. Management’s assumption about future revenues, as well as future number of subscribers, operating costs and selling, general and administrative costs have improved as a result of the recovery of the Argentine economy and its impact on our industry. In estimating future revenues, as well as future number of subscribers, operating costs and selling, general and administrative costs, we used internal projections. Although we believe our estimates are appropriate, significant differences in the actual performance of the asset or group of assets may materially affect our asset values and results of operations.

Valuation Allowance on Deferred Income Tax Assets Deferred income taxes are provided to reflect the net tax effects of temporary differences between the financial reporting and the tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws in each of the relevant jurisdictions. Deferred income taxes reflect management’s assessment of actual future taxes to be paid on items reflected in the financial statements, giving consideration to both timing and probability of realization. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Actual income taxes could vary from these estimates due to future changes in income tax law or the outcome of any review of our and our subsidiaries’ tax returns by the taxing authorities. U.S. GAAP Statement of Financial Accounting Standard N™ 109 “Accounting for Income Taxes” states specific and strict rules to determine a valuation allowance for tax credits. Under this pronouncement, an enterprise must use judgment in considering the impact of negative and positive evidence to determine if a valuation allowance is needed or not. For example, negative evidence includes (a) losses expected in early future years by a presently profitable entity, (b) unsettled circumstances that, if unfavorably resolved, would adversely affect future operations and profit levels on a continuing basis in future years, and (c) a carry forward that is so brief that it would limit

A-9 realization of tax benefits if significant deductible temporary difference is expected to reverse in a single year. We have recorded a valuation allowance under U.S. GAAP of Ps.116.3 million as of 31 Decem- ber 2006 due to uncertainties related to our ability to utilize certain deferred tax assets, primarily consisting of tax losses carried forward, before they expire. We have considered the reversal of the deferred income tax liabilities, tax planning and taxable income projections based on our best estimates in assessing the need for the valuation allowance. However, in the event management determined that it would be able to realise its deferred tax assets in the future in excess of its net recorded amount, it would be required to adjust to the deferred tax asset at the time and for the period such determination was made.

Accounting for Programming We produce part of our programming for initial broadcast over our television networks in Argentina. In-house production cost is fully expensed against the cost of sales after each relevant episode of a program or single program is broadcast or transmitted. Programming purchased from third parties, from our own producers and co-productions acquired in perpetuity, are expensed against the cost of sales over its estimated useful life, considering the expected future benefit period over which a given program will generate revenues (generally, over an eight year period). We then capitalize the production costs related to a given program over the expected future benefit period. Under this policy, we generally expense substantially all of the production costs related to a given program in the year of its initial broadcast and defer and expense the remaining production costs over the remainder of the expected future benefit period. See Note 1.1.b) to our audited consolidated financial statements. Rights related to feature films, series and single programs acquired in perpetuity for broadcasting by our cable signal Volver are expensed against the cost of sales over their estimated useful life (generally seven years), with a grace period of four years, amortized on a decreasing basis. We estimate expected future benefit periods based on past historical revenue patterns for similar types of programming and any potential future events through which we can exploit or distribute our programming. To the extent that a given future expected benefit period is shorter than we estimate, we may have to write off capitalized production costs sooner than anticipated. Conversely, to the extent that a given future expected benefit period is longer than we estimate, we may have to extend the amortization schedule for the remaining capitalized production costs. We also purchase programming from, and enter into license agreements with, various third party programming producers and providers, pursuant to which we receive the rights to transmit programming produced by third parties over our television networks in Argentina and/or our pay television and other media outlets. In the case of programming acquired from third parties, we estimate the expected future benefit period based on the anticipated number of showings in Argentina over our television network and/or our pay television and other media outlets. In the case of programming licensed from third parties, we estimate the expected future benefit period based upon the term of the license. To the extent that a given future expected benefit period is shorter than we estimate, we may have to write off the purchase price or the license fee sooner than anticipated. Conversely, to the extent that a given future expected benefit period is longer than we estimate, we may have to extend the amortization schedule for the remaining portion of the purchase price or the license fee.

Valuation of Currency and Interest Rate Swap We record receivables and liabilities generated by certain currency and interest rate swaps at their estimated fair value, which we determine by reference to arithmetic models, since the instruments cannot be marked to market. Variations in the estimated fair value are recognized as a gain or loss for the period. While we believe that management’s determinations of estimated fair value are

A-10 reasonable based on their knowledge of current factors, these estimates may be adjusted and result in future losses.

Results of Operations The following table is extracted from our audited consolidated financial statements as of 31 December 2004, 2005 and 2006 and for the years ended 31 December 2004, 2005 and 2006 and from our unaudited consolidated financial statements as of 30 June 2007 and for the six months ending 30 June 2006 and 2007, which have been prepared in accordance with U.S. GAAP, and sets forth the results of our operations for the periods indicated: Six Months Year Ended 31 December Ended 30 June 2004 2005 2006 2006 2007 (Unaudited) (Millions of Pesos) Net sales: Cable television and Internet access...... 642.9 742.8 1,274.8 438.1 1,218.9 Cable TV subscription fees ...... 536.5 611.5 1,003.2 352.2 957.5 Internet access ...... 72.0 97.6 221.4 61.0 239.7 Other ...... 34.4 33.7 50.1 24.9 21.8 Printing and publishing ...... 689.5 785.0 929.8 436.4 492.1 Advertising ...... 379.8 458.7 532.5 231.9 273.1 Circulation...... 227.5 236.8 266.8 134.0 138.5 Other ...... 82.2 89.4 130.5 70.5 80.5 Broadcasting and programming ...... 297.0 367.1 465.7 203.1 228.3 Other ...... 57.6 59.8 102.9 41.6 64.9 Eliminations ...... (115.8) (107.0) (212.7) (61.1) (108.8) Total...... 1,571.2 1,847.6 2,560.5 1,058.2 1,895.5 Cost of sales (excluding depreciation and amortization): Cable television and Internet access...... (309.1) (397.8) (578.1) (219.5) (519.9) Printing and publishing ...... (341.2) (395.5) (486.3) (230.7) (247.0) Broadcasting and programming ...... (159.9) (213.3) (313.7) (136.1) (146.5) Other ...... (14.7) (21.4) (23.0) (11.7) (21.8) Eliminations ...... 28.8 25.8 91.4 8.6 18.0 Total...... (796.1) (1,002.1) (1,309.6) (589.4) (917.2)

A-11 Six Months Year Ended 31 December Ended 30 June 2004 2005 2006 2006 2007 (Unaudited) (Millions of Pesos) Selling and administrative expenses (excluding depreciation and amortization): Cable television and Internet access...... (164.3) (188.5) (352.5) (111.7) (283.3) Printing and publishing ...... (168.5) (186.6) (201.2) (93.4) (126.9) Broadcasting and programming ...... (78.5) (88.0) (95.0) (47.4) (49.5) Other ...... (25.3) (32.7) (42.3) (21.1) (29.8) Eliminations ...... 87.0 81.2 121.5 52.5 90.8 Total...... (349.6) (414.6) (569.5) (221.1) (398.7) Depreciation and amortization:(1) Cable television and Internet access...... (60.4) (48.6) (105.5) (28.8) (133.6) Printing and publishing ...... (21.5) (16.8) (16.8) (7.9) (10.2) Broadcasting and programming ...... (10.9) (9.6) (12.7) (5.8) (5.3) Other ...... (1.0) (1.4) (1.7) (0.8) (1.0) Eliminations ...... 0.0 0.0 0.0 0.0 (0.0) Total...... (93.8) (76.4) (136.8) (43.2) (150.1) Financial results, net ...... 284.1 (305.3) 939.1 (200.7) (174.0) Equity in earnings (losses) from unconsolidated affiliates ...... 48.3 51.9 32.0 20.1 20.4 Gain on sale of subsidiaries, net ...... — — 6.0 — — Income before income tax, tax on assets and minority interest ...... 664.1 101.2 1,521.8 23.9 275.9 Income tax and tax on assets (expense)/benefit...... 98.2 (28.1) (174.6) 205.8 (80.2) Minority interest ...... (2.2) (3.1) (38.4) (4.0) (44.3) Net income for the year/period...... 760.2 70.0 1,308.7 225.7 151.4

(1) Includes amounts chargeable to cost of sales and selling and administrative expenses.

SFAS 131 “Disclosures about Segments of an Enterprise and Related Information” requires that a public business enterprise report financial and descriptive information about its reportable operating segments. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. We grouped our operations into four business segments: cable television and Internet access, printing and publishing, broadcasting and programming, and other. See Note 8 to our U.S. GAAP audited consolidated financial statements included elsewhere in this Annex A. The segment data set forth in this Offering Circular do not reflect the elimination of intersegment sales and corporate expenses.

Total Results

The Six Months Ended 30 June 2007 v. the Six Months Ended 30 June 2006

Net Sales

Our net sales increased by 79.1% to Ps.1,895.5 million in the first six months of 2007, compared to Ps.1,058.2 million in the first six months of 2006. The increase in sales is largely attributable to increased sales by the cable television and Internet access segment resulting from the consolidation of Cablevisión as consequence of the Cablevisión Acquisition. In addition, practically all of our business segments experienced continued growth during the first six months of 2007.

A-12 Cost of Sales (Excluding Depreciation and Amortization) Our cost of sales (excluding depreciation and amortization) increased by 55.6% to Ps.917.2 million in the first six months of 2007, compared to Ps.589.4 million in the first six months of 2006. The increase was principally due to increased cost of sales (excluding depreciation and amortization) in our cable television and Internet access segment resulting from the consolidation of Cablevisión as consequence of the Cablevisión Acquisition. In addition, all of our business segments experienced an increase in cost of sales (excluding depreciation and amortization) driven by higher salaries and, in certain cases, a larger payroll.

Selling and Administrative Expenses (Excluding Depreciation and Amortization) Our selling expenses (excluding depreciation and amortization) increased by 78.2% to Ps.192.1 million in the first six months of 2007, compared to Ps.107.8 million in the first six months of 2006. The increase was principally due to increased selling expenses (excluding depreciation and amortization) resulting from the consolidation of Cablevisión as a consequence of the Cablevisión Acquisition and, to a lesser extent, increases in salaries in all of our business segments. Our administrative expenses (excluding depreciation and amortization) increased by 82.4% to Ps.206.6 million in the first six months of 2007, compared to Ps.113.2 million in the first six months of 2006. The increase was principally due to increased administrative expenses (excluding depreciation and amortization) resulting from the consolidation of Cablevisión as a consequence of the Cablevisión Acquisition and, to a lesser extent, increased in salaries in all of our business segments.

Depreciation and Amortization Our depreciation and amortization expenses increased by 247.1% to Ps.150.1 million in the first six months of 2007, compared to Ps.43.2 million in the first six months of 2006. The increase was principally due to an additional amortization charge of Ps.32.0 million resulting from intangibles generated by the acquisition of the subscriber portfolios of Cablevisión and Teledigital (Ps.591.1 million) and the increased depreciation charges resulting from the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital.

Financial Results, Net Our financial losses, net, decreased by 13.3% to Ps.174.0 million in the first six months of 2007, compared to Ps.200.7 million in the first six months of 2006. The decrease was principally due to the reduction of the outstanding debt resulting from the completion of Multicanal’s APE in July 2006, which was partially offset by the consolidation of Cablevisión as a consequence of the Cablevisión Acquisition.

Equity in Earnings (Losses) from Unconsolidated Affiliates Our equity in earnings from unconsolidated affiliates increased by 1.5% to Ps.20.4 million for the first six months of 2007 compared to Ps.20.1 million for the same period in 2006. The increase is attributable to the growth experienced by businesses in which we hold unconsolidated equity investments. It was partially offset by the consolidation of Cablevisión as from 26 September 2006.

Income Tax and Tax on Assets - (Expense)/Benefit We had charges of Ps.80.2 million on account of income tax and tax on assets for the first six months of 2007 compared to gains of Ps.205.8 million for the same period in 2006. The gains for the first six months of 2006 are attributable to the tax loss carryforwards generated by Multicanal’s losses prior to the completion of its APE in July 2006, while in the same period in 2007 we generated net taxable income.

A-13 Net Income

As a result of the factors described above, we had net income of Ps.151.4 million in the first six months of 2007, compared to net income of Ps.225.7 million in the first six months of 2006.

2006 v. 2005

Net Sales

Our net sales increased by 38.6% to Ps.2,560.5 million in 2006, compared to Ps.1,847.6 million in 2005. The increase in sales is largely attributable to the consolidation of Cablevisión as consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital in September 2006, as well as to the growth of our sales across all of our business segments.

Cost of Sales (Excluding Depreciation and Amortization)

Our cost of sales (excluding depreciation and amortization) increased by 30.7% to Ps.1,309.6 million in 2006, compared to Ps.1,002.1 million in 2005. The increase was principally due to increased cost of sales (excluding depreciation and amortization) in our cable television and Internet access segment resulting from the consolidation of Cablevisión as consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital in September 2006 and to a lesser extent a general increase in salaries as well as an increase in the cost of programming rights.

Selling and Administrative Expenses (Excluding Depreciation and Amortization)

Our selling expenses (excluding depreciation and amortization) increased by 28.5% to Ps.275.4 million in 2006, compared to Ps.214.4 million in 2005. The increase was principally due to the consolidation of Cablevisión as consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital in September 2006 and, to a lesser extent, increases in salaries.

Our administrative expenses (excluding depreciation and amortization) increased by 46.9% to Ps.294.1 million in 2006, compared to Ps.200.2 million in 2005. The increase was principally due to the consolidation of Cablevisión as consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital in September 2006 and, to a lesser extent, increases in salaries.

Depreciation and Amortization

Our depreciation and amortization expense increased by 79.0% to Ps.136.8 million in 2006, compared to Ps.76.4 million in 2005. The increase was principally due to an additional amortization charge of Ps.43.3 million resulting from intangibles generated by the acquisition of the subscriber portfolios of Cablevisión and Teledigital (Ps.591.1 million) and to the increased depreciation resulting from the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital.

Financial Results, Net

We recorded financial gains of Ps.939.1 million in 2006, compared to losses of Ps.305.3 million in 2005. The gains in 2006 are primarily attributable to the completion of the restructuring of Multicanal’s financial debt in accordance with Multicanal’s APE in July 2006.

A-14 Equity in Earnings (Losses) from Unconsolidated Affiliates Our equity in earnings (losses) from unconsolidated affiliates decreased to Ps.32.0 million in 2006 compared to Ps.51.9 million in 2005. The decrease is attributable to the consolidation of Cablevisión since the acquisition date. During 2005 and through September 2006, we recorded our minority share in Cablevisión’s results as “Equity in earnings (losses) from unconsolidated affiliates”.

Gain on Sale of Subsidiaries, Net In 2006 we recorded a net gain of Ps.6.0 million related to the sale of our share of Prima to Multicanal, and to the sale of our share of Multicanal to Cablevisión.

Income Tax and Tax on Assets - (Expense)/Benefit We recorded charges of Ps.174.6 million on account of income tax and tax on assets for 2006 compared to charges of Ps.28.1 million for 2005. This increase is attributable to the increase in our taxable income primarily from the gains by the consummation of Multicanal’s APE.

Net Income As a result of the factors described above, we had net income of Ps.1,308.7 million in 2006, compared to net income of Ps.70.0 million in 2005.

2005 v. 2004 Net Sales Our net sales increased by 17.6% to Ps.1,847.6 million in 2005, compared to Ps.1,571.2 million in 2004. The increase in net sales is largely attributable to growth in all of our business segments as well as increases in the prices of our goods and services.

Cost of Sales (Excluding Depreciation and Amortization) Our cost of sales (excluding depreciation and amortization) increased by 25.9% to Ps.1,002.1 million in 2005, compared to Ps.796.1 million in 2004. The increase was principally due to the increased level of activity in all of our business segments and the impact of inflation on certain of our costs.

Selling and Administrative Expenses (Excluding Depreciation and Amortization) Our selling expenses (excluding depreciation and amortization) increased by 17.4% to Ps.214.4 million in 2005, compared to Ps.182.6 million in 2004. The increase was principally due to increases in salaries, and additional advertising expenses related to Diario Clarín’s 60th anniversary. Our administrative expenses (excluding depreciation and amortization) increased by 19.9% to Ps.200.2 million in 2005, compared to Ps.167.0 million in 2004. The increase was principally due to increases in salaries and a larger payroll.

Depreciation and Amortization Our depreciation and amortization expenses decreased by 18.5% to Ps.76.4 million in 2005, compared to Ps.93.8 million in 2004. The decrease was principally due to the full depreciation of equipment and the reduced level of capital expenditures.

Financial Results, Net Our financial losses increased to Ps.305.3 million in 2005, compared to a gain of Ps.284.1 million in 2004. This increase is primarily attributable to the non-recurrent gain of Ps.525.6 million recorded

A-15 as a result of the AGEA and AGR debt restructuring process in January 2004 and, to a lesser extent, to the impact of the devaluation of the Peso on our outstanding stock of foreign-currency denominated debt.

Equity in Earnings (Losses) from Unconsolidated Affiliates Our equity in earnings (losses) from unconsolidated affiliates remained stable at Ps.51.9 million in 2005 compared to Ps.48.3 million in 2004. The increase shows the internal growth in our unconsolidated affiliates.

Income Tax and Tax on Assets - (Expense)/Benefit We recorded charges of Ps.28.1 million on account of income tax and tax on assets for 2005 compared to gains of Ps.98.2 million for 2004. The gains for 2004 are attributable to a reversal in the valuation allowance on the deferred income tax asset recorded in the cable television and Internet access segment, partially offset with the increase of the taxable income in the printing and publishing segment due to a non-recurring gain recorded by AGEA attributable to its debt restructuring process.

Net Income As a result of the factors described above, we had net income of Ps.70.0 million in 2005, compared to a net income of Ps.760.2 million in 2004. The following is a discussion of net sales, cost of sales (excluding depreciation and amortization), selling and administrative expenses (excluding depreciation and amortization), and depreciation and amortization by segment as defined and set out in Note 8 to our U.S. GAAP audited consolidated financial statements included in this Annex A. The information set forth below is also summarized in the table directly under the heading “Results of Operations”. The segment data discussed below do not reflect the elimination of intersegment sales and corporate expenses.

Cable Television and Internet Access Our cable television and Internet access segment generates substantially all of its sales from monthly customer charges for basic cable and broadband Internet access services, and the balance from connection and other fees and advertising. We operate primarily in Argentina. A principal element of our strategy in the past was to increase our subscriber base through the acquisition of cable television companies and the expansion of our existing systems. More recently, we have focused on internal growth of cable television subscribers and expanding our Internet subscriber base. In addition, we have improved our sales through increases in our basic monthly subscription fees at a rate comparable to the annual inflation rate and the offering of premium programming. Programming costs (including sports programming rights acquired from our broadcasting and programming operations and unconsolidated affiliates) account for a significant portion of cost of sales of the segment. Under the terms of certain of our programming agreements, a decrease in the number of subscribers also causes a reduction in certain cost of sales. We seek to improve operating performance and cash flow through the consolidation of the networks of Cablevisión and Multicanal. These efforts have resulted in a significant improvement in the results of operations since the Cablevisión Acquisition in September 2006. In addition, by absorbing wholly-owned subsidiaries, Cablevisión and Multicanal eliminate duplicative administrative functions. Under selling and administrative expenses, our cable television and Internet access segment records charges for wages, salaries and fees as well as general advertising expenses.

A-16 The table set forth below presents net sales, cost of sales (excluding depreciation and amortization), selling and administrative expenses (excluding depreciation and amortization) and depreciation and amortization data for the segment for the periods indicated: Cable television and Internet Access Six Months Year Ended 31 December Ended 30 June 2004 2005 2006 2006 2007 (Unaudited) (Millions of Pesos) Net sales ...... 642.9 742.8 1,274.8 438.1 1,218.9 Cost of sales (excluding depreciation and amortization) ...... (309.1) (397.8) (578.1) (219.5) (519.9) as a % of net sales ...... 48% 54% 45% 50% 43% Selling and administrative expenses (excluding depreciation and amortization) ...... (164.3) (188.5) (352.5) (111.7) (283.3) as a % of net sales ...... 26% 25% 28% 25% 23% Depreciation and amortization ...... (60.4) (48.6) (105.5) (28.8) (133.6) as a % of net sales ...... 9% 7% 8% 7% 11%

The Six Months Ended 30 June 2007 v. the Six Months Ended 30 June 2006 — Cable Television and Internet Access Net Sales Net sales increased by 178.2% to Ps.1,218.9 million for the first six months of 2007 compared to Ps.438.1 million for the six months of 2006. The increase in sales is principally attributable to the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital on 26 September 2006, and, to a lesser extent, an increase in the number of subscribers through internal growth, including additional Internet subscribers, and in average subscription charges for cable television registered in 2006 and in the first six months of 2007. In addition to the subscribers acquired through Cablevisión and Teledigital, our segment had 1,304,600 cable television basic subscribers as of 30 June 2007 compared to 1,218,900 cable subscribers as of 30 June 2006, and 305,900 Internet subscribers as of 30 June 2007 compared to 259,200 as of 30 June 2006.

Cost of Sales (Excluding Depreciation and Amortization) Cost of sales (excluding depreciation and amortization) increased by 136.8% to Ps.519.9 million for the first six months of 2007, compared to Ps.219.5 million for the same period in 2006. This increase is mainly due to the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital on 26 September 2006, and to a lesser extent, the increase in our programming costs attributable to internal growth in our subscriber base and pricing adjustments linked to basic monthly fee increases contemplated in certain programming contracts, and the effect of salary increases.

Selling and Administrative Expenses (Excluding Depreciation and Amortization) Selling and administrative expenses (excluding depreciation and amortization) increased by 153.6% to Ps.283.3 million for the first six months of 2007, compared to Ps.111.7 million for the same period in 2006. This increase is mainly due to the consolidation of Cablevisión as a consequence of

A-17 the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital on 26 September 2006. Expenses for salaries, wages, social security charges and other personnel expenses increased primarily as a result of the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital on 26 September 2006, and the effect of salary increases.

Depreciation and Amortization Depreciation of property, plant and equipment increased by 263.5% to Ps.98.1 million for the first six months of 2007 from Ps.27.0 million for the same period in 2006. The increase reflects the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital on 26 September 2006, and additions of cable and network equipment during 2006 and the first six months of 2007. We also recorded Ps.35.4 million in amortization expenses for the first six months of 2007 compared to Ps.1.8 million for the same period in 2006. The increase is attributable to the intangible assets related to the purchase of Cablevisión’s and Teledigital’s subscriber portfolios in September 2006.

2006 v. 2005 — Cable Television and Internet Access Net Sales Net sales increased by 71.6% to Ps.1,274.8 million in 2006 compared to Ps.742.8 million in 2005. The increase in net sales is principally attributable to the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital on 26 September 2006, the growth during 2006 in the number of subscribers, including additional subscribers of high-speed Internet, and increases in average subscription charges for cable television recorded in 2006. In addition to the subscribers acquired through Cablevisión and Teledigital, as of 31 December 2006 our segment had 1,267,400 basic subscribers, compared to 1,145,200 basic subscribers as of 31 December 2005, and 293,100 Internet subscribers, compared to 229,000 subscribers as of 31 December 2005.

Costs of Sales (Excluding Depreciation and Amortization) Cost of sales (excluding depreciation and amortization) increased by 45.3% to Ps.578.1 million in 2006, compared to Ps.397.8 million in 2005. This increase is mainly attributable to the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital, and to a lesser extent to the increase in our programming costs attributable to the internal growth in our subscriber base and pricing adjustments linked to basic monthly fee increases contemplated in certain programming contracts. Expenses for salaries, wages, social security charges and other personnel expenses increased primarily as a result of the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital on 26 September 2006, and the effect of salary increases.

Selling and Administrative Expenses (Excluding Depreciation and Amortization) Selling and administrative expenses (excluding depreciation and amortization) increased by 87.0% in 2006 to Ps.352.5 million, compared to Ps.188.5 million in 2005. This increase is mainly due to the consolidation of Cablevisión as a consequence of the increase in our ownership interest in

A-18 Cablevisión and the acquisition of Holding Teledigital on 26 September 2006 and to a lesser extent an increase in marketing campaigns. Expenses for salaries, wages, social security charges and other personnel expenses increased primarily as a result of the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital on 26 September 2006, and the effect of salary increases.

Depreciation and Amortization Depreciation of property, plant and equipment increased by 84.1% to Ps.83.7 million in 2006 from Ps.45.5 million in 2005. The increase reflects the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital on 26 September 2006, as well as additions of cable and network equipment in 2006. We also recorded Ps.21.8 million in amortization expenses in 2006, compared to Ps.3.1 million in 2005. The increase is attributable mainly to the purchase of Cablevisión’s and Teledigital’s subscriber portfolios.

2005 v. 2004 — Cable Television and Internet Access Net Sales Net sales increased by 15.5% to Ps.742.8 million in 2005 compared to Ps.642.9 million in 2004. The increase in net sales is attributable to the internal growth in our subscriber base, including Internet subscribers, and increases in average subscription fees recorded in 2005. As of 31 December 2005, we had 1,145,200 basic subscribers, an increase of 8.3% from 1,057,900 basic subscribers as of 31 December 2004. In the same period, our Internet subscriber base increased by 40.9% from 162,500 subscribers as of 31 December 2004 to 229,000 subscribers as of 31 December 2005.

Cost of Sales (Excluding Depreciation and Amortization) Cost of sales (excluding depreciation and amortization) increased 28.7% to Ps.397.8 million for the year ended 31 December 2005, from Ps.309.1 million for the year ended 31 December 2004. Programming costs increased principally due to the internal growth in our subscriber base and pricing adjustments linked to basic monthly fee increases contemplated in certain programming contracts. Expenses for salaries, wages, social security charges and other personnel expenses increased mainly as a result of salary increases, and to a lesser extent as a result of growth of our payroll in 2005.

Depreciation and Amortization Depreciation and amortization expenses decreased by 19.7% to Ps.48.6 million in 2005 from Ps.60.4 million in 2004. The decrease is principally attributable to the full depreciation of certain equipment in 2004.

A-19 Printing and Publishing

Sales in our printing and publishing segment are largely derived from three principal sources:

• display and classified advertising sales;

• sales of newspapers, optional products (booklets and magazines) and textbooks; and

• printing services.

Advertising revenues are determined by the prices achieved per single column centimeter (the advertising yield) and the number of advertising centimeters sold (advertising lineage) in the relevant period. Circulation revenues reflect the share retained of the cover price of each newspaper and optional product sold and the number of copies thereof sold in the relevant period, net of copies returned.

Macroeconomic conditions have a significant impact on advertising revenues and, to a lesser extent, circulation revenues.

The cost of sales (excluding depreciation and amortization) of our printing and publishing segment comprise labor costs, the cost of raw material (primarily paper and ink, which are priced by reference to the international market) and printing costs, fees and utility costs.

The table set forth below presents net sales, cost of sales (excluding depreciation and amortization), selling and administrative expenses (excluding depreciation and amortization) and depreciation and amortization data for the segment for the periods indicated:

Printing and Publishing Six Months Year Ended Ended 31 December 30 June 2004 2005 2006 2006 2007 (Unaudited) (Millions of Pesos) Net sales ...... 689.5 785.0 929.8 436.4 492.1 Cost of sales (excluding depreciation and amortization) ...... (341.2) (395.5) (486.3) (230.7) (247.0) as a % of net sales ...... 49% 50% 52% 53% 50% Selling and administrative expenses (excluding depreciation and amortization) ...... (168.5) (186.6) (201.2) (93.4) (126.9) as a % of net sales ...... 24% 24% 22% 21% 26% Depreciation and amortization ...... (21.5) (16.8) (16.8) (7.9) (10.2) as a % of net sales ...... 3% 2% 2% 2% 2%

The Six Months Ended 30 June 2007 v. the Six Months Ended 30 June 2006 — Printing and Publishing

Net sales

Net sales increased by 12.8% to Ps.492.1 million in the first six months of 2007, compared to Ps.436.4 million in the first six months of 2006. The increase was the result of an increase in advertising yield, the increase in sales of optionals and in the cover price of newspapers, which more than offset the decrease in circulation.

A-20 Cost of Sales (Excluding Depreciation and Amortization) Cost of sales (excluding depreciation and amortization) increased by 7.1% to Ps.247.0 million in the first six months of 2007, compared to Ps.230.7 million in the first six months of 2006. The increase was primarily the result of an increase of the costs of raw materials (paper and ink), higher wages and salaries and a larger payroll.

Selling and Administrative Expenses (Excluding Depreciation and Amortization) Selling and administrative expenses (excluding depreciation and amortization) increased by 35.9% to Ps.126.9 million in the first six months of 2007, compared to Ps.93.4 million in the first six months of 2006. The increase was primarily the result of an increase in wages and salaries, and advertising expenses.

Depreciation and Amortization Depreciation and amortization expenses increased by 28.7% to Ps.10.2 million in the first six months of 2007, compared to Ps.7.9 million in the first six months of 2006. The increase reflects capital expenditures made during 2006 and the first six months of 2007.

2006 v. 2005 — Printing and Publishing Net Sales Net Sales increased by 18.5% to Ps.929.8 million in 2006, compared to Ps.785.0 million in 2005. The increase was primarily the result of an increase in the advertising yield and additional sales of advertising lineage, as well as additional sales of optionals and an increase in the cover price for newspapers, which more than offset the decrease in circulation, and increased printing of leaflets and magazines. In addition, in 2006 we began selling textbooks.

Cost of Sales (Excluding Depreciation and Amortization) Cost of sales (excluding depreciation and amortization) increased by 23.0% to Ps.486.3 million in 2006, compared to Ps.395.5 million in 2005. The increase was primarily the result of higher average prices for raw materials (primarily paper and ink), higher salaries and a larger payroll.

Selling and Administrative Expenses (Excluding Depreciation and Amortization) Selling and administrative expenses (excluding depreciation and amortization) increased by 7.8% to Ps.201.2 million in 2006, compared to Ps.186.6 million in 2005. The increase was primarily the result of increases in salaries and payroll and higher advertising expenses incurred to promote new optional products, which were offset by a decrease in general advertising and marketing expenses incurred in 2005 in connection with Diario Clarin’s 60th anniversary.

Depreciation and Amortization Depreciation and amortization expenses increased by 0.2% to Ps.16.8 million in 2006, compared to Ps.16.8 million in 2005.

2005 v. 2004 — Printing and Publishing Net Sales Net sales increased by 13.8% to Ps.785.0 million in 2005, compared to Ps.689.5 million in 2004. The increase was primarily the result of increased advertising yield and lineage, an increase in the cover price of newspapers and in circulation (including as a result of campaigns related to Diario Clarín’s 60th anniversary) and additional printing revenues.

A-21 Cost of Sales (Excluding Depreciation and Amortization) Cost of sales (excluding depreciation and amortization) increased by 15.9% to Ps.395.5 million in 2005, compared to Ps.341.2 million in 2004. The increase was primarily the result of a higher level of the purchase of greater volumes of raw materials (paper and ink), copyright payments and higher salaries resulting from wages and payroll increases.

Selling and Administrative Expenses (Excluding Depreciation and Amortization) Selling and administrative expenses (excluding depreciation and amortization) increased by 10.8% to Ps.186.6 million in 2005, compared to Ps.168.5 million in 2004. The increase was primarily the result of advertising expenses incurred in connection with general advertising and marketing campaigns related to the 60th anniversary of Diario Clarin.

Depreciation and Amortization Depreciation and amortization expenses decreased by 21.9% to Ps.16.8 million in 2005, compared to Ps.21.5 million in 2004. The decrease was primarily the result of full depreciation of certain equipment in 2004.

Broadcasting and Programming Sales in the broadcasting and programming segment, which includes our broadcast television and radio stations, the production of television content for our broadcast channels and cable signals, are largely derived from advertising. Cost of sales (excluding depreciation and amortization) comprise primarily programming rights, production and co-production costs and salaries. The table set forth below presents net sales, cost of sales (excluding depreciation and amortization), selling and administrative expenses (excluding depreciation and amortization), and depreciation and amortization data for the segment for the periods indicated: Broadcasting and Programming Six Months Year Ended Ended 31 December 30 June 2004 2005 2006 2006 2007 (Unaudited) (Millions of Pesos) Net sales ...... 297.0 367.1 465.7 203.1 228.3 Cost of sales (excluding depreciation and amortization) ...... (159.9) (213.3) (313.7) (136.1) (146.5) as a % of net sales ...... 54% 58% 67% 67% 64% Selling and administrative expenses (excluding depreciation and amortization) ...... (78.5) (88.0) (95.0) (47.4) (49.5) as a % of net sales ...... 26% 24% 20% 23% 22% Depreciation and amortization ...... (10.9) (9.6) (12.7) (5.8) (5.3) as a % of net sales ...... 4% 3% 3% 3% 2%

The Six Months Ended 30 June 2007 v. the Six Months Ended 30 June 2006 — Broadcasting and Programming Net Sales Net sales increased by 12.4% to Ps.228.3 million (including Ps.18.0 million to our other segments) in the first six months of 2007, compared to Ps.203.1 million (including Ps.9.4 million to our other segments) in the first six months of 2006. The increase was primarily the result of an

A-22 increase in advertising sales and the sale of cable signal due to pricing linked to increases in the monthly subscription fees charged to cable television companies and a larger subscriber base.

Cost of Sales (Excluding Depreciation and Amortization) Cost of sales (excluding depreciation and amortization) increased by 7.7% to Ps.146.5 million in the first six months of 2007, compared to Ps.136.1 million in the first six months of 2006. The increase was primarily the result of an increase in programming costs due to a more active summer season programming schedule and an increase in salaries and, to a lesser extent, a larger payroll.

Selling and Administrative Expenses (Excluding Depreciation and Amortization) Selling and administrative expenses (excluding depreciation and amortization) increased by 4.4% to Ps.49.5 million in the first six months of 2007, compared to Ps47.4 million in the first six months of 2006. The increase was primarily the result of an increase in salaries.

Depreciation and Amortization Depreciation and amortization expenses decreased by 7.4% to Ps.5.3 million in the first six months of 2007, compared to Ps.5.8 million in the first six months of 2006. The decrease was principally due to the full depreciation of equipment.

2006 v. 2005 — Broadcasting and Programming Net Sales Net Sales increased by 26.9% to Ps.465.7 million (including Ps.98.0 million to our other segments) in 2006, compared to Ps.367.1 million (including Ps.22.3 million to our other segments) in 2005. The increase was primarily the result of increased advertising sales associated with an improvement in ratings and the transmission of the football (soccer) world cup series as well as increased sales of programming rights to third party cable operators.

Cost of Sales (Excluding Depreciation and Amortization) Cost of sales (excluding depreciation and amortization) increased by 47.0% to Ps.313.7 million in 2006, compared to Ps.213.3 million in 2005. The increase was primarily the result of higher programming costs and talent fees, as well as additional programming and sports costs associated with the football world cup.

Depreciation and Amortization Depreciation and amortization expenses increased by 32.0% to Ps.12.7 million in 2006, compared to Ps.9.6 million in 2005. The increase reflects investment in equipment during 2006.

2005 v. 2004 — Broadcasting and Programming Net Sales Net Sales increased by 23.6% to Ps.367.1 million (including Ps.22.3 million to our other segments) in 2005, compared to Ps.297.0 million (including Ps.26.1 million to our other segments) in 2004. The increase was primarily the result of increased advertising sales, and higher revenues on account of programming from cable systems.

A-23 Cost of Sales (Excluding Depreciation and Amortization) Cost of sales (excluding depreciation and amortization) increased by 33.4% to Ps.213.3 million in 2005, compared to Ps.159.9 million in 2004. The increase was primarily the result of higher programming and talent fees, as well as increased salaries and a larger payroll.

Selling and Administrative Expenses (Excluding Depreciation and Amortization) Selling and administrative expenses (excluding depreciation and amortization) increased by 12.0% to Ps.88.0 million in 2005, compared to Ps.78.5 million in 2004. The increase was primarily the result of increased salaries and a larger payroll, and additional general advertising expenses during 2005 related to new programming and the 80th anniversary of Radio Mitre.

Depreciation and Amortization Depreciation and amortization expenses decreased by 11.2% to Ps.9.6 million in 2005, compared to Ps.10.9 million in 2004.

Other Sales in this segment are derived from the rendering of administrative and corporate services by the Company and by our subsidiary GC Gestión Compartida S.A. to third parties and subsidiaries of the Company. Additionally, this segment includes the production of digital content. Sales to third parties are largely derived from advertising in our webpages and portals. Cost of sales (excluding depreciation and amortization) is driven by salaries and professional fees paid to advisers.

Liquidity and Capital Resources We are a holding company and derive our operating income and cash flow from the operations of our direct and indirect subsidiaries, which in certain cases are subject to limitations on their ability to pay dividends. Our operations have historically relied on four main sources of liquidity: (1) equity contributions from our shareholders; (2) borrowings under bank facilities and debt security issuances; (3) cash flow from operations; and (4) seller financing. The conditions affecting the Argentine economy between 1998 and 2004 and the uncertainties as to future developments prevented several of our companies from raising the funds required to discharge their payment obligations under their then-outstanding financial debt as it became due in and after 2002. As a result, in 2002 each of Cablevisión, Multicanal, AGEA, AGR and ARTEAR defaulted on their then-outstanding financial debt and focused their efforts and resources on preserv- ing the continuation of their operations. In 2003, Cablevisión, Multicanal, AGEA, AGR and ARTEAR submitted debt restructuring proposals to their creditors, in certain cases relying on the expedited reorganization procedures (APE). AGEA and AGR completed the restructuring of their financial debt by the beginning of 2004. Cablevisión and Multicanal, instead, confronted significant opposition to the judicial confirmation of their respective APEs from certain minority creditors. In the case of Multicanal, its board of directors sought recognition of its APE in the United States under Section 304 of the U.S. Bankruptcy Code. Multicanal’s APE was confirmed in Argentina and recognized in the United States, subject to the implementation of certain remedies required by the Argentine court and the U.S. bankruptcy court. Multicanal consummated the transactions contemplated in its APE on 20 July 2006 and on 13 October 2006, the Argentine court recognised the compliance by Multicanal of all of the terms and conditions

A-24 of its APE. In the case of Cablevisión, however, the judicial confirmation of its APE in Argentina was appealed by creditors holding U.S.$30,000 in aggregate principal amount of debt subject to the APE, and such appeal is still pending. Nevertheless, on 7 October 2005 and thereafter, holders of more than 97% of Cablevisión’s financial indebtedness subject to the terms of the APE agreed to give effect to the transactions contemplated in Cablevisión’s APE with respect to their claims, thus allowing Cablevisión effectively to complete the restructuring of substantially all of its financial debt. Cablevisión also delivered into escrow the consideration that the remaining holders of its financial debt subject to the APE would be entitled to receive if the APE is finally judicially confirmed. Currently, U.S.$18 million are held in escrow by the trustee for the new debt securities issued by Cablevisión under the APE, for delivery to creditors that so far have declined to accept the terms of Cablevisión’s APE.

In connection with Cablevisión’s APE, its then shareholders contributed U.S.$55 million in equity on 3 October 2005, together with funds provided by Cablevisión, and made payments with respect to the cash option under Cablevisión’s APE. In connection with Multicanal’s APE, on 12 December 2003, we committed to contribute U.S.$15 million in equity, which, together with funds provided by Multicanal, were applied in July 2006 to make payments on account of the cash option in Multicanal’s APE.

We expect capital expenditures and the servicing of our financial debt to be our principal uses of cash. We expect cash flow from operations to be our principal source of liquidity. We also expect to raise funds through borrowings, if and when the market presents opportunities to do so. In particular, we will seek to refinance a portion of our outstanding debt through the incurrence of long-term indebtedness. Although the restructuring of substantially all the debt of our main subsidiaries outstanding prior to the 2002 crisis has enabled us to access the credit market on a voluntary basis, the terms of our outstanding debt contains significant restrictions. See “ — Indebtedness”.

Certain of our subsidiaries are required under the terms of their indebtedness to apply excess liquidity to prepay their outstanding debt and are subject to limitations on their ability to declare and pay dividends.

The table below reflects our cash and cash equivalents position at the dates indicated and the net cash provided by (used in) operating, investing and financing activities during the periods indicated:

Year Ended Six Months Ended 31 December 30 June 2004 2005 2006 2006 2007 (Unaudited) (Millions of Pesos) Cash and cash equivalents at the beginning of the year ...... 428.2 381.4 449.4 449.4 326.9 Cash provided by operating activities. . . 304.0 346.9 342.5 98.2 362.0 Of which Financial interest paid: ...... (15.9) (20.1) (196.6) (37.2) (105.6) Cash (used in) provided by investing activities ...... 98.6 (315.6) (199.8) (75.5) (191.9) Cash (used in) provided by financing activities ...... (453.6) 41.4 (274.2) 2.9 (99.8) Effect of exchange rate on cash and cash equivalents: ...... 4.2 (4.7) 9.1 8.1 6.8 Cash and cash equivalents at the end of the year/period...... 381.4 449.4 326.9 483.0 404.0

A-25 The following table sets forth cash flows provided by our operating activities for the six month periods ended 30 June 2007 and 2006 and the years ended 31 December 2006, 2005 and 2004:

Cash Flows Provided by Operating Activities Year Ended 31 December Six Months Ended 30 June 2004 2005 2006 2006 2007 (Unaudited) (Millions of Pesos) 304.0 346.9 342.5 98.2 362.0 Cash flows provided by our operating activities increased to Ps.362.0 million in the first six months 2007, from Ps.98.2 million in the first six months of 2006. The increase in cash flows is attributable mainly to the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital, and the growth in all our business segments. Cash flows provided by our operating activities decreased 1.3% to Ps.342.5 million in 2006, from Ps.346.9 million in 2005. This decrease in cash flows is attributable mainly to higher payments of interests (Ps.176.5 million) related to all of the accrued interests of Multicanal’s APE, interest payments related to the acquisition of Cablevisión and interest payments by Cablevisión and Multicanal under their outstanding debt instruments post-APE. These payments were partially offset by the consolidation of Cablevisión as a consequence of the increase in our ownership interest and the acquisition of Holding Teledigital in September 2006, and the growth of our operating performance in all of our business segments. Cash flows provided by operating activities increased 14.1% to Ps.346.9 million in 2005 from Ps.304.0 million in 2004. This increase in cash flows is attributable mainly to the variations in the working capital due to debt payments related to overdue programming fees and prepayments that were made during 2004 that were not made in 2005. We believe our working capital is sufficient to meet our present requirements. The following table sets forth cash (used in) provided by our investing activities (net of proceeds from sales) for the six month periods ended 30 June 2007 and 2006 and the years ended 31 December 2006, 2005 and 2004:

Cash (Used in) Provided by Investing Activities Year Ended 31 December Six Months Ended 30 June 2004 2005 2006 2006 2007 (Unaudited) (Millions of Pesos) 98.6 (315.6) (199.8) (75.5) (191.9) Cash used in investing activities increased by 154.0% to Ps.191.9 million for the first six months of 2007 compared to Ps.75.5 million for the same period in 2006. This increase is attributable mainly to the consolidation of Cablevisión as a consequence of the increase in our ownership interest in Cablevisión and the acquisition of Holding Teledigital, together with higher investments made in cable networks and set-top boxes. During 2006, we applied Ps.199.8 million to investing activities, a decrease of 36.7% from Ps.315.6 million in 2005. While we increased investments related to the acquisition of equipment for the provision of broadband services, and the construction, expansion and upgrading of existing systems, including the upgrade of networks to meet higher technological standards throughout the cable systems, and to offer a broader range of different programming alternatives, as well as

A-26 broadband services in certain areas, such increase was more than offset by the decrease in the cash applied to the acquisition of equity investees which in 2005 included our indirect acquisition of a minority interest in Cablevisión.

In 2005, we applied Ps.315.6 million to investing activities, compared to Ps.98.6 million generated in 2004 by the sale of a minority equity investment held in a foreign media company.

The following table sets forth the net cash (used in) provided by financing activities (excluding shareholders’ contributions) for the six months ended 30 June 2007 and 2006 and the years ended 31 December 2006, 2005 and 2004:

Net Cash (Used in) Provided by Financing Activities

Year Ended 31 December Six Months Ended 30 June 2004 2005 2006 2006 2007 (Unaudited) (Millions of Pesos) (453.6) 41.4 (274.2) 2.9 (99.8)

We used Ps.99.8 million for financing activities in the first six months of 2007, compared to Ps.2.9 million generated in the first six months of 2006. This variation is mainly attributable to the funds used in 2007 to cancel an outstanding balance of unpaid dividends declared in favour of our Controlling Shareholders by companies we absorbed in connection with our organisation and for which we became liable (Ps. 18 million), cancel part of our debt with JP Morgan (U.S.$8.0 million), payments of interests related to the increase in our ownership interest in Cablevisión, payments by Cablevisión to cancel its debt with Banco Nación (Ps.33.8 million) and payments by Cablevisión and Multicanal under their outstanding debt instruments. In 2006 we generated funds from the issuance by AGEA of its Ps.300 million Bonds due 2011, and applied funds in connection with cancellations of U.S.$74.8 million of outstanding debt by AGEA and AGR and short-term financial advances of Ps.49 million.

We used Ps.274.2 million for financing activities in 2006, compared to Ps.41.4 million generated in 2005. In 2006, Multicanal used Ps.230.7 million in connection with the consummation of its APE, including the payment of the cash option, and Teledigital used Ps.76.4 million to prepay a bank loan.

Since our establishment in 1999, we have not declared any dividends.

Indebtedness

See “Operating and Financial Review — Liquidity and Capital Resources — Indebtedness”

Interest Expense

The following table sets forth our interest expense for the periods indicated:

Interest Expense — Generated by Liabilities

Year Ended 31 December Six Months Ended 30 June 2004 2005 2006 2006 2007 (Unaudited) (Millions of Pesos) 225.5 244.1 258.5 135.0 120.3

A-27 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004

GRUPO CLARIN S.A.

CONSOLIDATED FINANCIAL STATEMENTS

As of and For the Years Ended December 31, 2006, 2005 and 2004

A-F-1 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004

CONSOLIDATED BALANCE SHEETS (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated) As of December 31, 2006 2005 2004 ASSETS Current assets Cash and cash equivalents...... 326,926,096 449,368,949 381,425,735 Trade receivables, net ...... 410,586,773 242,027,559 234,582,847 Other receivables, net ...... 321,623,061 393,735,983 160,582,038 Inventories...... 125,953,459 123,358,319 80,887,139 Other assets ...... 2,633,079 2,048,421 883,850 Total Current assets ...... 1,187,722,468 1,210,539,231 858,361,609

Trade receivables, net ...... 256,791 351,595 151,676 Other receivables, net ...... 280,624,182 203,144,624 370,777,132 Inventories...... 19,693,806 21,282,562 17,229,226 Investments in unconsolidated affiliates ...... 235,739,725 387,585,838 173,959,067 Other long-term investments ...... 3,253,123 46,972,692 9,409,303 Property, plant and equipment, net...... 1,025,303,658 416,890,707 398,929,750 Intangible assets, net...... 577,635,998 17,659,468 12,565,694 Goodwill ...... 2,909,035,200 1,156,573,808 1,147,419,027 Total Assets ...... 6,239,264,951 3,461,000,525 2,988,802,484

LIABILITIES Current liabilities Accounts payable ...... 404,856,453 264,399,733 270,279,535 Short-term debt and current portion of long-term debt ...... 432,292,273 2,783,565,381 2,282,958,804 Salaries and social security payable ...... 110,341,780 74,222,120 55,312,448 Taxes payable ...... 168,876,436 112,315,119 57,333,300 Other liabilities ...... 120,585,068 77,199,082 65,397,809 Total Current liabilities ...... 1,236,952,010 3,311,701,435 2,731,281,896 Accounts payable ...... 10,640,522 6,603,628 19,869,421 Long-term debt...... 2,359,962,873 473,233,900 638,644,883 Taxes payable ...... 14,461,838 5,632,206 2,003,997 Other liabilities ...... 988,384,168 17,088,474 31,024,137 Provisions ...... 99,385,136 49,634,790 40,454,519 Minority interest ...... 669,465,068 28,198,992 34,051,289 Commitments and contingencies (Note 13) Shareholders’ Equity (Deficit) Common shares Class A common shares Ps.1 par value per share, 70,880,304 shares authorized, issued and outstanding. Class B common shares Ps.1 par value per share, 133,006,887 shares authorized, issued and outstanding. Class C common shares Ps.1 par value per share, 25,112,689 shares authorized, issued and outstanding ...... 228,999,880 228,999,880 228,999,880 Preferred shares Class A preferred shares Ps.1 par value per share, 20,630,822 shares authorized, issued and outstanding. Class B preferred shares Ps.1 par value per share, 20,630,822 shares authorized, issued and outstanding . . 41,261,644 41,261,644 41,261,644 Additional paid-in capital ...... 901,082,526 901,082,526 901,082,526 Accumulated deficit ...... (297,126,532) (1,605,866,610) (1,675,886,555) Accumulated other comprehensive (loss) income ...... (14,204,182) 3,429,660 (3,985,153) Total Shareholders’ Equity (Deficit) ...... 860,013,336 (431,092,900) (508,527,658) Total Liabilities and Shareholders’ Equity (Deficit) ...... 6,239,264,951 3,461,000,525 2,988,802,484 The accompanying notes are an integral part of these consolidated financial statements.

A-F-2 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004

CONSOLIDATED STATEMENTS OF OPERATIONS (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated) For the Years Ended December 31, 2006 2005 2004 Net sales ...... 2,560,522,755 1,847,630,926 1,571,212,889 Cost of sales (excluding depreciation and amortization)...... (1,309,617,925) (1,002,142,096) (796,108,283) Selling expenses (excluding depreciation and amortization)...... (275,383,422) (214,350,837) (182,606,116) Administrative expenses (excluding depreciation and amortization) ...... (294,070,104) (200,219,142) (167,015,759) Depreciation of property, plant and equipment . . (112,760,310) (72,352,902) (88,221,070) Amortization of intangible assets ...... (23,770,439) (3,946,487) (5,412,168) Depreciation of other investments ...... (242,995) (96,245) (124,945) Operating income ...... 544,677,560 354,523,217 331,724,548 Financial results, net ...... 939,110,120 (305,261,164) 284,066,978 Equity in earnings from unconsolidated affiliates ...... 31,983,506 51,925,399 48,328,555 Gain on sale of subsidiaries, net...... 6,024,839 — — Income before income tax, tax on assets and minority interest ...... 1,521,796,025 101,187,452 664,120,081 Income tax and tax on assets — (expense) / benefit ...... (174,643,299) (28,067,334) 98,227,230 Minority interest ...... (38,412,648) (3,100,173) (2,192,392) Net income...... 1,308,740,078 70,019,945 760,154,919 Net income per common share: Basic ...... 5.56 0.15 3.32 Diluted ...... 4.84 0.15 2.81 Weighted average number of common shares outstanding: Basic ...... 228,999,880 228,999,880 228,999,880 Diluted ...... 270,261,524 228,999,880 270,261,524

The accompanying notes are an integral part of these consolidated financial statements.

A-F-3 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004

CONSOLIDATED STATEMENT OF CASH FLOWS (In Argentine Pesos (“Ps.”). — Unless Otherwise Stated) For the Years Ended December 31, 2006 2005 2004 Operating activities: Net income ...... 1,308,740,078 70,019,945 760,154,919 Adjustments for non-cash and non-operating items: Income tax and tax on assets ...... 174,643,299 28,067,334 (98,227,230) Accrued interest ...... 233,332,095 231,832,930 215,455,987 Adjustments to reconcile net income to cash provided by operating activities Depreciation of property, plant and equipment ...... 112,760,310 72,352,902 88,221,070 Amortization of intangible assets ...... 23,770,439 3,946,487 5,412,168 Depreciation of other investments ...... 242,995 96,245 124,945 Allowances for doubtful accounts...... (3,046,460) 636,552 13,961,809 Setting up of provision for contingencies ...... 11,450,165 20,238,646 18,861,578 Equity in earnings from unconsolidated affiliates ...... (31,983,506) (51,925,399) (48,328,555) Gain on sale of subsidiaries, net ...... (6,024,839) — — Minority interest ...... 38,412,648 3,100,173 2,192,392 Gain from troubled debt restructuring and other financial results ...... (1,231,045,750) 23,775,913 (560,789,496) (Gains) losses on sale of property, plant and equipment ...... (685,731) (1,246,357) 192,273 Others ...... 287,393 806,288 5,789,927 Changes in assets and liabilities Trade receivables ...... (122,194,340) (22,444,998) (34,244,924) Other receivables ...... (110,362,961) 24,563,898 1,067,065 Inventories ...... (7,053,687) (49,769,176) (24,410,711) Other assets ...... 11,463,493 (1,489,665) (2,692,984) Accounts payable ...... 45,468,872 21,620,167 (23,812,382) Salaries and social security payable ...... 15,524,732 18,071,182 6,445,722 Taxes payable ...... 55,939,037 13,514,795 (1,046,268) Other liabilities ...... 136,908,608 4,484,634 5,535,366 Provisions ...... (17,068,783) (15,223,518) (8,685,661) Payment of interest ...... (196,601,744) (20,099,165) (15,914,552) Collection of interest ...... 369,001 1,937,708 550,150 Collection of dividends ...... 9,065,306 10,058,358 9,551,953 Income tax and tax on assets payments ...... (109,816,418) (40,032,533) (11,315,372) Cash provided by operating activities ...... 342,494,252 346,893,346 304,049,189 Investing activities: Payment for the acquisition of property, plant and equipment ...... (243,969,782) (91,155,347) (64,314,862) Payment for the acquisition of subsidiaries and unconsolidated affiliates, net of cash acquired. . 15,945,485 (225,922,887) (8,096,477) Payment for the acquisition of other investments ...... (14,719,018) — — Payment for the acquisition of intangible assets ...... (2,877,476) (1,597,968) (1,883,978) Proceeds from sale of property, plant and equipment and other investments ...... 106,060 3,028,848 11,616,147 Proceeds from sale of non-current investments ...... — — 161,280,000 Restricted cash ...... 45,750,000 — — Cash (used in) provided by investing activities ...... (199,764,731) (315,647,354) 98,600,830 Financing activities: Loans obtained ...... 473,069,121 226,465,472 158,937,547 Repayment of loans — Principal ...... (703,934,201) (157,218,490) (577,866,651) Net payments for financial instruments ...... (9,431,983) — — Payments of seller financing ...... — (9,824,050) (9,987,505) Payments to minority interest ...... (1,256,381) (6,897,166) (4,488,037) Payment of fees on bank and financial debt restructuring ...... (32,670,018) (11,129,136) (20,148,453) Cash (used in) provided by financing activities ...... (274,223,462) 41,396,630 (453,553,099) EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS ...... 9,051,088 (4,699,408) 4,167,315 (Decrease) Increase in cash and cash equivalents...... (122,442,853) 67,943,214 (46,735,765) Cash and cash equivalents at the beginning of the year ...... 449,368,949 381,425,735 428,161,500 Cash and cash equivalents at the end of the year ...... 326,926,096 449,368,949 381,425,735

The accompanying notes are an integral part of these consolidated financial statements.

A-F-4 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004

CONSOLIDATED STATEMENT OF CASH FLOWS (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

For the Years Ended December 31, 2006 2005 2004 Supplemental cash flow information Acquisition of subsidiaries (see Note 6) Cash and cash equivalents ...... 156,189,444 — — Trade receivables ...... 48,291,078 — — Other receivables ...... 165,927,808 — — Other assets ...... 68,281,032 — — Investments in unconsolidated affiliates ...... 16,784 — — Goodwill...... 1,043,199,827 — — Property, plant and equipment, net ...... 450,130,263 — — Intangible assets, net ...... 84,300,729 — — Accounts payable ...... (113,492,152) — — Borrowings...... (1,205,607,360) — — Salaries and social security payable ...... (21,046,989) — — Taxes payable ...... (48,708,047) — — Other liabilities ...... (57,231,599) — — Provisions ...... (60,452,467) — — Minority interest ...... 12,908,635 — — Net value of assets consolidated ...... 522,706,986 — — Subscriber portfolio acquired (net of related deferred income tax). . . 317,144,763 — — Goodwill...... 811,464,963 — — Investments in unconsolidated affiliates ...... (248,740,050) — — Minority interest on net assets consolidated ...... (711,851,982) — — Purchase price ...... 690,724,680 — — Cash and cash equivalents acquired ...... (156,189,444) — — Seller financing ...... (570,380,882) — — Net cash received from the acquisition of subsidiaries ...... (35,845,646) — — Significant non cash investing and financing activities Capitalization of long-term debt ...... 423,261,248 — — Purchase of Cablevisión with seller financing ...... 570,380,882 — —

A-F-5 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (DEFICIT) AND OTHER COMPREHENSIVE (LOSS) INCOME (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

Accumulated Other Total Common Shares Preferred Shares Additional Accumulated Comprehensive Shareholders’ Shares Amount Shares Amount Paid-In Capital Deficit Income (Loss) Equity (Deficit) Balance at December 31, 2003 ...... 228,999,880 228,999,880 41,261,644 41,261,644 901,082,526 (2,436,041,474) 9,547,510 (1,255,149,914) Foreign currency translation adjustments ...... — — — — — — (13,532,663) (13,532,663) Net income for the year . . . . — — — — — 760,154,919 — 760,154,919 A-F-6 Balance at December 31, 2004 ...... 228,999,880 228,999,880 41,261,644 41,261,644 901,082,526 (1,675,886,555) (3,985,153) (508,527,658) Foreign currency translation adjustments ...... — — — — — — 7,414,813 7,414,813 Net income for the year . . . . — — — — — 70,019,945 — 70,019,945 Balance at December 31, 2005 ...... 228,999,880 228,999,880 41,261,644 41,261,644 901,082,526 (1,605,866,610) 3,429,660 (431,092,900) Foreign currency translation adjustments ...... — — — — — — (17,633,842) (17,633,842) Net income for the year . . . . — — — — — 1,308,740,078 — 1,308,740,078 Balance at December 31, 2006 ...... 228,999,880 228,999,880 41,261,644 41,261,644 901,082,526 (297,126,532) (14,204,182) 860,013,336

The accompanying notes are an integral part of these consolidated financial statements. GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated) NOTE 1. DESCRIPTION OF THE BUSINESS Grupo Clarín S.A. (“Grupo Clarín” or “the Company”) is a holding company that operates in the media industry. Its operating income and cash flows derive from the operations of its subsidiaries in which it directly or indirectly participates. These operations include cable television and Internet access services, newspaper and other printing and publishing activities, broadcast television, radio operations and television content production, on-line and new media services, and other media-related activities. A substantial portion of its revenues is generated in Argentina. Through its controlled companies and joint ventures, it is engaged primarily in the following business segments: a) Cable television and Internet access, b) Printing and publishing, c) Broadcasting and programming and d) Other.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation In preparing these consolidated financial statements, the Company has followed accounting policies that are in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). US GAAP differs in certain respects from Argentine accounting practice applied by the Company in its statutory financial statements prepared in accordance with accounting principles generally accepted in Argentina (“Argentine GAAP”) and in accordance with the Comisión Nacional de Valores (“CNV”) rules. The consolidated financial statements include 100% of the assets, liabilities, revenues, expenses and cash flows of Grupo Clarín and all entities in which the Company has a controlling voting interest (“subsidiaries”) required to be consolidated in accordance with US GAAP. When Grupo Clarín consolidates entities, the ownership interests of any minority parties are reflected as minority interest, and investment in entities in which the Company has 20% to 50% ownership, but not a controlling interest, are accounted for by the equity method. Intercompany accounts and transactions between consolidated entities have been eliminated in consolidation. The following chart includes the most significant consolidated subsidiaries as of each closing date (percentages show direct and indirect interest held by the Company). 2006 2005 2004 Cablevisión S.A. (“Cablevisión”) ...... 60.0% 20.0% — Multicanal S.A. (“Multicanal”) ...... 59.1% 100.0% 100.0% Teledigital Cable S.A. (“Teledigital”) ...... 60.0% — — Primera Red Interactiva de Medios Argentinos S.A. (“PRIMA”) . . . 59.1% 82.4% 82.4% Arte Gráfico Editorial Argentino S.A. (“AGEA”) ...... 100.0% 100.0% 100.0% Artes Gráficas Rioplatense (“AGR”) ...... 100.0% 100.0% 100.0% Editorial La Razón S.A. (“La Razón”) ...... 100.0% 100.0% 75.0% Arte Radiotelevisivo Argentino S.A. (“ARTEAR”)...... 99.2% 99.2% 99.2% Inversora de Eventos S.A. (“IESA”) ...... 100.0% 100.0% 100.0% Radio Mitre S.A. (“Radio Mitre”) ...... 100.0% 100.0% 100.0% Primera Red Interactiva de Medios Americanos Internacional S.A. (“PRIMA Internacional”)...... 100.0% 82.0% 82.0% Clarín Global S.A. (“Clarín Global”) ...... 100.0% 100.0% 100.0% GC Gestión Compartida S.A. (“GCGC”) ...... 100.0% 100.0% 100.0% Grupo Clarín Services LLC (“GC Services”) ...... 100.0% — — Vistone LLC (“Vistone”) ...... 100.0% 100.0% —

A-F-7 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

The Company has not identified any variable interest entity (“VIE”) as defined by FIN 46 (R).

Use of Estimates US GAAP requires management to make estimates that affect the reported amounts of assets and liabilities, and the reported amounts of revenues and expenses. The Company evaluates its estimates, including those related to tangible and intangible assets, doubtful accounts, inventories, provisions and income taxes, on an ongoing basis. The Company bases its estimates on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents are carried at cost, which approximates market value. Cash in foreign currency is converted into Ps. at the exchange rate prevailing as of each year end.

Concentration of Cash and Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents, accounts receivable, and short-term investments. The Company maintains cash and cash equivalents and other financial investments with various high credit quality financial institutions, in order to mitigate the amount of credit exposure to any one institution. The Company has not experienced any significant losses in such accounts. The Company does not depend on any single customer. The Company maintains reserves for potential credit losses based on impaired accounts, historical charge-off patterns and management judgment; historically such losses have not been significant and have been within management’s expectations.

Allowance for Doubtful Accounts The Company reviews its doubtful accounts on a monthly basis for estimated losses resulting from the inability of its customers to make required payments. The customer base in the cable television and Internet access segment is primarily residential in nature while the customer base of our publishing, printing and broadcast television operations involves a wide range of companies and, to a lesser extent individuals. Generally, the Company does not require collateral from its customers, although it does require that all advertising agencies, receiver agencies and direct advertisers that are granted financing to sell advertisement in its print media, provide AGEA security with respect to at least 70% of the payment obligations, in general by means of a mortgage or bank guaranty. The Company invoices most of its cable television and Internet access subscribers in advance. A majority of Argentine cable television subscribers pay their invoices in cash, and it encourages them to pay their monthly invoices by automatic credit card or bank account debits. The Company enforces a strict disconnection policy.

A-F-8 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

In determining the adequacy of allowances for doubtful accounts, the Company analyzes, among other things, historic bad debt experience, customer credit worthiness, current economic trends in Argentina and customer payment history.

Inventories Inventories are valued at lower of cost (standards approximating the first-in, first out method) or market. Costs included in inventories are based on invoiced cost and/or production costs, as applicable. Included in production costs are material, direct labor and allocated overhead. The Company writes down inventories for the difference between the carrying value of the inventories and their estimated market value. If actual market conditions are less favorable than those projected by management, additional write-downs may be required. Part of programming for initial broadcast over television networks is produced in Argentina. In- house production cost is fully expensed against the cost of sales after each relevant episode of a program or single program is broadcast or transmitted. Programming purchased from third parties, from its own producers and co-productions acquired in perpetuity, are expensed against the cost of sales over its estimated useful life, considering the expected future benefit period over which a given program will generate revenues (generally, over an eight-year period). The production costs related to a given program are capitalized over the expected future benefit period. Under this policy, the Company generally expenses substantially all of the production costs related to a given program in the year of its initial broadcast and defer and expense the remaining production costs over the remainder of the expected future benefit period. Rights related to feature films, series and single programs acquired in perpetuity for broadcasting by its cable signal Volver are expensed against the cost of sales over their estimated useful life (generally seven years), with a grace period of four years, amortized on a decreasing basis. Expected future benefit periods are estimated based on past historical revenue patterns for similar types of programming and any potential future events through which it can exploit or distribute our programming. The Company also purchases programming from, and enter into license agreements with, various third party programming producers and providers, pursuant to which it receives the rights to broadcast programming produced by third parties over its television networks in Argentina and/or its pay television and other media outlets. In the case of programming acquired from third parties, the expected future benefit period is estimated based on the anticipated number of showings in Argentina over the Company’s television network and/or its pay television and other media outlets.

Investment in Unconsolidated Affiliates Investments in companies in which the Company has significant influence, but less than a controlling voting interest, are accounted for using the equity method. This is generally presumed to exist when the Company owns between 20% and 50% of the investee.

Property, Plant and Equipment, Net Property, plant and equipment are stated at cost. The cost of additions and substantial improvements to property, plant and equipment is capitalized. The cost of maintenance and repairs of

A-F-9 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated) property, plant and equipment is charged to operating expenses. Property, plant and equipment are depreciated using straight-line methods over their estimated economic lives.

Goodwill and Intangible Assets, Net Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a business combination. Such fair values are determined by using primarily internal valuations, including discounted cash flows, external market values and others. Goodwill is not subject to amortization, but is subject to at least an annual assessment for impairment, applying a fair-value based test. Intangible assets resulting from the acquisitions of entities accounted for using the purchase method of accounting are estimated by management based on the fair value of assets received. Identifiable intangible assets are mainly comprised of subscriber portfolio acquired, which is amortized over its useful life determined on the basis of the churn rate of such acquired portfolio. These useful lives range from approximately 7 to 10 years.

Impairment of Long-Lived Assets The Company reviews long-lived assets for impairments whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the asset. If such assets are considered to be impaired on this basis, the impairment loss to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Goodwill is reviewed at least annually for impairment. Impairment of goodwill is tested at the reporting unit level by comparing the reporting unit’s carrying amount, including goodwill, to the fair value of the reporting unit. The fair values of the reporting units are estimated using a combination of the income or discounted cash flows approach and the market approach, which utilizes comparable companies’ data. If the carrying amount of the reporting unit exceeds its fair value, goodwill is considered impaired and a second step is performed to measure the amount of impairment loss, if any. No impairments were recognized during the reporting years.

Revenue Recognition Revenue is recognized when persuasive evidence of an arrangement exists, the fees are fixed or determinable, the product or service has been delivered and collectability is reasonably assured. The Company considers the terms of each arrangement to determine the appropriate accounting treatment. Revenues for each of the business segments identified by the Company are recognized when the following conditions are met. • Cable television and Internet access Subscriber fees and internet services are recognized as revenue in the period that the service is provided. Advertising revenues for cable television are recognized when the advertisement is aired and online advertising revenues are recognized over the period in which the advertisements are displayed.

A-F-10 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

• Printing and Publishing Advertising sales are determined by the prices achieved per single column centimeter (the advertising yield) and the number of advertising centimeters sold (advertising lineage) in the relevant period. Circulation sales include the price received from the sale of newspapers, magazines and other publications. Printing services sales consists mainly of fees received from the printing of magazines, books, supermarket leaflets and related products. Advertising sales from newspapers and magazines is recognized when the advertisements are published. Revenues from the sale of newspaper and magazines are recognized upon passing control to the buyer. Regarding to residual returns, the Company records, as deduction of revenue, the estimated impact of such returns. In determining the estimate of the sales to be returned as of the end of each fiscal year, the Company uses historical trends returns to calculate the amount. Revenues from printing services are recognized upon completion of the services and delivery of the related product and customer acceptance. • Broadcasting and Programming Advertising revenues for television and radio stations are recognized when the advertisement is aired. Revenues from programming and distribution of television content for broadcast channels are recognized when the programming service is provided. The Company believes that its revenue recognition policies conform to Staff Accounting Bulletin No. 104, “Revenue Recognition”.

Barter Transactions The Company enters into transactions that either exchange advertising for advertising (“Advertis- ing Barter”) or advertising for other products and services (“Non-advertising Barter”). Advertising Barter transactions are recorded at the estimated fair value of the advertising given in accordance with the provisions of Emerging Issues Task Force (“EITF”) Issue No. 99-17, Accounting for Advertis- ing Barter Transactions. Revenue from barter transactions is recognized when advertising is provided, and services received are charged to expense when used. Revenues for Non-advertising Barter transactions are recognized at the estimated fair value when the product is available for telecast and the advertising spots received under such contracts are either used or sold to third parties. Revenue from barter transactions is not material to the Company’s consolidated statement of operations for any of the fiscal years presented herein.

Advertising Cost Advertising costs are expensed as incurred. Advertising expenses in 2006, 2005 and 2004 totaled approximately 77.7, 66.8 and 49.4 million, respectively.

Other Comprehensive (Loss) Income Other Comprehensive (Loss) Income is reported on the accompanying consolidated statement of shareholders’ equity (deficit) and other comprehensive (loss) income and consists of (loss) income and other gains and losses affecting shareholders’ equity (deficit) that, under US GAAP, are excluded from net income. For the Company, such item includes the cumulative translation adjustment relating to the translation of the financial statements of the Company’s foreign subsidiaries.

A-F-11 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

Fair Value of Financial Instruments The carrying amounts of cash, accounts receivables and short-term obligations approximate their fair value, because of the short-term maturities of these instruments. The fair value of long-term debt and non-current seller financing was estimated based on the current rates available to the Company for debt of similar remaining maturities. Fair value of derivative financial instruments represents the estimated amount that would have been required to terminate the contracts. The estimated fair values of financial instruments (amounts stated in millions of Ps.) are as follows, except for those financial instruments noted above for which the carrying values approximated fair values: 2006 2005 2004 Carrying Fair Carrying Fair Carrying Fair Amount Value Amount Value Amount Value Long-term debt ...... 2,536 1,240 2,149 989 2,260 1,054 Seller financing ...... 851 610 2 2 16 13

Foreign Currency Translation Management has determined that for all of the Company’s foreign subsidiaries the local currency is their functional currency. Accordingly, these foreign subsidiaries translate assets and liabilities from their local currencies to Ps. using year end exchange rates while income and expense accounts are translated at the average rates in effect during the year. The resulting translation adjustment is recorded as part of Other Comprehensive (Loss) Income, a component of shareholders’ equity (deficit). Gains and losses resulting from transactions denominated in non-functional currencies are recognized in earnings. Net foreign currency transaction (losses) gains are included in the consolidated statements of operations under the caption “Financial results, net” and amounted to 4.2, (51.5) and (19.2) million for the years ended December 31, 2006, 2005 and 2004, respectively.

Derivative Financial Instruments The Company uses derivative instruments, including interest rate swap and foreign exchange contracts to manage its exposure to interest rate and foreign exchange rate risks. The Company accounts for its derivatives in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 133 “Accounting for Derivative Instruments and Hedging Activities” as amended by SFAS No. 138 “Accounting for Certain Derivative Instruments and Certain Hedging Activities” and SFAS No. 149 “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”. The Company does not hold or issue financial instruments for speculative or trading purposes. Refer to Note 16 for additional information.

Income Taxes The Company accounts for income tax following the liability method of accounting which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred tax assets are also recognized for tax loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those

A-F-12 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated) temporary differences are expected to be recovered or settled. The effect on deferred tax assets or liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded when, based on the available evidence, it is more likely than not that all or a portion of the Company’s deferred tax assets will not be realized. The Company’s income tax expense consists of taxes currently payable, if any, plus the change during the period in the Company’s deferred tax assets and liabilities.

Tax on assets balance has been capitalized under the caption Other non-current receivables, since the Company has estimated, based on its current business plans, that the amounts paid for this tax will be recoverable within the statute of limitations.

Troubled Debt Restructurings

The Company accounts for debt restructurings, in accordance with SFAS No. 15, “Accounting for Debtors and Creditors for Troubled Debt Restructurings”. The statement requires that a debtor should (a) recognize a gain or loss by reducing the carrying amount of the debt by the fair value of the assets or equity interest transferred, and (b) account for the remainder of the restructuring as a modification of debt terms. When the terms of a debt are adjusted in a troubled-debt restructuring, the total amount of the future cash payments should be determined. If the carrying amount of debt is less than the aggregate future cash payments required by the new debt term, the debtor should amortize the difference over the life of the new debt as interest expense using the effective interest method. No gain or loss is recognized in the period of extinguishments. If the carrying amount of debt is greater than the aggregate future cash payments required by the new debt term, the debtor should reduce the carrying value of debt to an amount equal to the total future cash payments and recognize the reduction an extraordinary gain. No interest expense should be recorded.

Recent Accounting Pronouncements

Accounting for certain Hybrid Financial Instruments

In February 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 155, “Accounting for Certain Hybrid Financial Instruments, an amendment of FASB Statements No. 133 and 140”. This Statement permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation, clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS No. 133, establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestand- ing derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation and amends SFAS No. 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. This Statement is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year that begins after September 15,

A-F-13 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

2006. The adoption of SFAS No. 155 will not have any material impact on the Company’s consolidated financial statements.

Accounting for Servicing of Financial Assets

In March 2006, the FASB issued SFAS No. 156 “Accounting for Servicing of Financial Assets”, which amends FASB Statement No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”, with respect to the accounting for separately recognized servicing assets and servicing liabilities. This Statement requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract in certain situations; requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, if practicable; and permits an entity to choose between an Amortization method or a Fair value measurement method to measure each class of separately recognized servicing assets and servicing liabilities. This statement also requires separate presentation of servicing assets and servicing liabilities subsequently measured at fair value in the statement of financial position and additional disclosures for all separately recognized servicing assets and servicing liabilities. This Statement is effective for fiscal years that begin after September 15, 2006. The adoption of SFAS No. 156 will not have any material impact on the Company’s consolidated financial statements.

Accounting for Sabbatical Leave and Other Similar Benefits

In June 2006, the Emerging Issues Task Force (“EITF”) reached a consensus on EITF Issue No. 06-02, “Accounting for Sabbatical Leave and Other Similar Benefits” (“EITF 06-02”). EITF 06-02 provides than an employee’s right to a compensated absence under a sabbatical leave or similar benefit arrangement in which the employee is not required to perform any duties during the absence is an accumulating benefit. Therefore, such arrangement should be accounted for as a liability with the cost recognized over the service period during which the employee earns the benefit. The provisions of EITF 06-02 became effective for the Company as of January 1, 2007. The adoption of EITF No. 06-02 will not have any material impact on the Company’s consolidated financial statements.

Accounting for Uncertainty in Income Taxes

In June 2006, the FASB issued the Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 addresses the recognition and measurement of uncertain income tax position using a “more-likely-than-not” threshold and introduces new disclosures requirements. The evaluation of a tax position in accordance with FIN 48 is a two-step process: a) determines whether it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position; and b) a tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company is currently analyzing the impact that the adoption of FIN 48 will have on the Company’s financial position and results of operations.

A-F-14 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

Fair Value Measurements In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). The changes to current practice resulting from the application of SFAS 157 relate to the definition of fair value, the methods used to estimate fair value, and the requirement for expanded disclosures about estimates of fair value. The definition of fair value retains the exchange price notion in earlier definitions of fair value. SFAS 157 clarifies that the exchange price is the price in an orderly transaction between market participants to sell the asset or transfer the liability in the market in which the reporting entity would transact for the asset or liability. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The adoption of SFAS 157 will not have a significant impact on the Company’s financial position and results of operations.

Fair value for Financial Assets and Liabilities In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an amendment of FASB Statement No. 115”. This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent with the Board’s long-term measurement objectives for accounting for financial instruments. The adoption of SFAS No. 159 will not have any material impact on the Company’s consolidated financial statements.

A-F-15 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

NOTE 3. EARNINGS PER SHARE Basic income per share for the Company’s common shares is computed by dividing net income available to common shareholders attributable to common shares for the year by the weighted average number of common shares outstanding during the year. Net income available to common shareholders is computed by deducting from net income accretion of preferred shares. Diluted net income per common share is computed based on the average number of common shares outstanding and, when dilutive, potential common shares from preferred shares using the if converted method. Net income per common share for the years ended December 31, 2006, 2005 and 2004 is as follows: Year Ended December 31, 2006 2005 2004 Numerator Net income ...... 1,308,740,078 70,019,945 760,154,919 Adjustment for preferred shares ...... (35,000,000) (35,000,000) — Net income available to common shareholders for Basic earnings per share ...... 1,273,740,078 35,019,945 760,154,919 Adjustment for preferred shares ...... 35,000,000 — — Net income available to common shareholders for Diluted earnings per share ...... 1,308,740,078 35,019,945 760,154,919 Denominator: Weighted average of common shares outstanding for Basic earnings per share ...... 228,999,880 228,999,880 228,999,880 Adjustment for Preferred shares ...... 41,261,644 — 41,261,644 Adjusted weighted average of common shares outstanding for Diluted earnings per share ...... 270,261,524 228,999,880 270,261,524 Basic net income per share ...... 5.56 0.15 3.32 Diluted net income per share ...... 4.84 0.15 2.81

A-F-16 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

NOTE 4. BREAKDOWN OF CERTAIN BALANCE SHEET ACCOUNTS Investments in Unconsolidated Affiliates As of December 31, 2006 2005 2004 Papel Prensa S.A.I.C.F. y de M. (“Papel Prensa”) ...... 92,733,318 89,863,170 89,675,247 Compañía Inversora de Medios de Comunicación S.A. (“CIMECO”) ...... 64,419,417 57,579,755 44,162,805 Impripost Tecnologías S.A. (“Impripost”) . . . . 6,562,859 5,247,978 4,154,585 Ideas del Sur S.A. (“Ideas del Sur”) ...... 18,308,253 — — Pol-Ka Producciones S.A. (“Pol-Ka”) ...... 9,023,770 8,491,596 8,423,420 Tele Red Imagen S.A. (“TRISA”) ...... 15,134,927 9,801,636 8,904,299 Televisión Satelital Codificada S.A. (“TSC”) . . 14,605,482 8,836,168 10,053,883 Cablevisión ...... — 196,697,608 — Advances for future acquisitions of investments ...... 5,992,007 6,432,460 150,000 Other investments...... 8,959,692 4,635,467 8,434,828 235,739,725 387,585,838 173,959,067

Interest in Unconsolidated Capital and Affiliates Main Activity Votes Papel Prensa ...... Paper manufacture 36.99% CIMECO ...... Investing 33.33% Impripost ...... Printer 50.00% Ideas del Sur...... Production of television programmes 30.00% Pol-Ka ...... Production of television programmes 30.00% TRISA ...... Production and exploitation of sports events 50.00% TSC ...... Exploitation of transmission rights of sports events 50.00%

A-F-17 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

Summarized Financial Information of Unconsolidated Affiliates The following table provides summarized financial information on a 100% basis, for the main affiliates accounted for by the equity method as of and for the year ended December 31, 2005 (amounts stated in millions of Ps.): Company Cablevisión Papel Prensa CIMECO TRISA Current assets ...... 401.63 142.68 57.75 92.36 Non-current assets ...... 2,721.23 158.81 143.82 37.45 Current liabilities ...... 294.07 54.56 35.03 68.78 Non-current liabilities ...... 1,111.61 — 26.32 42.49 Net sales ...... 883.47 205.78 118.73 174.41 Operating income ...... 1,903.19 35.49 35.58 12.51 Net income ...... 2,041.73 22.59 23.23 10.66

Trade Receivables, Net Trade receivables, net consist of: As of December 31, 2006 2005 2004 Current Trade receivables ...... 477,292,739 308,504,139 314,661,939 Less: Allowance for doubtful accounts...... (66,705,966) (66,476,580) (80,079,092) 410,586,773 242,027,559 234,582,847 Non Current Trade receivables ...... 271,791 360,595 151,676 Less: Allowance for doubtful accounts...... (15,000) (9,000) — 256,791 351,595 151,676

A-F-18 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

Other Receivables, Net Other receivables, net consist of: Current Reserve account ...... 56,838,603 — — Net deferred tax assets ...... 127,280,250 289,650,824 59,642,460 Tax credits ...... 24,799,537 12,299,266 14,945,251 Court-ordered and guarantee deposits ...... 8,159,912 13,920,340 17,253,917 Prepaid expenses ...... 7,973,629 7,377,492 7,570,493 Advance payments...... 20,333,070 19,051,124 19,518,134 Related parties ...... 39,176,503 15,106,121 11,114,805 Dividends receivable ...... 4,787,355 3,538,300 499,595 Other receivables...... 6,261,508 5,091,924 7,405,943 Others ...... 27,398,715 27,992,030 22,876,767 Subtotal ...... 323,009,082 394,027,421 160,827,365 Less: Allowance for other doubtful accounts . . . . (1,386,021) (291,438) (245,327) 321,623,061 393,735,983 160,582,038 Non Current Net deferred tax assets ...... 177,504,658 117,046,644 301,352,234 Tax credits ...... 84,738,696 23,193,913 16,400,494 Guarantee deposits ...... 178,194 45,500,903 44,778,420 Prepaid expenses ...... 3,811,809 12,127,625 6,859,897 Advances to personnel...... 524,281 1,055,587 779,682 Derivatives ...... 6,963,398 — — Others ...... 8,686,294 5,065,158 1,451,611 Subtotal ...... 282,407,330 203,989,830 371,622,338 Less: Allowance for other doubtful accounts . . . . (1,783,148) (845,206) (845,206) 280,624,182 203,144,624 370,777,132

A-F-19 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

Inventories Inventories consist of: Current Film products and rights ...... 29,796,856 29,605,539 26,911,095 Finished goods ...... 6,965,689 8,240,331 4,049,048 Products in process ...... 1,671,961 1,592,996 1,406,961 Raw materials and supplies ...... 79,052,585 71,297,310 46,462,923 Other ...... 3,756,722 22,143 17,816 Subtotal ...... 121,243,813 110,758,319 78,847,843 Advances to suppliers...... 4,709,646 12,600,000 2,039,296 125,953,459 123,358,319 80,887,139 Non Current Film products and rights ...... 19,693,806 21,282,562 17,229,226 19,693,806 21,282,562 17,229,226

Accounts Payable Accounts payable consist of: As of December 31, 2006 2005 2004 Current Suppliers ...... 374,028,414 220,183,719 259,334,124 Related parties ...... 30,828,039 44,216,014 10,945,411 404,856,453 264,399,733 270,279,535 Non Current Suppliers ...... 10,640,522 3,118,675 6,215,646 Related parties ...... — 3,484,953 13,653,775 10,640,522 6,603,628 19,869,421

A-F-20 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

Other Liabilities Other liabilities consist of: Current Related parties ...... 3,003,757 417,200 1,815,223 Seller financing(1)...... 41,171,557 12,303,712 9,623,021 Dividends payable ...... 15,026,649 14,449,678 13,317,884 Advances from clients...... 29,773,507 23,905,105 14,768,445 Other ...... 31,609,598 26,123,387 25,873,236 120,585,068 77,199,082 65,397,809 Non Current Seller financing(1)...... 850,590,278 2,236,718 15,711,541 Net deferred tax liabilities ...... 136,372,019 — — Non-current investments ...... — 13,169,575 11,112,481 Other ...... 1,421,871 1,682,181 4,200,115 988,384,168 17,088,474 31,024,137

(1) Seller financing includes the amounts arising from the acquisition of Cablevisión and related transactions in 2006, for principal amounts of US$157.8 million and 360.9 million (refer to Note 6). Additionally it includes the outstanding balances originated in the acquisitions of Telecor S.A.C.I. (“Telecor”) and La Razón in 2000.

NOTE 5. GOODWILL AND INTANGIBLE ASSETS, NET The breakdown of Goodwill is as follows: As of As of December 31, Acquisitions/ December 31, 2005 (Dispositions) 2006 Comercializadora de Productos Gráficos Brasileros Ltda...... — 19,947,800 19,947,800 Telecor...... 18,854,954 — 18,854,954 Teledifusora Bahiense S.A. (“Telba”). . 1,929,235 — 1,929,235 Cablevisión ...... — 1,652,754,542 1,652,754,542 Teledigital...... — 201,910,249 201,910,249 Multicanal and subsidiaries ...... 1,132,761,628 (122,151,199) 1,010,610,429 PRIMA ...... 1,835,769 — 1,835,769 Other ...... 1,192,222 — 1,192,222 1,156,573,808 1,752,461,392 2,909,035,200

A-F-21 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

As of As of December 31, Acquisitions/ December 31, 2004 (Dispositions) 2005 Telecor...... 18,854,954 — 18,854,954 Telba ...... 1,929,235 — 1,929,235 Multicanal and subsidiaries ...... 1,124,505,774 8,255,854 1,132,761,628 PRIMA ...... 1,835,769 — 1,835,769 Other ...... 293,295 898,927 1,192,222 1,147,419,027 9,154,781 1,156,573,808

As of As of December 31, Acquisitions/ December 31, 2003 (Dispositions) 2004 Telecor...... 18,854,954 — 18,854,954 Telba ...... 1,929,235 — 1,929,235 Multicanal and subsidiaries ...... 1,119,974,513 4,531,261 1,124,505,774 PRIMA ...... 1,835,769 — 1,835,769 Other ...... 321,080 (27,785) 293,295 1,142,915,551 4,503,476 1,147,419,027

The components of Goodwill by segments are as follow: As of December 31, 2006 2005 2004 Cable television and Internet access . . 2,867,110,989 1,134,597,397 1,126,341,543 Printing and publishing ...... 21,140,022 1,192,222 293,295 Broadcasting and programming ...... 20,784,189 20,784,189 20,784,189 2,909,035,200 1,156,573,808 1,147,419,027

The breakdown of Intangible assets, net is as follows: As of December 31, 2006 Accumulated Gross amortization Net Editing/exploitation rights ...... 8,154,389 (3,817,074) 4,337,315 Subscriber portfolio acquired ...... 597,236,297 (43,606,861) 553,629,436 Trademarks and patents ...... 14,061,092 (699,020) 13,362,072 Others ...... 46,062,032 (39,754,857) 6,307,175 665,513,810 (87,877,812) 577,635,998

A-F-22 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

As of December 31, 2005 Accumulated Gross amortization Net Editing/exploitation rights ...... 3,232,219 (87,551) 3,144,668 Subscriber portfolio acquired ...... 6,094,293 (304,715) 5,789,578 Trademarks and patents...... 1,282,516 (760,520) 521,996 Others ...... 43,406,780 (35,203,554) 8,203,226 54,015,808 (36,356,340) 17,659,468

As of December 31, 2004 Accumulated Gross amortization Net Editing/exploitation rights ...... 3,569,722 (1,805,385) 1,764,337 Trademarks and patents...... 1,162,203 (687,174) 475,029 Others ...... 43,171,959 (32,845,631) 10,326,328 47,903,884 (35,338,190) 12,565,694

The amortization expense for each of the five succeeding fiscal years is estimated in approximately 64 million.

NOTE 6. BUSINESS COMBINATIONS On September 26, 2006, through a series of related transactions, the Company and Fintech Media LLC, an affiliate of Fintech Advisory, Inc. (together with all of its affiliates, “Fintech”), increased their holdings of Cablevisión’s share capital to approximately 60% and 40%, respectively. Grupo Clarín incurred US$157.8 million of seller financing, maturing on September 26, 2009 and accruing interest payable every six month as from March 26, 2007, at 6-month LIBOR plus a 3.75% spread. The original maturity of these securities may be extended until September 26, 2010 or September 26, 2011, under certain circumstances. In a simultaneous transaction, Cablevisión acquired 100% of the capital stock of Holding Teledigital Cable S.A. (“Holding Teledigital”) from one of the prior shareholders of Cablevisión. Cablevisión made irrevocable capital contributions to Holding Teledigital of approximately 76.4 million to permit the immediate prepayment of outstanding bank debt and seller financing debt of Holding Teledigital. Additionally, Multicanal acquired 100% of the capital stock of PRIMA from PRIMA Internacional incurring in 77.5 million of seller financing, maturing on September 26, 2009 and accruing interest payable every six month as from March 26, 2007, at a variable rate established by the BADLAR plus a fixed 6% spread, subject to certain ceilings. Furthermore, Cablevisión acquired 98.5% of the shares of common stock of Multicanal, from the Company, AGEA and Fintech, incurring in 824.8 million of seller financing, maturing on September 26, 2009 and accruing interest payable every six month as from March 26, 2007, at a variable rate established by the BADLAR plus a fixed 6% spread, subject to certain ceilings. The previously mentioned transactions performed between the Company and its subsidiaries have been eliminated for consolidation purposes.

A-F-23 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

The transaction was accounted for under the purchase method of accounting. The application of the purchase of accounting requires that the total purchase price be allocated to the fair value of assets acquired and liabilities assumed based on their fair values at the acquisition date, with amounts exceeding the fair values being recorded as goodwill. The allocation process requires an analysis of acquired property, plant and equipment, contracts, subscriber portfolio, contractual commitments, legal contingencies and brand value to identify and record the fair value of all assets acquired and liabilities assumed. On October 4, 2006, the Company and the parties involved in the above-mentioned transactions filed for the National Committee for the Defense of Competition (“CNDC” for its Spanish acronym) approval of the acquisition. On November 6, 2006, the CNDC notified the Company of its first request for additional information which was submitted on February 26, 2007. On May 22, 2007 the CNDC made a further request for information, which was submitted on July 2, 2007. On July 30, 2007 the CNDC notified the Company that the first stage of the procedure (form F-1) had been completed and requested the parties to submit form F-2, providing additional information regarding the impact of the transactions on competition in the relevant markets. Although the Company believes that the transactions that have been filed for CNDC approval meet the standards for such approval under the Local Antitrust Law, there is no assurance that this approvals will be obtained or that the CNDC will not impose conditions to their approval, which could include a disposal of operations or not approve one or more of the transactions. In addition, the Company cannot assure that third parties will not challenge the CNDC’s decision or aspects related to any conditions that the CNDC may impose. The following table summarizes the fair values of the Cablevisión assets acquired and liabilities assumed and related deferred income taxes as of acquisition date (amounts stated in millions of Ps.). Property, plant and equipment, net ...... 162.60 Intangible assets, net ...... 376.44 Goodwill ...... 644.96 Other assets ...... 159.02 Total assets acquired ...... 1,343.02

Long-term debt ...... (426.73) Deferred tax liabilities generated by fair value valuation...... (142.17) Other liabilities ...... (95.45) Total liabilities assumed ...... (664.35) Minority interest ...... 13.92 Net assets acquired ...... 692.59 The 376.44 million of acquired intangible assets were assigned to subscriber portfolio, subject to an amortization over a useful life ranging from approximately 7 to 10 years. The following unaudited pro forma condensed consolidated results of operations has been compiled to show what our financial results for the years ended December 31, 2006 and 2005 might have been had the following been in place on January 1st, 2005: • the increase of our ownership interest in Cablevisión to 60% of total capital and the related incurrence of seller financing; • the acquisition by Cablevisión of 100% of the share capital of Teledigital;

A-F-24 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

• the pre-payment by Teledigital of 77.5 million under an outstanding loan in connection with its acquisition by Cablevisión; • the acquisition by Multicanal of 100% of the share capital of PRIMA; and • the acquisition by Cablevisión of 98.5% of the share capital of Multicanal and the related incurrence of seller financing. This unaudited pro forma consolidated results of operations is furnished for informational purposes only and does not purport to reflect our results of operations that would have actually resulted had each of the transactions and other adjustments above been effected on the dates indicated. Further, our pro forma results of operations are not necessarily indicative of our results of operations that may be obtained in the future. Amounts are stated in millions of Ps. For the Years Ended December 31, December 31, 2006 2005 (Unaudited) (Unaudited) Net sales ...... 3,414.1 2,814.6 Net income ...... 1,222.8 56.0 Net income per common share: - Basic(1) ...... 5.19 0.09 - Diluted ...... 4.52 0.09

(1) See Note 3.

A-F-25 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

NOTE 7. PROPERTY, PLANT AND EQUIPMENT, NET The breakdown of Property, plant and equipment, net is as follows:

As of December 31, Estimated 2006 2005 2004 Useful Lives Real property...... 279,499,215 175,056,772 174,284,535 50 Furniture and fixture ...... 63,735,021 40,639,216 35,728,318 10 Telecommunication, audio and video equipment ...... 217,396,092 94,448,446 85,586,608 3 External network and broadcasting equipment ...... 2,390,223,287 727,063,251 756,928,288 14 Computer equipment and software ...... 284,851,376 114,729,203 107,085,132 4 Technical equipment ...... 9,869,366 7,977,236 7,562,686 10 Workshop machinery ...... 224,488,828 220,641,177 217,707,181 10 Tools ...... 26,950,757 8,353,420 7,794,382 4 Spare parts ...... 14,059,725 11,909,705 10,046,226 5 Installations ...... 37,714,783 44,859,003 41,712,921 10 Vehicles...... 77,361,394 19,406,950 17,088,199 5 Plots ...... 8,261,144 6,688,594 4,895,529 5 Leased assets ...... 73,854 67,404 67,404 5 Other materials and equipment . . . . 159,068,026 47,830,571 26,214,617 — Works in progress ...... 59,211,523 26,672,607 16,724,259 — Leasehold improvements ...... 34,794,973 7,076,802 6,370,061 3 Advances to suppliers ...... 1,102,178 1,892,629 1,155,321 — Subtotals ...... 3,888,661,542 1,555,312,986 1,516,951,667 Less accumulated depreciation . . . . (2,863,357,884) (1,138,422,279) (1,118,021,917) 1,025,303,658 416,890,707 398,929,750

NOTE 8. ADDITIONAL FINANCIAL INFORMATION Financial results, net, consist of: Year Ended December 31, 2006 2005 2004 Interest income ...... 25,145,382 12,234,242 9,996,584 Interest expense ...... (258,477,477) (244,067,172) (225,452,571) Exchange difference ...... 4,172,689 (51,531,980) (19,206,053) Gain from troubled debt restructuring. . . . 1,222,055,813(1) 33,999,621 574,396,398 Others ...... (53,786,287) (55,895,875) (55,667,380) 939,110,120 (305,261,164) 284,066,978

(1) Includes the result from the dilution of the Company’s ownership in Multicanal as a result of its troubled debt restructuring (see Note 15).

A-F-26 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

NOTE 9. COMPREHENSIVE (LOSS) INCOME The following represents the components of Other Comprehensive Income (“OCI”), net of taxes, for the years ended December 31: 2006 2005 2004 Net income ...... 1,308,740,078 70,019,945 760,154,919 Other comprehensive (loss) income, net: Foreign currency translation adjustments ...... (17,633,842) 7,414,813 (13,532,663) Total comprehensive income, net ...... 1,291,106,236 77,434,758 746,622,256

NOTE 10. SEGMENT INFORMATION SFAS No. 131 “Disclosure about Segments of an Enterprise and Related Information” requires that a public business enterprise report financial and descriptive information about its reportable operating segments. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company is mainly engaged in media and entertainment activities, which are carried out through the companies in which it holds a participating interest. Therefore, the following business segments have been identified: • Cable television and Internet access: it is basically comprised by the operations of its subsidiary Cablevisión together with its subsidiaries, mainly Multicanal, Teledigital and PRIMA. • Printing and publishing: it is basically comprised by the operations of its subsidiary AGEA and its subsidiaries AGR, Tinta Fresca Ediciones S.A. (“Tinta Fresca”), La Razón, Ferias y Exposiciones Argentinas S.A. and Oportunidades S.A. and its equity investments in CIMECO and Papel Prensa. • Broadcasting and programming: it is basically comprised by the operations of its subsidiaries ARTEAR, IESA and Radio Mitre, and their respective subsidiaries, including Telecor, Telba, Radio Televisión Río Negro Sociedad del Estado LU 92 Canal 10 — UTE, and their equity investments in Pol-Ka, Ideas del Sur, TRISA and TSC. Additionally, the Company is engaged in other related business, which was included under “Other”. These segments include the Company’s own operations (particular to a holding company) and those carried out by its directly and indirectly controlled subsidiaries GCGC and Clarín Global.

A-F-27 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

The following tables summarize the information as of December 31, 2006, 2005 and 2004 for each of the businesses segments identified by the Company: Cable Television Printing Broadcasting and Internet and and Access Publishing Programming Other Eliminations Total INFORMATION ARISING FROM CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2006 Netsalestothirdparties...... 1,226,309,460 887,698,980 367,683,112 78,831,203 — 2,560,522,755 Intersegment net sales ...... 48,474,550 42,111,043 98,032,425 24,117,553 (212,735,571) — Netsales...... 1,274,784,010 929,810,023 465,715,537 102,948,756 (212,735,571) 2,560,522,755 Cost of sales (excluding depreciation and amortization) ...... (578,088,781) (486,268,111) (313,655,685) (23,003,950) 91,398,602 (1,309,617,925) Selling expenses (excluding depreciation and amortization) . . . (179,900,029) (100,306,220) (35,693,768) (8,225,007) 48,741,602 (275,383,422) Administrative expenses (excluding depreciation and amortization) . . . (172,591,310) (100,862,748) (59,321,800) (34,059,554) 72,765,308 (294,070,104) Depreciation of property, plant and equipment ...... (83,711,579) (15,238,888) (12,333,866) (1,475,977) — (112,760,310) Amortization of intangible assets . . . (21,774,751) (1,507,432) (390,845) (97,411) — (23,770,439) Depreciation of other investments . . . — (70,981) — (172,014) — (242,995) Operating Income...... 238,717,560 225,555,643 44,319,573 35,914,843 169,941 544,677,560 Financial results, net ...... 994,251,879 (19,621,593) (12,069,922) (23,280,303) (169,941) 939,110,120 Equity in earning (losses) from unconsolidated affiliates ...... 34,119,928 (14,302,068) 16,115,213 (3,949,567) — 31,983,506 Gain on sale of subsidiaries, net ..... 6,024,839 — — — — 6,024,839 Income before income tax, tax on assets and minority interest ..... 1,273,114,206 191,631,982 48,364,864 8,684,973 — 1,521,796,025 Income tax and tax on assets (expense) benefit ...... (130,083,030) (72,755,335) (11,444,819) 39,639,885 — (174,643,299) Minorityinterest...... (37,495,122) 68,428 (1,198,066) 212,112 — (38,412,648) Net income ...... 1,105,536,054 118,945,075 35,721,979 48,536,970 — 1,308,740,078 INFORMATION ARISING FROM CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2006 Total Assets ...... 5,079,617,111 827,215,614 428,098,212 433,739,817 (529,405,803) 6,239,264,951 Total Liabilities ...... 3,403,714,859 637,993,174 249,512,742 947,971,575 (529,405,803) 4,709,786,547 ADDITIONAL CONSOLIDATED INFORMATION AS OF DECEMBER 31, 2006 Acquisition of property, plant and equipment ...... 224,430,307 38,524,738 13,637,688 1,529,705 (34,152,656) 243,969,782 Acquisition of intangible assets . . . . 14,364,252 2,635,191 35,756,472 — — 52,755,915 Non-cash expenses ...... (20,929,065) 11,002,082 (1,392,604) (16,194) — (11,335,781)

A-F-28 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

Cable Television Printing Broadcasting and Internet and and Access Publishing programming Other Eliminations Total INFORMATION ARISING FROM CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2005 Netsalestothirdparties...... 733,894,382 757,332,630 344,795,266 11,608,648 — 1,847,630,926 Intersegment net sales ...... 8,891,031 27,628,307 22,298,716 48,209,918 (107,027,972) — Netsales...... 742,785,413 784,960,937 367,093,982 59,818,566 (107,027,972) 1,847,630,926 Cost of sales (excluding depreciation and amortization) ...... (397,778,825) (395,452,047) (213,347,952) (21,380,232) 25,816,960 (1,002,142,096) Selling expenses (excluding depreciation and amortization) . . . (105,401,095) (98,686,205) (41,891,281) (3,550,876) 35,178,620 (214,350,837) Administrative expenses (excluding depreciation and amortization) . . . (83,057,260) (87,931,395) (46,075,044) (29,187,835) 46,032,392 (200,219,142) Depreciation of property, plant and equipment...... (45,475,570) (16,590,552) (9,024,915) (1,261,865) — (72,352,902) Amortization of intangible assets . . . (3,052,064) (148,722) (613,794) (131,907) — (3,946,487) Depreciation of other investments . . . — (42,280) — (53,965) — (96,245) Operating Income...... 108,020,599 186,109,736 56,140,996 4,251,886 — 354,523,217 Financial results, net ...... (290,241,654) 12,722,691 (4,060,422) (23,681,779) — (305,261,164) Equity in earning from unconsolidated affiliates...... 20,562,668 17,657,360 6,857,637 6,847,734 — 51,925,399 Income (loss) before income tax, tax on assets and minority interest . . . (161,658,387) 216,489,787 58,938,211 (12,582,159) — 101,187,452 Income tax and tax on assets (expense) benefit ...... 52,585,317 (67,707,038) (12,548,645) (396,968) — (28,067,334) Minorityinterest...... (290,039) (1,756,609) (1,015,589) (37,936) — (3,100,173) Net income (loss) ...... (109,363,109) 147,026,140 45,373,977 (13,017,063) — 70,019,945 INFORMATION ARISING FROM CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2005 Total Assets ...... 2,506,847,608 617,188,721 368,880,850 76,644,890 (108,561,544) 3,461,000,525 Total Liabilities ...... 2,708,332,962 581,632,128 224,317,469 458,173,418 (108,561,544) 3,863,894,433 ADDITIONAL CONSOLIDATED INFORMATION AS OF DECEMBER 31, 2005 Acquisition of property, plant and equipment...... 72,128,951 9,934,070 8,116,126 976,200 — 91,155,347 Acquisition of intangible assets . . . . 896,859 — 661,189 39,920 — 1,597,968 Non-cash expenses ...... (15,073,740) (272,792) (3,703,253) (252,499) — (19,302,284)

A-F-29 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

Cable Television Broadcasting and Internet Printing and and access publishing programming Other Eliminations Total INFORMATION ARISING FROM CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2004 Netsalestothirdparties...... 632,836,030 660,943,624 270,869,303 6,563,932 — 1,571,212,889 Intersegment net sales ...... 10,033,983 28,530,241 26,102,665 51,085,163 (115,752,052) — Netsales...... 642,870,013 689,473,865 296,971,968 57,649,095 (115,752,052) 1,571,212,889 Cost of sales (excluding depreciation and amortization) ...... (309,089,965) (341,173,913) (159,920,641) (14,725,618) 28,801,854 (796,108,283) Selling expenses (excluding depreciation and amortization) . . . . (82,293,572) (97,089,566) (36,210,658) (2,017,440) 35,005,120 (182,606,116) Administrative expenses (excluding depreciation and amortization) . . . . (81,958,888) (71,393,625) (42,335,292) (23,273,032) 51,945,078 (167,015,759) Depreciation of property, plant and equipment ...... (56,198,120) (20,845,591) (10,284,407) (892,952) — (88,221,070) Amortization of intangible assets . . . . (4,204,463) (572,969) (574,042) (60,694) — (5,412,168) Depreciation of other investments . . . — (70,981) — (53,964) — (124,945) Operating Income...... 109,125,005 158,327,220 47,646,928 16,625,395 — 331,724,548 Financial results, net ...... (249,204,099) 551,326,922 (3,636,686) (14,419,159) — 284,066,978 Equity in earning from unconsolidated affiliates ...... 1,788,668 36,233,380 7,214,391 3,092,116 — 48,328,555 Income (loss) before income tax, tax on assets and minority interest . . . (138,290,426) 745,887,522 51,224,633 5,298,352 — 664,120,081 Income tax and tax on assets (expense) benefit ...... 340,544,281 (222,421,124) (19,905,220) 9,293 — 98,227,230 Minorityinterest...... (2,581,400) 843,726 (314,951) (139,767) — (2,192,392) Net income ...... 199,672,455 524,310,124 31,004,462 5,167,878 — 760,154,919 INFORMATION ARISING FROM CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2004 Total Assets ...... 2,079,746,461 542,223,568 305,518,155 123,188,163 (61,873,863) 2,988,802,484 Total Liabilities ...... 2,396,272,115 657,260,943 191,114,713 280,504,945 (61,873,863) 3,463,278,853 ADDITIONAL CONSOLIDATED INFORMATION AS OF DECEMBER 31, 2004 Acquisition of property, plant and equipment ...... 43,375,535 8,478,959 10,963,823 4,557,251 3,000,000 70,375,568 Acquisition of intangible assets . . . . . 1,786,879 — 88,268 8,831 — 1,883,978 Non-cash expenses ...... (1,536,099) (20,859,407) (7,971,970) (237,613) — (30,605,089)

A-F-30 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

NOTE 11. SHAREHOLDERS’ EQUITY (DEFICIT) Common Shares Authorized, Issued and Outstanding Shares At December 31, 2006, the Company has authorized the following classes of common shares (collectively the “Common Shares”): Number of Shares Authorized, Issued and Outstanding at December 31, 2006, 2005 and Class of Common Shares 2004 Class “A” ...... 70,880,304 Class “B” ...... 133,006,887 Class “C” ...... 25,112,689 Total...... 228,999,880

Voting Rights The holders of Class A are entitled to five votes per share. Holders of Class B and Class C Common Shares are entitled to one vote per share.

Preferred Shares The main terms and conditions of the preferred shares, which refer to dividends payments, the preference among the different classes of preferred shares and between them and common shares, and its redemption, according to the Company’s by-laws and the respective documents and agreements are as follows: a. On December 27, 1999 two classes of preferred shares were issued: “A” and “B” (“preferred shares”). Those preferred shares accrue an annual dividend of 7%, payable quarterly as from the quarter ended on March 31, 2003. The Company can pay 5% of that dividend in cash, and the remaining 2% in kind. If, in any given year, the Company fails to pay dividends in cash, the annual dividend will be increased to 9% on a cumulative basis, until the Company pays them. The Company’s shareholders’ meetings held on August 29, 2005 and July 13, 2007 approved the following decisions, among others: (a) the waiver by the holders of preferred shares of their right to collect the total preferred dividends accrued before January 1, 2005; (b) the suspension of dividends between that date and June 30, 2008; and (c) the extension to June 30, 2008 of the date when, subject to compliance with certain conditions, the mandatory conversion of preferred shares into common shares takes place. If these conditions are not met within the agreed-upon terms, suspended dividends will be considered as accrued. b. Preferred shares may be redeemed until December 27, 2009 (“redemption date”), at 12.117792 times (“Payment Preference”) the face value of the shares as determined by the Board of Directors’ resolution dated December 27, 1999, plus accrued and unpaid dividends. Class “A” preferred shares will have redemption preference over Class “B” preferred shares. If the shares are not redeemed at the redemption date, the annual dividend will be increased to 13%, 50% of which may be payable in cash and 50% in kind.

A-F-31 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

c. Subject to compliance with certain conditions, class “A” preferred shares may be converted into class “C” common shares, and class “B” preferred shares into class “B” common shares. The terms and conditions for the issuance establish a Conversion Price as well as an adjustment to the Conversion Price subject to certain assumptions. In both cases, these prices are agreed upon based on the subscription price of the shares, plus amounts due corresponding to unpaid and recognized dividends. d. The right to redeem such preferred shares may only be exercised by the Company. e. In the event of liquidation or merger of the Company, preferred shares have certain preferential rights to receive an amount equivalent to the “Payment Preference” per share plus the amount of quarterly dividends and accumulated unpaid dividends. f. In accordance with the terms and conditions for the issuance of preferred shares set forth in the Company’s by-laws and until such time as the Company has carried out an Initial Public Offering of Shares or until January 1, 2010, whichever takes place first, the Company is subject to certain restrictions on the payment of dividends to the holders of common shares. Basically, those restrictions establish that: (i) the Company can only pay dividends to holders of common shares as from the end of fiscal year 2002; (ii) the payment of dividends to the holders of common shares is subordinated to the preferential and priority rights of the holders of preferred shares established in the terms and conditions for the issuance of those shares; (iii) subject to the restriction stated in paragraph (i) above, the maximum distribution of dividends to the holders of common shares amounts to US$40 million per each year; (iv) in addition to the distributions mentioned above, after the year ended December 31, 2003, the Company may distribute additional earnings to the holders of outstanding common shares for up to a total of US$60 million on one or more occasions. g. If at the redemption date, the Company has not redeemed all the preferred shares, it will be unable to declare or pay distribution of dividends on common shares in excess of US$15 million per year. h. After the Initial Public Offering of shares and, if that event has not taken place before the redemption date; as from January 1, 2010, provided that the Company has redeemed all its preferred shares, any decision related to dividends and distribution of profits on common shares will be exclusively subject to the approval of the Company’s Board of Directors and Sharehold- ers’ meeting, following the majorities established by law. i. The paid-in-capital that resulted from the issuance of class “C” common shares and class “A” preferred shares amounting to 333,636,239 is appropriated to a Class “A” and Class “B” Preferred shares Paid-in-capital Reserve”, which will be irrevocably appropriated as follows: (a) to the payment of dividends in shares, even if no profits or insufficient profits are generated, to the holders of preferred shares, in accordance with the terms and conditions for the issuance and the preference of class “A” preferred shares established in the Sixth section of the by-laws, and (b) in the first place, with preference, to the payment of class “A” preferred shares and/or common shares to be delivered as a result of the conversion of class “A” preferred shares and, in the second place and in a subordinate category, if a reserve remains after all class “A” preferred shares have been converted, to the payment of class “B” preferred shares and/or common shares to be delivered through the conversion of class “B” preferred shares, which must be issued in accordance with the terms and conditions for issuance established by

A-F-32 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

section Sixth of the by-laws. This amount is included within “Additional Paid-in-Capital” in the Company’s Shareholders’ Equity. See Note 18 for subsequent events affecting preferred shares.

NOTE 12. INCOME TAX Current and deferred income taxes provided are as follows (amounts stated in thousands of Ps.): For the Years Ended December 31, 2006 2005 2004 Current...... (39,612) (73,770) (68,905) Deferred ...... (135,031) 45,703 167,132 Total...... (174,643) (28,067) 98,227

The following table summarizes the reconciliation between the income tax charged to statement of operations for the years ended December 31, 2006, 2005 and 2004 and the income tax liability that would result from applying the current tax rate on income before income tax and tax on assets and the income tax liability assessed for each year (amounts stated in thousands of Ps.): For the Years Ended December 31, 2006 2005 2004 Income tax assessed at the current tax rate (35%) on income before income taxes, tax on assets and minority interest ...... 532,629 35,416 232,442 Permanent differences: Equity in earnings from unconsolidated affiliates . . . . . (11,194) (18,174) (16,915) Net gain (loss) on sale of investments ...... (20,918) 447 (17,223) Non-taxable gain on troubled debt restructuring ...... (48,009) — — Non-taxable income/expense ...... 551 5,706 1,368 Others ...... (11,863) 10,353 (12,974) Expiration of tax loss carryforward ...... 24,151 7,419 896 Effect of changes in the allowance of deferred tax asset and tax loss carryforward ...... (290,704) (13,100) (285,821) Total ...... 174,643 28,067 (98,227)

A-F-33 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

The following table shows the breakdown of net deferred tax position as of December 31, 2006, 2005 and 2004, respectively (amounts stated in thousands of Ps.): As of December 31, 2006 2005 2004 Deferred Assets (Liabilities) Tax loss carryforward ...... 319,744 680,284 613,241 Deferred exchange gain and losses ...... — 26,085 53,302 Trade receivables ...... 22,012 20,567 27,107 Property, plant and equipment ...... (10,235) 11,022 12,271 Intangible assets ...... (176,406) — — Other assets ...... (1,714) (936) (566) Other investments ...... 8,633 — — Short and long-term debt ...... 52,641 8,755 27,231 Provisions ...... 70,482 28,830 13,536 Others ...... (486) 6,643 2,526 Subtotal...... 284,671 781,250 748,648 Allowance for deferred tax asset ...... (116,258) (374,553) (387,653) Net deferred tax position ...... 168,413 406,697 360,995

As of December 31, 2006, 2005 and 2004, the Company presents current deferred tax assets of 127.3 million, 289.7 million and 59.6 million, respectively and non-current deferred tax assets of 177.5 million, 117.0 million and 301.4 million, respectively. The Company also presents non-current deferred tax liabilities of 136.4 million as of December 31, 2006. The Company has assessed the recoverability of its deferred tax assets as of December 31, 2006 and believes that it is more likely than not that the deferred tax assets, net of the valuation allowance, will be realized through future taxable income. As of December 31, 2006, the Company’s accumulated tax losses amount to approximately 914 million, which calculated at the current tax rate, represent deferred tax assets in the amount of approximately 320 million. There follows the statute of limitations of the accumulated tax losses (amounts stated in thousands of Ps.): Tax Loss Year of Expiry Carryforward 2007 ...... 161,971 2008 ...... 84,212 2009 ...... 424,929 2010 ...... 229,359 2011 ...... 13,084 913,555

A-F-34 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

NOTE 13. COMMITMENTS AND CONTINGENCIES Restrictions, Surety and Guarantees • As of December 31, 2006, 2005 and 2004 and in accordance with the contract entered into to sell its equity interest in Activa Anticipar A.F.J.P. S.A., Grupo Clarín holds a guarantee deposit amounting to US$26,793 (net of provisions) recoverable under certain conditions and within specified terms (provided by Jupenhold S.A., a company absorbed by Grupo Clarín) to cover potential liabilities and the payment of all ongoing lawsuits, and to guarantee labor and social security obligations arising before the date of that sale. The amount of the deposit does not limit the amount of the Company’s guarantees. The Company estimates that the guarantee fund is sufficient based on the legal advisors’ opinion. • Grupo Clarín has executed guarantees with the banks involved in the swap contracts specified in Note 16 in order to fully, unconditionally and irrevocably guarantee the timely payment of all obligations arising from said contracts. • In October 2003, Grupo Clarín approved a US$15 million contribution to Multicanal, to be applied to the Cash Option Payment set forth in its debt restructuring, as described in Note 15. For that purpose, in December 2003, Grupo Clarín entered into a trust agreement with JPMorgan Chase Bank and made a deposit of this amount in that entity. This deposit was accounted for as restricted cash as a guaranty deposit within Other receivables. During 2006 this deposit was released. • IESA has contractual restrictions on the transfer of its equity interest in TRISA and Tele Net Image Corp. • Furthermore, TRISA’s equity interest in Torneos y Competencias S.A. (Uruguay) is pledged as collateral for a credit line. • AGEA, TRISA, Cablevisión and Multicanal have financial indebtedness outstanding involving certain restrictions, including but not limited to, the distribution of dividends. • Pursuant to the terms and conditions of Cablevisión’s outstanding Negotiable Obligations issued on October 7, 2005, as of December 31, 2006, Cablevisión holds 56,838,603 in a reserve account to guarantee the payment of interest on the agreed-upon terms. Should Cablevisión default, either partially or totally, on the payment of amounts due under the Negotiable Obligations above-mentioned, the trustee shall promptly apply the funds deposited in the reserve account the amounts to settle principal or interest and cure the default. To the extent Cablevisión has not defaulted on its obligations under the Negotiable Obligations issued on October 7, 2005, it may instruct the Trustee to transfer amounts deposited for the sole purpose of applying them to service debt or to pay the purchase or redemption price of such Negotiable Obligations, acquired in the over-the-counter market or redeemed by Cablevisión.

Pending Authorizations from the Federal Broadcasting Committee (“COMFER”) Authorizations regarding the elimination of signal distribution modems by Multicanal, share transfers in its favor and company reorganizations are pending with the COMFER. While the subsidiaries expect to obtain such approvals, no assurance can be given that the COMFER will grant them.

A-F-35 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

Broadcasting Licenses

Broadcasting licenses are granted for an initial period of 15 years, allowing for a one-time extension of 10 years. Applicable legislation sets forth that the COMFER shall grant the extension, provided it can be proved that the licensee has complied with the effective applicable legislation, bidding terms and conditions and undertakings in their proposals during the first period of the license in question.

On May 24, 2005, Decree 527/05 provided for a 10-year-suspension of the terms then effective of broadcasting licenses or its extensions, subject to certain conditions. Calculation of the terms shall be automatically resumed upon expiration of the suspension term. The Decree requires that companies seeking to rely on the extension subject to it submit for the COMFER’s approval, within 2 years of the date of the Decree, proposals to make broadcasting tune available for programming, contributing to the preservation of the national culture and the education of the population.

ARTEAR, its subsidiaries Telecor and Telba, as well as Cablevisión, Multicanal and their subsidiaries, and Radio Mitre hold broadcasting licenses and have submitted proposals. Although no assurance can be given, these subsidiaries expect that their respective licenses will be timely extended or renewed.

On November 5, 2004, the COMFER notified Cablevisión, among other issues, that the requests submitted by the subsidiary aiming to validate some changes of shareholders and directors already introduced had not been approved by such Committee, which would mean an infringement of the broadcasting law and would render null the decisions made at the Shareholders’ Meetings. Even though, based on the available information and the respective reports of its legal counsel, the notice would not be legally binding upon the subsidiary, Cablevisión took the necessary steps and brought legal actions and defenses, as appropriate.

Additionally, the COMFER notified Televisora La Plata S.A., a Cablevisión subsidiary, of an alleged breach of the terms and conditions of its broadcasting license. The COMFER indicated that it may impose penalties, including fines or even the revocation of such broadcasting license. Although no assurance can be given as to the final outcome of this matter, the subsidiary and its legal counsel consider that the probability that it will have a significant adverse impact on Cablevisión’s financial- economic situation is remote.

Antitrust Considerations

The CNDC received several complaints against Cablevisión, Multicanal and their subsidiaries prior to the increase of our ownership interest in Cablevisión in September 26, 2006 alleging, among other issues, divisions of areas among these companies, imposition of predatory prices, price discrimination among areas, minimum pricing for the trading of channels and other anti-competitive practices.

Although no assurance can be given as to the final outcome of the above-mentioned cases, Cablevisión, Multicanal and its legal counsel believe, based on the available information, that the probability of these issues having a significant adverse impact on the financial-economic situation of these companies is remote.

A-F-36 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

Other Regulatory Matters

Multicanal and Cablevisión

In January 2006, the Government of the City of Buenos Aires enacted Act 1.877, which provides for a 15 year term to regularize the authorization to install cable television networks in the thorough- fare on a single column. It also provides for a one-year-term in order to remove posts in the area known as “historical part of town”. Finally, the new Act sets forth a 3-year-term for regularizing on a single column basis the avenues of the City of Buenos Aires. The related works have already been scheduled and budgeted to be executed in the forthcoming years.

Commitments to Make Capital Contributions to Subsidiaries

Fintelco S.A. (“Fintelco”) reported negative balance in its shareholders’ equity as of November 30, 2006. Under the Argentine Business Associations Act, this event could bring about its dissolution due to capital loss, unless the shareholders agree to its total or partial repayment or a capital increase. Cablevisión and Multicanal hold each 50% of Fintelco’s capital share. Both companies have undertaken to make the required contributions in that same proportion to settle the liabilities of Fintelco’s and its subsidiaries when due.

In those cases where the Company has not committed to provide further financial support to its direct and indirect subsidiaries, the Company does not recognize its share of losses in excess of the carrying amount of such investment.

Claims brought by the COMFER

ARTEAR

On December 9, 2002, ARTEAR adhered to the payment facilities regime established by Executive Power Decree No. 2362/02 to comply with fines already imposed or that could be imposed due to infringement of effective broadcasting regulations between January 1, 2001 and October 31, 2002, inclusive, and opted to recognize the total amount to be settled by granting advertising seconds in favor of the COMFER.

In addition, between November 1, 2002 and December 31, 2006, the COMFER applied fines to ARTEAR under the new regime in effect, amounting to 551,000, which have been provisioned. ARTEAR has appealed the decisions imposing those fines.

Radio Mitre

As of December 31, 2006, 2005 and 2004, Radio Mitre records an outstanding balance to be settled with advertising in favor of TELAM, arising from fines imposed by the COMFER.

A-F-37 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

Lawsuits and/or Claims ARTEAR There has been a recent dispute between broadcast TV operators and the National Customs Administration (“ANA” for its Spanish acronym) in connection with the import value of films. Under the criterion followed by the broadcast TV operators, ARTEAR paid other taxes which, if ANA’s position prevails, should not have been paid. Since the amount of taxes paid exceeds those claimed by the ANA, in the opinion of the subsidiary and its legal advisors, this situation would not have a material economic impact and, therefore, no provision has been recorded.

TRISA The Argentine Association of Songwriters and Composers (“SADAIC” for its Spanish acronym) filed a claim against TRISA, a company in which IESA holds a 50% interest and exercises control jointly with Torneos y Competencias S.A., for the payment of royalties on musical works used in TyC Sports programs, which are broadcast nationwide via satellite. The claim is equivalent to 1% on TRISA’s gross sales since 1993. In August 2006, TRISA reached a settlement with SADAIC with respect to the claim. The agreement contemplates a payment of a 0.3% royalty over TRISA’s turnover as from June 2006, payable monthly. In addition, the parties agreed on the payment of a lump sum to discharge any and all amounts allegedly owed by TRISA for the whole period elapsed through May 2006.

A-F-38 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

As of the date of these consolidated financial statements, TRISA has fulfilled all the obligations arising from such settlement.

GCGC During the year ended December 31, 2005, GCGC recorded a provision amounting to approximately 2.3 million based on a potential claim that could arise from different interpretations made by the Argentine Tax Authorities (“AFIP” for its Spanish acronym) of Act No. 25.250 and application assumptions. Although GCGC and its legal advisors consider that the original interpretation was technically correct and duly supported, following a conservative criterion, such subsidiary decided to set up a provision. As of the date of these financial statements, the subsidiary voluntarily paid approximately 2.2 million for differences between its original calculations and the various interpretations of the AFIP of Act No. 25.250, plus the related interest and fines. GCGC reserves the right to apply for a refund of amounts paid.

Multicanal Multicanal brought several claims against Grupo Supercanal, including an action to declare null and void the resolutions adopted during the Extraordinary Shareholders’ Meeting of Supercanal Holding S.A. held on January 25, 2000. The mentioned resolutions were intended to reduce the capital share of Supercanal Holding S.A. to 12,000 and subsequently increase such capital to 83,012,000. The Court approved the preliminary injunction requested by Multicanal for the suspension of the effects of such Extraordinary Shareholders’ Meeting, but required that Multicanal post bond for 22 million for potential damages that could be assessed against the defendant, should the complaint be dismissed. The remedy was granted against the issue of a surety bond. The Court of Appeals revoked the preliminary injunction. Multicanal filed an extraordinary appeal against that resolution, claiming it is both “arbitrary” and “damaging to the institution”. On October 1, 2004, Multicanal was served notice of the dismissal of its extraordinary appeal. As a result of the revocation of the preliminary injunction mentioned above, on December 12, 2001, Multicanal was served notice of the filing of a claim by Supercanal Holding S.A. for damages caused by the granting of the preliminary injunction that was subsequently revoked. It has been claimed that the suspension of the effects of the meeting held on January 25, 2000 resulted in the default by Supercanal Holding S.A. on its outstanding financial debt.

A-F-39 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

Multicanal answered the complaint and rejected the liability attributed to it based on the fact that the default had taken place before the date of the meeting that was suspended by the preliminary injunction, according to documentation provided by the plaintiff itself. Furthermore, the suspension of the meeting did not prevent the capitalization of Supercanal Holding S.A. through other means.

Based on de jure and de facto records of the case, Multicanal believes that the claim filed should be rejected in its entirety, and the legal costs should be borne by the plaintiff. There is no certainty that Multicanal will obtain an economic or financial gain as a result of these actions.

NOTE 14. RESTRICTIONS ON PROFIT DISTRIBUTIONS

The Company may declare dividends only out of the Company’s retained earnings stated in the Company’s financial statements, prepared in accordance with Argentine GAAP and CNV regulations and approved by the shareholders’ meeting. As of December 31, 2006, the Company reported an accumulated deficit of 433.3 million in its financial statements prepared in accordance with Argentine GAAP and CNV regulations.

As required by the Argentine Business Associations Act and the Company’s by-laws net income for the year should be appropriated as follows: (i) 5% of net income until reaching 20% of the capital share to the legal reserve and (ii) to dividends on preferred shares, giving priority to unpaid accumulated dividends.

See Note 11 for additional restrictions related to terms and conditions of the Company’s preferred shares.

NOTE 15. BORROWINGS

Weighted Average Interest Rate at December 31, As of December 31, 2006 Maturities 2006 2005 2004 Current Bank overdraft ...... 12.25% 2007 1,500,000 257,418 193,832 Financial loans ...... 6.29% 2007 294,921,498 326,979,307 111,348,271 Negotiable obligations . . . . 4.80% 2007 78,024,846 1,538,791,560 1,513,398,960 Related parties ...... 8.00% 2007 5,000,000 5,000,000 — Accrued interests ...... 2007 52,845,929 912,537,096 658,017,741 432,292,273 2,783,565,381 2,282,958,804 Non Current Financial loans ...... 8.42% 2008-2009 163,678,782 135,216,273 193,292,968 Negotiable obligations . . . . 5.80% 2008-2017 2,196,284,091 338,017,627 445,351,915 2,359,962,873 473,233,900 638,644,883

A-F-40 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

Scheduled maturities of the long-term debt for the next years (excluding current portion), as of December 31, 2006, are as follows: 2008 ...... 212,619,419 2009 ...... 211,930,497 2010 ...... 228,662,826 2011 ...... 240,832,165 2012 ...... 231,517,618 2013-2017 ...... 1,234,400,348 2,359,962,873

Financial Loans a) The Company held a debt with Telefónica Media S.A. of US$30 million payable in 5 annual, consecutive and equal installments of US$6 million each, falling due on August 31, 2004, 2005, 2006, 2007 and 2008, respectively. The balances accrue interest payable every six month at (a) a 3.5% annual rate or (b) at LIBOR plus a 0.75% annual spread, whichever is higher at the beginning of each interest period. Such debt was collaterized by an original pledge on Multicanal’s common shares. On September 26, 2006, the Company agreed with Telefónica de Contenidos S.A. Unipersonal (former Telefónica Media S.A.) to substitute the existing pledge on the remaining pledged shares by a new pledge on 49,828 common shares of IESA, which are owned by the Company. Upon payment of the fourth installment, the release of the pledge on one third of the total amount of new pledged shares shall take place automatically and as a matter of law. Upon payment of the fifth installment and the related interest, the release of the pledge on the remaining new pledged shares shall take place automatically and as a matter of law. As of December 31, 2006, the Company owed principal and interest in the amounts of 36,720,000 and 718,605, respectively. As of the date of these financial statements, the Company has made all due and payable payments. b) The Company held a debt with JP Morgan Chase Bank (“Chase”) in the amount of US$40 million, which was refinanced through an agreement between the Company and Chase on May 3, 2004. Such agreement sets forth the accrual of interest at LIBOR plus a 2% spread, payable quarterly and the annual repayment of the remaining principal on an annual basis. In March 2006, the Company paid the first installment of the loan for US$4 million.

A-F-41 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

In August 2006, the Company executed an addendum to such refinancing agreement, whereby Chase reimbursed the US$4 million paid by the Company and the repayment of principal was rescheduled as follows: Repayment of Payment Date Principal March 17, 2007 ...... US$8 million March 17, 2008 ...... US$16 million March 17, 2009 ...... US$16 million As of December 31, 2006, the Company owed principal and interest in the amounts of 122,400,000, and 361,610, respectively. As of the date of these financial statements, the Company has made all due and payable payments. c) As of December 31, 2006, the Company subsidiary Vistone holds short-term financial debts for a total principal amount of US$79.9 million, which accrue interest at Libor plus 0.75%. d) As of December 31, 2006, the Company subsidiary Radio Mitre holds loans having an aggregate principal amount outstanding of approximately 2.6 million which repaid in monthly installments. Such loans accrue interest at an average fixed rate of 13.1%.

Negotiable Obligations a) Owing to the conditions of the Argentine economy as from the end of 2001, in 2002 AGEA had to postpone the settlement of its financial debts. For this reason, AGEA invited all the holders of unsecured financial loans to execute an out-of-court restructuring agreement established by Argentine Law (“APE” as for its Spanish acronym) privately, which was executed on January 16, 2004, by all the creditors. Thus, the above-mentioned debt was repaid on January 28, 2004, issuing new Series “B” Negotiable Obligations maturing over 7 years listed on the stock exchange in a total amount of US$83.7 million, Series “B” Negotiable Obligations maturing over 7 years and not publicly traded for a total amount of US$34.7 million, and Series “C” Negotiable Obligations maturing over 10 years for a total amount of US$30.6 million, as well as cash payments for US$56.2 million. This transaction was accounted for as a troubled debt restructuring. Its effects are summarized under the caption Troubled debt restructuring within this Note. Series “C” Negotiable Obligations maturing over 10 years and amounting to US$30.6 million accrue interest at a fixed and incremental rate (2% from December 17, 2003, through January 28, 2008; 3% from January 29, 2008, through January 28, 2012, and 4% from January 29, 2012, through the repayment of the loan) payable bi-annually. The principal is amortized through a single payment to be made on January 28, 2014. As of December 31, 2006, the outstanding principal amounts to 93.6 million and accrued and unpaid interest totals 0.8 million. On January 26, 2005, AGEA settled the balance due on the seven-year maturity Series “B” Negotiable Obligations that at that date amounted to US$58.4 million with funds arising from the issue of Series “D” Negotiable Obligations. The new Negotiable Obligations, amounting to 300 million, accrue interest at a floating rate determined by the variation in the reference stabilization index (“CER” as for its Spanish acronym) plus a fixed margin of 4.25% payable on a half-yearly basis as

A-F-42 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated) from June 15, 2006. Principal is amortized in 8 equal, half-yearly and consecutive installments as from June 15, 2008. As of December 31, 2006, the outstanding principal amounts to 300 million and accrued and unpaid interest totals 1.7 million.

b) Owing to the conditions of the Argentine economy as from the end of 2001, in 2002 AGR had to postpone the settlement of its financial debts. For this reason, AGR invited all the holders of unsecured financial loans to execute an APE privately, which was executed on January 16, 2004, by all the creditors. Thus, such debt was repaid on January 28, 2004, by executing a new Loan Agreement over 7 years totaling US$27.7 million and payments in cash in the amount of US$8.8 million.

This transaction was accounted for as a troubled debt restructuring. Its effects are summarized under the caption Troubled debt restructuring within this Note.

On August 10, 2004, AGR made a purchase offer to bondholders under the 7-year Loan Agreement for a total cash purchase price of up to US$10.3 million and a fixed price of US$750 for every US$1,000 of face value assigned, and no interest accrued until the payment date on the bonds assigned would be paid. Finally on September 17, 2004, AGR paid US$10.2 million and thus settled a total principal amount of US$13.6 million and US$0.1 million in interest accrued and outstanding as of such date.

On January 26, 2006, AGR settled the remaining part of its financial debt amounting to US$14.5 million at that date with funds arising from an irrevocable contribution made by AGEA.

c) As of December 31, 2006 Cablevisión held a debt of Negotiable Obligations issued prior to the acquisition by the Company. This debt consisted in 7-year Negotiable Obligations for a total amount of US$115,360,813, which accrue interest at an annual rate of 6% for the first 5 years, and 7% for the remaining 2 years, and 10-year Negotiable Obligations set up for a total amount of US$235,121,316, which accrue interest at an annual incremental rate of 3% to 12%.

d) During the year ended December 31, 2002, Multicanal suspended payments on its financial debt as a result of the economic situation in Argentina.

In 2003, Multicanal submitted to its creditors a proposal for the restructuring of its financial debt through an APE, comprising three options: a cash buyback option at 30 cents per US$1, a 10-year bond exchange option and a combined exchange option (including 7-year bonds and common shares). Each of these options was subject to a ceiling. On December 13, 2003, Multicanal announced that the required majority of affected creditors had consented to the restructuring set forth in the APE.

On June 29, 2006, Multicanal’s Board of Directors approved the issuance of 15 million registered non-endorsable Class A common shares at a par value of 1 each and entitled to 5 voting rights per share. The difference between the funds contributed by the Company (US$15 million) and the nominal value of the shares issued was allocated to paid-in capital.

A-F-43 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated) par value of 1 each and entitled to 1 vote per share. As a result the Company’s interest in Multicanal decrease from 100% to 65%.

On July 20, 2006, after having obtained the authorizations from the Argentine Securities and Exchange Commission (CNV) and the Buenos Aires Stock Exchange, Multicanal delivered to its Exchange Agent: a) 10-year Series A Negotiable Obligations for US$80,325,000, which accrue interest at an annual rate of 2.5% until the fourth year as from their issuance, 3.5% as from the fourth year and up to the eighth year, and 4.5% as from the eighth year and up to maturity; and 7-year Series B Negotiable Obligations for US$142,966,475, out of which US$139,869,850 accrue interest at an annual rate of 7% and US$3,096,625 accrue interest at three-month Libor plus 1.325%, in order for the Exchange Agent, in its capacity as such, to deliver them to the holders entitled to receive them according to their options under the APE, b) aggregate interest accrued on those securities from December 10, 2003 until June 19, 2006, and c) purchase price for the old bonds and interest accrued thereon from December 10, 2003 until July 19, 2006 to those who opted for the cash option.

Effective July 20, 2006, after having exchanged the securities and paid the cash amount mentioned above, Multicanal’s entire debt subject to the APE was discharged.

This transaction was accounted for as a troubled debt restructuring. Its effects are summarized under the caption Troubled debt restructuring within this Note.

On September 20, 2006, Multicanal repaid all of its Series B Negotiable Obligations (floating interest rate, 7-year maturity) in the amount of US$3,096,625 plus accrued interest as of such date. Furthermore, on September 27 and 28, 2006, the Company repurchased Series B Negotiable Obligations (fixed rate bonds, 7-year maturity) for a nominal value of US$34,144,281 plus accrued interest as of such date.

On October 13, 2006, the Argentine Court confirmed the completion of Multicanal’s APE.

Troubled Debt Restructurings

The following table summarizes the troubled debt restructurings made by the Company. The gain includes the result from restructuring and dilution derived from troubled debt restructuring, as explained above in this Note. It does not include the related effects on deferred income tax.

Amount of Debt Date of Before Amount of Debt Gain on Troubled Company Restructuring Restructuring After Restructuring Debt Restructuring Multicanal . . . . . July 2006 2,668,229,817 1,060,860,892 1,157,407,587 AGEA ...... January 2004 1,147,569,012 706,496,810 441,072,202 AGR ...... January 2004 203,979,643 119,468,869 84,510,774

Related Parties

As of December 31, 2006, IESA holds, with one of its subsidiaries on which it holds a 50% interest, a short-term loan in the amount of 5 million. Such loan accrues interest at an annual rate of 8% fixed rate. Interest accrued and unpaid as of December 31, 2006 totals 0.4 million.

A-F-44 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

Covenants and Events of Default Covenants and events of default regarding the Company debt are as follows:

• Financial loan (Chase), US$40 million: Restrictions on debt incurrence, liens, mergers, sale of substantial assets, liquidations, dissolution and winding-up.

• Negotiable Obligations (Cablevisión), US$115.3 and US$235.1 Restrictions on capital expenditures and on transactions with affiliates including Grupo Clarín provided that Cablevisión may pay certain amount of technical assistance fees to Grupo Clarín. Twice a year, Cablevisión is required to apply its excess cash to prepay amounts due under these Negotiable Obligations. Cablevisión can only make dividend payments with amounts available after giving effect to its excess cash prepayment obligations. Holders of the Negotiable Obligations are entitled to appoint one member and one alternate member to the Board of Directors of Cablevisión. • Negotiable Obligations (Multicanal), US$105.7 million: Restrictions on capital investments, on indebtedness incurrence, transactions with shareholders and affiliates, repurchase of capital stock, sale of assets, mergers and asset dispositions, and other payment restrictions by significant subsidiaries, significant subsidiary guarantees, liens and sale and leasebacks. Twice a year, Multicanal is required to apply a portion of its excess cash to prepay amounts due under these Negotiable Obligations. • Negotiable Obligations (Multicanal), US$80.3 million: Restrictions on indebtedness incurrence, transactions with shareholders and affiliates, payments to equity, sale of equity in significant subsidiaries, mergers and asset dispositions, payments of dividends and other payment restrictions by significant subsidiaries, significant subsidiary guarantees, liens and sale and leasebacks. • Negotiable Obligations (AGEA), 300 million: Restrictions on debt incurrence, liens, mergers, sale of substantial assets and transactions with affiliates. In addition, AGEA has restrictions to pay dividends or make any other payments to its shareholders (including payment of management fees to Grupo Clarín) if the ratio of net worth to assets is below 30%.

• Negotiable Obligations (AGEA), US$30.6 million: Restrictions on debt incurrence, liens, sale of assets, transactions with affiliates that are not arms’ length, provided that payment of management fees to Grupo Clarín for certain amounts is permitted. AGEA shall not pay dividends to its shareholders (including Grupo Clarín) if certain financial ratios are not met or if an event of default under these Negotiable Obligations has occurred. Should the Company or its subsidiaries fail to comply with these covenants, all or a portion of our borrowings under the agreements mentioned before could become immediately payable and the revolving credit facility could be terminated. At December 31, 2006, the Company and its subsidiaries were in compliance with all such covenants.

NOTE 16. DERIVATIVE FINANCIAL INSTRUMENTS

The Company enters into derivative instruments only to the extent considered necessary to ensure future debt cash flows at a fixed-rate in US dollars, and do not enter into derivative contracts for speculative purposes.

A-F-45 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated)

Receivables and liabilities generated by derivatives have been valued at their estimated fair value. Changes in fair value have been recognized as result for the year. The amounts of 6.96 million and 0.02 million are included under Other non-current receivables and Other non-current liabilities, respectively. These figures represent the net amounts of certain outstanding interest rate and exchange rates swap agreements, relating to a nominal value of approximately 152 million, whereby one of the Company’s subsidiaries transfers to or receives from the counterparts the net position resulting from swapping a 152 million payment obligation accruing interest at a variable Ps. rate into a US$ obligation accruing interest at a fixed rate. These transactions generated a loss of 2.5 million for 2006. The swap agreements, executed in January 2006, are effective until December 2011.

NOTE 17. RELATED PARTIES The Company has entered into certain transactions in the ordinary course of business with unconsolidated affiliates accounted for under the equity method. These transactions have been executed on terms comparable to those of unrelated third parties and primarily include: Year Ended December 31, 2006 2005 2004 Income (Expense) Advertising sales ...... 7,858,057 6,084,622 2,791,718 Cable television signals sales ...... 10,494,075 8,672,710 14,749,421 Other sales ...... 7,070,927 5,639,307 5,346,524 25,423,059 20,396,639 22,887,663 Cost of sales ...... (176,206,910) (180,507,015) (157,137,281) Selling expenses ...... (4,647,634) (3,339,182) (2,479,591) Administrative expenses ...... (723,854) (581,751) — Financial Interest ...... (229,086) (450,009) (658,822) (181,807,484) (184,877,957) (160,275,694)

NOTE 18. SUBSEQUENT EVENTS a) In January 2007, Cablevisión and Multicanal were served with an injunction issued by a provincial court in the province of San Luis at the request of Grupo Radio Noticias SRL (“Grupo Radio Noticias”), a company alleging to own a broadcast radio station that would arguably be harmed by the transactions involving Cablevisión, Multicanal, Holding Teledigital and PRIMA that the Company consummated in September 2006. Among other measures, the injunction directed Cablevisión, Multicanal and its controlling shareholders and subsidiaries to refrain from a number of transactions, including mergers, acquisitions and the issuance of securities. The injunction was inconsistent with an order issued by a Federal Court in the City of Buenos Aires in 2005, to the effect that the CNDC had jurisdiction to determine the legality of the Company’s acquisition of an ownership interest in Cablevisión without prior judicial intervention. Accordingly, the Company took action to have the case initiated by Grupo Radio Noticias removed from the San Luis court and transferred to the Federal Court in Buenos Aires. The Supreme Court of Argentina resolved the Company’s petition in its favour

A-F-46 GRUPO CLARIN S.A. Consolidated Financial Statements As of and For the Years Ended December 31, 2006, 2005 and 2004 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated) in June 2007. Its request to have the injunction ordered by the San Luis court repealed remains pending and will be decided by a Federal Court of Appeals in the City of Buenos Aires. The Federal Court of Buenos Aires has been adjudicated jurisdiction to decide the substance of the matter. On 19 July 2007 the Federal Court of Buenos Aires, indicating that the injunction ordered by the San Luis court was not binding on the Company or Multicanal, issued a ruling expanding on its 2005 order and reaffirming that the CNDC must issue a decision with respect to the transactions described above, and that the CNDC as well as all other government agencies must abstain from taking steps to impede such transactions before of the CNDC’s final decision. While the Company can give no assurance that it will prevail against Grupo Radio Noticias, the Company believes that their claims are unfounded. b) On July 4, 2007 ARTEAR acquired a 100% of Bariloche TV S.A. capital share for a total consideration of US$1.1 million. c) At year-end, Grupo Clarín owed outstanding dividends to shareholders in the amount of 11.1 million, which had been approved before December 31, 1999. After year-end, the Company executed an agreement with such shareholders providing for the settlement of the outstanding balance plus an adjustment, for a total of approximately 18 million, which was approved by the Board of Directors’ Meeting, held on June 13, 2007 and ratified by the Shareholders’ Meeting held on July 13, 2007. d) On July 16, 2007 the Company approved the conversion of 5,100,000 Class B common shares at a par value of 1 each and entitled to 1 voting right per share into 5,100,000 Class A common shares at a par value of 1 each and entitled to 5 voting rights per share. e) On July 20, 2007 the Company Shareholders’ meeting resolved to: • Authorize the Company to go public and request authorization of the initial public offering of its entire capital share in Argentina and on foreign markets and listing on the Buenos Aires Stock Exchange and/or foreign stock exchange and/or self-regulated markets. • Increase share capital up to the amount of 30,000,000 by means of the issuance of up to 30,000,000 Class B common shares with a face value of Ps.1 (one) each and entitled to 1 (one) vote per share, to be offered by means of public subscription in Argentina and abroad. The subscription price of the new shares to be issued, as well as the exact amount of the increase of the capital stock, will be established in due time by the Board of Directors. • Amend the bylaws comprehensively, which will be effective as from the date on the resolution providing for the Company to go public. Such amendments contemplate among others changes in the structure and election of directors and the supervisory committee, the conversion of preferred shares issued by the Company into common shares, and the organization of an audit committee.

A-F-47 REPORT OF INDEPENDENT AUDITORS

To the Shareholders, President and Directors of Grupo Clarín S.A. We have audited the accompanying consolidated balance sheets of Grupo Clarín S.A. and its subsidiaries at December 31, 2004, 2005 and 2006, and the related consolidated statements of operations, shareholders’ equity and comprehensive income and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Grupo Clarín S.A. and its subsidiaries at December 31, 2004, 2005 and 2006, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Price Waterhouse & Co. S.R.L.

by /s/ Carlos A. Rebay (Partner) Carlos A. Rebay

City of Buenos Aires, August 13, 2007

A-F-48 GRUPO CLARIN S.A.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2007 and December 31, 2006 and For the Six-Month Periods Ended June 30, 2007 and 2006

A-F-49 GRUPO CLARIN S.A. Condensed Consolidated Financial Statements As of June 30, 2007 and December 31, 2006 and For the Six-Month Periods Ended June 30, 2007 and 2006 CONSOLIDATED BALANCE SHEETS (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated) As of June 30, As of December 31, 2007 2006 (Unaudited) (Audited) ASSETS Current assets Cash and cash equivalents ...... 404,035,843 326,926,096 Trade receivables, net ...... 442,922,133 410,586,773 Other receivables, net ...... 263,814,035 321,623,061 Inventories ...... 154,348,269 125,953,459 Other assets ...... 4,730,220 2,633,079 Total Current assets ...... 1,269,850,500 1,187,722,468 Trade receivables, net ...... 46,731 256,791 Other receivables, net ...... 284,037,556 280,624,182 Inventories ...... 19,660,002 19,693,806 Investments in unconsolidated affiliates ...... 244,067,120 235,739,725 Other long-term investments ...... 3,217,097 3,253,123 Property, plant and equipment, net ...... 1,107,306,957 1,025,303,658 Intangible assets, net ...... 543,429,702 577,635,998 Goodwill ...... 2,905,318,853 2,909,035,200 Total Assets...... 6,376,934,518 6,239,264,951

LIABILITIES Current liabilities Accounts payable...... 436,628,330 404,856,453 Short-term debt and current portion of long-term debt ...... 464,829,702 432,292,273 Salaries and social security payable ...... 107,464,599 110,341,780 Taxespayable...... 179,618,098 168,876,436 Other liabilities...... 112,473,672 120,585,068 Total Current liabilities ...... 1,301,014,401 1,236,952,010 Accounts payable...... 13,152,316 10,640,522 Long-term debt ...... 2,248,374,733 2,359,962,873 Taxespayable...... 17,838,954 14,461,838 Other liabilities...... 982,580,074 988,384,168 Provisions...... 100,683,296 99,385,136 Minority interest ...... 711,903,530 669,465,068 Commitments and contingencies (Note 7) Shareholders’ Equity Common shares Class A common shares Ps.1 par value per share, 70,880,304 shares authorized, issued and outstanding. Class B common shares Ps.1 par value per share, 133,006,887 shares authorized, issued and outstanding. Class C common shares Ps.1 par value per share, 25,112,689 shares authorized, issued and outstanding. . . . 228,999,880 228,999,880 Preferred shares Class A preferred shares Ps.1 par value per share, 20,630,822 shares authorized, issued and outstanding. Class B preferred shares Ps.1 par value per share, 20,630,822 shares authorized, issued and outstanding ...... 41,261,644 41,261,644 Additional paid-in capital ...... 901,082,526 901,082,526 Accumulated deficit ...... (152,639,032) (297,126,532) Accumulated other comprehensive loss ...... (17,317,804) (14,204,182) Total Shareholders’ Equity ...... 1,001,387,214 860,013,336 Total Liabilities and Shareholders’ Equity ...... 6,376,934,518 6,239,264,951

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

A-F-50 GRUPO CLARIN S.A. Condensed Consolidated Financial Statements As of June 30, 2007 and December 31, 2006 and For the Six-Month Periods Ended June 30, 2007 and 2006

CONSOLIDATED STATEMENTS OF OPERATIONS (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated) For the Six-Month Periods Ended June 30, 2007 2006 (Unaudited) (Unaudited) Net sales ...... 1,895,457,403 1,058,179,521 Cost of sales (excluding depreciation and amortization) ...... (917,150,277) (589,375,276) Selling expenses (excluding depreciation and amortization) ...... (192,149,847) (107,815,749) Administrative expenses (excluding depreciation and amortization). . . (206,592,550) (113,241,903) Depreciation of property, plant and equipment ...... (112,851,412) (40,434,101) Amortization of intangible assets ...... (37,166,797) (2,644,285) Depreciation of other investments...... (31,840) (153,842) Operating income ...... 429,514,680 204,514,365 Financial results, net ...... (173,979,082) (200,714,628) Equity in earnings from unconsolidated affiliates...... 20,374,374 20,066,700 Income before income tax, tax on assets and minority interest ...... 275,909,972 23,866,437 Income tax and tax on assets — (expense) / benefit ...... (80,186,936) 205,771,880 Minority interest ...... (44,313,267) (3,975,412) Net income...... 151,409,769 225,662,905 Net income per common share: Basic ...... 0.58 0.91 Diluted ...... 0.56 0.83 Weighted average number of common shares outstanding: Basic ...... 228,999,880 228,999,880 Diluted ...... 270,261,524 270,261,524

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

A-F-51 GRUPO CLARIN S.A. Condensed Consolidated Financial Statements As of June 30, 2007 and December 31, 2006 and For the Six-Month Periods Ended June 30, 2007 and 2006

CONSOLIDATED STATEMENT OF CASH FLOWS (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated) For the Six-Month Periods Ended June 30, 2007 2006 (Unaudited) (Unaudited) Operating activities: Net income ...... 151,409,769 225,662,905 Adjustments for non-cash and non-operating items: Income tax and tax on assets ...... 80,186,936 (205,771,880) Accrued interest ...... 108,872,051 120,203,650 Adjustments to reconcile net income to cash provided by operating activities Depreciation of property, plant and equipment ...... 112,851,412 40,434,101 Amortization of intangible assets ...... 37,166,797 2,644,285 Depreciation of other investments ...... 31,840 153,842 Allowances for doubtful accounts ...... 10,017,246 (7,411,227) Setting up of provision for contingencies ...... 6,740,511 4,759,249 Equity in earnings from unconsolidated affiliates ...... (20,374,374) (20,066,700) Minority interest ...... 44,313,267 3,975,412 Other financial results ...... 26,110,953 56,552,518 (Gains) losses on sale of property, plant and equipment ...... (136,924) 987,963 Changes in assets and liabilities Trade receivables ...... (35,418,339) (87,950,708) Other receivables ...... 20,635,033 (43,044,072) Inventories...... (24,438,403) (50,708,281) Other assets ...... (1,569,286) 223,632 Accounts payable ...... 22,980,287 100,228,248 Salaries and social security payable ...... (2,780,967) (4,749,581) Taxes payable ...... (1,476,220) 23,453,212 Other liabilities ...... (18,996,599) 27,183,042 Provisions ...... (5,418,940) (7,689,632) Payment of interest ...... (105,596,121) (37,227,374) Collection of interest ...... 5,005,419 216,362 Collection of dividends ...... 11,577,605 7,537,767 Income tax and tax on assets payments ...... (59,728,906) (51,352,522) Cash provided by operating activities ...... 361,964,047 98,244,211 Investing activities: Payment for the acquisition of property, plant and equipment ...... (196,624,133) (78,560,386) Payment for the acquisition of subsidiaries and unconsolidated affiliates, net of cash acquired ...... — (27,180,467) Payment for the acquisition of other investments ...... — (14,719,018) Payment for the acquisition of intangible assets ...... (1,093,616) (778,855) Proceeds from sale of property, plant and equipment and other investments ...... 509,481 (40,990) Restricted cash ...... — 45,750,000 Capital restitution of equity investees...... 5,345,751 — Cash used in investing activities...... (191,862,517) (75,529,716) Financing activities: Loans obtained ...... 1,068,096 308,688,824 Repayments of loans and financial advances...... (64,957,030) (271,377,039) Net collection (payments) for financial instruments ...... 5,481,971 (6,796,629) Payments of seller financing ...... (5,695,973) (3,096,546) Payments of dividends ...... (18,000,000) — Payments to minority interest ...... (3,301,578) (410,284) Deposits in reserve account ...... (14,379,385) — Payment of fees on bank and financial debt restructuring ...... — (24,158,238) Cash (used in) provided by financing activities ...... (99,783,899) 2,850,088 EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS ...... 6,792,116 8,101,889 Increase in cash and cash equivalents...... 77,109,747 33,666,472 Cash and cash equivalents at the beginning of the period ...... 326,926,096 449,368,949 Cash and cash equivalents at the end of the period ...... 404,035,843 483,035,421

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

A-F-52 GRUPO CLARIN S.A. Condensed Consolidated Financial Statements As of June 30, 2007 and December 31, 2006 and For the Six-Month Periods Ended June 30, 2007 and 2006

CONSOLIDATED STATEMENT OF CASH FLOWS (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated) For the Six-Month Period Ended June 30, 2007 2006 (Unaudited) (Unaudited) Supplemental cash flow information Significant non cash investing and financing activities Transfer of reserve account ...... 25,296,777 —

A-F-53 GRUPO CLARIN S.A. Condensed Consolidated Financial Statements As of June 30, 2007 and December 31, 2006 and For the Six-Month Periods Ended June 30, 2007 and 2006 CONSOLIDATED STATEMENT OF SHAREHOLDERS’ (DEFICIT) EQUITY AND OTHER COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (In Argentine Pesos (“Ps.”) — Unless Otherwise Stated) Accumulated Total Additional Other Shareholders’ Common Shares Preferred Shares Paid-In Accumulated Comprehensive Equity Shares Amount Shares Amount Capital Deficit Income (Loss) (Deficit) Balance at December 31, 2005 . . . . 228,999,880 228,999,880 41,261,644 41,261,644 901,082,526 (1,605,866,610) 3,429,660 (431,092,900) Foreign currency translation adjustments...... — — — — — — (4,081,142) (4,081,142) Net income for the period ...... — — — — — 225,662,905 — 225,662,905 Balance at June 30, 2006...... 228,999,880 228,999,880 41,261,644 41,261,644 901,082,526 (1,380,203,705) (651,482) (209,511,137) A-F-54 Balance at December 31, 2006 . . . 228,999,880 228,999,880 41,261,644 41,261,644 901,082,526 (297,126,532) (14,204,182) 860,013,336 Dividend declared ...... (6,922,269) — (6,922,269) Foreign currency translation adjustments...... — — — — — — (3,113,622) (3,113,622) Net income for the period ...... — — — — — 151,409,769 — 151,409,769 Balance at June 30, 2007...... 228,999,880 228,999,880 41,261,644 41,261,644 901,082,526 (152,639,032) (17,317,804) 1,001,387,214

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. NOTE 1. DESCRIPTION OF THE BUSINESS Grupo Clarín S.A. (“Grupo Clarín” or “the Company”) is a holding company that operates in the media industry. Its operating income and cash flows derive from the operations of its subsidiaries in which it directly or indirectly participates. These operations include cable television and Internet access services, newspaper and other printing and publishing activities, broadcast television, radio operations and television content production, on-line and new media services, and other media-related activities. A substantial portion of its revenues is generated in Argentina. Through its controlled companies and joint ventures, it is engaged primarily in the following business segments: a) Cable television and Internet access, b) Printing and publishing, c) Broadcasting and programming and d) Other.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation In preparing these condensed consolidated financial statements, the Company has followed accounting policies that are in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). US GAAP differs in certain respects from Argentine accounting practice applied by the Company in its statutory financial statements prepared in accordance with accounting principles generally accepted in Argentina (“Argentine GAAP”) and in accordance with the Comisión Nacional de Valores (“CNV”) rules. The unaudited condensed consolidated financial statements include 100% of the assets, liabilities, revenues, expenses and cash flows of Grupo Clarín and all entities in which the Company has a controlling voting interest (“subsidiaries”) required to be consolidated in accordance with US GAAP. When Grupo Clarín consolidates entities, the ownership interests of any minority parties are reflected as minority interest, and investment in entities in which the Company has 20% to 50% ownership, but not a controlling interest, are accounted for by the equity method. Intercompany accounts and transactions between consolidated entities have been eliminated in consolidation. The Company has not identified any variable interest entity (“VIE”) as defined by FIN 46(R). These unaudited interim financial statements reflect the Company’s consolidated financial position as of June 30, 2007 and December 31, 2006. These statements also show the Company’s consolidated statement of operations, its consolidated statement of shareholders’ equity and its consolidated statement of cash flows for the six-month periods ended June 30, 2007 and 2006. These statements include all normal recurring adjustments that Management believes are necessary to fairly state the Company’s financial position, operating results and cash flows. Because all of the disclosures required by US GAAP for annual consolidated financial statements are not included herein, these unaudited interim financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2006. The consolidated statements of operations, shareholder’s equity and cash flows for the periods presented are not necessarily indicative of results expected for any future period.

A-F-55 assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Uncertainty in Income Taxes On January 1, 2007 the Company adopted Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — An Interpretation of FASB Statement No. 109” (“FIN 48”). This interpretation clarifies the accounting for uncertain tax positions recognized in a company’s financial statements in accordance with Statement 109. FIN 48 prescribes a more likely than not recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on de-recognition, classification of a liability for unrecognized tax benefits, accounting for interest and penalties, accounting in interim periods, and expanded income tax disclosures. The adoption of FIN 48 had no significant impact on the Company’s condensed consolidated financial statements. As of June, the Company had 104 million of gross unrecognized tax benefits related to the allowance for deferred tax assets and tax loss carryforwards, which, if recognized, would favorably affect the effective income tax rate in future periods. As of June 30, 2007, income tax filings corresponding to fiscal years 2002 through 2006 could be subject to examination by the Administración Federal de Ingresos Públicos (The Argentine Tax Authority, “AFIP” for its Spanish acronym).

Recent Accounting Pronouncements Fair Value Measurements In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). The changes to current practice resulting from the application of SFAS 157 relate to the definition of fair value, the methods used to estimate fair value, and the requirement for expanded disclosures about estimates of fair value. The definition of fair value retains the exchange price notion in earlier definitions of fair value. SFAS 157 clarifies that the exchange price is the price in an orderly transaction between market participants to sell the asset or transfer the liability in the market in which the reporting entity would transact for the asset or liability. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The adoption of SFAS 157 will not have a significant impact on the Company’s financial position and results of operations.

Fair Value for Financial Assets and Liabilities In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an amendment of FASB Statement No. 115”. This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent with the Board’s long-term measurement objectives for accounting for financial instruments. The adoption of SFAS No. 159 will not have any material impact on the Company’s consolidated financial statements.

A-F-56 Diluted net income per common share is computed based on the average number of common shares outstanding and, when dilutive, potential common shares from preferred shares using the if converted method. Net income per common share for the six-month periods ended June 30, 2007 and 2006 is as follows: Six-Month Periods Ended June 30, 2007 2006 Numerator Net income...... 151,409,769 225,662,905 Adjustment for preferred shares ...... (17,500,000) (17,500,000) Net income available to common shareholders for Basic earnings per share ...... 133,909,769 208,162,905 Adjustment for preferred shares ...... 17,500,000 17,500,000 Net income available to common shareholders for Diluted earnings per share ...... 151,409,769 225,662,905 Denominator: Weighted average of common shares outstanding for Basic earnings per share ...... 228,999,880 228,999,880 Adjustment for Preferred shares ...... 41,261,644 41,261,644 Adjusted weighted average of common shares outstanding for Diluted earnings per share ...... 270,261,524 270,261,524 Basic net income per share ...... 0.58 0.91 Diluted net income per share ...... 0.56 0.83

NOTE 4. GOODWILL The breakdown of Goodwill is as follows: As of December 31, Acquisitions/ As of June 30, 2006 (Dispositions) 2007 Comercializadora de Productos Gráficos Brasileros Ltda...... 19.947.800 (34.762) 19.913.038 Telecor S.A.C.I. (“Telecor”) ...... 18.854.954 — 18.854.954 Teledifusora Bahiense S.A. (“Telba”)...... 1.929.235 — 1.929.235 Cablevisión S.A. (“Cablevisión”) . . 1.652.754.542 (7.087.961) 1.645.666.581 Teledigital Cable S.A. (“Teledigital”) ...... 201.910.249 — 201.910.249 Multicanal S.A. (“Multicanal”) and subsidiaries ...... 1.010.610.429 2.717.403 1.013.327.832 Primera Red Interactiva de Medios Argentinos S.A. (“PRIMA”). . . . . 1.835.769 — 1.835.769 Other ...... 1.192.222 688.973 1.881.195 2.909.035.200 (3.716.347) 2.905.318.853

A-F-57 As of December 31, Acquisitions / As of December 31, 2005 (Dispositions) 2006 Comercializadora de Productos Gráficos Brasileros Ltda...... — 19,947,800 19,947,800 Telecor ...... 18,854,954 — 18,854,954 Telba ...... 1,929,235 — 1,929,235 Cablevisión...... — 1,652,754,542 1,652,754,542 Teledigital...... — 201,910,249 201,910,249 Multicanal and subsidiaries. . 1,132,761,628 (122,151,199) 1,010,610,429 PRIMA ...... 1,835,769 — 1,835,769 Other ...... 1,192,222 — 1,192,222 1,156,573,808 1,752,461,392 2,909,035,200

The components of Goodwill by segments are as follow: As of June 30, As of December 31, 2007 2006 Cable television and Internet access...... 2,862,740,431 2,867,110,989 Printing and publishing ...... 21,794,233 21,140,022 Broadcasting and programming ...... 20,784,189 20,784,189 2,905,318,853 2,909,035,200

NOTE 5. COMPREHENSIVE INCOME (LOSS) The following represents each of the components of Other Comprehensive Income (“OCI”), net of taxes, for the six-month periods ended June 30: 2007 2006 Net income...... 151,409,769 225,662,905 Other comprehensive (loss) income, net: Foreign currency translation adjustments ...... (3,113,622) (4,081,142) Total Comprehensive income, net ...... 148,296,147 221,581,763

NOTE 6. SEGMENT INFORMATION SFAS No. 131 “Disclosure about Segments of an Enterprise and Related Information” requires that a public business enterprise report financial and descriptive information about its reportable operating segments. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company is mainly engaged in media and entertainment activities, which are carried out through the companies in which it holds a participating interest. Therefore, the following business segments have been identified: • Cable television and Internet access: it is basically comprised by the operations of its subsidiary Cablevisión together with its subsidiaries, mainly Multicanal, Teledigital and PRIMA. • Printing and publishing: it is basically comprised by the operations of its subsidiary AGEA and its subsidiaries AGR, Tinta Fresca Ediciones S.A., and its equity investments in Compañía Inversora de Medios de Comunicación S.A. (“CIMECO”) and Papel Prensa S.A.I.C.F. y de M.

A-F-58 • Broadcasting and programming: it is basically comprised by the operations of its subsidiaries ARTEAR, IESA and Radio Mitre, and their respective subsidiaries, including Telecor S.A.C.I (“Telecor”), Teledifusora Bahiense S.A. (“Telba”), Radio Televisión Río Negro Sociedad del Estado LU 92 Canal 10 — UTE, and their equity investments in Pol-Ka Producciones S.A., Ideas del Sur S.A., Tele Red Imagen S.A. (“TRISA”) and Televisión Satelital Codificada S.A. Additionally, the Company is engaged in other related business, which was included under “Other”. These segments include the Company’s own operations (particular to a holding company) and those carried out by its directly and indirectly controlled subsidiaries GCGC, Prima Internacional and Clarín Global. The following tables summarize the information as of June 30, 2007 and 2006, and Decem- ber 31, 2006 for each of the segments identified by the Company: Cable Television and Broadcasting Internet Printing and and Access Publishing Programming Other Eliminations Total INFORMATION ARISING FROM THE UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2007 Net sales to third parties ...... 1,215,997,695 447,552,330 210,212,945 21,694,433 — 1,895,457,403 Intersegment net sales ...... 2,949,846 44,589,324 18,048,902 43,240,933 (108,829,005) — Net sales ...... 1,218,947,541 492,141,654 228,261,847 64,935,366 (108,829,005) 1,895,457,403 Cost of sales (excluding depreciation and amortization) ...... (519,874,312) (247,020,025) (146,510,881) (21,771,835) 18,026,776 (917,150,277) Selling expenses (excluding depreciation and amortization) ...... (145,079,095) (71,454,611) (19,283,179) (6,548,236) 50,215,274 (192,149,847) Administrative expenses (excluding depreciation and amortization) ...... (138,269,128) (55,429,004) (30,209,064) (23,272,309) 40,586,955 (206,592,550) Depreciation of property, plant and equipment ...... (98,132,802) (8,604,196) (5,116,260) (998,154) — (112,851,412) Amortization of intangible assets...... (35,434,328) (1,513,988) (210,884) (7,597) — (37,166,797) Depreciation of other investments ...... — (31,840) — — — (31,840) Operating Income ...... 282,157,876 108,087,990 26,931,579 12,337,235 — 429,514,680 Financial results, net ...... (137,869,882) (14,041,014) (7,023,795) (15,044,391) — (173,979,082) Equity in earnings (losses) from unconsolidated affiliates ...... 2,544,221 7,437,250 12,055,885 (1,662,982) — 20,374,374 Income before income tax, tax on assets and minority interest ...... 146,832,215 101,484,226 31,963,669 (4,370,138) — 275,909,972 Income tax and tax on assets (expense) benefit ...... (33,013,934) (32,327,557) (6,955,119) (7,890,326) — (80,186,936) Minority interest ...... (43,705,194) — (611,923) 3,850 — (44,313,267) Net income ...... 70,113,087 69,156,669 24,396,627 (12,256,614) — 151,409,769

A-F-59 Cable Television and Broadcasting Internet Printing and and Access Publishing Programming Other Eliminations Total INFORMATION ARISING FROM UNAUDITED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2007 Total Assets ...... 5,126,709,868 872,549,323 487,465,092 517,690,213 (627,479,978) 6,376,934,518 Total Liabilities...... 3,421,056,281 648,542,343 303,716,952 917,808,176 (627,479,978) 4,663,643,774

ADDITIONAL UNAUDITED CONSOLIDATED INFORMATION AS OF JUNE 30, 2007 Acquisition of property, plant and equipment ...... 177,836,928 12,594,855 5,211,794 980,556 — 196,624,133 Acquisition of intangible assets. . — 1,092,601 1,015 — — 1,093,616 Non-cash expenses ...... (14,036,008) 640,474 (2,945,556) (416,667) — (16,757,757)

INFORMATION ARISING FROM THE UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2006 Net sales to third parties ...... 434,025,949 420,458,825 193,772,839 9,921,908 — 1,058,179,521 Intersegment net sales ...... 4,081,570 15,987,145 9,367,933 31,656,820 (61,093,468) — Net sales ...... 438,107,519 436,445,970 203,140,772 41,578,728 (61,093,468) 1,058,179,521 Cost of sales (excluding depreciation and amortization) ...... (219,504,175) (230,689,700) (136,078,288) (11,669,790) 8,566,677 (589,375,276) Selling expenses (excluding depreciation and amortization) ...... (63,708,311) (43,731,260) (18,739,897) (4,205,048) 22,568,767 (107,815,749) Administrative expenses (excluding depreciation and amortization) ...... (48,005,369) (49,655,301) (28,645,389) (16,893,868) 29,958,024 (113,241,903) Depreciation of property, plant and equipment ...... (26,999,737) (7,217,774) (5,498,268) (718,322) — (40,434,101) Amortization of intangible assets...... (1,795,682) (633,930) (255,265) 40,592 — (2,644,285) Depreciation of other investments ...... — (35,492) — (118,350) — (153,842) Operating Income ...... 78,094,245 104,482,513 13,923,665 8,013,942 — 204,514,365 Financial results, net ...... (159,791,854) (3,297,205) (4,428,563) (33,197,006) — (200,714,628) Equity in earnings (losses) from unconsolidated affiliates ...... (8,927,582) 9,233,079 5,383,233 14,377,970 — 20,066,700 Income before income tax, tax on assets and minority interest ...... (90,625,191) 110,418,387 14,878,335 (10,805,094) — 23,866,437 Income tax and tax on assets (expense) benefit ...... 247,200,984 (35,533,156) (4,940,657) (955,291) — 205,771,880 Minority interest ...... (3,742,383) — (233,029) — — (3,975,412) Net income ...... 152,833,410 74,885,231 9,704,649 (11,760,385) — 225,662,905

A-F-60 Cable Television and Broadcasting Internet Printing and and Access Publishing Programming Other Eliminations Total INFORMATION ARISING FROM CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2006 Total Assets ...... 5,079,617,111 827,215,614 428,098,212 433,739,817 (529,405,803) 6,239,264,951 Total Liabilities...... 3,403,714,859 637,993,174 249,512,742 947,971,575 (529,405,803) 4,709,786,547

ADDITIONAL UNAUDITED CONSOLIDATED INFORMATION AS OF JUNE 30, 2006 Acquisition of property, plant and equipment ...... 68,278,174 26,423,563 7,339,368 681,270 (24,161,989) 78,560,386 Acquisition of intangible assets. . — 778,855 — — — 778,855 Non-cash expenses ...... (3,293,208) 10,169,513 (3,788,245) (556,082) — 2,531,978

NOTE 7. COMMITMENTS AND CONTINGENCIES Restrictions, Surety and Guarantees • As of June 30, 2007 and in accordance with the contract entered into to sell its equity interest in Activa Anticipar A.F.J.P. S.A., Grupo Clarín holds a guarantee deposit amounting to US$26,793 (net of provisions) recoverable under certain conditions and within specified terms (provided by Jupenhold S.A., a company absorbed by Grupo Clarín) to cover potential liabilities and the payment of all ongoing lawsuits, and to guarantee labor and social security obligations arising before the date of that sale. The amount of the deposit does not limit the amount of the Company’s guarantees. The Company estimates that the guarantee fund is sufficient based on the legal advisors’ opinion. • Grupo Clarín has executed guarantees with the banks involved in certain outstanding interest rate and exchange rates swap agreements, entered into by one of the Company’s subsidiaries and relating to a nominal value of approximately 152 million, in order to fully, unconditionally and irrevocably guarantee the timely payment of all obligations arising from said contracts. • In October 2003, Grupo Clarín approved a US$15 million contribution to Multicanal, to be applied to the Cash Option Payment set forth in its debt restructuring, as described in Note 15 to the annual financial statements. For that purpose, in December 2003, Grupo Clarín entered into a trust agreement with JPMorgan Chase Bank and made a deposit of this amount in that entity. This deposit was accounted for as restricted cash as a guaranty deposit within Other receivables. During 2006 this deposit was released. • IESA has contractual restrictions on the transfer of its equity interest in TRISA and Tele Net Image Corp. • Furthermore, TRISA’s equity interest in Torneos y Competencias S.A. (Uruguay) is pledged as collateral for a credit line. • AGEA, TRISA, Cablevisión and Multicanal have financial indebtedness outstanding involving certain restrictions, including but not limited to, the distribution of dividends. • Pursuant to the terms and conditions of Cablevisión’s outstanding Negotiable Obligations issued on October 7, 2005, as of June 30, 2007, Cablevisión holds 33.6 million in a reserve account to guarantee the payment of interest on the agreed-upon terms. Should Cablevisión default, either partially or totally, on the payment of amounts due under the Negotiable

A-F-61 Obligations above-mentioned, the trustee shall promptly apply the funds deposited in the reserve account the amounts to settle principal or interest and cure the default. To the extent Cablevisión has not defaulted on its obligations under the Negotiable Obligations issued on October 7, 2005, it may instruct the Trustee to transfer amounts deposited for the sole purpose of applying them to service debt or to pay the purchase or redemption price of such Negotiable Obligations, acquired in the over-the-counter market or redeemed by Cablevisión.

Furthermore, pursuant to the terms and conditions of the Negotiable Obligations issued by Multicanal on July 20, 2006, such subsidiary set up a reserve account, which amounted to 14.4 million as of June 30, 2007. Such funds are restricted to the payment of interest and principal of the above securities.

Pending Authorizations from the Federal Broadcasting Committee (“COMFER”)

Authorizations regarding the elimination of signal distribution modems by Multicanal, share transfers in its favor and company reorganizations are pending with the COMFER.

While the subsidiaries expect to obtain such approvals, no assurance can be given that the COMFER will grant them.

Broadcasting Licenses

On May 24, 2005, Decree 527/05 provided for a 10-year-suspension of the terms then effective of broadcasting licenses or its extensions, subject to certain conditions. Calculation of the terms shall be automatically resumed upon expiration of the suspension term. The Decree requires that companies seeking to rely on the extension subject to it submit for the COMFER’s approval, within 2 years of the date of the Decree i) a programming project contributing to the preservation of the national culture and the education of the population; and ii) a project to invest in technology.

All the broadcasting services licensee subsidiaries have submitted both projects in due time and form. ARTEAR and its subsidiaries Telecor and Telba have obtained the COMFER’s approval of the projects submitted. The projects submitted by Radio Mitre, as well as Cablevisión, Multicanal and its subsidiaries are still pending approval from the COMFER. Although no assurance can be given, these subsidiaries expect that their respective licenses will be timely extended or renewed.

Antitrust Considerations

The Comisión Nacional de Defensa de la Competencia (“CNDC” for its Spanish acronym) received several complaints against Cablevisión, Multicanal and their subsidiaries prior to the increase of our ownership interest in Cablevisión in September 26, 2006 alleging, among other issues, divisions of areas among these companies, imposition of predatory prices, price discrimination among areas, minimum pricing for the trading of channels and other anti-competitive practices.

A-F-62 Although no assurance can be given as to the final outcome of the above-mentioned cases, Cablevisión, Multicanal and its legal counsel believe, based on the available information, that the probability of these issues having a significant adverse impact on the financial-economic situation of these companies is remote.

Other Regulatory Matters Multicanal and Cablevisión In January 2006, the Government of the City of Buenos Aires enacted Act 1.877, which provides for a 15-year-term to regularize the authorization to install cable television networks in the thorough- fare on a single-column. It also provides for a one-year-term in order to remove posts in the area known as “historical part of town”. Finally, the new Act sets forth a 3-year-term for regularizing on a single column basis the avenues of the City of Buenos Aires. The related works have already been scheduled and budgeted to be executed in the forthcoming years. Furthermore, the Government of the City of Mar del Plata enacted Ordinance No. 9163, governing the installation of cable television networks. Such Ordinance was amended and restated by Ordinance No. 15981 dated February 26, 2004, providing for a term due December 31, 2007 for cable companies to convert their cable networks.

Commitments to make Capital Contributions to Subsidiaries Fintelco S.A. (“Fintelco”) reported negative balance in its shareholders’ equity as of November 30, 2006. Under the Argentine Business Associations Act, this event could bring about its dissolution due to capital loss, unless the shareholders agree to its total or partial repayment or a capital increase. Cablevisión and Multicanal hold each 50% of Fintelco’s capital share. In March 2007, both companies made irrevocable contributions to Fintelco S.A. in the amount of 12.4 million each, in order to restore the financial position of such company. In those cases where the Company has not committed to provide further financial support to its direct and indirect subsidiaries, the Company does not recognize its share of losses in excess of the carrying amount of such investment.

Claims brought by the COMFER ARTEAR On December 9, 2002, ARTEAR adhered to the payment facilities regime established by Executive Power Decree No. 2362/02 to comply with fines already imposed or that could be imposed due to infringement of effective broadcasting regulations between January 1, 2001 and October 31, 2002, inclusive, and opted to recognize the total amount to be settled by granting advertising seconds in favor of the COMFER. In addition, between November 1, 2002 and June 30, 2007, the COMFER applied fines to ARTEAR under the new regime in effect, amounting to approximately 1.2 million, which have been provisioned. ARTEAR has appealed the decisions imposing those fines.

Radio Mitre As of June 30, 2007, Radio Mitre records an outstanding balance to be settled with advertising in favor of TELAM, arising from fines imposed by the COMFER.

A-F-63 these summary proceedings, imposing fines in the amount of approximately 1.5 million. Cablevisión appealed such penalties and the rest of the summary proceedings are pending of resolution.

Lawsuits and/or Claims CIMECO The AFIP sent CIMECO a notice challenging the income tax assessment for the fiscal periods 2000, 2001 and 2002. In such communication, the AFIP challenged mainly the deduction of interest and exchange differences in the tax returns filed for those years. Even though such challenge does not generate final tax liabilities for the above periods, CIMECO would have had to reduce the accumulated tax loss amounts that were used to offset taxable income in subsequent years. In the event AFIP’s position prevailed, CIMECO’s contingency as of June 30, 2007 would amount to approximately 12.3 million for tax and 5.6 for interest. CIMECO presented its defense before the AFIP. It was dismissed by the tax authorities, which issued an official assessment and imposed the respective penalties. Due to the above dismissal, CIMECO, pursuant to section 76 of the Tax Proceedings Act, appealed such resolution before the Tax Court on August 15, 2007. CIMECO and its legal and tax advisors believe it has sound grounds to defend its position, for which it believes AFIP’s challenge shall not prevail. Accordingly, it has not booked an allowance as of June 30, 2007 for the impact such challenge might have on CIMECO.

ARTEAR There has been a recent dispute between broadcast TV operators and the National Customs Administration (“ANA” for its Spanish acronym) in connection with the import value of films. Under the criterion followed by the broadcast TV operators, ARTEAR paid other taxes which, if ANA’s position prevails, should not have been paid. Since the amount of taxes paid exceeds those claimed by the ANA, in the opinion of the subsidiary and its legal advisors, this situation would not have a material economic impact and, therefore, no provision has been recorded.

TRISA The Argentine Association of Songwriters and Composers (“SADAIC” for its Spanish acronym) filed a claim against TRISA, a company in which IESA holds a 50% interest and exercises control jointly with Torneos y Competencias S.A., for the payment of royalties on musical works used in TyC Sports programs, which are broadcast nationwide via satellite. The claim is equivalent to 1% on TRISA’s gross sales since 1993. In August 2006, TRISA reached a settlement with SADAIC with respect to the claim. The agreement contemplates a payment of a 0.3% royalty over TRISA’s turnover as from June 2006, payable monthly. In addition, the parties agreed on the payment of a lump sum to discharge any and all amounts allegedly owed by TRISA for the whole period elapsed through May 2006. As of the date of these consolidated financial statements, TRISA has fulfilled all the obligations arising from such settlement.

A-F-64 GCGC

During the year ended December 31, 2005, GCGC recorded a provision amounting to approximately 2.3 million based on a potential claim that could arise from different interpretations made by the AFIP of Act No. 25.250 and application assumptions.

Although GCGC and its legal advisors consider that the original interpretation was technically correct and duly supported, following a conservative criterion, such subsidiary decided to set up a provision. During the year ended December 31, 2006, the subsidiary voluntarily paid approximately 2.3 million for differences between its original calculations and the various interpretations of the AFIP of Act No. 25.250, plus the related interest and fines. GCGC reserves the right to apply for a refund of amounts paid.

Cablevisión

On April 20, 2005, Cablevisión was served notice of the ruling from the National Tax Court, which provided for the confirmation of AFIP’s official assessment concerning the alleged failure to pay Value Added Tax (“VAT”) on sales of advertising in magazines for certain periods of the years 1996 through 1998. As of December 31, 2006, the restated amounts are estimated at approximately 13 million. Cablevisión appealed such ruling. On June 6, 2006, Cablevisión obtained a preliminary injunction pursuant to which the AFIP shall refrain from claiming the VAT payment mentioned above. Cablevisión and its legal counsel consider that it may be possible to obtain a favorable judicial resolution and, therefore, that the probability of this issue having a significant adverse impact on Cablevisión’s financial-economic situation is remote.

In January 2007, Cablevisión and Multicanal were served with an injunction issued by a provincial court in the province of San Luis, at the request of Grupo Radio Noticias S.R.L. (hereinafter, “Grupo Radio Noticias”). Such company alleged being the owner of a broadcast radio station that would arguably be harmed by the transactions involving Cablevisión, Multicanal, Holding Teledigital Cable S.A. (“Holding Teledigital”) and PRIMA, and the Company that would be consummated in September 2006.

Pursuant to such injunction, Cablevisión, Multicanal and its controlling shareholders and subsidiaries, and certain regulatory agencies shall, among other things, refrain from carrying out or authorizing, respectively, certain corporate operations, including, but not limited to, mergers, acquisitions and issuance of securities. Cablevisión and Multicanal appealed such injunction, but yet no decision has been rendered as of the date of these financial statements. Furthermore, a direct request for the case to be transferred to the Superior Court of the Province of San Luis was filed, which was considered unfounded pursuant to the resolution referred to below.

Pursuant to the request for dismissal due to lack of jurisdiction filed by the Company in the case 527 entitled “Multicanal S.A. and other versus/ CONADECO Decree ⁄5 and Other over/ proceeding to decide on a legal issue” (whereby the CNDC was ordered to assume, in exercise of its legal and regulatory power, pre-judicial intervention in relation to the acquisition of Cablevisión’s capital stock, in the event it were under its jurisdiction), the Supreme Court of Justice determined that the San Luis Court lacked jurisdiction and adjudicated jurisdiction with respect to the proceedings “Grupo Radio Noticias” to the Federal Administrative Court in Buenos Aires. Pursuant to this ruling, such file is subject to the jurisdiction of the Federal Administrative Court No. 2, Secretariat No. 4.

On July 19, 2007, the Federal Administrative Court No. 2 indicated that the preliminary injunction issued by San Luis Court is not binding upon the Company and Multicanal and ruled that the previous preliminary injunction imposed on the Company is legally binding on any public or private entity that has any legal interest in the merger subject to CNDC assessment. Even though the Company cannot give assurance that it will prevail as to the claims filed by Grupo Radio Noticias, it considers such claims to be unfounded.

A-F-65 Multicanal

Multicanal brought several claims against Grupo Supercanal, including an action to declare null and void the resolutions adopted during the Extraordinary Shareholders’ Meeting of Supercanal Holding S.A. held on January 25, 2000. The mentioned resolutions were intended to reduce the capital share of Supercanal Holding S.A. to 12,000 and subsequently increase such capital to 83,012,000. The Court approved the preliminary injunction requested by Multicanal for the suspension of the effects of such Extraordinary Shareholders’ Meeting, but required that Multicanal post bond for 22 million for potential damages that could be assessed against the defendant, should the complaint be dismissed. The remedy was granted against the issue of a surety bond. The Court of Appeals revoked the preliminary injunction. Multicanal filed an extraordinary appeal against that resolution, claiming it is both “arbitrary” and “damaging to the institution”. On October 1, 2004, Multicanal was served notice of the dismissal of its extraordinary appeal.

Other Commitments

ARTEAR

Upon ARTEAR acquisition of its subsidiary Telecor in 2000, it maintains an irrevocable put option of 755,565 common, nominative, non-endorsable shares, representing 14.815% of the capital stock and votes of Telecor, agreed in favor of the sellers, for a 16-year term as from March 16, 2010 at a price of US$3 million and an irrevocable call option of such shares agreed in favor of ARTEAR, and the latter at 26 years as from March 16, 2000 for US$4.8 million, which will be adjusted at a nominal annual rate of 5% as from April 16, 2016.

NOTE 8. RESTRICTIONS ON PROFIT DISTRIBUTIONS

The Company may declare dividends only out of the Company’s retained earnings stated in the Company’s financial statements, prepared in accordance with Argentine GAAP and CNV regulations and approved by the shareholders’ meeting. As of June 30, 2007, the Company reported an accumulated deficit of 329.8 million in its financial statements prepared in accordance with Argentine GAAP and CNV regulations.

As required by the Argentine Business Associations Act and the Company’s by-laws, net income for the year should be appropriated as follows: (i) 5% of net income until reaching 20% of the capital share to the legal reserve and (ii) to dividends on preferred shares, giving priority to unpaid accumulated dividends.

A-F-66 NOTE 9. AGREEMENTS WITH THE ARGENTINE FOOTBALL ASSOCIATION (“AFA” FOR ITS SPANISH ACRONYM) On June 22, 2007 TRISA and TSC executed supplementary agreements with AFA applicable from the 2007/2008 until the 2013/2014 soccer seasons for broadcasting the Argentine soccer first division official tournament matches (in the case of TSC) and National B and metropolitan first B categories (in the case of TRISA). Under such agreements, TRISA and TSC expanded their services in exchange for a new programming schedule that basically implies the live broadcasting of all soccer matches of each season.

NOTE 10. INCOME TAX Income tax and tax on assets benefit for the six-month period ended June 30, 2006 was mainly derived from the reversal of deferred tax provisions of Multicanal related to the impact on tax loss carryforwards of the gain generated by its troubled debt restructuring carried out on July 2006 and the resulting future lower interest accrual. The effective tax rate determined for the six-month period ended June 30, 2007 does not differ significantly from the effective tax rate determined for the year ended December 31, 2006, without taking into consideration the effect of changes in the allowance of deferred tax asset and tax loss carryforward.

NOTE 11. SUBSEQUENT EVENTS On July 4, 2007 ARTEAR acquired a 100% of the shares of capital stock of Bariloche TV S.A. c for a total consideration of approximately US$1.1 million. On July 16, 2007 the Company approved the conversion of 5,100,000 Class B common shares at a par value of 1 each and entitled to 1 voting right per share into 5,100,000 Class A common shares at a par value of 1 each and entitled to 5 voting rights per share. On July 20, 2007 the Company Shareholders’ meeting resolved to: • Authorize the Company to go public and request authorization of the initial public offering of its entire capital share in Argentina and on foreign markets and listing on the Buenos Aires Stock Exchange and/or foreign stock exchange and/or self-regulated markets. • Increase share capital up to the amount of 30,000,000 by means of the issuance of up to 30,000,000 Class B common shares with a face value of Ps.1 (one) each and entitled to 1 (one) vote per share, to be offered by means of public subscription in Argentina and abroad. The subscription price of the new shares to be issued, as well as the exact amount of the increase of the capital stock, will be established in due time by the Board of Directors. • Amend the bylaws comprehensively, which will be effective as from the date on the resolution providing for the Company to go public. Such amendments contemplate among others changes in the structure and election of directors and the supervisory committee, the conversion of preferred shares issued by the Company into common shares, and the organization of an audit committee.

A-F-67 In August 2007 AGEA incorporated a new company, in which it holds 51% interest. Such subsidiary acquired a classified advertisements Internet portal dedicated to the purchase and sale of automobiles and motorcycles, partially financed with a loan granted by the Company. Upon closing, the Company subscribed, through one of its subsidiaries, options with a third party over a participating interest in one of its affiliates in the Printing and Publishing segment. These options, which are not subject to certain terms set forth in the respective agreements, would involve, if executed, payments to be made by the Company in the amount of approximately US$64 million. On August 27, the Company indirectly increased its equity interest in CIMECO from 33.33% to 50% for a total amount of US$18 million paid in cash. On August 28, 2007, the Company made an irrevocable contribution to CIMECO, thus acquiring a 50% indirect interest for a total amount of US$6 million. Such affiliate thus repaid a debt arising from a recent acquisition.

A-F-68 REPORT OF INDEPENDENT AUDITORS

To the Shareholders, President and Directors of Grupo Clarín S.A.: We have reviewed the accompanying condensed consolidated balance sheet of Grupo Clarín S.A. and its subsidiaries as of June 30, 2007 and the related condensed consolidated statements of operations, shareholders’ equity and comprehensive income and cash flows for each of the six-month periods ended June 30, 2007 and 2006. These interim condensed consolidated financial statements are the responsibility of the Company’s management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying interim condensed consolidated financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

PRICE WATERHOUSE & CO. S.R.L.

by /s/ Carlos A. Rebay (Partner) Carlos A. Rebay

City of Buenos Aires, September 10, 2007

A-F-69 ISSUER

Grupo Clarín S.A. Piedras 1743 (1140) City of Buenos Aires, Argentina

JOINT COORDINATORS AND INTERNATIONAL BOOKRUNNERS

Goldman Sachs International Credit Suisse Securities (Europe) Limited Peterborough Court One Cabot Square London EC4A 2BB London E14 4QJ United Kingdom United Kingdom

INTERNATIONAL LEADMANAGER

J.P. Morgan Securities Inc. 277 Park Avenue New York, NY 10172 United States of America

INTERNATIONAL CO-MANAGERS

Merrill Lynch International Itaú Securities, Inc. Merrill Lynch Financial Centre 540 Madison Avenue, 23rd floor 2 King Edward Street New York, New York 10022 London EC1A 1HQ United States of America United Kingdom

AUDITORS

Price Waterhouse & Co. S.R.L. (member firm of PriceWaterhouseCoopers) Bouchard 557 City of Buenos Aires, Argentina

LEGAL ADVISORS TO THE ISSUER LEGAL ADVISORS TO THE JOINT GLOBAL COORDINATORS

With reference to Argentine Law With reference to Argentine Law Saenz Valiente & Asociados Marval, O’Farrell & Mairal Juana Manso 205, 1st floor (1107) Av. Leandro N. Alem 928 (1001) City of Buenos Aires City of Buenos Aires Argentina Argentina

With reference to U.S. Law With reference to U.S. Law Cleary Gottlieb Steen & Hamilton LLP Shearman & Sterling LLP One Liberty Plaza 599 Lexington Ave. New York, Now York 10006-1470 New York, New York 10022 United States of America United States of America