GCLA.L Regulatory News (GCLA)

GRUPO CLARÍN S.A.

Annual Report and Consolidated Financial Statements

for the year ended December 31, 2013, presented on a comparative basis

GRUPO CLARÍN S.A.

ANNUAL REPORT FOR FISCAL YEAR No. 15 ENDED DECEMBER 31, 2013

The main subsidiaries in which Grupo Clarín S.A. has a direct or indirect controlling interest are: Arte Gráfico Editorial Argentino S.A. (AGEA), Artes Gráficas Rioplatense S.A. (AGR), Compañía Inversora en Medios de Comunicación S.A. (CIMECO), Cablevisión S.A. (Cablevisión), Primera Red Interactiva de Medios Argentinos (PRIMA) S.A., Compañía de Medios Digitales S.A. (CMD), Arte Radiotelevisivo Argentino S.A. (ARTEAR), GC Gestión Compartida S.A., Inversora de Eventos S.A. (IESA) and Radio Mitre S.A., among others.

2013 MACROECONOMIC ENVIRONMENT

In spite of the slow dynamics that developed countries continued to experience in 2013, emerging economies continued to grow in 2013 at a slightly slower pace than in previous years, but still well above average global growth.

The world has continued to register economic growth at two different structural paces, reflecting the operation of the new global accumulation mechanism, centered on emerging economies.

In this global framework, the performance of the Argentine economy in 2013 showed certain pronounced differences with respect to previous years. One major difference is the gradual advance in the correction of a significant portion of the main relative prices that occurred in the last months of 2013.

The upturn in economic activity, which showed an increased growth rate compared to 2012 in spite of the stagnation of the last quarter, is one of the highlights amidst the few assets of 2013.

Among the several liabilities, the accelerated deterioration of some of the fundamental macroeconomic variables over the last months of the year clearly stands out. This circumstance underscored the urgent need to start correcting imbalances that had been brewing in previous years and led to the replacement of the Minister of Economy and the President of the Central Bank after the October congressional elections.

In that regard, we note the extent of the decrease in Central Bank reserves (which fell by USD 12.7 billion, from USD 43.3 million to USD 30.6 billion). The seriousness of this decrease, which paradoxically took place under a scheme of strict exchange controls, reflects the material deterioration of the economy's external front.

The magnitude of the decrease in reserves eliminated the possibility to continue to extend in time, both the anchors (exchange rate and utility tariffs) that had been used in previous years to take pressure off the price index, and the negative interest rate for local currency savings in regard to inflation.

Hence, and in line with most currencies of other countries in the region, the Argentine peso depreciated with respect to the US dollar during 2013 (by almost 33% in nominal terms, or by 5.6% in real terms, taking into account the inflation rate differential between Argentina and the United States). The cost of utilities and the basic fares for buses and trains in the metropolitan area of the City of Buenos Aires suffered adjustments ranging from 33% to 42%. The BADLAR (average interest rate for 30 to 35 day term deposits of more than Ps. 1 million in Buenos Aires) in Argentine pesos paid by private banks to depositors stood at 20% by the end of the year, i.e. five percentage points above the level of the previous year.

The inflationary context in which the peso experienced its depreciation contrasted with the circumstances in other economies in the region. Another of the relevant liabilities of 2013 on the economic front was the acceleration of the price index, which according to private estimates closed at 27-28% at year end; 2.5 percentage points higher than in 2012. The increase in the price index was the highest since 2002, and contrasts with the single-digit levels registered by all other countries in the region, except for Venezuela.

A material portion of these imbalances is attributable to fiscal and monetary issues. The national public accounts have been deteriorating uninterruptedly since 2005 (when the primary fiscal surplus reached its record high, accounting for 3.9% of GDP). The national primary fiscal imbalance worsened significantly throughout 2013 and was increasingly financed with the printing of currency. Without counting remittances from the Central Bank and ANSES, the national primary deficit rose to Ps. 81.7 billion (approximately 2.7% of nominal GDP) during the year, more than doubling the figure for 2012. The financial deficit (i.e. deficit after honoring public debt interest) climbed to Ps. 123.7 billion (approximately 4.1% of GDP) in 2013.

Both figures are record highs since 2003, both in absolute and in relative terms. Such fiscal deterioration took place in spite of the increasing tax pressure of the last decade (a current record high for the three governmental levels on a consolidated basis).

Due to the reform of the Central Bank Charter, the fiscal imbalance described above was financed to a large extent with the printing of currency. In 2013, the monetary authority issued approximately Ps. 90.0 billion in order to aid the National Treasury, doubling the figures for 2012. However, the year-on-year growth of the monetary base (approximately 24%) was lower than in 2012, both in absolute values and as a percentage increase, because unlike previous years, in 2013 the external sector contributed to shrinking the monetary base.

Perspectives for the Upcoming Year

The changes introduced to U.S. monetary policy, along with the pace at which such changes will be finally implemented, and their gradual impact on that country's growth and employment rates, will be a determining factor in the development of the world economy in the upcoming year. The global environment of the emerging countries in the upcoming years will be probably characterized by less liquidity, a stronger U.S. dollar and lower commodity prices.

Under the current scheme, the short-term and medium-term performance of the Argentine economy depend mostly on the country's ability to generate sufficient foreign currency to honor interest payments on its foreign debt and to finance the necessary imports to sustain the production process. All other things being equal, this circumstance will depend on the evolution of the price and volume of exports and/or the use of the Central Bank's reserves.

Therefore, the likely stagnation of export values is a conditioning factor for the Argentine economy's performance in 2014. This scenario is attributable to the expected inflow of U.S. dollars injected to the economy by the agricultural sector (which will be similar to 2013, to the extent that the expected increase in the harvest volume is offset by an expected fall in the price of the main agricultural commodities), coupled with the potentially lower dynamism of industrial exports due to the poor growth expected for Brazil, among other reasons.

Consequently, this scenario will test the capacity of the economy to sustain the increase in imports required to preserve production growth without compromising the current levels of foreign currency reserves.

At a strictly local level, the key question for 2014 is the extent to which the significant nominal depreciation of the official Argentine Peso exchange rate that occurred in January, will be reflected on the prices of the economy as a whole and on the prices of food, in particular. Even though the adjustments to the price of public utilities that have already been implemented and those that are likely to be implemented in the future help to stop fiscal deterioration, they are also an additional factor that exerts pressure on an already high inflation rate.

Hence, if the inflation rate continues to accelerate, it will put pressure on the next rounds of wage negotiations, and will have a negative impact on the purchasing power of salaries and pensions that are not adjusted periodically, thus compromising improvement in social indicators and the distribution of income among the people of Argentina.

In summary, the external constraint that compromises the normal operation of the Argentine economy and the other imbalances created in, and carried over from, previous years, jeopardize the country's ability to make progress with pending matters as well as the accomplishments achieved so far.

All the circumstances described in this report reveal that the degree of freedom in making short and mid-term economic policy will be more limited than in previous years. The transition of the Argentine economy from a position of abundance of U.S. dollars to one of scarcity, gives rise to budgetary constraints to which economic policy makers are little accustomed, but that will necessarily have to be taken into account in their decisions during their remaining years in office.

THE YEAR 2013 AND THE MEDIA SECTOR IN ARGENTINA

At the close of 2013, the global media industry recorded an average growth rate of approximately 5%, similar to that of previous years, thus consolidating the recovery phase that was noticeable in the aftermath of the 2008-2009 crisis. The strong growth of digital revenues (of approximately 15% compared to 2012, according to the Global Entertainment and Media Outlook 2013-2017 issued by PWC) is a highlight of that phase, as such revenues increase at a rate significantly above the average. However, digital revenues still account for less than 10% of the total revenues generated by the industry (this percentage rises to 25% considering advertising revenues only).

The sustained growth of emerging economies and its resulting direct impact on the industry, fundamentally explains the performance of the industry that was described above. By way of example, in the course of the last few years the Latin-American media industry-in contrast to that of Argentina-has been experiencing growth rates at a global level slightly above those recorded by its Asian counterparts.

The healthy growth rate achieved by the economies of these countries takes some pressure off the most critical source of concern for this industry, which is always facing new challenges arising from the recurring emergence of new technologies and the changes in the media consumption patterns of new generations and of the population as a whole.

The accelerated migration of audiences, content and advertisers towards the digital ecosystem is still the cornerstone of the media industry's worldwide performance during 2013. The flexibility and user-friendliness of the new digital products, as well as the emerging opportunities for access and connectivity, are the key drivers of this change.

Hence, the acceleration of the current migration process towards digitalization in general, and to mobile platforms in particular, is giving rise to a veritable cultural revolution on a global basis, beyond the boundaries of our industry. The gradual shift to new available technologies is transforming the way in which we carry out our day-to-day activities and is leading to an unprecedented transformation of essential aspects of our societies, such as interpersonal relationships and access to the media for information and entertainment purposes. Digital natives and nomads are definitely the key drivers of this huge cultural change.

Over the last years, the choices available for media consumers have increased exponentially. That increase is mostly attributable to new technologies and platforms. Hence, the new "always-on consumer" is able to take significant control of when, where and how to access the desired content. As a consequence of this, companies are being permanently tested on how fast they can adapt and respond to these new demands.

All of the above, coupled with this new generation of consumers whose habits and preferences differ remarkably from those of prior generations, still poses a great challenge and at the same time represents an opportunity for each of the different segments of the media industry. The worldwide growth experienced by social media and new video and audio streaming platforms is of particular note.

For the local economy and media industry, the year 2013 was characterized by slow dynamics in direct contrast to the regional trend. In fact, as mentioned above, the moderate growth coupled with high inflation that characterized the economy throughout the year was an additional source of stress for this industry.

In addition to the macroeconomic trends analyzed above, at a micro level, the government escalated its attacks against the press with the clear purpose of colonizing the media and weakening independent media in general, and Grupo Clarín in particular.The regulatory tools devised to increase governmental intervention and affect private media sustainability, the discrediting campaigns and attacks against journalists and directors from media that are critical of the current administration, the arbitrary allocation of official advertising, the unprecedented restrictions imposed by the government on private advertising in newspapers and their related dramatic impact on the media economy, the use of publicly-owned media as promotional tools for the government, and the expansion of pro-government media (sustained only by the official advertising allocated to them) are good examples of such escalation.

In this complex environment, the results of the main sources of revenue of the industry were generally meager. In fact, advertising investment (including investment in digital products) increased by approximately 20% in nominal terms, slightly above the level of the previous year. This rise was mostly driven by government advertising expenditure, directed to continue to finance a matrix with a growing share of publicly-owned media. In terms of consumer prices, the increase in the consolidated advertising pie of the several industry segments fell again well below the inflation rate (of approximately 27% according to private estimates). This reveals that although advertising increased in nominal terms, the rate of increase was substantially lower than the inflation rate and the economy as a whole, thus reducing its relative weight in the same.

Unlike the trend of previous years and in line with most countries of the region, the broadcast television segment outperformed the newspaper segment in terms of attracting the largest share of advertising in the local market. This circumstance is mainly attributable to the decrease in private advertising derived from the restrictions imposed by the government on the main local newspapers.

The paid television and Internet segments continued to expand in 2013, even though Argentina's penetration rates are among the highest in the region. Online advertising has continued to increase its share in total revenues year after year. During 2013, these revenues accounted for almost 17% of the total advertising pie, moving closer to the newspaper segment which accounts for 25%.

The number of pay television subscribers increased at a faster pace during 2013, leveraged by the growing penetration of additional services (incorporation of high-definition signals to the grid and new technologies, such as, on-demand services, due to intensive investments in the expansion of network capacity).

Broadband demand continued to be dynamic, although it showed signs of a slight slowdown. In fact, by year-end, residential fixed broadband Internet access reached a new record high in a fiercely competitive environment noted for the promotional offers of its main market players. At the same time, the mobile broadband segment dynamics, driven by the high penetration of smartphones and the implementation of combined voice and data subscriptions by cell phone companies, evidenced the complementariness that this technology provides to the market.

In this regard, an increasingly relevant phenomenon on a global basis is the users' ongoing demand for higher speed, mostly as a result of the predominance of video traffic over other traffic and, to a lesser extent, as a result of the increasing number of devices connected to the Internet at home. Naturally, this increased demand for bandwidth per client compels providers to add new capabilities to their networks on an ongoing basis, building pressure on the current business models.

Lastly, newspaper circulation has continued to show its downward structural trend, similar to that of the rest of the world. Average newspaper circulation in the metropolitan area (City of Buenos Aires and its surroundings) (source: Newspaper and Magazine Circulation Verification Institute, IVC, adjusted by the Company to account for newspapers in the City of Buenos Aires for which circulation is not verified) fell by 6.4% (Mondays through Sundays) compared to the previous year. In contrast, it is worth noting the exponential, sustained increase in the number of visits to social networks and websites that create content, mainly news sites, with newspapers at the top of the rankings.

As a logical consequence, the increased number of readers of digital newspapers reveals that the demand for content (but not the preference for paper) remains strong, although it is spread across a broader variety of technological platforms. Hence, the way in which content is consumed, rather than content itself, is what represents a dramatic change in this specific segment of the industry.

Within the framework of this new ecosystem, deriving profitability from digital newspapers by generating revenues in line with their growing number of readers is still the main challenge faced by newspaper publishers from an economic-financial standpoint.

REGULATORY FRAMEWORK AND CONDITIONS FOR THE JOURNALISTIC AND MEDIA ACTIVITY DURING 2013

In addition to the above, during 2013 private media in general and Grupo Clarín in particular continued to face an escalating level of harassment. Such harassment was executed through official and para-official structures, with the clear intention of damaging the media's reputation and directly and indirectly limiting its journalistic activities.

In this framework, the government continued with the discriminatory allocation of official advertising used to create and sustain pro-government media, and to retaliate against critical media, as a tool to condition the press.

In this regard, the Supreme Court of Justice confirmed, in a decision that since 2009 there has been a discriminatory allocation of official advertising in connection with Arte Radiotelevisivo Argentino S.A., which was allocated practically no official advertising in early 2012. The court confirmed the decision rendered by Chamber No. 4 of the National Court of Appeals on Federal Administrative Matters in re "Arte Radiotelevisivo Argentino S.A. vs. EN-JGM-SMC on Claim for the protection of constitutional rights ("acción de amparo", Law 16,986) and ordered the national government to allocate official advertising among América TV S.A., Telearte S.A. (Canal 9), Teledifusora Federal (Canal 11), Arte Radiotelevisivo Argentino (Canal 13) and SNMP S.E. y RTA S.E. (Canal 7) on an equal and proportional basis, and that allocation mechanisms be implemented with a reasonable jurisdictional equilibrium that allows for an adequate judicial control of any illegality or unreasonableness in governmental action or failure to act with respect to the allocation of public funds to official advertising.

Thus, the Supreme Court of Justice confirmed the existence of discriminatory conduct in the allocation of official advertising towards one of the companies of Grupo Clarín. Such discriminatory conduct was also extended to the other companies of the Group, in particular Arte Gráfico Editorial Argentino S.A. and Radio Mitre S.A. The ARTEAR case is based on the precedents of Editorial Perfil and Editorial Rio Negro, and the court held that because it had already rendered judgment about the matter of allocation of official advertising in those cases, it could not now disregard its own doctrine.

The government also continued to use public funds and media on a discretionary basis to generate content and shows devoted to political propaganda and to the stigmatization of dissenting opinions; placing a number obstacles and discriminating against non-partisan media in the access to public information and escalating government attacks against such media to compromise their economic sustainability and credibility.

Other tools to exert editorial pressure consisted of abuse of bureaucratic controls or controls by public agencies that took the form of administrative persecutions, groundless resolutions, disproportionate tax controls and recurring audits. In this scenario, certain unusual administrative actions took place against Grupo Clarín through entities such as the National Antitrust Commission, AFSCA, the Argentine Securities Commission and the Financial Information Unit.

In addition to the discretionary allocation of official advertising as an indirect censorship tool, the Secretary of Domestic Trade put unprecedented pressure on advertisers of several industries and threatened them with fines if they advertised their products or services on certain media. In February 2013, it was publicly announced that the Secretariat of Domestic Trade had issued an unwritten order that is observed without exception by the entire market, whereby supermarkets and home appliance stores were arbitrarily banned from advertising in any media from the City of Buenos Aires and its surroundings. This virtual boycott of private advertising, paired with the arbitrary exclusion of official advertising from non-partisan media, affected directly the economic sustainability of independent media.

In the audiovisual sector, this offensive against the media was expressed though the enactment of the Audiovisual Communication Services Law No. 26,522 (LSCA) and its controversial implementing regulations, which clearly exceed the legal framework by granting powers to the enforcement agency that are not vested in that agency by the law. Some examples of this are: i) the power to intervene in the affairs of audiovisual broadcasting services on a discretionary basis: whether by revoking licenses or through simple summary proceedings, ii) the oversight of the organization and mandatory content of the programming grid of subscription cable TV services, particularly targeted at Cablevisión, or iii) the mandatory registration of direct advertisers with the AFSCA.

With respect to AFSCA, the persecution against Clarín reached its utmost expression during 2013 with the alleged attempt-which was later suspended-to kick off an ex-officio forced divestiture process to conform the Company and some of its subsidiaries to the provisions of the LSCA after the Supreme Court ruled that the controversial Section 161 of the LSCA was constitutional, thus confirming all red flags pointing at the risk of arbitrary enforcement by a non-independent authority.

On October 29, 2013 the Company was served with a decision rendered by the Supreme Court of Argentina which ordered (i) to revoke the decision issued by the Federal Court of Appeals on Civil and Commercial Matters on April 17, 2013 to the extent that it declared the unconstitutionality of Section 45, part 1, subsection "c" and final paragraph; part 2, subsections "c" and "d" and final paragraph; part 3 in its entirety; and part 1, subsection "b", with respect to the limitation to holding registered title to a single content signal, and Section 48, second paragraph, of the LSCA and (ii) to confirm the Decision to the extent it rejected the claim for damages as brought under the case file.

Both Grupo Clarín and its subsidiaries believe that the challenged sections-as held by the three dissenting opinions-not only contradict the principles of the Argentine National Constitution, but also those of the American Convention on Human Rights (Pact of San José de Costa Rica), as well as recent precedents in the Inter-American Commission on Human Rights, the Inter-American Court of Human Rights and the Special Rapporteurship for Freedom of Expression of the Organization of American States (OAS). Therefore, the claimant companies will analyze bringing an appeal before international courts to challenge those sections that entail an indirect act of censorship, that silence and discriminate against critical media, and violate acquired rights.

In addition, as provided in the Court's decision, the Company will continue to litigate in local courts all the aspects related to the discretionary and selective application of the law by the national government.

On October 31, 2013, even before the due date of the term for enforcing the decision rendered by the Supreme Court of Argentina in re "Grupo Clarín S.A. and Others v. National Executive Branch and other re: Merely Declarative Action" (File 119/10) within the framework of File No. 1395-AFSCA/2012, the Company was served with AFSCA Resolution No. 2276/2012 issued by the president of AFSCA on December 17, 2012. The Resolution provides for an ex-officio proceeding to conform the Company and some of its subsidiaries to the provisions of the LSCA.

Faced with the de-facto proceedings that sought to dispossess the Company of its licenses and assets through an ex-officio procedure, on November 4, 2013 the Company submitted to AFSCA and to the Supreme Court of Argentina a voluntary proposal to conform to the LSCA pursuant to section 161 of the LSCA, approved by Grupo Clarín's Board of Directors on November 3, 2013, in an attempt to avoid the forced divestiture of its assets by AFSCA.

The filing of the proposal resulted in the enactment of AFSCA Resolution No. 1471/AFSCA/2013 whereby the ex-officio divestiture procedure initiated pursuant to Resolution No. 2276/AFSCA/2012 was suspended and the AFSCA stated its intention to refrain from pursuing any administrative proceeding thereunder.

The voluntary proposal-which does not interrupt any of the judicial actions brought by the Company and its subsidiaries, among others, to defend their rights-was submitted together with a request that the decision rendered by the Supreme Court of Argentina be complied with in full. That is, requesting the involvement of an independent, unbiased enforcement authority with technical expertise, which may ensure a transparent and egalitarian treatment in the enforcement of the law.

The proposal involves a division of Grupo Clarín's current structure into six independent corporate units, whose respective owners will be defined as the implementation process progresses. This way, each unit will conform individually to the provisions of Sections 45 and 46 of the LSCA and its implementing regulations, and will be divided according to the following detail:

(i) Unit I: composed by (a) ARTEAR, owner of the signal of Canal 13 of Buenos Aires and the news signal TN (Todo Noticias). ARTEAR will also maintain its interest in (i) Telecor, holder of the license of Canal 12 of Córdoba and (ii) Bariloche TV, holder of the license of Canal 6 of Bariloche. (b) Radio Mitre, which will maintain the frequencies AM 790 and FM 100 in Buenos Aires, AM 810 and FM 102.9 in Córdoba, and FM 100.3 in Mendoza; and (c) certain assets, liabilities, rights and obligations to be spun off from Cablevisión ("Cablevisión Spinoff 1"), which will include 24 local licenses for physical link subscription television services, in cities where there is no incompatibility with broadcast TV.

(ii) Unit II: composed by the surviving Cablevisión, which will continue to carry out the business activities and operations of Cablevisión with all the assets, liabilities, rights and obligations that are not spun off from Cablevisión. It will include 24 licenses for physical link subscription television services.

(iii) Unit III: composed by Cablevisión Spinoff 2, which will include assets, rights and obligations to be spun off from Cablevisión, including 18 licenses for physical link subscription television services and 1 license for radio-electric link subscription television services.

(iv) Unit IV: (a) composed by IESA, owner of the signals TyC Sports and TyC Max; (b) the signals El 13 Satelital, Magazine, Volver, Quiero Música en mi Idioma, Canal Rural and Metro-the latter involves only the registration for its commercialization-.

(v) Unit V: held by an individual or legal entity that will not maintain a corporate relationship with Radio Mitre, its controlling companies, subsidiaries and/or controlled companies, and which shall hold: (a) one sound frequency modulation broadcasting service for the City of San Miguel de Tucumán-FM 99.5, (b) one sound frequency modulation broadcasting service for the City of San Carlos de Bariloche-FM 92.1, (c) one sound frequency modulation broadcasting service for the City of Santa Fe-FM 99.3, and (d) one sound frequency modulation broadcasting service for the City of Bahía Blanca-FM 96.5.

(vi) Unit VI: held by an individual or legal entity that will not maintain a corporate relationship with ARTEAR, its controlling companies, subsidiaries and/or controlled companies, and which shall hold one broadcast television license for the City of Bahía Blanca, Province of Buenos Aires-LU81 TV Canal 7-and an equity interest in Cuyo Televisión S.A., holder of one broadcast television license in Mendoza-LV83 TV Canal 9 Mendoza-.

Said proposal contemplates that the Company will continue to own, directly or indirectly, only one of the audiovisual communication service Units (among those defined as Unit I and Unit II) of the six that were described above.

The proposal submitted by the Company requires the approval of AFSCA, the intervention of other governmental and oversight agencies and the approval of the shareholders at the respective Shareholders' Meetings in order to carry out the restructuring and the transfer of licenses, assets, liabilities and operations to third parties. On February 18, 2014, the AFSCA declared the admissibility of said proposal and granted the Company a term of 180 calendar days for its implementation. On February 18, 2014, the Company's Board of Directors decided to call an Extraordinary Shareholders' Meeting to be held on March 20, 2014, in order to consider AFSCA Resolution No. 193/2014 and to instruct the Board of Directors to begin implementation of the proposal.

During 2013, the Company and its subsidiaries were also subject to other administrative attacks and maneuvers. The effects of Resolution No 50 of the Secretariat of Domestic Trade and subsequent resolutions issued in connection thereto, which arbitrarily and discriminatorily sought to fix Cablevisión S.A.'s monthly basic subscription price, were suspended by the Federal Court of the City of Mar del Plata in response to a claim filed by the Argentine Cable Television Association. Additionally, in connection with an administrative resolution issued by SECOM in 2010, whereby Fibertel's license was revoked, there are preliminary injunctions that suspend the application of the resolution and challenge its legality that are still effective.

At the same time, the attack against independent media affected again the distribution of newspapers and magazines by means of blockades to printing facilities, and and included continued actions by several official agencies to seek control of newsprint, the basic input for newspaper production.

The government's attempt to gain control of the paper industry has intensified, through several measures that sought to hinder the management of Papel Prensa (Papel Prensa supplies approximately 95% of the Argentine newspapers and the Company indirectly holds a 49% equity interest in that company). The government has tried to interfere with Papel Prensa's business practices and bring legal and administrative actions against it. For example, the government filed several claims with the CNV to have Papel Prensa's resolutions declared void for administrative purposes. Several summary proceedings against the Company, its directors, members of the supervisory committee and statutory auditors are currently pending before the CNV. Another example is Resolution No. 17,102/13, issued within the framework of Case No. 1032/2010, whereby the CNV imposed a fine against the Company and the members of its corporate bodies. On the legislative front, in 2011 Congress enacted Law No. 26,736, whereby the production and sale of newsprint was declared a matter of public interest. Said law is still effective and so are the limits on production and import of newsprint and the price per newsprint ton.

Additionally, under the Capital Markets Law, which was regulated by the Executive in 2013, the Argentine Securities Exchange Commission was vested with additional, discretionary powers to intervene in the governance of publicly traded companies. The CNV moved forward with certain administrative proceedings concerning the companies of Grupo Clarín that may lead to the application of the most controversial aspects of the Capital Markets Law. In fact, in July 2013, the CNV issued Resolution No. 17,131, whereby the General Ordinary Shareholders' Meeting of Grupo Clarín S.A. held on April 25, 2013 was declared null and void. The effects of this decision were suspended pursuant to a decision rendered by Chamber V of the National Court on Federal Administrative Matters in re "GRUPO CLARIN S.A vs. CNV RESOL. 17,131/13 (FILE 737/13)" File No. 29,563/13. Grupo Clarín S.A. was also served notice of an injunction issued on August 12, 2013 by Chamber A of the Federal Court of Appeals on Commercial Matters in re "SZWARC RUBEN MARIO vs. NATIONAL GOVERNMENT AND OTHERS on Injunction", a claim brought by one of the Company's minority shareholders. The injunction provided for the suspension of the effects of Section 20 of Law No. 26,831 in connection with Grupo Clarín S.A.

THE COMPANY. ORIGIN, EVOLUTION AND PROFILE

Grupo Clarín is Argentina's most prominent and diversified media group and one of the most important in the Spanish-speaking world. The Company is organized and operates in Argentina and its controlling shareholders and management are Argentine. Grupo Clarín is present in the Argentine printed media, radio, broadcast and cable television, audiovisual production, the printing industry and Internet access. Its leadership in the different media is a competitive advantage that enables Grupo Clarín to generate significant synergies and expand into new markets. Substantially all of Grupo Clarín's assets, operations and clients are located in Argentina, where it generates most of its revenues. The Company also carries out operations at a regional level.

The companies that comprise Grupo Clarín employ around 16,000 people and, as of year-end, reported annual net sales of Ps. 14.184 billion.

Grupo Clarín's history dates back to 1945, the year in which Roberto Noble founded the newspaper Clarín of Buenos Aires ("Diario Clarín"), with the goal of becoming a mass-distribution and quality newspaper, privileging information and committing to the comprehensive development of the country. Since 1969, Diario Clarín has been led by his wife, Ernestina Herrera de Noble. It became the flagship national newspaper and has consolidated its position throughout the years thanks to the work of its journalists and the loyalty of its readers. Diario Clarín is now one of the Spanish-language newspapers with the highest circulation in the world. Grupo Clarín has been one of the main actors in the changes undergone by the media worldwide. It has incorporated new and varied printing activities and decided to embrace technological developments, investing to reach its audiences through new platforms and channels and through new audiovisual and digital languages.

In this way, Grupo Clarín entered the radio and television sectors. Today, it is the owner of one of the two leading broadcast television channels in Argentina (ARTEAR/El Trece) and of AM/FM broadcast radio stations. Along with the newspaper, these media are recognized as the most credible and considered leaders of Argentine journalism in one of the most diverse media markets in the world. For example, in Buenos Aires, the Company's media compete in a market that has 5 broadcast television stations, 550 radios, and 12 national newspapers.

Grupo Clarín also publishes Olé, the first and only sports newspaper in Argentina; the free newspaper La Razón and the magazines Ñ, Genios, Jardín de Genios, Pymes and Elle, among other publications. Through CIMECO, the Company holds equity interests in the newspapers La Voz del Interior, Día a Día and Los Andes, in a market of approximately 200 regional and local newspapers. The Company also holds an equity interest in a national news agency (DyN). In the audiovisual arena, the Company also produces one of the 5 cable news signals (Todo Noticias), and the cable television signals Volver and Magazine, among others, sports channels and events (TyC Sports), television series and motion pictures (through Pol-ka, Ideas del Sur and Patagonik Film Group).

Another strength lies in its strategic stake in the content distribution sector, through cable television and Internet access. Since the beginning of Multicanal's operations in 1992 and after the recent acquisition of a majority interest in Cablevisión, Grupo Clarín has created one of the largest cable television systems in Latin America in terms of subscribers. Cablevisión is the first cable operator in Argentina among 700 operators and always competes with other cable or satellite options. Through Fibertel, it also provides high-speed Internet services and has one of the largest subscriber bases in a highly competitive market. In line with the global trend, Grupo Clarín has committed itself to expanding digital content production. Grupo Clarín's Internet portals and sites receive more than half of the visits to Argentine websites.

In 1999 Grupo Clarín was incorporated as an Argentine sociedad anónima, a corporation with limited liability. It gradually opened its capital to other participants and, since October 2007, it is listed on the Buenos Aires Stock Exchange and on the London Stock Exchange. It takes pride in having grown in Argentina, in being a source of influence on a local level in an increasingly transnational market with a size that enables it to compete without losing strength among large international players.

Grupo Clarín's investments in Argentina in the last 20 years have been very significant, always with the same central focus: Journalism and the media. Its activities have contributed to the creation of an important Argentine cultural industry and generate qualified and genuine employment. Its vision and business model focus on investing, producing, informing and entertaining, preserving Argentine values and identity, and preserving business independence in order to ensure journalistic independence.

In relation to its mission and values, since its foundation, Grupo Clarín has undertaken intense community activities. Grupo Clarín, together with the Noble Foundation, which was established in 1966, organizes and sponsors several programs and activities, particularly focused on education, culture and citizen participation. Furthermore, as an indication of its social responsibility throughout its history, Grupo Clarín focuses on the ongoing improvement of its processes, develops initiatives that arise from discussions with different stakeholders, and works for sustainability.

GRUPO CLARÍN AND ITS BUSINESS SEGMENTS IN 2013

In terms of results, Grupo Clarín and its business segments grew again in 2013 in a highly challenging context. During this year the Company consolidated the positive performance trends of the previous years in terms of revenues.

Net consolidated sales increased by 25.3%, from Ps. 11.319 billion to Ps. 14.184 billion. The growth in cable modem Internet access subscribers played a key role in the performance of subscription revenues. Sales of the remainder of the Company's products and services also increased.  

By the end of 2013, Grupo Clarín's gross consolidated financial indebtedness (including sellers financing, accrued interest and fair value adjustments) was approximately Ps. 4.142 billion, while net consolidated indebtedness was approximately Ps. 2.492 billion, accounting for an increase  of  29.9% and 32.3%, respectively. This was mostly due to the fact that approximately 90% of the Company's indebtness as of December 31, 2013 is denominated in US dollars and that the Argentine Peso depreciated by 32.5% in 2013, from Ps. 4.92 = USD 1 as of December 31, 2012 to Ps. 6.52 = USD 1 as of December 31, 2013.

The following is a description of the most significant events related to the situation and management of each of Grupo Clarín's business segments during 2013.

CABLE TELEVISION AND INTERNET ACCESS

Grupo Clarín operates, through Cablevisión, one of the main regional cable television and broadband systems. This segment's revenues mainly derive from monthly subscriptions to cable television service and high-speed Internet access. Its revenues also derive from connection and advertising charges, sales of premium and pay-per-view programming, digital packages, DVR, high definition (HD) signal packages, VOD (Video On Demand) services and the magazine.

Out of Grupo Clarín's total sales in 2013 the Cable TV and Internet access segment was the Company's main revenue driver, with sales of Ps. 9.782 billion, considering intersegment sales.

In terms of geographic availability of Grupo Clarín's services, by the end of 2013, its network reached approximately 7.4 million Argentine households. Grupo Clarín provides services in the City of Buenos Aires and suburban areas, as well as in the cities of Buenos Aires, Santa Fe, Entre Ríos, Córdoba, Corrientes, Formosa, Misiones, Salta, Chaco, Neuquén and Río Negro. Regionally, Grupo Clarín also operates in Uruguay.

As of December 31, 2013, it had approximately 3,367,500 paid TV subscribers in Argentina, 125,000 in Uruguay and 1,711,600 Internet subscribers in Argentina.

By the end of 2013, most of the homes in Cablevisión's network were passed by its 750Mhz bi-directional broadband. Cablevisión's 750MHz networks enable it to offer services and products that generate additional revenues, such as access to Internet, digital services and premium channels.

Programming, Cable Television and Internet Services

Cablevisión offers subscribers a basic service plan that includes the main programming signals, depending on the capacity of local networks. It offers basic and premium programming from more than 25 providers and broadcast television stations of the City of Buenos Aires.

Cablevisión's subscribers may purchase premium packages in addition to the basic service for an additional fee. These packages or services have a number of signals additional to those offered in the basic package, with a unique content differentiated by film genre, adult programming, sports or a combination of these options.

Cablevisión is also offering digital services to its subscribers that include a basic digital package, as well as Premium and High Definition (HD) services and Video On Demand ("VOD") programming. The digital service reaches the City of Buenos Aires and its surrounding areas (the "AMBA Region"), the city of La Plata and the major markets of the provinces (for instance, Córdoba, Rosario, Santa Fe, etc.). This service enables to broaden the signal offering and features an on-screen programming guide.

Cablevisión offers a high definition signal package (Cablevisión Digital HD) as well as the Cablevisión Max HD product in locations with the necessary technology to broadcast under this format. During 2013 and through the HD platform, Cablevisión broadcast events in 3D for customers subscribed to the Premium HD service who have the suitable equipment for such technology.

In order to increase its brand value, move forward with innovation and content production to meet client demands and continue with the development of the digital products launched in 2007, during the last quarter of 2012, Cablevisión launched the VOD (Video On Demand) platform that allows subscribers to buy programs or event packages on demand through a programming library and that features video functions (pause, fast-forward, rewind). The VOD content has signals, such as, Wobi TV, HBO, Discovery, ARTEAR, among others.

Cablevisión also offers Cablevisión Flex, an optional social service of digital paid television with a reduced subscription, to approximately 500,000 neighbors of low-income areas. This service, which seeks to enhance "digital inclusion", includes the installation of digital set-top units and allows clients to buy a service with fewer signals for half the price and gradually buy additional signal packages until completing a full basic product.

As to Internet access services, Cablevisión has been offering high-speed cable modem Internet access through its networks under the Fibertel brand since September 1997. Cablevisión's Internet access products are specially customized to the needs of each residential or corporate user, providing specific solutions, such as, virtual private network or "VPN" services, traditional Internet Protocol ("IP") connections and corporate products that include additional services.

Cablevisión provides high-speed Internet services in the AMBA region, the cities of La Plata, Córdoba, Rosario, Campana, Río Cuarto, Posadas, Salta, Olavarría, Pergamino, Mar del Plata, Bahía Blanca, Santa Fe, and other cities of the provinces.

Fibertel is undoubtedly the broadband service that offers the best variety of speeds in the market, widely and at competitive prices. Since 2011, it has offered the Fibertel Evolution product, becoming the first Internet provider in the country in incorporating the new "Wideband" technology to its product portfolio. During 2013, Fibertel launched the 12-mega product extending its product offering to all of its subscribers, and continued to provide the 30-mega product, thanks to the enlarged capacity of its network.

As of December 31, 2013, Cablevisión provided Internet access in Argentina to 1,711,600 subscribers through its own networks.

Commercialization and Customer Service

Cablevisión uses several market positioning mechanisms, including promotions, customer service center locations, newsletters about the company, institutional information and programming through its websites. It advertises its services in the printed media and over its own broadcasting signals. Cablevisión also publishes a free monthly guide distributed to most of its cable television service subscribers and a monthly magazine called "Miradas", which is sold to a portion of its subscriber base.

Customer service is provided through an integrated service center that offers round-the-clock support, with the aim of optimizing customer relations. In this regard, it launched "Sucursal Virtual", a website that enables its subscribers to interact with the company to follow procedures that were previously carried out through a telephone call or even in person.

Even though most interactions take place over the phone, subscribers may also contact the customer service by e-mail, fax, chat, the web site and the social networks, mainly Facebook and Twitter. In April 2013, Cablevisión was certified under the model of the COPC (Customer Operations Performance Center) standards, which foster improvements in the processing of customer's inquiries. Not only was this achieved by making changes in the procedures, but also by delivering results that boost customer's satisfaction. This high-performance management model is used by the world's leading service companies. In addition, Cablevisión included a solution called "Interaction Analytics" that provided further information to spot opportunities for improvement in customer service.

Video subscriber turnover rate for the year ended December 31, 2013 was 15.3%, compared to 15.0% recorded in the previous year.

Competition

Cablevisión competes in the cable television segment against other cable television operators and providers of other television services, including direct, satellite and broadcast services. Given the fact that licenses are granted on a non-exclusive basis, Cablevisión's systems are frequently subject to overlapping of one or multiple competing cable networks; in addition to the satellite service that is available throughout the company's entire coverage area. Free broadcasting services are currently available to the Argentine population; in the AMBA region, these services primarily include four private television signals (one of them is controlled by Grupo Clarín) and their local affiliates, and a national state-owned television signal. Additionally, under a project aimed at implementing the Argentine Terrestrial Digital TV System, the National Government handed out digital set-top units among certain sectors of the population that allow free access to certain signals.

The Argentine cable television industry has more than 700 operators. The most significant competitors are Telecentro S.A located in the AMBA region and DIRECTV (DTH technology), and Internet video streaming systems (Netflix, Arnet play, Speedy) that compete against Cablevisión nationwide.

The Company can effectively compete against other cable television providers on the basis of a competitive price, a higher number of quality programs and services, and the customer service it renders through its call-center.

Two other major competitors (Arnet and Speedy) are identified in the high-speed Internet access segment; each of them related to one of the country's two fixed-telephony providers. These companies also render 3G services through their brands Personal and Movistar, respectively. Claro - which had already been selling 3G technology, started to offer high-speed Internet services through fiber optics.

Therefore, the Internet access segment faces fierce competition from several providers in an ever-growing market.

PRINTING AND PUBLISHING

Grupo Clarín, through Arte Gráfico Editorial Argentino S.A. ("AGEA"), is the main newspaper publisher in Argentina and one of the most prominent editorial content producers in Latin America.

Out of Grupo Clarín's total sales in 2013, the Printing and Publishing segment accounted for Ps. 2.653 billion, considering intersegment sales. This segment derives revenues primarily from the sale of advertising, newspaper copies and magazines and optional products.

Arte Gráfico Editorial Argentino

AGEA publishes Clarín, the flagship Argentine newspaper and one of the most important in terms of circulation in the Spanish-speaking world; Olé, founded in 1996, the first and only sports newspaper of its kind in the Argentine market; Diario La Razón, a pioneer in the free newspaper segment; Diario Muy; and regional supplements. It also publishes Genios, a magazine with a high penetration rate in the schoolchildren's segment; Jardín de Genios, aimed at children between 2 and 5 years of age that comes with a supplement for parents; Ñ, a cultural magazine that reflects all cultural news and trends; Revista Pymes, aimed at small- and medium-sized businesses; and Diario de Arquitectura, aimed at the construction world, architects, designers and building contractors, among other products.

AGEA has a strong presence in the on-line classified ads segment through vertical sites, including Autos, Inmuebles y Empleos and in the Internet content market through its websites clarin.com, ole.com.ar, entremujeres.com and biencasero.com.

Diario Clarín

With a long-standing journalistic and commercial leadership consolidated in its 67-year track record, Clarín is the most prominent Argentine newspaper in terms of outreach, circulation and advertising.

The success of its prestigious editorial line lies in its identification with the needs and emotions of its audience through a plural and independent journalistic style that includes the most diverse opinions. Clarín's approach to reality is in tune with its audience, supporting this bond with the responsibility and credibility that characterizes its journalists. Its extensive and thorough investigations, approaches and analyses are conveyed in clear and direct language, providing its readers with easy access to the different sections and issues.

During the year, AGEA has received several recognitions which serve as encouragement to continue with its excellent work, such as the Citi Journalistic Excellence Award granted to Ezequiel Burgo and the 2nd Honorable Mention from the University of Buenos Aires received by Alfredo Dillon and Pablo Riggio for their article entitled "Schools for Adults: The dream of studying" published in the supplement of Diario Clarín.

With an average daily circulation of 251,000 copies, Clarín's circulation is 1.6 times higher than its closest competitor, while Sunday's sales exceed 562,000 daily copies, which places it among the major Sunday newspapers of the world. Clarín has a 38.4% share of the newspaper market in the City of Buenos Aires and a 9.6% in the provinces. At a national level, it has a 23.3% market share.

Clarín 365, designed to build loyalty among readers and to reinforce its close bond with them, as well as to retain circulation, offers its over 260,000 subscribers a discount, promotion and benefit program they can use in over 1,600 brands and 5,000 stores nationwide. The 365 site (www.365.com.ar) had more than 4 million accumulated annual visits as of December 31, 2013.

AGEA leads the print media market with over Ps. 668 million in sales in 2013, ranking first in terms of advertising revenues and sold advertising space. AGEA also leads all advertising categories (display, special section and classified ads). On-line advertising sales rose by 40% to Ps. 124 million, compared to the previous year.

The Zepita facility, where Dario Clarín is printed, has a surface area of 35,000 m2 and capacity to store 12,000 tons of newsprint. It has five Goss Metrocolor rotary offset printing presses that enable it to print 300,000 copies of 80 full-color pages per hour. The entire production process is developed in accordance with leading industrial criteria -such as the "computer to plate" (CTP) - and environment preservation standards, such as, ISO 14001. Ongoing audits are conducted by companies that are engaged for that purpose.

For the last few years, Clarín has been engaged in a significant business transformation process. It started with the production of a single product - Diario Clarín - that reached its readers through the newsstands under a reading contract that was renewed every 24 hours. It had a direct relationship with advertisers or through agencies. In the last few years the Company has maintained those standards and undertaken the challenge of adjusting its business model to an increasingly complex environment for traditional media. Thanks to the proliferation of web sites, Clarín now maintains a direct link with millions of readers, where information is updated by the second, rather than every 24 hours.

Products

The basic offer of the newspaper is comprised by the main body and its supplements: Entertainment, Sports and Classified ads. Weekly supplements, such as, Rural, Countries, iEco, Autos, Mujer, Sí, Viajes, New York Times, Educación and Ollas, make Diario Clarín one of the most comprehensive newspapers in the market.

The Company continued to offer 12 regional newspapers that maintain the concept of proximity and symmetry with readers. The product yielded considerable profitability for the fourth consecutive year and was a good support to the Thursday edition of Diario Clarín, with coverage in the following locations: Vicente López, San Isidro, Morón - Ituzaingó and Hurlingham, Lomas de Zamora, Avellaneda - Lanús, San Martín - Tres de Febrero, La Matanza, Tigre - San Fernando, San Miguel - Malvinas Argentinas - José C.Paz and Quilmes- Berazategui - Florencio Varela. The monthly supplements published for Pilar, Escobar, Zárate and Campana, and Moreno, Rodríguez and Luján are also part of the offering.

Like every year, the Sports Supplement of Diario Clarín covered the most prominent sports events through its usual and its special editions, such as the Rally Dakar and the Davis Cup editions. As usual, soccer had its preferential spot. Special supplements were published covering the Clausura and Apertura tournaments. The Sports Supplement held its usual annual award ceremony Premios Clarín Deporte in 2013, broadcast by TyC Sports and clarin.com.

iEco is the economic supplement of Diario Clarín, and offers readers an in-depth economic review, the secrets of leading companies, personal finance, marketing and the labor market. The Rural supplement is a management tool for the production sector, embracing all the solutions and technologies for agricultural businesses. It is published on a weekly basis. Diario de Arquitectura is published every Tuesday and offers professionals a benchmark editorial product. It develops optional products, which are highly regarded by the industry.

In order to continue to provide services and add value to its readers, Diario Clarín constantly keeps up to date and offers a wide range of editorial products together with the core product, addressing the need to satisfy an increasing segmentation among the diverse demographic groups. The following are among the most prominent collectible products for the period: El cuerpo humano en Acción, Todo Clemente, DC Súper Amigos, Los secretos del Gran Asador 2013, Grandes Ideas Grandes Negocios, Los mejores cuentos de siempre, Cuentos con Moraleja, El Gran Libro del Tejido 2013, El Gran Libro de las Tortas, Tartas y Budines, Angry Birds, Un Padre Nuestro, Ver y aprender, Historia del Siglo XX Time, Los autos que enamoran a los Argentinos, El Gran Libro de Clarín del Crochet 2013, Historia Ilustrada de la Biblia, El gran libro del sushi y la cocina oriental, La Historia de los Papas, Biblioteca de Intriga y suspenso, El Mundo de los Dinosaurios y Otros Animales Prehistóricos, Libros del viajero National Geographic, Crecer con Mozart, Monster High.

Internet

Clarin.com is a news and opinion portal with updates in real time and free access on a 365/24/7 basis, which has been online since 1996. In addition to the full version of the printed newspaper and its archive, Clarin.com features ongoing updates of news produced and published by its own journalists, high-definition audiovisual content production, Android and iOS applications, and a growing footprint in social networks, such as, Facebook and Twitter. During 2013, Clarin.com embarked in an inclusion initiative and launched a system that can be accessed by people with disabilities. Clarín.com continues to be the news site with the highest market share in the Argentine digital market, with 16 million unique visitors and around 200 million page views per month.

With its sites "Deautos", "Argenprop" and "Empleos Clarín"; the company maintains its strong presence in the on-line classified ads for cars, real estate and jobs.

The most outstanding sites in the AGEA network are Vía Restó, Clarín's online restaurant guide; Biencasero.com, a site with practical solutions to enjoy the cooking experience; Entremujeres.com, which continued to grow in terms of unique visitors and consolidated itself as one of the most visited sites, with over 4 million unique visitors; and Espectáculos.com, a site that keeps readers updated with the best information on movies, theater plays, TV shows, music and celebrities from Argentina and the rest of the world.

El Gran DT is another alternative among online products. Argentina's most popular game managed to engage more than 4 million participants since its launch at the Apertura Tournament. The latest online editions of Gran DT engaged more than 1.8 million participants who had the chance to build their fantasy teams and win outstanding prizes.

Magazines

AGEA also continued to build upon the achievements attained by the cultural magazine Ñ, reaching average sales of 32,000 copies per issue. The 500th issue of magazine Ñ was published during the year. Several initiatives were carried out, aimed at engaging readers through the launching of collectible products and special editions, and the creation and sponsorship of forums comprising different cultural issues and involvement in and sponsorship of major cultural events, such as the Feria del Libro de Buenos Aires (Buenos Aires' Book Fair).

Revista ELLE is a high-end magazine for women mostly focused on fashion, beauty and news. In 2013, its circulation exceeded a monthly average of 30,000 copies. Revista Pymes continued to consolidate its position with a special offering that reflects the voice of entrepreneurs and the keys to their strategies.

In 2013, the Company continued to publish the magazines Genios and Jardín de Genios. With children and school in mind, these magazines were created with the aim of integrating content for children, parents, school and society, combining education with entertainment. In 2013, the monthly issue of Genios magazine, along with its classical collectible product "Gran Enciclopedia Escolar Ilustrada", an encyclopedia with full-color illustrations covering school topics, exceeded the previous year's circulation with over 61,000 copies sold; while the monthly issue of Jardín de Genios retained its leading position in the children's magazine segment, with over 78,000 copies sold. During 2013, "Tiki Tiki", a magazine aimed at children aged 7 through 14, continued to strengthen its position.

Also in 2013 the company continued to publish the monthly magazine-catalogue, Shop & Co, which includes discount coupons on important brands.

Other Newspapers

La Razón, which joined Grupo Clarín in late 2000, is the first-ever free distribution newspaper. It is mainly distributed in the public transportation network of the City of Buenos Aires, including trains, subways and highways. La Razón is also distributed at certain bars and among a group of opinion leaders through an exclusive mailing program.

Diario Olé is the first and only sports newspaper in Argentina. Since 1996 and with an average annual historical circulation of 40,000 copies per day, Olé continues to lead the sports editorial market, and is one of the highest circulation newspapers in the city of Buenos Aires, including general interest newspapers. Among its editorial offering, it has the broadest and most comprehensive soccer and multi-sport coverage. Since its inception, it has drastically changed reading habits and managed to engage a new generation of young readers, avid for information and critical opinions. The editorial profile is fresh and complicit, with an agile and informal style focused on photography, illustrations and infographics as communication tools, with a good design and modern and effective production technology.

In 2011, Clarín launched MUY, a dynamic, visually designed and entertaining newspaper, which features news in addition to regional pages and sports and show business sections. With a "TV-format" design, the newspaper summarizes the most resounding police cases and breaking news on soccer clubs and celebrities. During 2013, the newspaper MUY has continued to offer promotions, optional books and free collectibles.

Tinta Fresca

Founded in 2004, Tinta Fresca is an Argentine publishing company focused on textbook publishing for all stages of the Argentine education system. Tinta Fresca seeks to place books at the heart of the teaching and learning processes and have teachers and students use them as an effective and updated learning tool. The company has been growing in many aspects over these years. In the editorial area, the company has learned from experience, and has managed to expand its exclusive and original focus on textbooks to a considerably diverse editorial offering.

With more than 300 titles, in addition to several textbook series for all school stages, including elementary and secondary education, its editorial offering is currently comprised by a variety of activity books for all levels. Said offering has been enriched with sourcebooks and an interesting catalogue of children and youth literature. 

In 2013, it strengthened its editorial offering through the launch of the series "Dame la Palabra 1, 2 y 3"; "Abracadabra 1, 2 y 3"; "Aprendo Matemática 1, 2 y 3" and "Descubro las ciencias 3" for the elementary school. For high-school, Tinta Fresca published "Práctica del lenguaje 1, 2 y 3" and launched a series of 10 mathematics booklets that develop the education program per topic. It continued to produce "El Plan Lector", a set of book series that provides teachers a plan to implement reading in the classroom, and launched the series "Efemérides" and "Enseñar matemática". For 2014, Tinta Fresca produced "Aprendo Matemática 4, 5 y 6" and "Dame la Palabra 4, 5 y 6", thus completing the series launched during the year. It developed the areas of natural and social sciences by publishing the books "Econaturaleza" and "Socialmente".

As a result of the production of collectible materials, newsstands have again been intensively used as sales channel. During 2013, Tinta Fresca continued to sell dictionaries and literature in supermarkets, an action that substantially contributes to product and content access. 

The company also made headway in the Digital Development project that focuses on the several ways in which ICT will be introduced in the education system. The Company has made available at Clarín.com a digital and free version of "Diccionario integral del español de la Argentina" since 2011.

In 2013, and in spite of the good selection of Tinta Fresca's products, the company was not awarded any contract for the procurement of material by the National Government, while it did receive contracts from the city of Salta and the city of Buenos Aires.

Also during the period, the company continued to explore foreign markets, such as Paraguay, Chile and Uruguay. In 2013, the Mexican-based operation, Rios de Tinta, renewed the content addressed to third-year students of high-school as a consequence of a change in the education program, and reinforced local promotions.

Artes Gráficas Rioplantense

AGR meets certain special printing needs of Clarín and Olé (magazines, optional and collectible products, among others), and also publishes large volumes of graphic material for third parties. It is the leading printing services company in Argentina.

In 2013, AGR retained its leading position in the sector with net sales of Ps. 233.8 million.

In addition to the progress made in improvement and control management of its production processes, AGR has continued to integrate several processes, from the design and composition of its products, to paper printing, up to digital applications in tablets, mobile phones and Internet, thus being able to offer its customers complete communication solutions. AGR purchased a sheet printer and a digital printer in order to take care efficiently of minor print runs, mostly books and magazines, and the market segmentation with state-of-the-art equipment, which will also help to reduce costs.

AGR successfully completed the implementation of the FSC standard and ISO 14000, an internationally accepted standard that sets forth how to establish an effective Environmental Management System (EMS) to achieve a balance between maintaining profitability and reducing the environmental impact. On the other hand, AGR focused on ongoing improvements to reduce waste.

In May 2000, AGR entered into an agreement with the Techint Group, acquiring 50% of Impripost Tecnologías S.A. Impripost is mainly engaged in the overall production and printing of invoices, advertising brochures, forms, labels and cards. It also provides envelope-stuffing services for mass mailing.

During 2013, AGR continued to focus on training and internal development policies. Occupational health actions were consolidated in order to improve environmental conditions as part of the workplace culture; the Safety, Health and Environment Committee was reinstated, and improvements were introduced through in-house developments in computing mechanisms to prevent and follow up on accidents and diseases. AGR maintained personal health programs and conducted awareness and prevention campaigns.

In 2011, the Company acquired an interest in the capital stock of Cúspide Libros SA. through AGR. After this acquisition, it launched Librocity.com, the on-line bookstore of Grupo Clarín, in partnership with the retail bookstore chain Cúspide. In 2013, Cúspide celebrated its 50th anniversary in the country, renewed its image and centralized the operations of its administrative and warehousing divisions in a new office located in the city of Buenos Aires. As a consequence of this, it managed to integrate operational processes with the software for monitoring warehouses, orders and distribution, streamlining the company's logistics. During the period, Cúspide opened a new branch in Martínez, Province of Buenos Aires, which sells new products. Cúspide also added a new sales channel through the distribution of traditional books and the offering of its products at newsstands located in several locations throughout the country.

UNIR S.A. is a company engaged in wholesale mail reception, classification, transportation, distribution and delivery services. As from August 25, 2008, AGEA holds a 93.41% direct controlling interest in Unir. During 2013, Unir's total sales increased by 26.2%. Such increase is attributable to readjustments in rates since the sales volume remained at a similar level to the previous year. UNIR is focusing its development on warehousing and logistics services, areas in which it expects significant growth. Unir has certified its Quality Management System under ISO 9001.

CIMECO

CIMECO was organized in 1997 with the aim of acquiring equity interests in Argentine and foreign newspapers, seeking to preserve the regional journalism industry, blending experience, synergy and economies of scale, without altering its editorial principles. CIMECO holds a majority interest in two of the three largest regional newspapers in Argentina: La Voz del Interior (Córdoba) and Los Andes (Mendoza).

Los Andes newspaper has been reporting Mendoza's news since 1882. In that year, the Calle family founded one of the oldest journalistic companies in the country. Los Andes is a benchmark brand in the market. In 2012, Los Andes was actively involved in all major provincial events and put special emphasis on driving the growth of the on-line version, positioning its loyalty program Los Andes Pass and subscriptions, and boosting the sale of optional products. Following the innovation trend in online products and footprint in networks, the audience of Los Andes digital version was similar to 2012, reaching 26 million page views and 2.9 million visitors in its best month. During the year, the newspaper's share in the provincial advertising market was 39%, despite the fact that it was not allocated any official advertising.

La Voz del Interior SA has again maintained its leadership position in the printed press and its position as an information and entertainment digital benchmark in the central region of the country. Its two printed newspapers, La Voz del Interior and Día a Día, have continued to maintain a significant market share in the province of Córdoba. In addition to this, the sectional directories and the sustained growth in the distribution of third party and in-house editorial products have contributed to an increase contracts with clients. Its web sites position the newspaper as a leader in unique visits and page views in the provinces of Argentina, with a 60% year-on-year increase in advertising in this segment. During the year, the operation of its multi-platform newsroom was consolidated and the web site, www.lavoz.com.ar, was redesigned.

During 2013, Comercializadora de Medios del Interior SA (CMI) consolidated as the major advertising selling network in the provinces. The company focused on key network development. Rumbos magazine, which celebrated its 10th anniversary in the market, is one of its remarkable products, and consolidated as the leading Sunday magazine in the provinces in terms of the volume and quality of units sold. In 2013, the magazine was distributed through 22 channels, reaching a record high since its launch. In addition to the digital network, a new optional business unit was incorporated to achieve scale synergies.

Papel Prensa

Papel Prensa is the first producer of newsprint that is wholly owned by Argentine capital. It started its operations in 1978 and is currently Argentina's major producer. As of December 31, 2013, the shareholders of Papel Prensa were AGEA (37%), CIMECO (12%), S.A. La Nación (22.5%), the Argentine federal government (27.5%), and other minor investors (1%).

Ferias y Exposiciones Argentinas

Since 2007, Ferias y Exposiciones Argentinas has been mainly engaged in the organization of Caminos y Sabores, an exhibition intended to foster Argentina's gastronomy and handicrafts and to promote the region's major tourist destinations. Subsequently, Ferias y Exposiciones Argentinas also started to organize Admite, an exclusive training platform for users and owners of agricultural machinery.

Throughout its nine editions, Caminos y Sabores has consolidated itself as one of the fastest growing fairs and has boosted the development of all of its key participants: food producers, craftsmen and representatives of tourist destinations.

ADMITE is held in 4 editions - Arroz (Rice), Gestión (Management), Agrícola (Agriculture) and Forrajero (Fodder) - and is one of the most innovative proposals demanded by the agro-industrial sector due to its prestigious team of instructors, which includes technicians from the INTA, and professionals from the participating companies and private consultants. With a learning methodology that includes theoretical and hands-on training using the machinery and actual data, Admite is one of the most productive training offerings of the sector. In this edition, Admite Arroz was held in Mercedes, province of Corrientes; Admite Forrajero, in Concepción de Uruguay, province of Entre Ríos, and Admite Gestión and Agrícola were held in Venado Tuerto, Santa Fe, where the event was declared a matter of municipal interest.

With respect to other companies, in 2007 FEASA executed an agreement with S.A La Nación in order to create a joint venture in which AGEA has a 50% interest. The joint venture will be devoted mainly to the joint organization, development and operation of exhibitions and events. The decision to create the joint venture mas made in order to organize jointly Expoagro, improving the results that had been obtained until then by Feriagro, and achieving a record-high number of exhibitors. The seventh edition of Expoagro was organized in 2013. Expoagro is an annual outdoor agro-industrial fair that gathers producers from Latin America. It is an outstanding event in which participants may engage in discussions and training, and learn about innovation and businesses in the agricultural sector. The fair is held in different agricultural areas with production potential. This mega-event closed its doors consolidating itself as Argentina's most important agricultural exhibition, delivering satisfactory financial results, and with a commitment to search for innovative technologies and business opportunities among exhibitors.

BROADCASTING AND PROGRAMMING

Grupo Clarín is also the leading company in the audiovisual broadcasting and programming segment. Through ARTEAR, it holds the license (LS85 TV Canal 13 Buenos Aires) to broadcast El Trece, one of the two largest broadcast television channels in Argentina, and segment leader in terms of advertising share and prime-time audience share. It also has a presence in broadcast television stations in Córdoba (Telecor), Bahía Blanca (Telba), Bariloche (Bariloche TV), and Río Negro (Radio Televisión Río Negro). Grupo Clarín also produces and sells some of the most popular cable television signals.

Its audiovisual broadcasting and programming array includes agreements and equity interests in the main television and film producers, such as Pol-ka Producciones, Ideas del Sur and Patagonik Film Group. Grupo Clarín also owns prominent radio stations, such as Mitre AM 790, La 100 (FM 99.9), both in Buenos Aires, and Mitre AM 810 in the province of Córdoba. Grupo Clarín also has a strong stake in sports commercialization and broadcasting rights, directly and through joint ventures.

Out of Grupo Clarín's total sales in 2013, the Broadcasting and Programming segment accounted for Ps. 1,872 billion, taking into account intersegment sales.

ARTEAR

In a scenario marked by industry challenges and strong competition, ARTEAR was able to achieve its goals in 2013. Its share of the traditional advertising market of broadcast television reached 33.4%. Its professionalism, artistic quality, innovative proposals and technological developments continue to distinguish it as one of the most prominent signals in the market.

Even though El Trece ranked second in the broadcast TV audience rating with 7.9 points from 12 p.m. to 12 a.m., Mondays through Sundays, the difference with Telefé was 0.6 points only, thus reducing the gap recorded in 2012. The fall in audience ratings with respect to 2012 was mostly attributable to the fact that Show Match was not on the screen this year. Notwithstanding this, El Trece led this segment. El Trece led the Prime Time and beat its main competitor by 11.6 rating points, or by 12%.

In terms of programming, El Trece combined fiction, news and entertainment embracing a varied offering. "Solamente Vos", "Farsantes" and "A todo o nada" led audience ratings. "Periodismo para Todos" - a program hosted by Jorge Lanata - is a highlight in terms of journalistic and news programs. Furthermore, "Arriba Argentinos" continued to consolidate its morning audience rating. El Trece's news programs - "Noticiero Trece", "Telenoche" and "En Síntesis"- further validated their already existing recognition and credibility with audience ratings that led their respective time slots.

With respect to cable television channels, TN achieved the highest audience share throughout the year across all time slots, with a 10% increase compared to 2012. "El Juego Limpio", "Palabras más, Palabras menos", "Código Político", "Desde el Llano", "Argentina para Armar", "Otro tema", "A Dos Voces" and "TN Central" are particularly remarkable programs.

ARTEAR further strengthened its TV slots, seeking to offer diverse options in terms of information and entertainment. The Spanish language music channel "Quiero Música en mi Idioma" was quick to lead audience ratings in the music genre. "Volver" continued to offer the best of classic and vintage Argentine films and television shows and reaffirmed its role as a 100% national channel that preserves our history with the highest technology. Magazine continued to develop its in-house programs and products with broadcast TV format and technology. It was the signal with the highest audience in the variety category.  

Additionally in the production section, the most prominent show business and general interest events were broadcast, such as, the concerts of Steve Vai, Sara Brightman, Cat Stevens, Ringo Starr, Bon Jovi, Black Sabbath, Herbie Hancock, Ricardo Montaner, Ismael Serrano, Los Nocheros, Tan Biónica, Eros Ramazzotti, Vicentico and Alejandro Sanz, among others; as well as major events, such as, Quilmes Rock, Personal Fest, Fuerza Bruta, Piñon en Familia, Experiencia Art Attack, Madagascar Live and Panam y Circo. ARTEAR also held a new edition of "Un Sol para los chicos" the traditional UNICEF fund-raising event at the Luna Park stadium and broadcast the ceremony of the "Abanderados de la Argentina Solidaria 2013" awards.

During 2013, ARTEAR sought to strengthen its position as technological market leader, after the successful launch of the signals El Trece HD and TN HD in 2011, when it became the first broadcast signal to produce all of its content in high definition. This success is the result of intensive investment in equipment and professional training. El Trece was the first signal to test a high-definition system on September 25, 1998 and has continued to use it uninterruptedly from 2000 through mid-2009.

During the period, certain investments were made to continue on this path of innovation and technological leadership. Cable signals were transferred from the old satellite system to the new, fully updated system. This operation enabled the ARTEAR to make better use of satellite capacity due to the improvements embedded in newer compression systems. These investments also enabled the refurbishing of Mobile Satellite Unit 3 and the technical controls of the studios allocated to the Magazine signal. In the News segment, ARTEAR enlarged again its storage capacity for the edition of news articles and programs, due to the larger size of high-definition materials and the increased volume of material produced by the area. In the Programming segment, new investments were made to expand the centralized storage system for the edition of programs broadcast by El Trece and other signals.

ARTEAR continued to produce fictional content for TV series and motion pictures through Pol-Ka, Ideas del Sur and Patagonik Film Group.

Pol-kacontinued to produce "Solamente vos", a program starred by Natalia Oreiro and Adrián Suar that led El Trece's audience during the Prime Time. At the beginning of the year, Pol-ka decided to change the format of "Farsantes" from a fiction show broadcast once a week to a daily series. The program had a distinctive quality and high audience ratings during the prime time. It was starred by Julio Chávez, Benjamín Vicuña, Alfredo Casero, Griselda Siciliani and Facundo Arana.

In addition, during 2013 Pol-ka continued with the production of the second season of "Violetta". The show was a success among children and youth on a global basis. The show has become very popular among children and teens, with high audience levels both in cable and broadcast TV in Argentina and abroad.

At the beginning of 2013, Ideas del Sur failed to renew its agreement with ARTEAR for the production and broadcasting of Showmatch. The show was not produced in 2013 because no agreement was reached with other signals. The same happened with the weekend shows and the high-season daily magazine. Consequently, programming decreased to 351 hours in 2013 from 1749 hours in 2012. All of this resulted in a decrease in revenues and resultsfor Ideas del Sur. Ideas del Sur only managed to cut variable and indirect costs related to programs that were not produced. Therefore, its Board of Directors started to negotiate the sale of the majority equity interest in the company owned by Marcelo Tinelli and ARTEAR. By the end of 2013, most shares had been transferred to Grupo Indalo.

During the year and as part of the strategy to produce motion pictures, several productions were launched through the Patagonik Film Group: "Roa", an Argentine-Colombian coproduction; "Vino para robar", another coproduction written by Adrián Garelik and directed by Ariel Winograd, which participated in several international contests; "Corazón de león", a film directed by Marcos Carnevale and starred by Guillermo Francella and Julieta Diaz, which was broadly welcomed by audiences; and "Un paraíso para los malditos", another coproduction written and directed by Alejandro Montiel and starred by Joaquín Furriel, Maricel Alvarez and Alejandro Urdapilleta.

The Company also made significant efforts towards developing activities related to the commercialization, organization and broadcast of sports events through TyC sports and Autosports, mainly football and motor racing. During 2013, the Company worked on the restructuring and profitability of its sports businesses and the exploration of new local and regional businesses.

Radio Mitre

In 2013, AM Mitre 790 reaffirmed its track record and consolidated its leading position in the ranking of audience share during the entire year, reaching an audience share of 42 points. The gap with respect to its main competitor reached 23 points.

The morning radio talk show "Cada Mañana", hosted by Marcelo Longobardi and his team, stood out among Radio Mitre's programming, with unprecedented peaks in audience share of 55 points. "Lanata sin Filtro", the program hosted by Jorge Lanata and a team of journalists from 10 am to 13 pm, also surpassed the 50 point mark. The show can also be watched in high-definition at mitrehd.com.ar.

In the afternoon slot (from 2 pm to 5 pm), "Encendidos en la tarde", hosted by María Isabel Sánchez, Rolo Villar and Tato Young, is a fun afternoon show that combines information, humor and interviews. The show also led its time slot. Pepe Eliaschev continued with his traditional show "Esto que pasa", with engaged editorials and an in-depth news review. The show is broadcast from 5 pm to 8 pm.

La 100 maintained the highest average audience share of the FM market with 13.26 points, with an audience of over one million listeners in the city of Buenos Aires and its surroundings. La 100 consolidates its leadership in the FM radio segment, with an entertaining, smart and innovative proposal based on shows led by famous artists and good music. In 2013, the shows "El Show de la Noticia", hosted by Roberto Pettinato in his tenth season, and "Lalo por hecho", hosted by Lalo Mir and Maju Lozano, stood out once again. In the afternoon slot, La 100 managed to consolidate its position with "Sarasa", hosted by Ronnie Arias, and "Atardecer de Un Día Agitado", hosted by Sergio Lapegüe and Rifle Varela. During the weekends, "Ranking Yenny" hosted by Guillermo López led the audience segment. Mariano Peluffo joined the Sunday grid with one of the preferred shows in its time slot.

To further deepen its bond with listeners, La 100 continued to organize acoustic concerts with the most renowned musicians and live broadcasts from its mobile studio.

Finally, of remarkable note is the growth experienced by Cienradios.com.ar, a site that was conceived as an extension of the Radio Mitre brands to the web, and that managed to consolidate itself as the most prominent on-line radio site in Latin America. With over 470 options, users may choose among a wide offering of broadcast radio stations and other stations, specially designed for the Internet with segmentations of singers, bands, music from different decades, music genres and assorted topics. Mitre AM 810 consolidated itself in the province of Córdoba as the radio with the second highest audience share. With a permanent staff in the city and its own news service, Mitre AM 810 developed comprehensive coverage of news comprising Córdoba, Argentina and the world. Its programming includes prestigious hosts, such as, Jorge "Petete" Martínez, Rebeca Bortoletto, Juan Alberto Mateyko and Federico Tolchinsky, among others.

DIGITAL CONTENT AND OTHER

Revenues in this segment are derived from the sale of advertising on some Internet web sites and portals and the provision of administrative and corporate services by Grupo Clarín and its subsidiary GC Gestión Compartida S.A. ("GCGC") to third parties and other subsidiaries. They also include digital content production through Compañía de Medios Digitales S.A. ("CMD").

Out of Grupo Clarín's total sales in 2013, this segment accounted for Ps. 496 million, considering intersegment sales.

Digital Content

Grupo Clarín is the leading producer of digital content. Through CMD, the Company developed the broadest network of portals and digital content in Argentina, covering news, entertainment, sports, classified advertisements, direct marketing, e-commerce, digital photography, video, blogs, chat rooms, music, mobile content (ringtones, SMS and games) and a browser. This network seeks to replicate on the Internet the presence and relevance of Grupo Clarín's several offline media.

Given the fact that, in line with the corporate strategy, the exploitation of Clarín, Ole and Club Cupón websites that were previously operated by Grupo Clarín was transferred to another company of the same economic group, goals have been redefined in order to strengthen the positioning of other sites, such as, Todo Noticias, Cienradios, Ciudad and EltreceTV in terms of traffic and revenues.

In addition, the Company continued to sell contextual advertising under the brand iAvisos and completed the second year of operation in the Adnetwork business. The presence of CMD in the direct marketing segment through its brand Mr. Sale was consolidated, achieving sustained growth in product variety and completed sales.

The website of Todo Noticias developed by CMD registered amazing audience share growth at year-end. Ciudad.com remained the most visited show-business web site in Argentina.

CMD SA held its 80% equity interest in Interwa SA, a company dedicated to tourism web sites. In addition, through its 51% interest in Clawi SA, it develops Mundo Gaturro, a successful on-line game, and has continued with its expansion process to other countries. As far as the Spanish-speaking market is concerned, traffic in Chile, Peru, México, Colombia and Spain has continued to grow. In addition, CMD consolidated the second year of operations of Tecdía SA, a company engaged in e-business development and in which CMD owns a 95% equity interest.

CMD also owns a 95% equity interest in QB9 SA, a company engaged in the development of on-line games for different platforms, with a local and international sales strategy. During the period, CMD launched three new interactive games, "Amigos de fierro", "Potreros" and "A pura garra", one of them for PC and the other two, for mobile platforms. The games are based on the characters of the film Metegol and were created by a group of 30 professionals who worked in a project that, together with the film, made a remarkable difference in the local entertainment industry. Through its brand Yuisy, CMD launched League of Legend, a game with over 32 million followers per month worldwide.

Other Services

Through GCGC, Grupo Clarín renders specialized-process outsourcing services to medium and large companies. The services rendered, which include payroll management and processing and implementation of related processes, as well as human resources management, are oriented to optimize quality and provide innovative management tools.

During 2013, total sales increased by 34.5% compared to the previous year. Business growth was basically sustained by the Payroll Management and Processing service. The company continues to enhance the services offered, increasingly focusing on a customer-driven approach, as well as on strengthening improvement processes.

During the period, several facilities were moved to the new corporate building located at the Technological District of the City of Buenos Aires.

CORPORATE RESPONSIBILITY AND SUSTAINABILITY

OUR COMMITMENT

Since its foundation, Grupo Clarín has been aware of its social responsibility as a company and as a member of the media, and has strived to assume such responsibility abiding by the laws, honoring its active and sustained social and community involvement and, especially, fulfilling its duty to inform with honesty and accuracy.

Commitment to society is an inherent and essential part of Grupo Clarín's vision and mission statement. Grupo Clarín attaches special importance to the relationship with different audiences that acknowledge and validate its activities every day and, over the years, has established multiple communication and interaction channels with its stakeholders.

From the standpoint of its audiences, readers and society in general, Grupo Clarín's media and journalists work day after day towards fulfilling and consolidating the citizens' right to information, combining high credibility with a comprehensive journalistic and entertainment offering, based on a deep knowledge of the audience.

Transparency, Standards and Guidelines

Grupo Clarín seeks to intensify the values and principles that guide its daily work, especially insofar as labor, sustainable development, and human rights are concerned.

Grupo Clarín's adherence to these principles is also outlined in the Company's Code of Ethics and in the Guía para la Acción, a document that proposes models for management, organization and roles, and outlines Grupo Clarín's policies and procedures concerning labor, the environment and human rights.

During 2013, the Company put in place the main pillars of its Social Corporate Responsibility and Sustainability Policy in order to extend best practices and set common goals within the organization and its subsidiaries. The policy also embraces and fosters the adoption of related industry specific standards by its subsidiaries.

Since 2004, the Company has adhered to the United Nations Global Compact in order to systematically address the 10 guiding principles to sustainable management.

Grupo Clarín is also involved in several groups and organizations that gather global, Latin American and Argentine media players and stakeholders in order to share experiences, identify best practices and foster cooperation in specific issues addressed by the media, as part of their social responsibility strategies. During 2013, through its support to the Noble Foundation, the Company renewed its presence in the "Grupo de Fundaciones y Empresas", a space to share strategic social investment knowledge and standards.

Since 2009, Grupo Clarín contributed to the development of the Global Reporting Initiative (GRI)'s Media Sector Supplement, together with multiple stakeholders worldwide. The GRI's global guidelines for the media, published in May 2012, serve as benchmark for a comprehensive process that is currently underway that seeks to further reinforce, identify and report relevant information on social and environmental performance, as well as to set new goals with the aim of strengthening the Company's sustainability initiatives and strategies. Additionally, since January 2014, the Company has been engaged in the global identification and validation process of materiality standards for the cable TV and media industry, organized by the SASB (Sustainability Accounting Standards Board), an entity that gives advice to the SEC (Securities and Exchange Commission) on transparency standards.

Freedom of speech and transparency are key values for the Company and its professionals. Both principles are particularly relevant in areas related to news services. At Grupo Clarín, each company undertakes a commitment to information and content quality, accuracy and transparency. The coverage of news and the news programs reflect the development of journalistic criteria inherent to each specific outlet and the professionals' commitment to reporting facts and events in a balanced fashion, while allowing the necessary time and space for experts, leaders and the parties involved to express their opinions.

Style guides, ethics manuals and news coverage guidelines, including internal rules and commitments to journalistic quality and journalist responsibility, are the guiding principles of the several activities developed by news and entertainment companies. In everyday practice, this does not mean that each issue is addressed as expected by audiences or in line with the stated goals. Hence, Grupo Clarín's media companies permanently work on the design of new tools and channels that enable interaction with readers and audiences in order to understand expectations, while fostering full adherence to its principles and values with the aim of reaching the highest standards of the industry.

As was the case with previous years, 2013 was particularly challenging for the press and freedom of speech in Argentina. The Company carried out several initiatives to raise awareness on the matter and showed its firm commitment to defending and fostering such essential right.

Independence and transparency

Independence is a value. It is the strong foundation of the work done by journalists and the media that allows them to search for the truth without any conditioning factor.

Independence is at the core of Grupo Clarín as a guarantee of the freedom to exercise the journalistic role of its media in the Argentine democracy. Independence is also an assumed responsibility, a way of exercising and guaranteeing rights, a view of sustainability from the Company's standpoint, a daily commitment.

Independence requires transparency. Hence, the information about Grupo Clarín and its subsidiaries, media, shareholders, activities, revenues and investments is public and is available at its web site, at the web site of the Argentine Securities Commission, and at multiple and diverse communication channels with the public, audiences and readers. In this regard, the Company stands out as a pioneer in an environment where most Argentine media companies fail to publicly disclose their financial statements and sources of their revenues and, often times, fail to reveal the identity of their respective owners.

Advertising is one of the sources of revenues of the media. Governments are major advertisers and often seek to influence media content through the allocation of official advertising. This circumstance has become commonplace in Argentina, where more than 80% of the country's audiovisual media directly or indirectly depend on the government or its advertising funds, which are managed on a discretionary basis and with little transparency. During 2013, Grupo Clarín received virtually no funds for official advertising and very little from provincial governments. Historically, due to the scale and diversity of Grupo Clarín's revenues, the significance of such funds has always been very limited so as to guarantee its media and journalists the freedom to report news without any conditioning factor.

Grupo Clarín also has business policies in place concerning its advertisers that foster the existence of diverse and multiple sources of advertising investment as another way of guaranteeing the free and independent exercise of journalism.

Media independence also requires responsible relationships between journalism and the Company's own business interests. Business and editorial functions are clearly separated at Grupo Clarín's media. Special emphasis is placed on the fact that journalists are completely detached from the sale of advertising so as to allow for the free exercise of journalism, free of any risk or conditioning factor. In addition, Grupo Clarín's media specifically focus on the distinction between advertising and editorial space.

As mentioned above, the Company has a Code of Ethics in place applicable to its subsidiaries and employees. The code sets forth standards of conduct and procedures that govern and prevent circumstances that may affect the free exercise of their functions and the transparency of their activities.

Information on Sustainability

In line with its Social Corporate Responsibility and Sustainability Policy, Grupo Clarín identifies the material aspects of its activities following international social responsibility standards applicable to the media, particularly, the GRI's guidelines, and in accordance with the expectations of its multiple stakeholders. Grupo Clarín's materiality analysis serves a starting point to define its corporate sustainability goals and strategy, as well as the daily management of its performance.

During 2012, the Company started to prepare its financial statements in accordance with the International Financial Reporting Standards (IFRS), thus changing the manner in which figures are presented. The deconsolidation of some of its minority interests was also reflected in the way of reporting information on sustainability, which made it difficult to perform a comparative analysis as it did before between some of the figures included in this section and the figures eventually reported in previous years through different communication channels.

As to the scope of the information provided in this section, labor indicators include all of Grupo Clarín's subsidiaries, pursuant to the criteria indicated above. Environmental performance refers to production or scale operations in which disclosing this kind of information is material. Similarly, some content-related indicators are exclusively applied to subsidiaries engaged in journalistic or entertainment broadcasting and programming activities. As to other indicators, for instance, those related to certain community engagement programs of Grupo Clarín or its subsidiaries that require comprehensive and detailed impact assessments, the information provided is related to the core of the activities inherent to the Metropolitan Area of Buenos Aires, due to the complexity and extension of the processes involved in reviewing and verifying journalistic information.

THE VOICE OF THE PEOPLE

Media sustainability depends, to a large extent, on readers and audiences that are aware of their rights and are determined to demand quality journalistic and entertainment content, and on media that are willing to listen to them.

Grupo Clarín's media foster the interaction with its public and audiences, creating listening and discussion channels and tools. Opinion, criticism, tastes, suggestions and comments are expressed through multiple open spaces for content created by the people and for the free expression of the entire diverse and plural society. At a corporate level, within the framework of a complex environment marked by the escalating attacks against independent media, Grupo Clarín also offered multiple communication and interaction channels to discuss specific institutional issues, such as spaces on the Internet and social networks, in order to share the latest updates with accuracy and transparency.

The proliferation of new media and technologies has drastically changed journalism and the way in which the public has access to and produces news and other content. These conditions require an open and rigorous look to determine how to face the challenges imposed by the digital era, adjusting the Company's business model to meet readers' and audiences' demands, while guaranteeing the sustainability of its activities, without relegating its leadership position.

Grupo Clarín's media companies have assumed a long-standing commitment to audiences and readers. Grupo Clarín's sustained leadership and its privileged position as the people's preferred choice are attributable to its ability to anticipate trends and its vast knowledge of media consumers, paired with its capacity to understand their needs and meet their requirements.

Some segments of Diario Clarín, such as the traditional section entitled "Letters to the Country" and the readership surveys, are supplemented with new initiatives to satisfy the people's need to participate in the process of casting news, such as, the inclusion of readers' comments and other strategies based on the social networks in virtual news platforms.

Over the last years, the Company has launched an increasing number of new blogs and applications and fostered people's interaction with journalists, as well as the interaction among users. Interaction allows readers, listeners and Internet users to provide information. 'TN y la gente', an initiative from the news signal TN, is a good example of this, since it allows the audience to send photos or videos captured with personal cameras or mobile devices as an additional way to foster the citizens' involvement in journalism and increase the end-user participation in Grupo Clarín's several media.

Grupo Clarín is also focused on giving a voice to small communities and on fostering the development of local content at a regional level. Through the signal program Somos, Cablevisión and ARTEAR have been working together in order to gradually renew TV signals and local news programs in several cities of Argentina. The program is based on the concepts of access to information and cultural proximity with the people, and introduces state-of-the-art technology and training to develop local talents.

Audiovisuales en la Escuela is a similar program developed by Cablevisión to facilitate audiovisual tools to public schools with the aim of building content related to the local cultural identity. Since its inception, over 5,000 students, parents and teachers from 34 schools participated in the program and produced 34 audiovisual pieces, which together with other special programs, were broadcast by Cablevisión's local signals. After the end of the school year, participants may apply for educational practices at their local signals.

In addition, for more than 30 years now and through its support to the Noble Foundation, Grupo Clarín offers free media literacy tools to thousands of children and teachers in order to foster critical thinking on journalism, while empowering people in their roles as consumers and content generators.

SOCIAL AND SUSTAINABILITY COVERAGE

In order to better assess the potential influence of the media on different audiences, Grupo Clarín sets goals to guarantee the quality and diversity of its content. Grupo Clarín's newspapers and news programs have a long-standing and respected reputation for journalistic research and offer comprehensive coverage of news and relevant social and environmental issues. The ability to reflect social diversity - both through the coverage of news and entertainment content - is one of the pillars of its commitment towards the audiences and readers.

Special supplements, experts' and scholars' opinions, on-site news coverage, journalistic talent and the quality of the images and infographics complete the broad variety of issues addressed by Grupo Clarín, including but not limited to health, consumption and development, science, education and preservation. Weekly TV programs, such as, 'TN Ecología' and 'TN Ciencia' broadcast by Todo Noticias, have become leaders and benchmarks in their respective fields.

During 2013, the Company's media continued to develop content related to climate change and the environment.

Radio Mitre, Grupo Clarín's main radio station, combined the 24-hour coverage of these issues with "Planeta Mitre, Compromiso Verde", a series of daily brief radio programs hosted by a journalist specialized in the environment aimed at raising awareness on environmental issues, recycling and what each of us can do to make the world a better place.

Also during this period, Grupo Clarín renewed its commitment to the supplement Gestión Sustentable (Sustainable Management), published together with Diario La Razón, to make readers think about the most prominent issues of the sustainable development global agenda and to report on social and environmental responsibility actions carried out by companies and organizations of the civil society. The supplement received the prestigious award Gota en el Mar, in the category Environment and Sustainability.

The Company continued to support and promote blogs that raise awareness on social issues from its web site, clarín.com. For example, "El Otro, el Mismo" is a blog aimed at the inclusion of people with disabilities, developed in association with the Universidad Católica Argentina and social organizations.

In this regard, the Calendario del Compromiso con la Comunidad (Calendar of Commitment to the Community) was published for the eighth consecutive year in Revista Viva, a weekly section sponsored by Clarín, the Noble Foundation and Red Solidaria that provides an overview of the social challenges Argentina currently faces, with an emphasis on the potential positive effect that contributions made by individuals and the organizations of the civil society may have in addressing such challenges.

Acknowledging the importance of reflecting diversity, fostering social justice, protecting the youth, encouraging minority recognition and avoiding discrimination on the basis of race and gender are key actions to create content in the media in a responsible fashion. Over the last years, there has been a gradual but sustained increase in the coverage of social issues by Grupo Clarín's media as recorded by several monitoring actions carried out by third parties, particularly, independent observatories of media companies and universities.

In 2011, the NGO Periodismo Social and Universidad Austral started to prepare reports on the coverage of children-related news on television in Argentina. In that first year, Telenoche, Grupo Clarín's main news program that leads audience ratings, was identified as one of the news programs that spent more time broadcasting news and giving information on children and young people, accounting for 32.4% of total coverage. In addition, the report stated that more than 54% of the information sources were children and their families.

In 2012, the second edition of the report revealed that the percentage of children as sources of information increased by 60% and that the topic of violence decreased remarkably (16%) since 2011 to 29% of the total coverage. Consequently, the news program was awarded the best score among private signals. The report also pointed out that 41% of children-related coverage was specifically addressed to girls, while the other 47% was equally addressed to boys and girls, strengthening the news program's commitment to reflecting gender-related issues. As of the date of this annual report, the abovementioned organizations have not made available data on the year 2013.

The emphasis placed on these monitoring processes fits within the framework of an initiative launched by the Company in 2009 that included an internal review of specialized third party analysis, combined with an ambitious training program oriented to audiovisual journalists, focused on achieving journalistic excellence and raising awareness of the particular features of the main social topics in order to give them responsible treatment in the news.

In its early stages, the project included training for journalists that work on news programs broadcast by provincial signals. In a second stage, Grupo Clarín, together with experts in communications and scholars from said organizations, offered in-house workshops for journalists, editors, cameramen and journalistic producers that work at all news programs produced by ARTEAR (TN and Canal Trece), in order to provide them with content development tools and to discuss the main challenges imposed by the several aspects of the coverage of social issues on TV and the editorial values that guide day-to-day decisions. This program was the first of its kind to be implemented in an Argentine signal.

PROMOTING INVOLVEMENT

Nevertheless, when it comes to responsibility and content quality, there is always much to be done in order to identify the potential positive effects that the media may have on a society. In this regard, Grupo Clarín seeks permanently to improve its role in the promotion of the public debate by fostering individual involvement and further describing the social, economic and environmental challenges faced by society with diversity of opinion.

The several media companies that comprise Grupo Clarín also endorse several initiatives that encourage citizens' involvement in democracy and responsible citizen controls on the acts and decisions of their representatives.

Aware of the need to advocate for further respect for republican principles and fundamental human and civil rights, during 2013 the Company continued to foster and raise awareness on the importance of every citizen's right to information and freedom of speech.

The Company also sought to foster values, such as solidarity and community commitment.

Through ARTEAR, in 2013 the Company launched a new edition of "Abanderados de la Argentina Solidaria", an award that recognizes the work-that would otherwise go unnoticed-done by social entrepreneurs and community leaders, by communicating valuable initiatives, that foster social transformation and may be replicated. The initiative is supported by Ashoka and a panel of outstanding people from the social, academic and cultural sectors. In this edition, the prize was granted to Mario Raimondi, founder and director of El Desafío, a foundation that fights against poverty and structural exclusion in Rosario. The winner received Ps. 150,000 in cash to continue with his work. Jorge De All, a physician that travels around the province of Chaco to diagnose, prevent and cure diseases of people in basic need received Ps. 75,000 in cash and the Jury's Special Award.

During the period, Clarín renewed its partnership with Missing Children and Red Solidaria to publish photographs of missing children in La Razón newspaper and raise awareness about the role of the community in dealing with this problem. The Company also helped to broadcast the events held to commemorate and raise awareness on the anniversary of the AMIA and the Israel Embassy bombings.

In order to promote other campaigns and fund-raising events and raise awareness about Argentina's main social issues, Grupo Clarín donated advertising space to several NGOs. Among the most notable efforts in this regard were the Colecta Más por Menos, the annual Caritas collection organized by the Argentine Episcopal Conference and the annual collection of the Food Bank Network, among others. 

Grupo Clarín also renewed its support for the traditional campaign "Un sol para los chicos", together with ARTEAR and UNICEF. In 2013 the campaign celebrated its 22nd anniversary and raised Ps. 17,531,826 for educational and social programs oriented to children and young people. The campaign is one of UNICEF's main sources of revenues in the country and also seeks to boost individual donations in Argentina, which still remain at significantly low levels compared to the US and Europe, on a relative basis.

In order to deal with this issue strategically, and to bolster the impact and scale of its investments in public welfare campaigns on its media, Grupo Clarín, in partnership with AEDROS, an specialized entity engaged in fundrasing, and with the support of Rapp Argentina, designed a campaign to foster civic involvement through a sustained and ongoing economic commitment with organizations of the civil society. In its second edition, the campaign Donar Ayuda was largely promoted in audiovisual and electronic media, as well as in newspapers and magazines throughout 2013 and early 2014. Individual contributions to NGOs that take their missions seriously are regarded as one of the most effective ways to make a drastic and sustained difference in the lives of many people in need. In addition to conveying this individual commitment message, the campaign also seeks to make a significant contribution to the organizations of the civil society as a whole, which face increasing challenges to their sustainability and independence.

COMMUNITY ENGAGEMENT AND SOCIAL ADVERTISING

Grupo Clarín's impact on and relationship with communities and individuals goes beyond the boundaries of its editorial coverage. The support to vulnerable communities, the coordination of educational projects, and the organization of campaigns to address social issues or to help areas that were hit by natural disasters, paired with Grupo Clarín's sustained commitment evidenced by several types of donations and knowledge transfer, are just some examples of the numerous initiatives organized and fostered by Grupo Clarín's media companies, either jointly or individually.

In response to the growing communication needs and demands from the organizations of the civil society, Grupo Clarín has a multiple approach program in place that combines raising and spreading active awareness of public and social interest topics, through advertising, design and communication services for the NGOs.

With respect to social advertising, during 2013, Grupo Clarín, through the Noble Foundation and several of its media companies, donated a significant amount of advertising time and space to foster causes related to social, civic and environmental issues, through its own social investment programs or within the framework of strategic alliances with prestigious organizations of the civil society.

Among these programs, the Company continued to launch Segundos para Todos, a program organized by Cablevisión, in order to donate free advertising seconds to organizations of the civil society. In 2013, this initiative donated 113,000 advertising seconds to broadcast public welfare messages.

Advertising space donated in 2013 on Grupo Clarín's media

Radio and Broadcast and Cable TV 539,900 seconds

Pages in newspapers and magazines 123 pages

The estimated impact of these in-kind contributions allocated to public welfare messages accounts for the equivalent to a social investment of approximately Ps. 45.2 million.

Grupo Clarín has also undertaken a sustained and strategic commitment to breaching the digital gap and promoting the responsible use of the Internet. During 2013, Cablevisión continued to provide free services to 20,241 schools, hospitals and social organizations. This commitment differentiates the Company from others, such as telephone companies, which have policies that do not include donating communication services, in spite of their reach and scale. Cablevisión's service contribution accounts for an annual in-kind contribution equivalent to Ps. 43 million, and is supplemented by specific programs, such as Cablevisión Flex which offers reduced subscriptions to low income neighborhoods. The program Puente Digital is one of the main pillars of the work done in order to breach the digital gap. The program offers free Internet access to public schools, combined with the integration of new technologies to school teaching. Through this program, the Company seeks to create a multimedia and interactive platform built upon convergence, where TV content will be a tool to supplement the use of Internet at school. This service is also provided to hospitals, health centers and organizations of the civil society. The initiative also embraces the donation of computers through Fundación Equidad when there is an upgrade in the Company's equipment, which also favors the reutilization of these resources.

The impact of donated advertising space and free Internet access services may be added to the Noble Foundation's Ps. 3.5 million budget for 2013, and to the amount set aside for other social investment programs in several subsidiaries, which reached Ps. 2.6 million in 2013. Hence, the amounts of cash and in kind contributions allocated to social and community investment programs for the period account for an aggregate Ps. 94.3 million. This estimated figure does not include all programs developed by smaller subsidiaries, since some internal information gathering systems related to the business units' community actions are under development.

In addition to providing financing, resources, capacity and experience in the promotion of socially valuable initiatives, Grupo Clarín also relies upon third parties to secure regular sponsorships and donations within the framework of strategic alliances related to the sponsored initiatives.

FOSTERING EDUCATION AND CULTURE

As part of its initiatives in support of education, Grupo Clarín used its cross-segment position and its ability to communicate with society to raise awareness of the importance of education as a right and as a critical element in Argentina's future social development. In this sense, it tried to foster equal opportunities in education through its publishing company Tinta Fresca with the generation of updated, affordable and quality educational materials for students, teachers and schools throughout the country.

For the twelfth consecutive year the Company organized "Digamos Presente", an initiative focused on equal access to education and rural education, in partnership with APAER and the Cimientos Foundation, and with the support of Telecom.

The Company has also renewed its support for the 5th Educational Quality Forum, under the motto "Improving education is a top priority". The forum is a massive event organized by Educar 2050, an entity that combines the fieldwork related to the instruction of principals of schools attended by low-income children with extensive public policy advocacy activities.

Among the main alliances to foster education, the Company developed specific initiatives, such as the program Potenciar Comunidades Rurales, with the support of several companies to provide support to local development projects in certain communities under the leadership of Emprendimientos Rurales Los Grobo.

One of the most prominent initiatives resulting from a collective effort is the award "Premio Clarín- Zúrich a la Educación". In its fifth edition, this award recognized the best practices in the use of ICT in high schools. The first prize was Ps. 160,000 for the winning school to be able to develop the project. Other two schools were distinguished with a recognition and received Ps. 45,000 each. The next edition of the award in 2014 will choose the best education project for sustainable development at the elementary school level, in order to underscore the importance and interest of this issue and recognize the capacity to introduce critical thinking and a problem-solving approach to education.

During this period, through the Noble Foundation, the Company continued to donate bibliographical material, and renewed its long-standing support of Escuelas Roberto Noble, named after the founder of Diario Clarín, Roberto Noble.

Noble Foundation's donations of educational material

2013 2012 2011

Books 44,219 48,900 53,406

Magazines 6,140 6,660 6,625

Manuals 561 500 260

Again this year, the Company sponsored the annual Maratón de Lectura (Reading Marathon) initiative, organized by Fundación Leer with the participation of over 4.2 million children from 13,700 educational institutions. The event received the donation of books published by Clarín and the initiative was promoted through a broad advertising campaign.

Grupo Clarín and its subsidiaries have also renewed their commitment to culture through several sponsorships to important events and entities, such as, Feria del Libro (Book Fair), PROA Foundation, Faena Art Center, Teatro Colón, and Usuahia's Classical Music Festival. The Company also sponsored several plays during the season at the Teatro Maipo and the films "Vino para robar", directed by Ariel Winograd, written by Adrián Garelik and starred by Daniel Hendler and Valeria Bertuccelli; "Séptimo" starred by Ricardo Darín and Belén Rueda and "Tesis de un homicidio", a thriller directed by Hernán Goldfrid and starred by Ricardo Darín, Alberto Ammann, Calu Rivero and Arturo Puig. In 2013, Clarín held the traditional annual ceremony of the "Premio Clarín de Novela" awards. This year the award went to Fernando Monacelli for his novel "Sobrevivientes". The novel was published by Clarín-Alfaguara and the author won Ps. 150,000. Grupo Clarín also sponsored a series of concerts organized by Buenos Aires Lírica Foundation.

Through its cable and broadcast TV signals, Grupo Clarín's companies make significant efforts to promote the most relevant cultural, motion picture and sports events and such efforts are an increasing contribution to cultural diversity and local identity. Of particular note are initiatives such as "Volver", the cable TV signal that keeps Argentina's most complete programming archive.

MEDIA LITERACY AND PROTECTION OF YOUNG AUDIENCES

The media play an increasingly important role in society, particularly, in the lives of young people. Through several programs, the Company encourages them to develop media access tools through critical thinking and to leverage the opportunities provided by the media and technology to explore their identity, creatively express their ideas and opinions and make their voices heard.

Media literacy is generally defined as the ability to access to, analyze, respond with critical thinking and benefit from, the media. Grupo Clarín's main tool to foster media literacy is "Los medios de comunicación y la educación" (Education and the Media Program), a pioneer program widely recognized abroad, that has been developed and permanently updated for almost 30 years. In 2013, the Noble Foundation was mostly engaged in renewing the program that consists of classroom workshops and special educational content for teachers and students oriented to foster a critical approach to the media and their use as resources that supplement formal education.

"Education and the Media" Program 2013 2012 2011

Workshops for teachers 120 125 100

Workshops for students 441 534 525

This program is supplemented through other initiatives related to the promotion of responsible content consumption. Through the Noble Foundation, Grupo Clarín renewed its presence and coordination of the media space in the "Museo de los Niños" (Children's Museum) and continued to offer visits to printing facilities. During 2013, 13,628 people (mostly students) and 262 institutions had the chance of experiencing first-hand the processes involved in news production and newspaper printing.

Within the Cable Television and Internet Access segment, the Company helps to protect vulnerable audiences by providing parents with the tools to make decisions about the content their children are allowed to access.

This includes several parental control options. For cable TV services, the on-screen guide allows parents to easily block content that is not suitable for children by introducing a PIN. The Video On Demand platform includes the identification of adults-only services with access control systems that may be enabled by the subscribers. In terms of protection of audiences in Internet, the Company developed Fibertel Security. With this tool, users may filter the access to certain web sites deemed inappropriate and customize the protection level for each family member, among other things. In addition, adults may restrict the use of Internet by setting specific days and times. Adult users have a password that enables them to turn the control off and freely access the Internet, as well as to change all of the software configuration settings. Every time the operating system is rebooted, the service returns to its "enabled" status to prevent potential accidents.

These tools are provided with information and criteria on how to use Internet. Cablevisión launched the program "Compás para el uso de Internet" in partnership with Unicef and Chicos.net. This project, specifically addressed to families and teachers, is intended to provide proposals to teach children and teens about the proactive, responsible and safe use of technology. The topics discussed in this program include digital citizenship, on-line security, data protection, content diversity, respect for information sources and awareness on cyber-bullying and discrimination. The initiative includes the development of an information portal (www.programacompas.com.ar), tools for journalists, relationship with elementary schools, publication of citizenship awareness information through the media and awareness actions by way of 84 workshops attended by 1,776 participants.

The Company also addresses responsibly children's artistic participation in the television and film industry; a category that was embraced by the ILO as a valid form of participation in labor activities by children in these age categories. To such end, special emphasis is placed on compliance with the applicable standards in force, while adhering to internal guidelines that set limited activity schedules, protection and promotion of school education and active involvement of parents and tutors.

EXCELLENCE IN JOURNALISTIC TRAINING

In order to reaffirm the commitment to journalistic excellence, Grupo Clarín also carried out activities aimed at consolidating the training and excellence of current and future communicators.

In this sense, the Company provided support to the Masters Degree in Journalism, an international graduate course with the highest academic level, organized by Grupo Clarín and the University of San Andrés, with the participation of the School of Journalism at Columbia University and the University of Bologna, and led by renowned national and international journalists and academics. Year after year, this renowned training program gathers professionals from Argentina and other Latin American countries, and also offers scholarships linked to outstanding performance.

The Company also sponsored the achievements of the Graduate Course in Scientific, Medical and Environmental Communication. This specialized course is particularly relevant from the perspective of the media responsibility in dealing with issues that have a direct impact on people's lives. Therefore, the Company renewed its support to this program, which is organized by the University Pompeu Fabra in Barcelona, together with the Leloir Institute and the cable signal Todo Noticias (TN). The support was renewed at the institutional level, as well as at the level of journalistic content, which continued to be focused on increasing the involvement of specialists in the coverage of news related to these specific issues.

During 2011 and in this same regard, the Company helped to promote and support the Graduate Program in Digital Journalism organized by the University Pompeu Fabra and TN.com.ar. With the second edition of this state-of-the-art program underway, the Company reinforced its commitment to enhancing the quality of professionals in the 2.0 world.

OUR PEOPLE

Grupo Clarín's success and leadership are mostly the result of the efforts, talent, professionalism and creativity of its employees. Grupo Clarín's media companies are among the preferred workplaces of most communication professionals. The Company strives to offer better opportunities, incentives and tools to sustain and strengthen the firm commitment of the professionals that believe in the project of Grupo Clarín.

Total headcount

as of December 31, 2013: 15,990

Distribution of Company

Employees broken down by gender 2013

Men 12,232

Women 3,758

Employees broken down by age groups 2013

31-50 10,249

>51 2,046

Employee turnover ratio -1.9%

Employee distribution by category 2013

Directors and Managers 244

Middle management 2,262

Analysts and administrative staff 5,848

Technical staff 7,070

Other 566

The Company has its own structure in terms of the age and gender diversity of its employees. As to gender, the higher proportion of male employees is mostly attributable to the high number of qualified employees required in technical areas pertaining to printing facilities and the cable TV and Internet access segment. In Argentina these specialization are mostly chosen by men. The gender structure in other companies of Grupo Clarín is well-balanced, particularly in content-related activities, such as journalism and audiovisual production where the workforce is more diverse.

In any case, the Company seeks to foster diversity and the hiring of first-time job seekers and people in the upper age group. The Professional Development Program, the Young Professionals Program, the guided visits to the Zepita facility and Cablevisión and the Audiovisuales en la Escuela program are good examples of these initiatives that seek to foster the articulation between formal education and the workforce, by encouraging young people to complete their high-school studies as a necessary condition to get a job. On the other hand, Gestión Compartida, a company which, among other things, provides employee recruitment, selection and training services to the companies of Grupo Clarín and third parties, is engaged in promoting and developing job opportunities for people older than 45 both in its daily work as well as through partnerships with social organizations that share the same focus.

In terms of employee turnover, the Company and its subsidiaries maintain market ratios, particularly in connection with permanent employees. However, the consolidated media turnover ratio usually reflects certain particular features of the industry, which is influenced by factors such as seasonality and involvement of specific technical or artistic employees during certain periods. These employees do not terminate their relationship with the company; instead, they have temporary employment agreements related to special products inherent to the programming activity.

The Company fosters an open dialogue with union representatives facilitating mutual understanding and conflict resolution. Employees freely exercise their right to unionize and are currently represented by several unions related to each of the activities developed by Grupo Clarín and its subsidiaries. Out of Grupo Clarín's total employees 75% are covered by collective bargaining agreements.

Taking care of the work environment and conditions, health and job safety and employee training to enhance their professional skills are some of the actions aimed at consolidating the sense of integration and achievement of organizational goals.

The work environment survey is one of the key tools employed to gather opinions on the Company's performance in this regard. The survey is conducted every two years at Grupo Clarín's subsidiaries on a global basis and as a cross-section of the group's companies. This process serves identify sensitive issues and opportunities for internal improvement. Based on the results of the survey, the Company designs action plans, communication channels and training programs in order to set new goals for the coming year. In 2012, the survey was conducted among all of the Company's subsidiaries achieving a record level of responses (92%), compared to 88% achieved in 2010 and 81% in 2008. Within a complex environment for the Company and its employees, the figures achieved in the work environment category remained strong and the figures achieved in the commitment category were above 70% on average. Leadership indicators also maintained high scores. The work environment survey is expected to be conducted during 2014.

In 2013, Grupo Clarín continued to develop its Corporate Volunteer Program, which was launched in 2011 with global actions and other actions inherent to each subsidiary. Named "Vos también", the program seeks to develop and consolidate in an inclusive fashion valuable initiatives for employees' solidarity actions that have a positive impact on the community while contributing to the Company's organizational environment. During 2013, the program was implemented in 10 business units, including the corporate areas, and its impact was extended to 12 provinces. According to its main indicators, volunteers devoted 6,180 hours of work (4,670 during working hours), with a global engagement rate of 10.2%. All program actions were carried out in partnership with social organizations to shift the benefits derived from the experience to the civil society. During 2013, the program partnered with 100 NGOs and reached 9,813 people.

Through these initiatives, volunteers had the chance to collaborate with several programs and topics. The main projects carried out during the year were the following: Donación de Sangre, a project that seeks to foster solidarity in the area of health; Vos también Jugás, a project oriented to infants; Socios por un día, a project carried out in partnership with Junior Achievement that seeks to foster entrepreneurship among young people; Plantación de Árboles por el Medioambiente in partnership with Plantarse, and a program to support community centers that involved games in school playgrounds and a child day care center. On the other hand, two cross-cutting actions were proposed to all of Grupo Clarín's business units: the initiative Concurso de Iniciativas Vos También that rewards employee's innovation in social projects by providing the financing to execute employee projects and Fin de año en Familia, a family support program that consists of delivering Christmas gift boxes to low income families. For the third consecutive year, overall satisfaction with the program Vos También was extremely high: 99.60% of the participants found it rewarding or very rewarding and a similar percentage stated that they would participate again.

 "Vos También" volunteer program in 2013

Volunteers 1,420

Participating social organizations 118

Direct beneficiaries 9,813

Working hours 4,670

Non-working hours 1,510

Employee's engagement 10.2%

Grupo Clarín also put special emphasis on multiple internal communication tools, such as the magazine Nuestro Medio, the Corporate Intranet with participation spaces and forums, the digital newsletter named Nuestro Resumen and the Corporate Training Program and the Company Climate Management newsletters, as well as internal communication spaces and notice boards. Year after year, Grupo Clarín increases its efforts to implement and streamline the information channels on benefit programs, policies and relevant organizational changes, and news concerning the daily development of activities.

Benefits and Career Development

Despite the fact that most benefits are common throughout the Company, each Business Unit grants additional benefits, which may differ based on their respective activities. During the last quarter of 2007, the Company, together with its subsidiaries, began to implement a long-term savings plan for directors and managers, which became effective in January 2008.

During 2013, the corporate HR department and the business units continued to implement several programs to identify internal talents for professional development. In addition, Cablevisión and AGEA renewed their Young Professionals program creating opportunities for professionals who are taking their first steps in their careers.

In order to build new skills and reinforce existing strengths, employees need motivation and support. During 2013, the Company made further efforts to increase the scope and improve the performance review program of employees in several job categories.

Grupo Clarín's employees and professionals may update and build upon their knowledge and skills through several training programs, ranging from seminars and courses to graduate degrees and MBAs. One of the main initiatives in this respect is the 'Corporate Training Program', which includes a broad variety of courses. Training management is currently focused on planning new tools and technological developments in order to train their employees on how to face the challenges imposed by the changes in the media industry.

In addition, the Company has developed two specific and cross-cutting programs addressed to managers. In partnership with the Universidad Argentina de la Empresa, the Company designed the Management Development Program oriented to second and third tier managers. The program helps to build knowledge on, and skills in strategy, finance, management tools such as leadership, motivation, teamwork, etc. The Senior Management Development Program is addressed to top tier managers and was developed together with the Barcelona School of Business, ESADE. The program deals with issues such as innovation, global strategies and entrepreneurship.

Moreover, seminars and programs on health and disease prevention and other relevant topics were delivered in all business units supplementing the special health and medical check campaigns, with special emphasis on the prevention of seasonal diseases. Grupo Clarín also develops several activities to prevent work-related accidents.

Relationship with the value chain

Grupo Clarín's Social Responsibility management is embedded in the relationship with its value chain. During 2013, the Company continued to explore alternatives of interaction or joint approach to common-interest issues at the various levels of relationship with its suppliers.

Grupo Clarín focused on the implementation of systems and procedures aimed at the application of best practices for purchases, employee hiring, and contracting with suppliers within a framework of supervision and transparency.

During the year and through Gestión Compartida, a subsidiary engaged in managing the relationship with most of the suppliers, the Company initiated a tool redefining process, which, among other things, seeks to require that new suppliers undertake a commitment to the sustainability of their operations. Through this process, the Company expects to develop internal training sessions, introduce and develop its own record of sustainable suppliers and foster sustainability as management strategy oriented to related third parties.

ENVIRONMENT

During 2013, the Company continued to implement measures to identify, plan for and improve production processes in order to optimize results and react to potential impacts.

Progress was made in achieving the period's goals by introducing sustainable methods to obtain and use resources, developing equipment investment policies, raising active awareness on the appropriate use of supplies and technologies and promoting the adoption and certification of environmental standards.

Since 2004, Grupo Clarín has adhered to the United Nations Global Compact that sets forth several environmental protection standards. The Compact requires that companies:

(Principle 7) adopt a preventive approach to environmental challenges;

(Principle 8) take initiatives to foster increased environmental responsibility; and

(Principle 9) foster the development and promotion of environmentally friendly technologies.

In addition, Grupo Clarín's Social Corporate Responsibility and Sustainability Policy serves as a management guideline and drives the definition of goals for its subsidiaries.

Among the period's highlights, AGEA -the subsidiary engaged in publishing Grupo Clarín's main newspapers and managing the largest printing facility- focused on implementing the main guidelines of its Environmental Policy defined in 2012 and made investments to put in place an Environmental Management System that enabled it to have its production processes certified under ISO 14001 in July 2013. This is in addition to AGR's recent certification of its paper handling process under FSC during 2010.

Consumption. Newsprint and energy

Within the framework of an environmental management policy oriented to eco-efficiency, the Company and its subsidiaries mainly use energy, newsprint, cable and other technology-related elements.

Use of materials in 2013

Newsprint 81,077 Tons

Ink 1,868 Tons

Aluminum plates 197.6 Tons

Residential connection cables 3,042 Tons

CPE (Set-top units and customer's equipment) 971 Tons

At the printing plants, the Company followed established guidelines to ensure the provision of materials at quality levels compatible with international standards for newsprint, inks and other specific inputs.

Papel Prensa, a subsidiary in which Grupo Clarín owns an indirect minority interest, supplies most of the newsprint used in newspaper printing.

As disclosed in its web site, Papel Prensa has put in place production policies based on the procurement of strategic inputs without depleting natural resources. To this end, the paper mill recovers raw materials from the recycling of returned newspapers in order to produce more newsprint and reduce the use of virgin fiber. The type of fiber source (aspens and willows) depends on the availability of materials and economic considerations concerning freight distance minimization, a key economic and environmental issue. However, it should be noted that fresh fiber comes from sustainable plantations. This means that native forests are not endangered. In addition, ongoing research studies are conducted concerning genetic enhancement of tree species and environmental and forestry aspects. Such research is conducted through agreements with universities, research centers and specialists in order to boost productivity, cut costs and guarantee ecosystem sustainability.

Papel Prensa's forestry department conducts its activities with a sustainability strategy in mind to protect biodiversity. Birdlife has experienced a sustained increase as a result of forestry protection actions and a ban on hunting. These conditions encourage the design of several research and development programs, also in conjunction with universities, including the introduction, production and reproduction of certain endangered deer species for their adequate and safe development.

As to the types of inks used at the printing facilities, the diverse variety of printed products requires a varied approach from the perspective of resources. For instance, the use of vegetable-based coldset ink at the Company's main printing facility, accounts for almost 60% of total use of the input. This type of ink is environmentally friendlier due to its vegetable components and its efficiency in terms of the amount of ink required to print, which may be 10%-15% lower than other inks. As another way to reduce the environmental impact, the Company streamlines its resources through the selection of printing techniques. For instance, since 2008 AGR has successfully introduced stochastic printing at its premises, significantly reducing the number of inks required for the printing process.

The Company also has specialized and qualified professional teams that work towards the goal of reducing material consumption, identifying and adopting increasingly efficient processes related to the environment. The newspaper size adjustments introduced in previous years continue to reduce the use of newsprint and other materials.

The Cable Television and Internet Access segment is engaged in service activities, which essentially do not require the use of raw materials, as opposed to the industrial processes run by other segments. Nevertheless, given the scale of operations, Grupo Clarín's companies use certain materials produced by their respective value chains, such as the cable for residential services installed during the period, top-set units delivered under loan for use and poles used as part of the distribution network.

Power is the main additional resource used by Grupo Clarín and its subsidiaries. Grupo Clarín uses power from direct and indirect sources. Even though the Company has alternative power generators in place for offices and industrial facilities that require fuel, the main indirect consumption is the electricity provided by the power supply network.

Direct and indirect use of power by primary source in 2013:

Electricity 121,080 MWh

Natural gas 167,105 GJ

Gasoline 1,198 GJ

Gasoil 6,916 GJ

LP gas 0 GJ

The subsidiaries engaged in printing activities are the heaviest users of power, followed by the business units that use technology in their operations, such as the cable TV and Internet access distribution services and audiovisual programming services. In this area, ARTEAR has policies in place for the ongoing development of innovation resources to reduce the use of electricity at its premises. The main initiatives in this regard include the introduction of cold lighting systems in all new and remodeled TV studios, which allowed a fivefold reduction in the power ARTEAR normally used for lighting.

In addition, since 2011 the Company has been working to replace the vehicles of ARTEAR's mobile units by low consumption vehicles. This goal was achieved in 2012. The Company also renovated its buildings in order to make better use of natural light and installed energy-efficient linings. During the period, ARTEAR continued to work on a multiple-stage arrangement that includes the replacement of other lighting material. In line with its goal of staying at the forefront of new technology, ARTEAR also introduced new technologies in the technical control areas and continued to invest in equipment manufactured under environmentally friendly standards, in order to meet the need for High-Definition programming and distribution.

At Cablevisión, energy from indirect sources is mainly used for temperature adjustment, workroom ventilation and lighting and for the operation of data transfer networks and equipment. Hence, Cablevisión introduced technologies in its main building to reduce the amount of energy used in lighting (through efficient electrical devices and motion sensors at meeting rooms) air conditioning and smart elevators.

Waste and Emissions

Grupo Clarín's subsidiaries develop most of their activities in urban areas that are not in contact with natural areas and that meet effective urban planning standards.

As to emissions, printing facilities have the most significant impact on the carbon footprint. Therefore, the Company is permanently exploring alternatives to improve processes and efficiency in these areas and to further deepen the analysis and inventory of Co2 emissions generated by the activities developed by the several subsidiaries. The main strategies available to reduce greenhouse gas emissions entail cutting consumption or changing power resources, for instance, by making more intensive use of renewable fuel and bio-energy.

Total greenhouse gas emissions by weight in 2013

Direct emissions 8,577.6 Tons

Indirect emissions 60,268.9 Tons

Each subsidiary of Grupo Clarín identifies and manages waste production and disposal.

As part of the treatment of industrial waste from printing processes, the Company's subsidiaries collect and separate certain waste materials, such as ink, oil, grease and solvents, that are sent to third party facilities for their recycling, reuse or safe final disposal. Hazardous waste is subject to a rigorous treatment handled by licensed waste management companies. At the same time, the Company continues to develop strategies to reduce hazardous waste and has made significant progress. Fully reusable aluminum plates are used in the printing process.

In the Cable TV and Internet access segment, waste is separated at origin in order to add social or environmental value, where practicable. During 2013, the Company developed an Internet portal to keep track of waste production. With respect to recycling, the Company keeps strict control of the recovery of equipment delivered to subscribers under loans for use, such as top-set units and remote controls, for their reuse or safe final disposal. In this area, the Company's waste management substantially differs from that of other technology companies that are not involved in the final disposal of electronic waste related to equipment delivered to customers.

Total waste weight by type in 2013

Urban or non-hazardous waste 4,794.04 Tons

Hazardous waste 301.10 Tons

Special care is given to effluents resulting from the printing facilities' development processes, which are subject to rigorous treatments and measurements before disposal. A water re-usage system was put in place at the Zepita facility. Hence, the facility managed to reach the goal of almost zero effluents throughout the year under its Environmental Management System. At La Voz del Interior's printing facilities, waste water is subject to treatment and is then reused for irrigation or as part of the production process. The water discharge figures disclosed below are mostly attributable to processed water that can be safely used for irrigation. The Company's office buildings and other facilities only discharge domestic waste water.

Total waste water discharge

at printing facilities in 2013 8,454 m3

Also in terms of recycling, Grupo Clarín continued to reaffirm its contribution to Fundación Garrahan through an office-paper recycling program. Such arrangement was combined with other programs to reduce the use of paper at the Company's offices, while seeking to streamline printing techniques; in addition to the Company's renewed efforts to raise sustainability awareness among employees.

Additionally, the Company continued to support projects related to the care and protection of green areas by sponsoring and contributing to the preservation of the parks Plazoleta Dr. Roberto Noble in the city of Buenos Aires and Parque de la Ribera located in San Isidro. Through preservation works in both parks, the Company also sought to promote responsibility in the care of public areas by the community and constructively contribute to the defense of the environment.

RISK FACTORS  

As an Argentine multimedia company, Grupo Clarín is exposed to a wide range of risks, related to the country and also to its operations. Nevertheless, one of the Company's strengths lies in its strategic asset diversification to help spread possible risks.

The Company relies on a strong internal control system. The identification of risk and its assessment is part of each unit's business plans, and is also addressed by a corporate based control department and by the Board on a regular basis.

Argentina's economic environment  

Substantially all of our operations are conducted in Argentina, and are therefore affected by changes in Argentina's economic environment.

The Argentine economy has experienced significant volatility in recent decades, with periods of low or negative growth, high inflation and currency devaluation. After six years of sustained economic growth, the Argentine economy slowed down in the second half of 2008 and throughout 2009, affected by the international crisis as well as internal political developments. The trend was later reversed, with real GDP growth reaching 9.2% in 2010 and 8.9% in 2011. In 2012, however, real GDP growth declined to 1.9% (this statistical data is derived from information published by the National Institute of Statistics and Census -INDEC-. In 2013, the Monthly Indicator for Economic Activity -IMAE- grew by 4.9%.

Sustainable economic growth depends on a variety of factors, including international demand for Argentine export commodities and their prevailing prices, stability and competitiveness of the Peso against foreign currencies, confidence of consumers and local and foreign investors and a low rate of inflation.

The Argentine economy might be adversely affected by the following factors:

- increase in current inflation affecting competitiveness and economic growth;

- insufficient levels of investment;

- exchange rate volatility and depletion of Central Bank international reserves;

- poor development of the Argentine credit market and limited ability to obtain financing from international markets;

- a reduction of the payment capacity of the Argentine public sector and the possibilities of procuring international financing;

- increase in current public expenditure affecting fiscal accounts;

- possible reduction or reversal in the trade balance due to significant decrease in agricultural prices in general and soy in particular or adverse climatic conditions affecting the production of agricultural commodities;

- recession, low economic growth or economic uncertainties affecting Argentina's main trading partners;

- government imposed restrictions on imports or exports;

- wage and price controls;

- political and social tensions;

- continued instability of the financial systems of the main developed economies;

- abrupt changes in the monetary and fiscal policies of the main economies worldwide; and

- reversal of capital flows due to domestic and international uncertainty.

A downturn in economic activity is likely to result in increased subscriber churn and bad debt, subscriber losses as well as decreased advertising revenues. We seek to address the cycles affecting the Argentine economy by diversifying the scope of our business and managing our foreign currency liabilities.

Political and Economic Uncertainties  

Our financial condition and results of operations depend to a significant extent on macroeconomic and political conditions prevailing in Argentina. Measures adopted by the Argentine government that impact upon the economy, including those measures related to monetary policy, inflation, interest rates, price controls, exchange controls and taxes, have affected and could continue to affect Argentine companies like ours.

a. Inflation

Argentina has confronted inflationary pressures since 2007, evidenced by significantly higher fuel, energy and food prices, among other indicators. According to inflation data published by the INDEC, from 2009 to 2013, the Argentine consumer price index increased 7.7%, 10.9%, 9.2%, 9.5% and 10.9%, respectively; and the wholesale price index increased 10.0%, 14.8%, 12.7% and 13.1% and 14.7%, respectively. However, since 2007, the INDEC has experienced a process of institutional and methodological reforms that have given rise to controversy with respect to the reliability of the information that it produces. Reports published by the International Monetary Fund ("IMF") state that their staff uses alternative measures of inflation for macroeconomic surveillance, including data produced by private sources, which have shown inflation rates considerably higher than those published by the INDEC since 2007. The IMF has also issued a declaration of censure against Argentina in connection with its breach of its related obligations under the Articles of Agreement for failing to make sufficient progress in adopting remedial measures to address the quality of official data, including inflation and GDP data. According to figures published by members of Congress from opposition parties, the average private inflation estimate was 25.6% for 2012 and 28.4% for 2013.

During the first quarter of 2011, a team from the IMF started to work in conjunction with the INDEC. Notwithstanding the foregoing, reports published by the IMF state that the IMF staff has called on Argentina to adopt remedial measures to address the quality of official data. In a meeting held on February 1, 2013, the Executive Board of the IMF found that Argentina's progress in implementing remedial measures was not sufficient and, as a result, the IMF issued a declaration of censure against Argentina and called on Argentina to adopt remedial measures to address the inaccuracy of inflation and GDP data without further delay, and in any event, no later than September 29, 2013.

In December 2013 the Argentine Government announced the implementation of a new methodology for the calculation of price indexes, designed in cooperation with IMF experts. The new methodology will apply to the calculation of price indexes starting in January 2014. On February 13, 2014, INDEC published the first measurement of the consumer price index under the new methodology, covering the month of January 2014. According to INDEC, the Argentine consumer price index increased by 3.7% in the month of January 2014 alone, with respect to price levels as of December 31, 2013.

Since 2007, inflation in Argentina has contributed to a material increase in our operating costs, in particular labor costs, and negatively impacted our results of operations and financial condition. There can be no assurance that inflation rates will not escalate in the future, or of what effects the measures adopted or that may be adopted in the future by the Government to control inflation may have.

In the past, inflation has materially undermined the Argentine economy and Argentina's ability to create conditions that would permit growth. High inflation may also (i) undermine the competitiveness of Argentina's manufacturing and service industries producing, inter alia, an increase in unemployment levels and (ii) negatively impact the country's long-term credit markets. There can be no assurance that inflation rates will not continue to escalate in the future or that the measures adopted or that may be adopted by the Argentine government to control inflation will be effective or successful. Inflation remains a challenge for Argentina. Significant inflation could have a material adverse effect on Argentina's economy and in turn could increase our costs of operation, in particular labor costs and access to financing, and may negatively impact our financial condition and results of operations.

b. Foreign Exchange Controls, Devaluation and Central Bank Depletion

During the second half of 2011 and in 2012, the Argentine government increased controls on the incurrence of foreign currency-denominated indebtedness, and the sale and acquisition of foreign currency by local residents. New regulations issued in 2012 subject foreign exchange transactions to prior approval by Argentine tax authorities. Formal and informal foreign exchange controls continued throughout 2013 and remain in place. Since the enhancement of exchange controls in November 2011, and the introduction of measures that have practically closed the foreign exchange market to retail transactions, it is widely reported that the peso/U.S. dollar exchange rate in the unofficial market and in neighboring markets where the peso is traded differs substantially from the official foreign exchange.

During 2013, the Argentine peso devalued from Ps. 4.92 per U.S. dollar as of December 31, 2012 to Ps. 6.52 per U.S. dollar as of December 31, 2013. In 2014 devaluation of the Argentine peso accelerated. In the week of January 20 to January 24, the official peso/U.S. dollar exchange rate went from Ps. 6.83 per U.S. dollar to Ps. 8.00.

Government intervention in the foreign currency market to sustain the value of the Argentine peso, increased energy imports and the decline in the international price of gold have resulted in a progressive depletion of Central Bank reserves. In 2013, Central Bank reserves decreased by approximately 29.3% from US$43,290 million as of December 31, 2012 to US$30,599 million as of December 31, 2012. In January 2014, Central Bank reserves fell an additional 9.37% to US$27,742 million as of January 31, 2014.

Additional exchange controls could have a negative effect on the economy and on private sector companies, including our business. Furthermore, in such event, the imposition of future restrictions on the transfers of funds abroad may impede the transfer of foreign currency on account of dividends to GDS holders.

c. International Trade Restrictions

In 2012, the Argentine government introduced a procedure pursuant to which local authorities must pre-approve the import of products and services to Argentina as a pre-condition to permit such import and the consequent access to the foreign exchange market for the payment of the imported products or services. Repeated complaints from various countries against import restrictions implemented by Argentina, suspension of export preferences or retaliations by trading partners may have an adverse effect on Argentine exports, affect the trade balance and, consequently, adversely impact Argentina's economy.

Additionally, increased government control over foreign trade has resulted in a shortage of inputs and spare parts and in production disruptions. The continuation of these shortages may affect the growth of the economy and, consequently, could affect our business, financial condition and results of operations.

d. Other forms of government intervention

Expropriations, interventions and other direct involvement by the Argentine government in the economy have had an adverse impact on the level of foreign investment in Argentina, the access of Argentine companies to the international capital markets and Argentina's commercial and diplomatic relations with other countries. The level of government intervention in the economy may continue or increase, which may adversely affect Argentina's economy in the medium and long term and, in turn, our business, results of operations and financial condition.

e. Sovereign litigation

Litigation, as well as claims filed Argentine sovereign debt bondholders and foreign investors with the International Centre for Settlement of Investment Disputes (ICSID) and United Nations Commission on International Trade Law (UNCITRAL) against the Argentine government, have resulted in material judgments and may result in new material judgments against the 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 Argentine government may not have all the necessary financial resources to honor its obligations, implement reforms and foster growth. The lack of access to financial markets could have a material adverse effect on the country's economy, and consequently, our business, financial condition and results of operations.

g. Government expenditure

During the last few years, the Argentine government has substantially increased public expenditure. The Argentine government has sourced part of its funding requirements from the Central Bank and the ANSES. For 2012, the government reported the first fiscal deficit since 2009. That trend continued in 2013, with the country's primary deficit more than doubling to approximately Ps.81.7 billion (approximately 2.7% of nominal GDP), without taking into account transfers from ANSES and the Central Bank. The financial deficit (i.e. deficit after payment of interest on debt) was of Ps. 123.7 billion (approximately 4.1% of nominal GDP). We cannot assure you that the government will not seek to finance its deficit by gaining access to the liquidity available in the local financial institutions.

On March 22, 2012, the Argentine Congress passed Law No. 26,739, which amended the charter of the Central Bank and Law No. 23,298. Law No. 26,739 amends the objectives of the Central Bank (established in its charter) and removes certain provisions previously in force. As amended, the Central Bank Charter provides that reserves may be made available to the government for the repayment of debt or to finance public expenses. This use of Central Bank reserves for expanded purposes may render Argentina more vulnerable to external shocks, affecting the country's capacity to overcome the effects of an external crisis, and fuel inflation as the amount of pesos in circulation increases while reserves decrease. In addition, Law No. 26,739 amends the criteria for compliance with the minimum cash requirement for banks. This amendment could affect financial institutions by forcing them to increase liquidity, with a potential adverse impact on credit supply, and therefore on the growth of the Argentine economy and on our business.

Legislation and Regulation of the Media Industry  

In Argentina, the legal system, including the Constitution, protects the independence of the free press. As a media company, we are vigilant as to the menaces that might arise in this respect and widely cooperate with journalistic associations and other NGOs that advocate for the protection of fundamental constitutional rights such as freedom of speech and freedom of the press. Moreover, since 2009 the government has conducted an overt policy designed to restrict the activities of the free press.

During 2013 private media in general and Grupo Clarín in particular continued to face an escalating level of harassment, executed using official and para-official means and resources with the clear intention of damaging the media's reputation and directly and indirectly limiting its journalistic activities.

a. Audiovisual Communication Services Law

In October 2009, the Argentine Congress passed a new Audiovisual Communication Services Law ("LSCA") to replace the general legal framework under which the audiovisual media industry operated in Argentina for approximately three decades. We and others challenged the new LSCA on several grounds, including its encroachment upon constitutional rights, the broad and discretionary powers over media and content granted to the Executive Branch, for favoring state-owned and sponsored media and affecting the sustainability of privately-owned media, promoting the elimination of independent signals and enabling a pervasive and questionable censorship system anchored upon the discretionary power to grant licenses and the application of penalties, among other controversial aspects.

On October 29, 2013, the Argentine Supreme Court, in a split decision, upheld the constitutionality of the LSCA in re "Grupo Clarín S.A. and others v. National Executive Branch and others re/ Merely declarative Action". The Company believes that the Sections of the LSCA it had challenged in that litigation not only contradict principles of the Argentine National Constitution, but also those of the American Convention on Human Rights (Pact of San José de Costa Rica), as well as recent precedents of the Inter-American Commission on Human Rights, the Inter-American Court of Human Rights and the Special Rapporteurship for Freedom of Expression of the Organization of American States. The Company will analyze bringing an appeal before international courts to challenge those sections that entail an indirect act of censorship, silence and discriminate critical media, and violate acquired rights. 
In addition, as provided in the Court's ruling, the Company will continue to litigate in local courts all the aspects related to the arbitrary and selective application of the law by the national government.

On October 31, 2013 the Company and some of its subsidiaries were served with Resolution No. 2276/2012 of the LSCA Federal Enforcement Authority ("AFSCA"), providing for an ex-officio proceeding force compliance by the Company and some of its subsidiaries with the requirements and limitations of the LSCA by dispossessing the Company of certain licenses, among other measures.

Faced with the de-facto proceedings that sought to dispossess the Company of its licenses and assets through an ex-officio procedure, on November 4, 2013 the Company submitted to AFSCA and the Supreme Court of Argentina a proposal pursuant to section 161 of the LSCA, which was approved by Grupo Clarín's Board of Directors on November 3, 2013, in an attempt to avoid the forced divestiture of its assets by AFSCA. Shortly after receipt of the proposal, AFSCA issued Resolution No. 1471/2013, whereby it suspended the ex-officio transfer procedure.

The proposal includes the necessary reservations to safeguard the rights of the Company, including the reservation to bring a claim for economic damages caused to the Company and its subsidiaries as a consequence of their adjustment to conform to the LSCA; the reservation of its right to challenge the conformity of Sections 41, 45, 48 and 161 of the LSCA to international conventions before the Inter-American Commission on Human Rights, the Inter-American Court of Human Rights and other competent International Courts; the reservation to challenge judicially the current composition of AFSCA for not conforming to the provisions of the LSCA and for not being a technical and independent agency protected against undue interferences from the State.

The proposal submitted by the Company requires the approval of AFSCA, the intervention of other governmental and oversight agencies and the approval of the shareholders at the respective Shareholders' Meetings in order to carry out the restructuring and the transfer of licenses, assets, liabilities and operations to third parties. On February 18, 2014, the AFSCA declared the admissibility of said proposal and granted the Company a term of 180 calendar days for its implementation. On February 18, 2014, the Company's Board of Directors decided to call an Extraordinary Shareholders' Meeting to be held on March 20, 2014, in order to consider AFSCA Resolution No. 193/2014 and to instruct the Board of Directors with to begin implementation of the proposal.

Implementation of the proposal will entail significant changes in the Company's structure, generating an uncertain scenario about the future development of the business.

Implementation of this proposal may entail a strong reduction of its operating income and its profitability in the Cable Television and Internet Access segment and/or a strong reduction of its operating income and profitability of the Broadcasting and Programming segment, depending on the choices made by the Company. The above-mentioned considerations and the limits to the growth of Grupo Clarín imposed by this law, against world trends and against legitimately acquired rights, will have an impact on the equity value of Grupo Clarín. The proposal's implementation process and the related results will depend on a series of approvals and decisions from regulatory agencies, the Company and the subsidiaries involved (including the respective third party shareholders) and all those involved in this process.

Potential changes in the implementation of the proposal, additional limitations to those contemplated thereunder and/or a forced divestiture process may give rise to different results and, eventually, adverse consequences. As of the date of these financial statements and given the current uncertainties regarding the effective evolution of the process of conforming the Company and its subsidiaries to the LSCA, the existing restrictions imposed by the regulatory framework and the conditions in which these processes will be effectively carried out, the Company cannot provide assurance about the results of that process.

The decision rendered by the Supreme Court of Argentina on October 29, 2013 expressly states the claimant companies' right to claim economic damages caused to the Company and its subsidiaries as a consequence of the adjustment to conform to the LSCA. Accordingly, in the voluntary conforming proposal submitted to AFSCA on November 4, 2013 the Company expressly reserved its right to bring judicial actions to claim for those damages.

This situation describes above generates uncertainties about the business of the Company and its subsidiaries that could materially affect the recoverability of the Company's relevant assets, its business, results of operations and financial condition.

b. Other government action relating to the Company and the media industry

In addition to the government's drive to implement the LSCA, the Argentine government has also sought to revoke the authorization granted unanimously by the National Antitrust Commission in 2007 to the transaction whereby the Company indirectly acquired 60% of Cablevisión and Cablevisión acquired all or part of the equity interests of certain of our subsidiaries.

The Argentine government has also taken measures to revoke the license under which Cablevisión renders internet services and to set the price of its pay-television service according to a pricing formula. Such measures, which we have challenged in court, if upheld would materially adversely affect our business. We have obtained preliminary injunctions that have enjoined the government's action, and will continue to make every effort to defend ourselves by taking all actions necessary to safeguard our rights. However, we cannot assure that such efforts ultimately will prove successful.

Other government of para-official actions against the Company and media in general include:

- an exponential increase and discriminatory allocation of official advertising used to create and sustain pro-government media, as well as the use of such advertising to condition the press;

- the use public funds and media on a discretionary basis to generate content and shows that display political propaganda, while creating hurdles and discriminating against certain media in the access to public information;

- an aggressive campaign to destroy non-partisan media by compromising their economic sustainability and credibility;

- abuse of bureaucratic controls or controls by public agencies in the form of administrative persecutions, groundless arbitrary resolutions, disproportionate tax controls and recurring audits;

- banning private companies from including their advertising slots in independent media;

- blockades to printing facilities to prevent the distribution of certain newspapers and magazines;

- government interference and regulation of the newsprint industry, including a series of temporary clauses, specifically and exclusively addressed to our affiliate Papel Prensa, whereby Papel

Prensa is forced to make investments to meet the total national newsprint demand - excluding from this requirement the other existing company that operates in the country with installed capacity to produce newsprint;

We cannot assure that government action against independent media and against the Company in particular will not continue or intensify. Increased government action against the Company could materially affect our business, results of operations and financial condition.

Capital Markets Regulations

On November 29, 2012 Congress passed Capital Markets Law No. 26,831 (the "Capital Markets Law"), which was enacted by the Executive on December 27, 2012, published on December 28, 2012 and became effective on January 28, 2013. The Capital Markets Law provides for a comprehensive amendment of the public offering regime, previously governed by Law No. 17,811 and, among other things, enhances the National Government's oversight powers over publicly traded companies.

On July 29, 2013, the National Government issued Decree No. 1023/2013 to regulate partially the Capital Markets Law. Among other provisions, the Decree regulates Section 20 of said Law, pursuant to which the CNV may appoint an overseer with veto rights over the decisions made by the boards of directors of entities subject to the public offering regime, or otherwise remove the boards from such entities for up to 180 days until all deficiencies found by the CNV are solved, without prior judicial authorization or control. The Decree also vests with the CNV the power to appoint the administrators or co-administrators that will hold office after a board of directors of an issuer is removed. The Company is of the view that the Decree amends the Law it seeks to regulate and, therefore, is not a valid implementing regulation.

On July 12, 2013, a few days prior to the issuance of the Decree, the Company was served notice of Resolution No. 17,131, dated July 11, 2013, whereby the CNV declared that the administrative effects of the decisions adopted at the Annual Ordinary General Shareholders' Meeting held on April 25, 2013 were irregular and ineffective. The CNV's Resolution was based on allegations that were absolutely false and irrelevant. These allegations, as well as the conduct of the representatives of ANSES (a shareholder of the Company) and of the CNV at the meeting, prompted certain directors of the Company-and later the Board itself-to press criminal charges against ANSES and CNV representatives (Messrs. Reposo, Kicillof, Moreno, Vanoli, Fardi and Helman) for making false statements and arguments with the sole intent of discrediting the Board of Directors and caricature its management, with the ultimate purpose of creating pretexts to permit an intervention of the Company without judicial control pursuant to the new powers vested on the CNV by the Capital Markets Law.

The Company gave the CNV written notice that what had happened at the Shareholders' Meeting could not be considered in any way as an acknowledgment of the legitimacy of the powers vested on the CNV by the Capital Markets Law, and included reservations to file the pertinent legal actions to challenge the constitutionality of that law.

On August 20, 2013, at the request of Mr. Rubén Mario Szwarc, a shareholder of the Company, the Company was served notice of the decision rendered by Chamber A of the National Court of Appeals on Commercial Matters, whereby that Chamber decided, among other things, to enjoin the enforcement of Section 20, subsection a), second part, paragraphs I and II (or 1 and 2) of the Capital Markets Law and of all laws, rules or administrative acts issued or that may be issued pursuant to such legal provisions, with respect to Grupo Clarín S.A., until the courts decide on the merits of Mr. Szwarc's claim.

On October 11, 2013 Chamber 5 of the National Court of Appeals on Federal Administrative Matters issued an injunction in re "Grupo Clarín S.A. v. CNV - Resol No. 17,131/13 (File 737/13)" File No. 29,563/2013, suspending the effects of Resolution No. 17,131/2013 until the courts reach a decision on the merits.

In spite of these judicial measures that have afforded the Company temporary protection against arbitrary and discriminatory action taken by the Government against us as part of its long-standing campaign, we cannot assure that these injunctions will remain in place, that the courts will not uphold the constitutionality of Section 20 of the Capital Markets Law, or that the CNV will not attempt to apply that provision against the Company, effectively removing the Board of Directors for up to 180 days and replacing it with CNV-appointed administrators or co-administrators.

Direct CNV intervention could materially affect our business, results of operations and financial condition.

Sector Development and Competition

The Company devotes significant resources to analyzing emerging trends and has vast experience and a solid track record in reading consumer demands and successfully developing new products and services, adapting its business model in time.

However, the media industry and certain maturing markets to which our services are catered, are dynamic and constantly undergo significant developments at a pace that may differ from our current expectations affecting our growth. Increased competition through new technological developments may adversely affect our business if our analysis of industry trends is not accurate or if we are not able to adapt readily our operations.

Programming and Personnel  

We may not be able to renew our rights to certain programming and our results of operations may be adversely affected by the loss of key personnel. In addition, under the new LSCA and pursuant to our proposal to conform to it, we may divest or cease to broadcast certain signals.

The production of content is part of our strategy and we dedicate significant resources to the identification of market trends and new figures and matters of public interest, to preserve the position of leadership we have acquired in the market.

Liquidity and Funding  

We have financial debt outstanding, a significant portion of which is denominated in foreign currency. Financial markets remain practically closed for Argentine companies, and we must rely primarily on our cash flow generation to service our debt.

We have engaged in an active liability management policy, and improved our debt to free cashflow ratio to limit our need to access the market as a means of repayment of our financial obligations. However, the implementation of our proposal to conform our operations to the LSCA may require prepayment of certain of our indebtedness. We cannot assure that we will be able successfully to access the market in order to prepay such indebtedness under terms that will not affect our financial condition adversely.

Certain of our costs, including a significant portion of our financial expenses, are dollar denominated. Currency fluctuations, such as a considerable devaluation of the Peso against the U.S. dollar are likely to affect adversely the Argentine economy and will impact negatively on our financial condition.

CORPORATE GOVERNANCE, ORGANIZATION AND INTERNAL CONTROL SYSTEM

Grupo Clarín's Board of Directors is responsible for the Company's management and approves its policies and overall strategies. Pursuant to the By-laws, the Board of Directors is comprised by ten permanent directors and ten alternate directors who are elected at the Ordinary Shareholders' Meeting on an annual basis. Four of them (two permanent and two alternate members) are required to be independent directors, appointed in accordance with the requirements provided under the CNV rules.

Members of the Board of Directors

Grupo Clarín's Board of Directors is comprised by the following members, appointed at the Annual Ordinary Shareholders' Meeting and Special Meeting per Class of Shares, held on April 25, 2013:

Héctor Horacio Magnetto*1 Chairman

José Antonio Aranda*1 Vice Chairman

Lucio Rafael Pagliaro*1 Director

Alejandro Alberto Urricelqui*2 Director

Jorge Carlos Rendo*2 Director

Pablo César Casey Director

Ralph Booth II*1 Director

Luis María Blaquier Director

Lorenzo Calcagno Independent Director

Alberto César José Menzani Independent Director

Hector Mario Aranda*1 Alternate Director

Saturnino Lorenzo Herrero Mitjans*1 Alternate Director

Ignacio R. Driollet *1 Alternate Director

Lucio Andrés Pagliaro Alternate Director

José María Sáenz Valiente (h) Alternate Director

Ignacio José María Sáenz Valiente Alternate Director

Carlos Rebay Alternate Director

Luis Germán Fernández Alternate Director

Sebastián Bardengo*1 Alternate Director

Martín Gonzalo Etchevers Alternate Director

*1. Permanent Directors Héctor Horacio Magnetto, José Antonio Aranda, Lucio Rafael Pagliaro and Ralph Booth II requested a leave of absence from their respective offices as from February 28, 2014 until the next Annual Shareholders' Meeting, at which time the Company's authorities will be renewed. They were replaced by the following Directors: Hector Mario Aranda, Saturnino Lorenzo Herrero Mitjans, Ignacio R. Driollet and Sebastián Bardengo.

*2. Effective as from the date stated above, the Board of Directors appointed Mr. Jorge Carlos Rendo as Chairman and Mr. Alejandro Alberto Urricelqui as Vice Chairman of the Company.

Executive Management Committee

Day-to-day business decisions of Grupo Clarín are made by an Executive Management Committee formed by three members of the Board of Directors: Héctor Horacio Magnetto; José Antonio Aranda; Lucio Rafael Pagliaro.

Grupo Clarín also has a Supervisory Committee comprised of 3 permanent members and 3 alternate members, who are also appointed on an annual basis at the Ordinary Shareholders' Meeting. The Board of Directors, through an Audit Committee, is in charge of the ongoing oversight of all matters related to control information systems and risk management, and issues an annual report on these topics. The members of the Company's Audit Committee may be nominated by any member of the Board of Directors and a majority of its members must meet the independence requirement provided under CNV rules.

Supervisory Committee

Grupo Clarín's Supervisory Committee is comprised by the following members, appointed at the Annual Ordinary Shareholders' Meeting and Special Meeting per Class of Shares, held on April 25, 2013:

Raúl Antonio Morán Permanent Member

Carlos A. P. Di Candia Permanent Member

Pablo San Martín Permanent Member

Hugo Ernesto López Alternate Member

Rubén Suárez Alternate Member

Miguel Ángel Mazzei Alternate Member

Audit Committee

The Audit Committee is comprised as follows:

Alberto César José Menzani Chairman

Lorenzo Calcagno Vice Chairman

Alejandro Alberto Urricelqui Permanent Member

Pablo César Casey Alternate Member

Carlos Rebay Alternate Member

Luis Germán Fernández Alternate Member

To assist the Executive Committee in their daily duties, Grupo Clarín organizes its activities under an executive structure comprising: External Relations Department; Corporate Finance Department; Corporate Control Department; Corporate Strategy Department; Audiovisual Content Department; Corporate Human Resources Department; Corporate Affairs Department; Digital Content Department.

The overall criteria used to appoint managers are based on the background and experience in the position and the industry, companies they have worked for, age, professional and moral aptitude, among other factors.

In order to identify opportunities and streamline structures and systems with the aim of improving processes and making informed decisions, Grupo Clarín sets forth several procedures and policies for controlling the Company's operations. The areas responsible for the Company's internal controls, both at the Company level and at the level of its subsidiaries and affiliates, contribute to the safeguarding of shareholders' equity, the reliability of financial information and the compliance with laws and regulations.

Compensation of the members of the Board of Directors and senior management

Compensation of the members of the Board of Directors is decided at the Shareholders' Meeting after the close of each fiscal year, considering the cap established by Section 261 of Law No. 19,550 and related regulations of the CNV.

All of Grupo Clarín's subsidiaries have compensation arrangements with all of their officers in executive and managerial positions, which contemplate a fixed and variable remuneration scheme. Fixed compensation is tied to the level of responsibility attached to each position, prevailing market salaries and performance. The annual variable component is tied to performance during the fiscal year based on the objectives set at the beginning of the year. Grupo Clarín does not have any stock option plans in place for its personnel.

As mentioned in Note 20 to the Consolidated Financial Statements, on January 1, 2008 Grupo Clarín began to implement a long-term savings plan for certain executives of Grupo Clarín and its subsidiaries. Executives who adhere to such plan will contribute regularly a limited portion of their salary to a fund that will allow them to increase their income at the retirement age. Furthermore, each company matches the sum contributed by such executives. This matching contribution will be added to the fund raised by the employees. Under certain conditions, employees may access such fund upon retirement or upon termination of their jobs with Grupo Clarín. This long-term benefit has a strong withholding component and is considered as an integral part of the employee's total compensation for comparative purposes with prevailing market salaries. During 2013, certain changes were made to the savings system, although itsoperation mechanism and the main characteristics with regard to the obligations undertaken by the company were essentially maintained.

The parameters used in fixing compensations are in line with customary market practices followed by companies of the scale of Grupo Clarín. To this end, the Company assesses the relative weight of the several positions within the company, as well as the performance of the employee that holds the position. In order to assess positions and compare salaries in different markets, the Company uses the services and reports of prestigious HR companies at the national and international level.

Annual Shareholders' Meeting

Grupo Clarín held its Annual Ordinary Shareholders' Meeting on April 25, 2013. On this occasion, the shareholders reviewed and approved the accounting records for fiscal year No. 14 ended on December 31, 2012 and the performance and compensation of the members of the Board of Directors, the Supervisory Committee and the Audit Committee. Among other things, they elected the permanent members and alternate members of the Board of Directors and the Supervisory Committee for the year 2013. 

Dividend Policy

Grupo Clarín does not have a formal dividend policy governing the amount and payment of dividends or other distributions. According to its By-laws and the Argentine Corporate Law, Grupo Clarín may lawfully pay and make declarations of dividends only out of the retained earnings stated in the Company's annual Financial Statements prepared in accordance with Argentine GAAP and CNV regulations and approved at the Shareholders' Meeting. In such case, dividends must be paid on a pro rata basis to all holders of shares of common stock as of the relevant record date.

Set-up of reserves

Pursuant to the Argentine Corporate Law and CNV resolutions, Grupo Clarín is required to set up a legal reserve of no less than 5% of each year's retained earnings until such reserve reaches 20% of its outstanding capital stock plus the corresponding adjustment. The legal reserve is not available for distribution to shareholders.

Code of Corporate Governance

In addition to the aforementioned and in conformity with the CNV's decisions concerning the filing of the report about compliance with the Code of Corporate Governance (Resolution No. 606/12), Grupo Clarín prepared the report for the year under analysis, which is attached as an exhibit to this annual report.

BUSINESS PROJECTIONS AND PLANNING

As mentioned above and in light of the decision rendered by the Supreme Court of Justice, on November 3, 2013 the Board of Directors approved a voluntary proposal to conform to the LSCA that was filed with AFSCA on November 4, 2013. The voluntary proposal-which does not interrupt any of the judicial actions brought by the Company and its subsidiaries to defend its rights-was submitted together with a request that the decision rendered by the Supreme Court of Argentina be complied with in full. That is, requesting the involvement of an independent, unbiased enforcement authority with technical expertise, which may ensure a transparent and egalitarian treatment in the enforcement of the law.

Pursuant to the proposal submitted by the Company and what was described above, the Company's assets and its group of companies governed by Law No. 26,522 will be divided into six units of audiovisual communication services. The proposal submitted by the Company requires the approval of AFSCA, the intervention of other governmental and oversight agencies and the approval of the shareholders at the respective Shareholders' Meetings in order to carry out the restructuring and the transfer of licenses, assets, liabilities and operations to third parties. On February 18, 2014, the AFSCA declared the admissibility of said proposal and granted the Company a term of 180 calendar days for its implementation. On February 18, 2014, the Company's Board of Directors decided to call an Extraordinary Shareholders' Meeting to be held on March 20, 2014, in order to consider AFSCA Resolution No. 193/2014 and to instruct the Board of Directors with to begin implementation of the proposal.

Implementation of the proposal will entail significant changes in the Company's structure, generating an uncertain scenario about the future development of the business.

Implementation of this proposal may entail a strong reduction of its operating income and its profitability in the Cable Television and Internet Access segment and/or a strong reduction of its operating income and profitability of the Broadcasting and Programming segment, depending on the choices made by the Company. The above-mentioned considerations and the limits to the growth of Grupo Clarín imposed by this law, against world trends and against legitimately acquired rights, will surely have an impact on the potential value of Grupo Clarín. The proposal's implementation process and the results that may eventually occur will depend on a series of approvals and decisions from regulatory agencies, the Company and the subsidiaries involved (including the respective shareholders) and from all the parties involved in this process, which has just began.

Potential changes in the implementation of the proposal, additional limitations to those contemplated thereunder and/or a forced divestiture process may give rise to different results and, eventually, adverse consequences. As of the date of these financial statements and given the current uncertainties regarding the effective evolution of the process of conforming the Company and its subsidiaries to the LSCA, the existing restrictions imposed by the regulatory framework and the conditions in which these processes will be effectively carried out, the Company cannot provide assurance about the results of that process.

In this sense, it should be noted that the decision rendered by the Supreme Court of Argentina on October 29, 2013 expressly states the claimant companies' right to claim economic damages caused to the Company and its subsidiaries as a consequence of the adjustment to conform to the law. Accordingly, under the proposal submitted to AFSCA on November 4, 2013 the Company expressly reserved its right to bring judicial actions to claim for those damages.

However, the Company seeks to reinforce and enhance its products and services through the activities developed by Grupo Clarín and its business units, preserving their quality and fostering ongoing innovation. Grupo Clarín intends to continue to focus on optimizing the productivity and efficiency levels in all of its operating areas, seeking to develop and to apply the best practices related to each of these processes. At a corporate level, activities will be focused on the main processes that allow sustainable, healthy and efficient growth from different perspectives: financial structure, management control, business strategy, human resources, innovation and corporate social responsibility.

Grupo Clarín renews its sustained commitment to regulatory compliance, while reinforcing once again its commitment towards its readers, audiences and the country. In its daily work, Grupo Clarín seeks to assume with strength and responsibility the role that the media are called to play through independent journalism and through the defense and promotion of universal and fundamental rights, such as freedom of speech, because these are pillars that extol the quality of democracy and the welfare of Argentine society as a whole.

SUPPLEMENTARY FINANCIAL INFORMATION

The information included in the Supplementary Financial Information is part of this Annual Report and, therefore, both should be read in conjunction.

FINANCIAL POSITION AND RESULTS OF ITS OPERATIONS

During this year, the main changes in the Company's financial position and results of its operations were the following:

Working capital (current assets minus current liabilities) at year-end increased by Ps. 234 million compared to the previous year, from (negative) Ps. 68.6 million to (positive) Ps. 165.4 million. This increase is basically evidenced in the increase in Company funds (the items Cash and Banks and Other Current Investments) in the amount of Ps 144.3 million, paired with an increase in the net balance of receivables and liabilities between related parties.

With respect to non-current items, the most significant variation was recorded under Investments, due to the results obtained by Grupo Clarín's subsidiaries, mainly Cablevisión S.A. (indirectly), Arte Gráfico Editorial Argentino S.A. and Arte Radiotelevisivo Argentino S.A.

The Statement of Operations as of December 31, 2013 recorded a net income of Ps. 479.8 million. Such income is basically derived from earnings of Ps 505.7 million resulting from equity investments in affiliates and subsidiaries.

Grupo Clarín S.A. is still controlled by GC Dominio S.A., which holds 64.2% of its voting rights.

PROPOSAL OF THE BOARD OF DIRECTORS

Net income for the year ended on December 31, 2013 was Ps. 479,831,556.

In light of the situation outlined in this Annual Report in connection with the proposal to conform to the LSCA, the financial position of certain subsidiaries, the dividend distribution proposal presented by the Boards of Directors of each of Grupo Clarín's subsidiaries, and the expected future cash flows from operating and financing activities, the Board of Directors considers that a dividend distribution proposal in excess of Ps. 240,000,000 would not be prudent. Hence, the Board of Directors proposes to the Annual Ordinary Shareholders' Meeting that such income be distributed as follows:

To the Legal Reserve: Ps. 6,750,470

Dividend distribution in cash: Ps. 240,000,000

To the Optional Reserve to give financial aid to its subsidiaries and the LSCA: Ps. 233,081,086

Below is a summary of the main criteria on which the above allocation proposed by the Board of Directors is based:

- Legal reserve: the legal reserve was calculated pursuant to Section 70 of Law No. 19,550 and CNV resolutions, considering 5% of the net income for the year, until it reaches 20% of the capital stock, plus the balance of the Capital Stock Adjustment account.

-Optional Reserve to give financial aid to subsidiaries and the Broadcasting Law: as mentioned above in this Annual Report and as exhaustively described in the Company's financial statements, the circumstances that gave rise to the setting up of this reserve are still prevailing. Additionally, the Board of Directors proposes to the Shareholders that the remaining net income for the year be appropriated to this optional reserve, because from the perspective of aprudent and reasonable management policy, one should expect, in light of the upcoming completion of the process to conform to the LSCA and the uncertainties relating to the implementation of the proposal, the Company could require, among other things, significant resources.

DIRECTORS' RESPONSIBILITY STATEMENT

We confirm that to the best of our knowledge:

- the consolidated financial statements included with this annual report, prepared in accordance with IFRS, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

- this annual report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

On behalf of the Board,

Alejandro Urricelqui

Chief Financial Officer

Grupo Clarín

EXHIBIT I - REPORT ON THE DEGREE OF COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE

(Information required by CNV RESOLUTION No. 606/12)

PRINCIPLE I. REVEAL THE RELATIONSHIP BETWEEN THE ISSUER AND THE ECONOMIC GROUP IT LEADS AND/OR BELONGS TO AND ITS RELATED PARTIES

The corporate governance framework shall:

Recommendation I.1. Ensure disclosure by the Board of Directors of the policies applicable to the relationship between the Issuer and the economic group it leads and/or belongs to and its related parties.

Answer whether or not:

The Issuer has an internal rule or policy governing the authorization of transactions between related parties pursuant to Section 73 of Law No. 17,811, operations carried out with shareholders and members of the Board of Directors, first-line managers and statutory auditors and/or members of the supervisory committee within the economic group it leads and/or belongs to. Specify the main guidelines of the internal rule or policy.

Full compliance.

The Company has a policy on transactions with related parties in place, in accordance with effective regulations.

Recommendation I.2. Ensure that policies and procedures are in place to prevent conflicts of interests.

Answer whether or not:

The Issuer has, notwithstanding the effective regulations, clear and specific policies and procedures to identify, handle and solve potential conflicts of interests arising from the relationship between members of the Board of Directors, first-line managers and statutory auditors and/or members of the supervisory committee and the Issuer or its related parties. Describe the relevant aspects of such policies and procedures.

Full compliance.

The Company has a Code of Ethics and Conduct in place, which, among other things, seeks to avoid potential conflicts between the Company's interests and the personal interests of its directors and employees and their respective direct relatives. The code describes objective scenarios where a conflict of interest may arise and provides a non-exhaustive list of examples that standardize conflicts.

Recommendation I.3. Prevent the misuse of privileged information.

Answer whether or not:

The Issuer has, notwithstanding the effective regulations, achievable policies and procedures to prevent the misuse of privileged information by members of the Board of Directors, first-line managers, statutory auditors and/or members of the supervisory committee, controlling shareholders or shareholders that exert significant influence on the Company, professionals involved and the other persons listed in Sections 7 and 33 of Decree No. 677/01. Describe the relevant aspects of such policies and procedures.

Full compliance.

The Code of Ethics and Conduct referred to in Item I.2. deals with the handling of confidential information by the Company's officers, where confidential information is understood as all such information that has not become publicly known and that may be important for an investor to make a buy, sell or hold decision concerning any of the Company's securities. The Code prohibits the use of such information by the Company's officers for their own benefit or for the benefit of a third party. The Company also has mechanisms in place to restrict the access to and internal distribution of information that supplement the measures implemented to prevent the use or disclosure of confidential information.

PRINCIPLE II. LAY THE FOUNDATIONS FOR THE ISSUER TO HAVE A STRONG MANAGEMENT AND SUPERVISION

The corporate governance framework shall:

Recommendation II.1. Ensure that Issuer's management and supervision and its strategic orientation are under the charge of the Board of Directors.

Answer whether or not:

II.1.1. The Board of Directors is in charge of approving:

II.1.1.1. The Company's strategic or business plan, as well as the management goals and annual budgets;

Full compliance.

The Company's Board of Directors reviews the business plan on an annual basis. That plan includes management goals and their respective budgets.

II.1.1.2. The investment policy (in financial assets and capital expenditures) and the financing policy;

Full compliance.

The investment and financing policy is an integral part of the Company's business plan as described in Item II.1.1.1.

II.1.1.3. The corporate governance policy (compliance with the Corporate Governance Code);

Full compliance.

As established by the effective regulations, the Board of Directors has approved the content of the report on the degree of compliance with the Corporate Governance Code, as a separate exhibit to the Annual Report.

II.1.1.4. The policy on selection, assessment and compensation of Top Management;

Partial compliance.

The policy on selection, assessment on performance and compensation of top management is under the responsibility of members of the Company's Board of Directors. The policy is implemented by the Human Resources Department.

II.1.1.5. The policy on allocation of responsibilities among first-line managers;

Partial compliance.

The Company has a policy in place that sets forth transaction authorization ranges and procedures by transaction amount and transaction type that may be implemented by first-line managers in handling the transactions under their responsibility. This policy is under the responsibility of members of the Company's Board of Directors and is implemented by the Control Department.

II.1.1.6. The oversight of first-line managers' succession planning;

Partial compliance.

Top Management succession planning is under the responsibility of members of the Company's Board of Directors. Succession plans are implemented by the Human Resources Department.

II.1.1.7. The Corporate Social Responsibility policy;

Partial compliance.

The Corporate Social Responsibility policy, see Item VI.2, is under the responsibility of members of the Company's Board of Directors. The policy is implemented by the Social Corporate Responsibility Department.

II.1.1.8. The policies on comprehensive risk and internal control management and fraud prevention;

Partial compliance.

The Company has a comprehensive internal control policy in place that deals with issues related to internal control, management control, fraud prevention and risk management. This policy is under the responsibility of members of the Company's Board of Directors and is implemented by the Control Department.

II.1.1.9. The policy on ongoing training for members of the Board of Directors and first-line managers.

Partial compliance.

The training policy is under the responsibility of members of the Company's Board of Directors and is implemented by the Human Resources Department.

II.1.2. If deemed relevant, add any other policy applied by the Board of Directors that has not been mentioned before, detailing its significant aspects.

The Company has other policies in place that are related to and supplement the above mentioned ones, such as: Procurement and Contracting, Register of Proxies, Register of Signatures, Information Security and Insurance.

II.1.3. The Issuer has a policy in place to ensure the availability of the information necessary for the Board of Directors to make decisions and a direct channel to make inquiries to line managers in a symmetric and fair way for all of its members (external and independent executives), with sufficient time ahead to adequately analyze its content. Specify.

Full compliance.

The Company's information flow procedures allow all of the Board members to receive relevant information on the issues submitted to their consideration, with sufficient time ahead to allow for a comprehensive analysis that facilitates the decision-making process. Top Management is also available to answer any question the directors may have in that regard.

II.1.4. The issues submitted to the consideration of the Board of Directors are supported by an analysis of the risks inherent to the decisions that may be adopted, taking into account the enterprise risk level the Issuer has defined as acceptable. Specify.

Full compliance.

Any decision submitted to the Board's consideration is supported by the relevant background, including the potential associated risks.

Recommendation II.2. Ensure the effective Control of Issuer's Management

Answer whether or not:

The Board of Directors is in charge of verifying:

II.2.1 Compliance with the annual budget and the business plan;

Full compliance.

The Board of Directors verifies compliance with the Company's annual budget and business plan.

II.2.2. Top Management performance and their compliance with their respective goals (expected level of profits versus actual profits, financial rating, accounting reporting quality, market share, etc.).

Full compliance.

The Board of Directors verifies compliance with the above items, through the fulfillment of the annual budget. Moreover, the Audit Committee assesses the financial reporting reliability. See Item II.2.1

Describe the relevant aspects of Issuer's Management Control policy, detailing the methods employed by the Board of Directors and the monitoring frequency.

A monthly report is prepared comparing the month's actual results and the year-to-date results against the budgeted results. This report also provides an explanation of the differences between budgeted and actual data, taking into account the changes between the expected activities and the actually executed activities. The Board of Directors regularly reviews this information.

Recommendation II.3. Disclose the Board of Directors' performance assessment process and its related impact.

Answer whether or not:

II.3.1. Each member of the Board of Directors complies with the By-Laws and, where applicable, with the Board of Directors' Rules of Operation. Specify the main guidelines of these rules. Specify the degree of compliance with the By-Laws and the Rules of Operation.

Full compliance.

All members of the Board of Directors comply with the effective regulations of the Argentine Business Associations Law No. 19,550, the Argentine Securities Commission (CNV) and the Buenos Aires Stock Exchange (BCBA), as well as with all the provisions of the Company's By-laws.

II.3.2. The Board of Directors reports the results of its management activities based on the goals set at the beginning of the year so that shareholders may assess the degree of compliance with such goals, which entail financial as well as non-financial aspects. The Board of Directors also presents a diagnosis of the degree of compliance with the policies referred to in Recommendation II, Items II.1.1 and II.1.2.

Specify the main aspects of the assessment made at the General Shareholders' Meeting on the Board of Directors' degree of compliance with the goals set and the policies referred to in Recommendation II, Items II.1.1 and II.1.2, indicating the date of the meeting in which the assessment was presented.

Partial compliance.

Pursuant to the Argentine Business Associations Law No. 19,550, the Company discloses the results of its management activities in the Annual Report, which is approved by the shareholders at the Annual Regular Shareholders' Meeting. Since the Board of Directors considers that the assessment of its own management activities is embedded in the Company's performance assessment, such assessment is not disclosed separately. Said disclosure does not include the diagnosis of the degree of compliance with the policies referred to in Items II.1.1 and II.1.2.

Recommendation II.4. That external and independent members account for a significant portion of the members of the Issuer's Board of Directors.

Answer whether or not:

II.4.1. The proportion of the Board of Directors' external and independent executive members (independent members as defined by the CNV's regulations) bears a relationship with the Issuer's capital structure. Specify.

Full compliance.

The Company's Board of Directors is comprised by members who are also managers of the Company, non-independent directors without executive responsibilities and independent directors. The distribution of directors bears relationship with the Company's capital structure, as provided by the effective legislation and the By-Laws.

II.4.2. During the current year, at a General Shareholders' Meeting, the shareholders agreed to a policy aimed at maintaining at least 20% of independent members in the total number of Board of Directors' members. Describe the relevant aspects of such policy and of any other shareholders' agreement to understand how and for how long the members of the Board are appointed. Indicate if the independence of the Board members was challenged at any time during the year and if there was any abstention as a result of a conflict of interest.

Partial compliance.

The Company has not implemented a policy in that regard. At present, independent directors account for 20% of the total number of the Board members. During the year, there were no abstentions as a result of a conflict of interest or any objections questioning directors' independence.

Recommendation II.5. Require that the Issuer implement rules and procedures for the selection and proposal of members of the Board of Directors and first-line managers.

Answer whether or not:

II.5.1. The Issuer has an Appointments Committee in place:

II.5.1.1. comprised by at least three members of the Board of Directors, most of them independent directors;

II.5.1.2. presided over by an independent member of the Board of Directors;

II.5.1.3. comprised by members with proven expertise and experience in human capital policies;

II.5.1.4. which holds at least two meetings per year;

II.5.1.5. which decisions in connection with the selection of Board members are not necessarily binding but rather consultative at General Shareholders' Meetings.

II.5.2. If there is an Appointments Committee in place, answer whether or not:

II.5.2.1. it verifies the annual review and assessment of its rules of operation and suggests amendments for the Board of Director's approval;

II.5.2.2. it proposes the development of criteria (qualification, experience, professional reputation and ethics, among others) for the selection of new members of the Board of Directors and first-line managers;

II.5.2.3. it identifies potential candidates to the Board of Directors to be proposed by the Committee at the General Shareholders' Meeting;

II.5.2.4. it proposes the Board of Directors' members that should be part of the several Board of Director's committees, based on their respective backgrounds;

II.5.2.5. it deems advisable that the positions of Board of Directors' Chairman and General Manager be held by different persons;

II.5.2.6. it ensures that the resumes of the Board members and the first-line managers are available at the Issuer's website, specifying the Board members' term of office;

II.5.2.7. it verifies that a Board member and first-line manager succession plan is in place.

II.5.3. If deemed relevant, add any policy implemented by the Issuer's Appointments Committee that has not been mentioned in the above item.

Non-compliance

The Company does not have an Appointments Committee in place. Notwithstanding the fact that, pursuant to the Argentine Business Associations Law No. 19,550, the above mentioned functions concerning the appointment of Board members shall be exclusively carried out at the Shareholders' Meeting, for the time being the Company does not see a need for implementing said Committee.

Recommendation II.6 Assess the convenience of the Board members and/or statutory auditors and/or members of the supervisory committee performing functions at several Issuers.

Answer whether or not:

The Issuer sets limits on Board members and/or statutory auditors and/or members of the supervisory committee in connection with the performance of functions at entities other than the economic group the Issuer leads and/or belongs to. Specify said limit and whether it was violated or not at any time during the year.

Non-compliance

Certain members of the Board of Directors and the Supervisory Committee carry out functions in other companies. In practice, the performance of such other functions, particularly in companies that are not related to the Company, has not been found to cause inconveniences in the due compliance with the functions of such bodies. Should any inconvenience occur, the respective member of the Board or Supervisory Committee would not be reappointed. The Board does not deem it necessary to set that limit in light of the current circumstances.

Recommendation II.7. Ensure the training and development of the Issuer's Board members and first-line managers.

Answer whether or not:

II.7.1. The Issuer has ongoing Training Programs in place addressed to Board members and first-line managers that are related to the Issuer's current needs, and include training on their respective roles and responsibilities, comprehensive enterprise risk management, know-how on the business and its regulations, corporate governance dynamics and corporate social responsibility, as well as international accounting standards, auditing and internal control standards and capital market regulations for members of the Audit Committee. Describe the programs developed during the year and the degree of compliance.

Full compliance.

The Company has complied with the management training programs covering the recommended issues. These programs were delivered at prestigious local and foreign universities and the implementation thereof is under the responsibility of the Human Resources Department. These are supplemented with in-house training programs delivered at the Company. Furthermore, every year the Company organizes information and discussion sessions to deal with the issues that concern senior management. These sessions are led by prestigious local and international specialists in the field. The members of the Audit Committee receive specific training on their incumbent issues, such as, accounting, auditing and regulatory standards, delivered by the most prestigious auditing firms in the market.

II.7.2. The Issuer employs other means not specified in Item II.7.1 to encourage members of the Board of Directors and first-line managers to pursue ongoing training supplementing their education level in order to add value to the Issuer. Specify how.

Non-compliance

The Company considers that the actions mentioned in Item II.7.1 are sufficient to engage directors and managers in the training process.

PRINCIPLE III. SUPPORT AN EFFECTIVE ENTERPRISE RISK IDENTIFICATION, MEASUREMENT, MANAGEMENT AND DISCLOSURE POLICY

The corporate governance framework shall:

Recommendation III. The Board of Directors shall have a comprehensive enterprise risk management policy in place and monitor its adequate implementation.

Answer whether or not:

III.1. The Issuer has comprehensive enterprise risk management policies (risk of compliance with strategic goals, operating risks, financial risks, accounting reporting risks and regulatory risks, among others). Describe the relevant aspects of such policies.

Partial compliance.

The general policy referred to in Item II.1.1.8 seeks to cover risks inherent to: (i) operational effectiveness and efficiency, (ii) financial reporting reliability, (iii) asset protection, and (iv) regulatory compliance. The Control Department is in charge of verifying that the established policies are followed and that the necessary actions are taken to correct potential deviations. The Company employs the following tools: (i) the policy governing the authorization of transactions referred to in Item II.1.1.5, (ii) the monthly management reports referred to in Item II.2, (iii) external audits, (iv) the auditing function referred to in Item IV.2, and (v) other policies referred to in Item II.1.2. The Company takes into account the COSO model to design its control system.

III.2. There is a Risk Management Committee at the core of the Board of Directors or Senior Management. Report on the existence of manuals of procedures, specifying the main risk factors specific to the Issuer or its business and the implemented mitigation actions. In the absence of such Committee, describe the oversight role performed by the Audit Committee concerning risk management. Specify the interaction level between the Board of Directors or its Committees with Issuer's Senior Management in terms of comprehensive enterprise risk management.

Partial compliance.

The Control Department prepares a monthly management report to monitor the Company's operational risks. The Audit Committee carries out the following tasks on that report: (i) analyzing the methodology used by the Control Department to prepare the above mentioned reports; (ii) discussing with the Control Department the process to identify and assess risks, mitigate them and implement solutions; (iii) considering to which extent the risks are adequately reported according to applicable legal and accounting standards; and (iv) reporting on monitoring completion in its annual report. In particular, that Committee assesses the risks of misstatements in the financial statements and other information made available to third parties.

III.3. There is an independent function within Issuer's Senior Management that implements the comprehensive enterprise risk management policies (function of the Risk Management Officer or its equivalent). Specify.

Partial compliance.

See Item III.2.

III.4. The comprehensive enterprise risk management policies are updated on an ongoing basis, according to related widely used recommendations and methodologies. Specify which (Enterprise Risk Management, according to the COSO conceptual framework - Committee of sponsoring organizations of the Treadway Commission - ISO 31.000, IRAM 17.551, Section 404 of the Sarbanes-Oxley Act, others).

Partial compliance.

See Item III.1.

III.5. The Board of Directors reports the results of the risk management supervisory activities carried out jointly with Senior Management in the financial statements and the Annual Report. Specify the main aspects of the disclosures.

Partial compliance.

In reviewing the financial statements, the Board of Directors supervises the note on financial risk management.

PRINCIPLE IV. SAFEGUARD FINANCIAL INFORMATION INTEGRITY THROUGH INDEPENDENT AUDITS

The corporate governance framework shall:

Recommendation IV. Ensure the independence and transparency of the functions entrusted to the Audit Committee and the External Auditor.

Answer whether or not:

IV.1. In selecting the members of the Audit Committee, the Board of Directors assesses the convenience of appointing an independent member as Chairman, taking into consideration that most members must be independent.

Full compliance

The Chairman of the Company's Audit Committee appointed by the members of that Committee on April 30, 2013 is an independent member.

IV.2. There is an internal audit function that reports to the Audit Committee or the Board of Directors' Chairman and that is responsible for assessing the internal control system. Specify whether or not the Audit Committee or the Board of Directors perform an annual assessment on the performance of the Internal Audit Department and the degree of independence in the conduct of its professional practice; which means assessing whether the professionals in charge of that function are independent from other operating areas and whether they meet the independent requirements concerning controlling shareholders or related parties exerting significant influence on the Issuer. Also specify if the Internal Audit function carries out its activities in accordance with international auditing standards issued by the Institute of Internal Auditors (IIA).

Partial compliance.

The Internal Audit function reports to the Company's CEO and the Audit Committee and is responsible for assessing the Company's internal control systems. This function is independent from the Company's operations. The Audit Committee conducts an annual performance review of the Internal Audit function, which is reflected in its annual report. The members of the Internal Audit Department are Company's employees and perform their respective functions taking into account the guidelines set forth in the international auditing standards.

IV.3. The members of the Audit Committee annually review the know-how, independence and performance of the External Auditors appointed at the Shareholders' Meeting. Describe the relevant aspects of the procedures used to perform the assessment.

Full compliance.

The Audit Committee periodically evaluates external auditors in terms of independence, know-how and performance, among other issues. To this end, the Audit Committee reviews the following: (i) the auditors' professional and personal suitability (considering the experience and background of the partner in charge of the audit, analysis of the work methodology employed, the auditing firm's independence and quality control practices, the affidavits required by effective regulations; (ii) contracted services; (iii) audit plan; (iv) auditor's reports and internal control recommendations; and (v) discussion with Company's key officers concerning the above mentioned items.

IV.4. The Issuer has a policy in place on the rotation of Supervisory Committee members and/or the External Auditor, and specifically in the case of the latter, whether such rotation includes the external auditing firm or its individual members only.

Partial compliance.

In the Board of Directors' view, it is not necessary to have a specific policy in place providing for the rotation of Supervisory Committee members. Given the fact that the requirements concerning the rotation of external auditors have been established by the CNV under Resolution No. 622/2013, the existence of a specific policy in this respect is not deemed necessary.

PRINCIPLE V. RESPECT SHAREHOLDER RIGHTS

The corporate governance framework shall:

Recommendation V.1. Ensure that shareholders have access to Issuer's information.

Answer whether or not:

V.1.1. The Board of Directors holds periodical informational meetings with the shareholders upon the presentation of the interim financial statements. Specify the number and frequency of the meetings held during the year.

Full compliance.

The Company communicates with its investors through its executives in charge of market relations and through regular informational meetings and conferences, in order to present the quarterly financial statements. The Company maintains communication channels with the minority shareholders through the disclosure of relevant information in the stock exchanges where its shares and GDSs are listed and through information disclosed in the Company's web site.

V.1.2. The Issuer has mechanisms in place to keep investors informed and a special area dedicated to answering their questions. It also has a web site accessible to shareholders and other investors that serves as a channel to communicate with each other. Specify.

Full compliance.

The Company's management is in charge of the relationship with investors and shareholders and addresses their questions and concerns. It also provides public financial and operating information, provided such disclosure conforms to the law and does not affect the Company's strategy and forward-looking plans. Management issues quarterly reports and holds regular conference calls to discuss further information requested by investors and shareholders. These reports and files can be found on the Company's web site.

Recommendation V.2. Foster shareholders' active involvement.

Answer whether or not:

V.2.1. The Board of Directors takes actions that foster the involvement of all shareholders at General Shareholders' Meetings. Specify which, distinguishing actions required by law from the Issuer's voluntary actions.

Full compliance.

The Company encourages the participation of all shareholders at the meetings. It calls the meeting and distributes the agenda with sufficient anticipation, translated into English for shareholders domiciled abroad, through the GDS's depositary institution. The Company also complies with the publication requirements set forth under current legislation (publication in the Official Gazette, a newspaper with high circulation and the bulletin of the Buenos Aires Stock Exchange) and with publication on the Company's web site.

V.2.2. The General Shareholders' Meeting has rules of operation in place to ensure that the information is available to all shareholders with sufficient anticipation to make decisions. Describe the main guidelines of such rules.

Partial compliance.

The Company does not have rules of operations concerning the General Shareholders' Meeting. However, it ensures that the information is available to shareholders with sufficient anticipation to make decisions as stated in Item V.1.

V.2.3. The mechanisms implemented by the Issuer are applicable in order for minority shareholders to raise issues to be discussed at the General Shareholders' Meeting, in accordance with effective regulations. Specify the outcomes.

Full compliance.

The Company conforms to the effective regulations in connection with the minority shareholders' ability to raise issues for discussion at the General Shareholders' Meeting. Therefore, the issues raised by the shareholders present at the meeting are registered in the respective minutes, pursuant to the applicable mechanisms.

V.2.4. The Issuer has policies in place to encourage the involvement of major shareholders, such as, institutional investors. Specify.

Full compliance.

See Item V.2.1

V.2.5. At Shareholders' Meetings where candidates to members of the Board of Directors are discussed, the following are disclosed prior to voting: (i) the position of each candidate as to the adoption or not of a Corporate Governance Code; and (ii) the rationale for such position.

Non-compliance.

The members of the Board of Directors have not stated their respective positions as to the adoption or not of a Corporate Governance Code. Notwithstanding the foregoing, the Company is committed to the highest standards of ethics and transparency in its corporate governance structure. As mentioned under II.1.1.3 and as provided under current laws, the Board of Directors has approved the content of the report on the degree of compliance with the Corporate Governance Code, as a separate exhibit to the Annual Report.

Recommendation V.3. Ensure the one-share-one-vote principle.

Answer whether or not:

The Issuer has a policy in place that fosters the one-share-one-vote principle. Describe the changes in the breakdown of outstanding shares per class over the last three years.

Full compliance.

Pursuant to Section 216 of the Argentine Business Associations Law No. 19,550, the Company may not issue shares with privileged voting rights after the authorization of the initial public offering of its shares. The Company strictly complies with the effective regulations.

Recommendation V.4. Establish mechanisms to protect all shareholders from takeovers.

Answer whether or not:

The Issuer abides by the mandatory tender offer rules. Otherwise, specify if there are other alternative statutory mechanisms, such as, the tag-along rights or others.

Partial compliance

As contemplated in the Company's By-laws, the Company opted out of the mandatory tender offer rules (as established by Decree No. 677/01). Section 90 of Capital Markets Law No. 26,831 provides that: "The tender offer rules regulated in this chapter and the residual interest regime regulated in the following chapter comprise all listed companies, including those which under the previous regime may have opted out of its application".

Notwithstanding the foregoing, the By-laws set forth mechanisms to protect the minority shareholders' interests against certain scenarios involving the acquisition of the Company's shares.

Recommendation V.5. Encourage the dispersed ownership of the Issuer's shares.

Answer whether or not:

Ownership of at least 20% of the Issuer's common shares is dispersed. Otherwise, indicate if the Issuer has a policy in place to increase dispersed ownership in the market. Specify dispersed ownership as a % of the Company's share capital and its evolution over the last three years.

Full compliance.

Ownership of more than 20% of the Company's shares is dispersed. Such dispersed ownership has not changed significantly over the last three years.

Recommendation V.6. Ensure that a transparent dividend policy is in place.

Answer whether or not:

V.6.1. The Issuer has a dividend distribution policy stated in its By-Laws and approved at the Shareholders' Meeting setting forth the conditions to distribute dividends in cash or in kind. If such policy is in place, specify the criteria, frequency and conditions to be met for dividend payment.

Non-compliance

The Company has not adopted a fixed dividend policy establishing the amount and payment of dividends or other distributions.

V.6.2. The Issuer has documented processes in place to propose the allocation of Issuer's retained earnings to set up legal, statutory or voluntary reserves, to be carried over to the next fiscal year and/or to pay dividends. Detail these processes specifying the minutes of Shareholders' Meetings in which the dividend distribution (in cash or in kind) was approved or not, if not provided for in the By-Laws.

Full compliance.

In the light of the Company's Business Plan, the Board of Directors prepares a retained earnings allocation proposal that is included in the Annual Report. This proposal is then reviewed at the Shareholders' Meeting, according to the Argentine Business Associations Law.

PRINCIPLE VI. KEEP A DIRECT AND RESPONSIBLE BOND WITH THE COMMUNITY

The corporate governance framework shall:

Recommendation VI. Disclose to the community the issues concerning the Issuer and provide a direct communication channel with the company.

Answer whether or not:

VI.1. The Issuer has an updated public website which provides relevant information about the Company (such as, by-laws, economic group, structure of the Board of Directors, financial statements, Annual Report, etc.) and which also gathers users' concerns in general.

Full compliance.

The Company has a website with sufficient and updated information, which may be easily accessed from multiple channels. The available data includes relevant information on the Company (such as, by-laws, economic group, structure of the Board of Directors, annual and quarterly financial statements, Annual Report, etc.). The website includes contact information as well as several forms and mechanisms to gather concerns from the various users.

VI.2. The Issuer issues an annual Statement of Social and Environmental Responsibility, verified by an independent External Auditor. If so, specify the legal and geographical scope or coverage of such statement and where it is available. Specify which standards or initiatives have been adopted to implement the Corporate Social Responsibility policy (Global Reporting Initiative and/or the United Nations Global Compact, ISO 26000, SA 8000, the Millennium Development Goals, the Forética's SGE standard, AA 1000, Ecuador's Principles, among others).

Partial compliance

Even though the Company does not issue a Statement of Social and Environmental Responsibility, within the framework of its Annual Report that is available on its web site, and of the annual report accompanying this report, it annually reports on its performance and the different initiatives in the field it has been developing. Its Corporate Social Responsibility policy encourages its subsidiaries to adopt and certify their activities under several standards, as well as a performance management scheme in accordance with the Global Reporting Initiative (GRI) guidelines. The Company is working on the preparation of a sustainability report under the GRI's guidelines. Since 2004, the Company has also adhered to the United Nations Global Compact.

PRINCIPLE VII. PAY FAIR AND RESPONSIBLE COMPENSATION

The corporate governance framework shall:

Recommendation VII. Set clear policies on the compensation of the Issuer's Board members and first-line managers, with special emphasis on conventional or statutory restrictions, based on whether the Issuer has made a profit or not.

Answer whether or not:

VII.1. The Issuer has a Compensation Committee in place:

VII.1.1. comprised by at least three members of the Board of Directors, most of them independent directors;

VII.1.2. presided over by an independent member of the Board of Directors;

VII.1.3. comprised by members with proven expertise and experience in human capital policies;

VII.1.4. which holds at least two meetings per year;

VII.1.5. which decisions in connection with the compensation of Board's members are not necessarily binding but rather consultative at General Shareholders' Meetings.

VII.2. If there is a Compensation Committee in place, answer whether or not:

VII.2.1. it ensures that the performance of the key employees bears a clear relationship with their fixed and variable compensation, taking into account the risks assumed and the management thereof;

VII.2.2. it supervises that the variable portion of the Board members' and first-line managers' compensation is linked to the Issuer's medium-term and long-term performance;

VII.2.3. it reviews the competitive position of Issuer's policies and practices in terms of compensation and benefits granted by comparable companies and recommends changes, where necessary;

VII.2.4. it defines and communicates the policy on retention, promotion, dismissal and suspension of key employees;

VII.2.5. it informs the guidelines to be followed in determining the retirement plans of the Issuer's Board members and first-line managers;

VII.2.6. it regularly reports to the Board of Directors and the Shareholders' Meeting on the actions carried out and the issues discussed at the meetings held;

VII.2.7. it guarantees the presence of the Compensation Committee's Chairman at the General Shareholders' Meeting where the Board of Directors' fees are approved in order to explain the Issuer's policy concerning the compensation of Board members and first-line managers.

VII.3. If deemed relevant, add any policy implemented by the Issuer's Compensation Committee that has not been mentioned in the above item.

VII.4. If there is no Compensation Committee in place, please explain how the functions described in Item VII.2 are performed within the Board of Directors.

Non-compliance

The Company does not have a Compensation Committee in place. Notwithstanding the fact that, pursuant to the Argentine Business Associations Law No. 19,550, the above mentioned functions concerning the Board members' fees shall be exclusively handled by the shareholders at the Shareholders' Meeting, for the time being the Company does not see a need to implement said Committee.

PRINCIPLE VIII. ENCOURAGE CORPORATE ETHICS

The corporate governance framework shall:

Recommendation VIII. Ensure the Issuer's ethical conduct.

Answer whether or not:

VIII.1. The Issuer has a Code of Corporate Conduct. Specify the main guidelines of the Code and whether or not it is publicly known. Said Code is signed by, at least, the Board members and the first-line managers. Specify if suppliers and clients are encouraged to implement the code.

Full compliance.

As mentioned in Item I.2, the Company has a Code of Ethics and Conduct which deals with issues, such as, conflicts of interests, relations with the personnel, political and governmental relationships, corporate asset protection, disclosure of confidential information, opinion on public issues or disloyalty to the Company. This Code is signed by the Company's key executives, but it is not disclosed to third parties.

VIII.2. The Company has mechanisms in place to report any unlawful or unethical conduct, either in person or by electronic means, securing the highest confidentiality and integrity standards concerning the reported information, as well as information recording and conservation. Specify if the reception and assessment of whistle-blower reports are handled by the Company's employees or by external and independent professionals to further protect the whistle-blowers.

Full compliance.

The Company has a whistle-blower hot line administered by the Internal Audit Department through which whistle-blowers may report unlawful conducts anonymously and the information can be handled confidentially.

VIII.3 The Issuer has policies, processes and systems in place to handle and address the whistle-blower reports mentioned in Item VIII.2. Describe the most relevant aspects of said policies, processes and systems and the degree of involvement of the Audit Committee in addressing whistle-blower reports, particularly those concerning internal control issues for accounting reporting and conducts of the Board members and first-line managers.

Full compliance.

The Company has a protocol to handle the anonymous reporting process. Said protocol embraces aspects related to: confidentiality, data management, notice to the Audit Committee, follow-up to prevent retaliation and adequate communication.

PRINCIPLE IX: EXPAND THE SCOPE OF THE CODE

The corporate governance framework shall:

Recommendation IX. Encourage the inclusion of provisions inherent to good corporate governance practices in the By-Laws

Answer whether or not:

The Board of Directors assesses whether or not the provisions of the Corporate Governance Code should be totally or partially reflected in the By-Laws, including the Board of Directors' general and specific responsibilities. Specify which provisions have been actually included in the By-Laws from the Code's effective date up to the present.

Non-compliance

The Company's By-laws include the corporate governance provisions required by effective legislation (such as the audit committee and the public offering regime). The Board of Directors is responsible for the adoption of general policies and strategies, which are updated based on the evolution of local and international trends. No provision included in the Company's By-laws contradicts the existing recommendations on corporate governance.

GRUPO CLARÍN S.A.

CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2013 PRESENTED ON A COMPARATIVE BASIS

GLOSSARY OF SELECTED TERMS

GRUPO CLARÍN S.A.

CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2013 PRESENTED ON A COMPARATIVE BASIS

GRUPO CLARÍN S.A.

CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2013 PRESENTED ON A COMPARATIVE BASIS

In Argentine Pesos (Ps.) - Notes 2.1 and 2.12 to the consolidated 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: October 10, 2007

Registration number with the IGJ: 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, Argentina

Information on the subsidiaries in Note 2.4 to the consolidated financial statements

CAPITAL STRUCTURE

GRUPO CLARÍN S.A.

In Argentine Pesos (Ps.)

(1)Includes amortization of intangible assets and film library, and depreciation of property, plant and equipment in the amount of Ps. 1,130,295,990 and Ps. 872,356,212 for the years ended December 31, 2013 and 2012, respectively.

(2) As of December 31, 2012, it includes approximately Ps. 444 million in connection with the sale of the interests described in Note 12.g.

The notes are an integral part of these consolidated financial statements.

GRUPO CLARÍN S.A.

In Argentine Pesos (Ps.)

The notes are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

In Argentine Pesos (Ps.)

(1)  Broken down as follows: (i) Optional reserve for future dividends of Ps. 300,000,000; (ii) Judicial reserve for future dividend distribution of Ps. 387,028,756, (iii) Optional reserve for illiquidity of results of Ps. 694,371,899 and (iv) Optional reserve to provide financial aid to subsidiaries and in connection with the Audiovisual Communication Services Law of Ps. 457,094,968.

The notes are an integral part of these consolidated financial statements.

The notes are an integral part of these consolidated financial statements.

INDEX OF THE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL INFORMATION

2. BASIS FOR THE PREPARATION AND PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS

3. ACCOUNTING ESTIMATES AND JUDGMENTS

4. SEGMENT INFORMATION

5. BREAKDOWN OF THE MAIN ITEMS OF THE BALANCE SHEET

6. BREAKDOWN OF THE MAIN ITEMS OF THE STATEMENT OF COMPREHENSIVE INCOME

7. INCOME TAX

8. PROVISIONS AND OTHER CONTINGENCIES

9. REGULATORY FRAMEWORK FOR AUDIOVISUAL COMMUNICATION SERVICES

10. CALL OPTIONS

11. FINANCIAL INSTRUMENTS

12. INTERESTS IN SUBSIDIARIES AND AFFILIATES

13. DISCONTINUED OPERATIONS

14. SHAREHOLDERS´ CONTRIBUTIONS AND RESERVES

15. NON-CONTROLLING INTEREST

16. BALANCES AND TRANSACTIONS WITH RELATED PARTIES

17. EARNINGS PER SHARE

18. COVENANTS, SURETIES AND GUARANTEES PROVIDED

19. AWARD OF THE BID OF THE CITY OF BUENOS AIRES

20. LONG-TERM SAVINGS PLAN FOR EMPLOYEES

21. OPERATING LEASES

22. DERIVATIVES

23. CABLE VISIÓN COMUNICACIONES S.A.'S INVESTMENT

24. LAW No. 26,831 CAPITAL MARKETS

25. SUBSEQUENT EVENTS

26. APPROVAL OF FINANCIAL STATEMENTS

GRUPO CLARÍN S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2013,

PRESENTED ON A COMPARATIVE BASIS

In Argentine Pesos (Ps.)

NOTE 1 - GENERAL INFORMATION

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 it participates directly or indirectly.

Its operations include cable television and Internet access services, newspaper and other printing, publishing and advertising 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 subsidiaries, it is engaged 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 (surviving company after its merger with Multicanal and Teledigital), with operations in Argentina and neighboring countries. This company also provides high-speed Internet access under the brands Fibertel and Flash.

- Printing and Publishing, consisting of national and regional newspapers, a sports daily, magazine publishing, editing and distribution, and 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 newspaper La Razón is the first ever free newspaper in Argentina. The children's magazine Genios is the children's magazine with the highest circulation in Argentina. AGR is its printing company.

- Broadcasting and Programming, consisting of Canal 13, one of the two broadcast television stations with the highest audience share in Argentina, AM (Amplitude Modulation) /FM (Frequency Modulation) radio broadcast stations (Radio Mitre and La 100), and the production of television, film and radio programming content, including cable television signals and organization and broadcasting of sporting events; and

- Digital Content and Other, consisting mainly of digital and Internet content, online classified ads and horizontal portals as well as its subsidiary GCGC, its shared service center.

NOTE 2 - BASIS FOR THE PREPARATION AND PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS

2.1 Basis for the preparation and transition to IFRS

Pursuant to General Resolution No. 562 issued on December 29, 2009, entitled "Adoption of International Financial Reporting Standards" and General Resolution No. 576/10, the CNV provided for the application of Technical Resolutions No. 26 and 29 issued by the Argentine Federation of Professional Councils of Economic Sciences (FACPCE, for its Spanish acronym). Since the Company is subject to the public offering regime governed by Law No. 26,831, it is required to apply such standards as from the year beginning January 1st, 2012. The FACPCE issues Adoption Communications for the enforcement of IASB resolutions in Argentina.

These consolidated financial statements of Grupo Clarín for the year ended December 31, 2013, presented on a comparative basis, have been prepared in accordance with IFRS. Some additional matters were included as required by the Argentine Business Associations Law and/or CNV regulations, including the supplementary information provided under the last paragraph of Section 1, Chapter III, Title IV of General Resolution No. 622/13. That information is included in the Notes to these consolidated financial statements, as provided under IFRS and CNV rules.

In preparing these consolidated financial statements for the year ending December 31, 2013, and for the purposes of presentation to the London Stock Exchange (LSE), the Company has followed accounting policies that are in accordance with IFRS.

These consolidated financial statements have been prepared based on historical cost except for the valuation of financial instruments (see Note 2.21). In general, the historical cost is based on the fair value of the consideration granted in exchange for the assets.

Certain figures reported in the financial statements presented on a comparative basis were reclassified in order to maintain the consistency in the disclosure of the figures corresponding to this period.

2.2 Standards and Interpretations issued but not adopted to date

The Company has not adopted IFRS or revisions of IFRS issued as per the detail below, since their application is not required for the year ended December 31, 2013:

- IFRS 9 Financial Instruments: Issued in November 2009 and amended in October 2010, IFRS 9 introduces new requirements for the classification and measurement of financial assets and liabilities and for their derecognition. IFRS 9 is applicable to the years beginning on or after January 1, 2015, and allows for its early application. The changes are not likely to have a material effect on the amounts disclosed in connection with the Company's financial assets and liabilities.

- IFRIC 21 Levies: The interpretation establishes how to account for liabilities to pay levies when those liabilities are within the scope of IAS 37 "Provisions, Contingent Liabilities and Contingent Assets" and when they do not arise from income taxes (IAS 12) or from fines or other penalties imposed for breach of tax legislation. The interpretation clarifies what is the obligating event that triggers the obligation to pay the levy and when an entity should recognize that obligation. This standard is applicable to financial years beginning January 1, 2014. The changes will probably not significantly affect the amounts disclosed in connection with the Company's tax liabilities.

2.3. Standards and Interpretations issued and adopted to date

- IAS 1 Presentation of financial statements: The amendment to IAS 1 requires that items of other comprehensive income be grouped into those that may and may not be subsequently reclassified to profit or loss. The amendments to IAS 1 do not specify which items are to be disclosed in other comprehensive income. This amendment is effective for annual periods beginning as from July 1, 2012. The impact of this standard is disclosed in the Consolidated Statement of Comprehensive Income.

- IAS 19 Employee Benefits: Since to date the Company has not established defined benefit plans for its employees and officers, this standard did not have an impact on the Company's financial statements.

- IFRS 10 Consolidated Financial Statements: Defines the principles of control and establishes control as the basis for determining which entities are to be consolidated in the consolidated financial statements. This standard did not have an impact on the Company's financial statements.

- IFRS 11 Joint Arrangements: Classifies joint arrangements either as joint operations (combining the existing concepts of assets under common control and operations under common control) or as joint ventures (similar to the existing concepts of entities under common control). IFRS 11 requires the use of the equity method for joint ventures and also eliminates the proportional consolidation method for this type of businesses. This standard did not have an impact on the Company's consolidated financial statements.

- IFRS 12 Disclosure of Interests in Other Entities: The interpretation establishes the disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities. The impact of this standard is disclosed in notes to these consolidated financial statements.

- IFRS 13 Fair Value Measurement: Sets up a single framework for measuring fair value when required by other standards and the disclosure requirements for fair value measurement. This IFRS is applicable to both financial and non-financial items measured at fair value. The impact of this standard is disclosed in notes to these consolidated financial statements.

2.4 Basis for Consolidation

These consolidated financial statements incorporate the financial statements of the Company and of the subsidiaries and joint ventures ("Interests in Joint Operations", Note 2.7) controlled by the Company. Control is presumed to exist when the Company has a right to variable returns from its interest in a subsidiary and has the ability to affect those returns through its power over the subsidiary. This power is presumed to exist when evidenced by the votes, be it that the Company has the majority of voting rights or potential rights currently exercised. The subsidiaries are consolidated from the date on which the Company assumes control over them and are excluded from consolidation on the date control ceases. Additionally, these consolidated financial statements incorporate the companies mentioned in 2.4.1.

For consolidation purposes, the intercompany transactions and the balances between the Company and the consolidated companies have been eliminated. Unrealized income has also been eliminated.

Below is a detail of the most relevant consolidated subsidiaries, together with the interest percentages held directly or indirectly in each subsidiary's capital stock and votes, as of each date indicated below:

(1) Includes Multicanal and Teledigital, which were merged into Cablevisión effective as of October 1, 2008.

(2) Interest in votes amounts to 99.7%.

The subsidiaries' financial statements used for consolidation purposes bear the same closing date as these consolidated financial statements, comprise the same periods and have been prepared under exactly the same accounting policies as those used by the Company, which are described in the notes to the consolidated financial statements or, as the case may be, adjusted as applicable.

2.4.1 Consolidation of Structured Entities

The Company, through one of its subsidiaries, has executed certain agreements with other companies, for the purposes of rendering on behalf of and by order of such companies certain selling and installation services, collections, administration of subscribers, marketing and technical assistance, financial and general business advising, with respect to cable television and Internet access services in Uruguay. In accordance with IFRS 10 "Consolidated Financial Statements", these consolidated financial statements include the assets, liabilities and results of these companies. Since the Company does not hold an interest in these companies, the offsetting entry of the net effect of the consolidation of the assets, liabilities and results of these companies is disclosed in the items "Equity attributable to non-controlling interests" and "Net Income attributable to non-controlling interests", as required by IFRS.

2.4.2 Changes in the Company's Interests in Existing Subsidiaries

The changes in the Company's interests in subsidiaries that do not generate a loss of control are recorded under equity. The book value of the Company's interests and non-controlling interests is adjusted to reflect the changes in the relative interest in the subsidiary. Any difference between the amount for which non-controlling interests were adjusted and the fair value of the consideration paid or received is directly recognized in equity and attributed to the shareholders of the parent company.