GCLA.L Regulatory News (GCLA)

GRUPO CLARÍN S.A.

2010 ANNUAL REPORT

To the Shareholders of

Grupo Clarín S.A.

We hereby submit for your consideration the Annual Report and Exhibit, the Balance Sheet, the Statement of Income, the Statement of Changes in Shareholders' Equity and the Statement of Cash Flows, Notes and Exhibits of Grupo Clarín S.A. (hereinafter, "the Company" or "Grupo Clarín") for fiscal year No. 12 ended December 31, 2010 and the Consolidated Financial Statements as of December 31, 2010.

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 S.A. (PRIMA), Contenidos 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.

2010 Macroeconomic Environment

Like most other emerging countries, the Argentine economy went through a recovery period in 2010. Such performance was driven by the conditions prevailing in the external arena, along with the expansionist bias of the economic policy and the favorable weather conditions for the agricultural sector on the domestic front.

However, unlike other emerging countries, the strong expansion of the local productive activity was paired with an inflationary upsurge that prevented the country from fully capitalizing on the proceeds from such growth and from improving their distribution.

In 2010, the Argentine economy experienced growth with inflation and currency appreciation. This fact, coupled with the currency board strategy implemented in order to moderate the inflationary impact of the strong drive generated by public policies, resulted in an unprecedented slowdown of all three pillars that supported the recovery process after the 2001-2002 crisis.

In addition to these two conditioning factors, the Argentine economy is operating under certain disturbing factors, such as, increased primarization, strong distortion in relative prices and a shortage of reproductive investments (noticeable mainly in the capital depletion of key strategic sectors).

Therefore, in spite of its growth cycle (of approximately 70% since 2002), Argentina has yet to show any predictability in its medium-term performance or clear progress in its development. Poverty, which has remained almost unchanged since early 2007 and which, according to private estimates, still affects 9 million Argentine people, clearly reflects the latter.

According to private sources, Argentina's real GDP is estimated to have increased by approximately 8% (recovering by far the three percentage points lost in 2009). Inflation is estimated to have risen to 25% - a record high in the last eight years - and approximately ten points above 2009. Consequently, in 2010 the Argentine economy generated more than 3.5 percentage points per point of growth (this ratio is substantially higher than that of its neighboring countries).

The three pillars that supported the economic recovery after the 2001-2002 crisis deteriorated in the year under analysis. The nominal exchange rate, which operates as an inflation buffer together with the virtually frozen utility tariff rates, did depreciate with respect to the US dollar throughout the year, but at a substantially lower rate than the price increases (less than 5% vs. 25%).

In addition to generating an accelerated loss of competitiveness, this rapid adjustment of the real exchange rate, paired with the economic activity, exacerbated the increase in the value of imports. In 2010, imports increased by 46%, doubling the increase in exports. These dynamics deteriorated the balance of trade surplus, which showed a significant decrease of almost 30% (from USD16.9 billion to USD12 billion in absolute values). The year-on-year decrease in capital flight from the private sector (30% compared to 2009, but still above USD10 billion/year) partially offset the genuine generation of foreign currency.

Thus, deterioration on the fiscal front was more significant than on the external front. Without counting revenue distributions received from the BCRA and revenues of the ANSES derived from the ownership government-issued securities, in 2010 the national public sector recorded a primary deficit, that is, a deficit before payment of interest on its indebtedness. Notably, this result occurred in spite of the application of tax pressure that, in consolidated terms (national, provincial and municipal level), already represents an historical record high (~32% of GDP)..

Perspectives for the Upcoming Year

The world currently offers Argentina, as a net exporter of food products, with an undisputable opportunity. The current terms for exchange are the best in the last fifty years and are expected to continue to be favorable in the coming years.

Leveraged by this extraordinary external scenario, in 2011 the Argentine economy could again grow well above its historical average, albeit at a lower rate than in 2010. In contrast with the lower expected rate of GDP growth, inflation is expected to exceed the rate registered in 2010.

The agricultural sector and the car industry are bound to continue to be the main pillars of growth. In fact, even though the crop harvest volume in general and the soybean harvest volume in particular are expected to be lower than in 2010 due to the effect of La Niña, the high prices of agricultural commodities would more than offset such fall, contributing to renewed growth in the value of exports in the coming year. This would certainly lead to an increased current account surplus and to higher fiscal revenues from export duties. The automobile industry is also expected to grow, driven by the strong demand from Brazil.

The upcoming presidential elections suggest that the current economic policy stimulus could be maintained or even intensify. Naturally, this strategy stresses inflationary pressures on an economy that already shows inertial price acceleration and lacks fiscal surplus to minimize the likelihood of spiralization. Thus, the projected inflation rate for the year (market consensus expects a floor of 27%), in addition to operating as a limiting factor to the sustainability of GDP growth, could continue to add tension to the struggle over distribution of income.

Finally, it is worth noting that the accelerated loss of competitiveness with respect to the rest of the world experienced in 2010 seems, far from slowing down, appears to be bound to increase this year, as a consequence of the projected soft slide in the exchange rate.

In summary, even though the local economic activity is ready to continue its expansive cycle, prevailing uncertainties condition the economy's growth potential because they represent a burden that inhibits the perspectives for the recovery of reproductive investments and employment. As a consequence of its adverse effects, high inflation would continue to hinder significant improvements in social indicators and in the distribution of income among the Argentine people.

THE YEAR 2010 AND THE MEDIA SECTOR IN ARGENTINA

Undoubtedly, the global media industry was one of the most affected industries by the severe financial crisis of 2009. However, it showed certain signs of recovery in 2010. Naturally, such recovery was far from homogeneous among countries, companies and segments.

However, the recovery experienced by virtually all developed countries throughout 2010 had a tranquilizing effect on this industry, which already faces several challenges arising from the ongoing emergence of new technologies and the changes in the new generations' media consumption patterns.

2010 was a year of recovery and genuine growth for the economy and the local media industry. In fact, economic activity and consumption are estimated to have increased between 8% and 9%, largely offsetting the setback suffered in 2009. However, this strong expansion of local productive activity was accompanied by an inflationary upsurge that prevented the country from fully capitalizing on the fruits of growth and improving their distribution.

Even so, the re-emergence of aggregate demand along with certain specific events, such as the Argentine Bicentennial celebrations and the Soccer World Cup held in South Africa, paved the way for a macroeconomic environment favorable to the industry. A good example of this is the good performance of the industry's main sources of financing.

In fact, advertising investment, which was by far the most affected by the 2009 slowdown due to its high sensitivity to the economic cycle, increased by more than 20% compared to 2009 (though slightly below the 25% annual inflation rate estimated by the private sector). Such performance was influenced by the government's advertising spending, oriented to finance a matrix with a greater share of publicly-owned media.

Unlike most countries in the region, newspapers continued to attract the largest share of advertising in the local market, followed by broadcast TV.

The paid television and Internet segments, whose growth curves - though flattened - had not shown much correlation with the economic cycle in 2009, expanded again in 2010 in accordance with their potential, even though Argentina's penetration rates are among the highest in the region.

Thus, during 2010 the paid television subscriber base grew at a rate of almost 5%, reaching approximately 7.3 million users at year-end. Leverage in the growing penetration of additional services (incorporation of high definition signals to the grid and VOD, among others), which permitted a high level of investment in the expansion of network capacity, had a key role in such performance. It is worth noting that the government's launch of Digital Terrestrial Television did not have a significant impact on the annual net capture of this industry.

Broadband demand grew for the second consecutive year at rates of approximately 20%, becoming increasingly ubiquitous. In fact, by year-end, residential fixed broadband Internet access reached a new record high of approximately 4.6 million subscribers in a fiercely competitive environment noted for the promotional offers of its main market players. At the same time, the existence of more than one million mobile broadband subscribers and the implementation of combined voice and data subscriptions by cell phone companies evidence the complementariness that this technology provides to the market.

In this regard, an emerging and curious phenomenon is the users' ongoing demand for higher speed, mostly as a result of the predominance of video traffic over other Internet traffic and, to a lesser extent, as a result of the increased 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, thus putting the current business models under pressure.

The trend towards change in media consumption habits, which was already present before the economic crisis but was accelerated by such crisis, has continued. In fact, the number of visits to websites with content development continued to increase, particularly news sites, with the newspapers in the top ranks. As a logical consequence, the increased number of readers of digital newspapers, together with the increased offering of news signals on television, helped to reinforce the downward structural trend in the volume of newspaper copies in paper format.

Notwithstanding the above, it is worth noting the current exponential growth of and massive access to social networks, not only as sources of entertainment, but also as sources of multimedia content and recommended information.

Regulatory framework and conditions for the journalistic and media activity

In addition to the aforementioned and to the comments under Note 15 to the Parent Company Only Financial Statements, during 2010 private media in general and Grupo Clarín in particular continued to face an escalating level of harassment. Such harassment was executed through the official and para-official apparatus, with the clear intention of damaging the media's reputation and directly and indirectly limiting its journalistic activities.

In the framework of this escalation, the government reinforced certain actions that threaten and distort the full effectiveness of freedom of speech and information, such as the exponential increase and discriminatory distribution of official advertising used to create and sustain like-minded media; the discretionary use of public funds and media to generate content and programs related to political propaganda; and the several obstacles and discriminatory conduct in the access to public information.

This discrediting and defamatory strategy was painfully reflected in aggravating street banner and graffiti campaigns, in persecution, espionage and phone-tapping actions against media, editors and journalists, and went so far as to include the financing of soccer hooligans arranging banners against the media and members of the judicial branch to be displayed in soccer stadiums and the advertising to be broadcast during the games.

Other tools to exert editorial pressure consisted of abuse of bureaucratic controls or controls by public agencies which took the form of administrative persecutions, groundless arbitrary resolutions, disproportionate tax controls and recurring audits. In this scenario, the government did not hesitate to exert pressure on entities such as the Argentine Securities Commission and the Financial Information Unit, causing the resignation of members and renowned officials of such agencies who refused to start unfounded investigations on Papel Prensa and Grupo Clarín.

In the audiovisual sector, this offensive against the media (against both, its editorial freedom and its economic sustainability, which guarantees its independence) has its utmost expression in the controversial Audiovisual Communication Services Law. This law was challenged by the judiciary for its substance, condemned for infringing constitutional rights, granting broad and discretionary powers over media and content to the Executive Branch, favoring official voices and affecting the sustainability of private media, promoting the elimination of independent signals and establishing dangerous indirect censorship criteria through the arbitrary granting of licenses and the application of penalties, among other controversial aspects.

Since its enactment in October 2009, several court decisions upheld preliminary injunctions which are currently effective, providing for the suspension of the main sections of the broadcasting law; including, but not limited to, section 161 which refers to the conforming regime that sets forth the mandatory divestiture in the term of one year. In spite of the existence and full effectiveness of said court decisions against the law, the government sought to move forward with the implementation thereof in an authoritarian and overwhelming manner. This ratifies all the warnings about the potential danger of editorial control by an enforcement authority that is not independent.

Accordingly, in September the regulations to the law were enacted exceeding the legal framework since they deal with issues not contemplated in the law. Through these regulations, the government attempted to create perverse media confiscating mechanisms. The enforcement authority reserves the right to intervene any media on a discretionary basis: whether by revoking licenses or through simple summary proceedings. In both cases, the national government seeks to assume the power to appoint a "Delegate Administrator" or auditor to take control of the media, using its infrastructure, name and trademark and taking control of its content, employees and journalists.

Additionally, in the month of August, the government announced a surprising decision aimed at discontinuing the services rendered by Fibertel. This measure, based on deceitful and arbitrary actions, affected the rights of over one million clients, directly benefiting the telephone companies' monopoly. Several court decisions suspended the application of the measure, in view of its inconsistency and massive subjugation of consumer rights.

At the same time, in 2010, the offensive against independent media and free journalism continued to take very diverse forms, including the measures adopted by trade unions related to the government, which repeatedly tried to prevent newspaper and magazine distribution by blockading printing facilities. Several official agencies also sought to control paper, the basic input for newspaper production.

The government's attempt to gain control of the paper industry has intensified, through several administrative measures that sought systematically 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 in a threatening and violent environment.

These and other deplorable actions that are not in line with the expected attitude of a democratic government towards the press were part of the challenging scenario in which private and independent media operated in 2010.

THE COMPANY. ORIGIN, EVOLUTION AND PROFILE

Grupo Clarín is the most prominent and diversified media group in Argentina 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.

Grupo Clarín and its subsidiaries have approximately 15,000 employees and, by the end of 2010, reached annual consolidated revenues of Ps. 7,632 million.

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/Canal 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, only 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 daily 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 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).

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. In Argentina, Cablevisión is the first among 700 operators and always competes with other cable or satellite options. Also, through Fibertel, it 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 in the Buenos Aires Stock Exchange and in 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 focused on journalism and the mass 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 and develops initiatives that arise from discussions with different stakeholders.

GRUPO CLARÍN AND ITS BUSINESS SEGMENTS IN 2010

In terms of results, Grupo Clarín and its business segments grew again in 2010 in a highly challenging context. During this year the Company consolidated the positive economic and financial performance trends of the previous years.

Net consolidated sales increased by 14.3%, from Ps. 6,678.8 million to Ps. 7,632 million. 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 2010, Grupo Clarín's gross consolidated financial indebtedness (including sellers financing, accrued interest and fair value adjustments) was approximately Ps. 2,399.1 million, while net consolidated indebtedness was approximately Ps. 1,758.4 million, representing a decrease of 7.8% and 17.9%, respectively, compared to the previous year.

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 2010.

CABLE TELEVISION AND INTERNET ACCESS

Grupo Clarín operates, through Cablevisión, one of the main regional integrated cable television and broadband systems. This segment's revenues mainly derive from monthly subscriptions to basic cable television service and high-speed Internet access. To a lesser extent, its revenues also derive from connection and advertising charges, sales of premium and pay-per-view programming, digital package, DVR, and high definition signal package (HD) and sales of the magazine "Miradas".

Out of Grupo Clarín's total sales in 2010, the Cable television and Internet access segment was the Company's main revenue driver, with sales of Ps. 4,885.1 million, taking into consideration intersegment sales.

Regarding the geographic availability of Grupo Clarín's services, by the end of 2010, its network reached approximately 7.3 million Argentine households. Grupo Clarín provides services in the City of Buenos Aires and suburban areas, as well as in the provinces of Buenos Aires, Santa Fe, Entre Ríos, Córdoba, Corrientes, Formosa, Misiones, Salta, Chaco, La Pampa, Neuquén and Río Negro. Regionally, Grupo Clarín also operates in Uruguay and Paraguay.

In terms of subscribers, by the end of the year, the Company's cable television systems had approximately 3,149,300 subscribers in Argentina, 208,500 in Paraguay and Uruguay, and 1,128,200 Internet service subscribers in Argentina and abroad. As of December 31, 2010 in most of the cities it operates, the monthly price of Cablevisión basic service was Ps. 126.25, including Value Added Tax. The price varies according to the system to which clients are subscribed and depends mainly on the number of channels offered in each system.

Cablevisión's network's backbone consists entirely of fiber optic cable. The bi-directional service network's architecture and the new networks rely on a fiber to service area ("FSA") design, which combines cable network fiber trunks with coaxial cable extensions and permits bi-directional transmission.

By the end of 2010, most of the total 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 including up to 120 programming signals, depending on the capacity of the local network. It offers basic and premium programming from more than 25 providers and broadcast television stations of the City of Buenos Aires. Most of the programming contracts include pricing terms denominated in Argentine Pesos generally linked to the number of subscribers.

By paying an additional fee and renting a digital decoder, Cablevisión subscribers receive premium packages and pay-per-view programming that include additional movie signals and adult programming, among other products.

Cablevisión is also offering digital services to its subscribers that include a basic digital package, as well as Premium and High Definition (HD) services. Such products are offered in the City of Buenos Aires and its surrounding areas (the "AMBA Region"), in the province of Buenos Aires, Córdoba, Rosario, Mar del Plata, Santa Fe and other cities in the provinces.

Cablevisión has recently launched a high definition signal package (HD) as well as state-of-the-art digital set top units with digital video recorder (DVR). During 2010, Cablevisión added signals to the HD package in order to enhance this product's offering. Thanks to its state-of-the-art technology, during 2010, Cablevisión carried out the first broadcasting of 3D content through a cable network.

As of December 31, 2010 there were approximately 699,100 digital set top units for Premium service in all of Cablevisión's operational regions (including Uruguay and Paraguay), resulting in a penetration rate of approximately 20.8% of all subscribers to its basic cable service provided through its digital network. Cablevisión also offers Cablevisión Flex, an optional social service of digital paid television with a reduced subscription, to approximately 500,000 inhabitants of low income neighborhoods.

As to Internet access services, Cablevisión offers products specially designed to meet the needs of both residential and corporate users. The products offered comprise high-speed cable modem Internet access through its 750 MHz network under the Fibertel brand, and ADSL, dial-up and telephony services under the brands Flash, Datamarkets and Vontel.

Fibertel is undoubtedly the broadband service that offers the highest speed in the market massively and at competitive prices. One of the main differentiating features of Fibertel's connectivity service lies in the great broadband potential of its services compared to the more limited ADSL connectivity service offered by its main competitors.

During 2010, it launched the 6-mega downstream and 712k upstream speed products and has trial subscribers to the 30-mega speed product in the AMBA region. Fibertel also launched Fibertel Nitro, a new technology aimed at enhancing its subscribers' browsing experience even more. This feature allows users to utilize the network's unused capacity at a particular instant to increase the actual browsing speed and, therefore, enhance subscribers' experience.

As of December 31, 2010, Cablevisión had 1,100,700 subscribers to cable modem Internet access in Argentina and abroad through its own networks, 9,300 subscribers to the dial-up system and 1,600 subscribers to other broadband technologies. Primera Red Interactiva de Medios Argentinos (PRIMA) S.A. ("Prima"), a subsidiary of Cablevisión, had 16,500 additional subscribers to its ADSL dial-up system. Even though Cablevisión has these 3 technologies, its main focus and differentiating feature is cable modem, in which market it has a leading position under the brand Fibertel, being a clear benchmark in its category.

Commercialization and Customer Service

Cablevisión uses several market positioning mechanisms for its products and brands, including promotions, customer service centre locations, newsletters about the company, institutional information and programming through its websites. It advertises in the printing media and over its own broadcasting signals. Cablevisión publishes a free monthly guide distributed to its subscribers and also publishes an optional, monthly paid magazine called Miradas, which, during 2010, increased its monthly circulation to approximately 382,100.

Customer service is provided through an integrated service center offering round-the-clock support, with the aim of optimizing customer relationship. During 2010 the company 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.

Subscriber base turnover rate for the year ended December 31, 2010 was 14.3%, compared to 15.8% recorded in the previous year. During the year ended December 31, 2010 Cablevisión added 165,000 subscribers to its base compared to 101,900 added in 2009.

Strategy

The long-term business strategy for the cable television and Internet access segment involves an expansion of the cable television and Internet broadband connectivity subscriber base, focusing on maintaining the highest speed in the market and stressing customer service and the brand. This strategy also involves improvements in technology, and broader investments intended to streamline a flexible network architecture serving as a platform for developing additional video Internet and voice services to realize the potential provided by technology convergence.

PRINTING AND PUBLISHING

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

Out of Grupo Clarín's total sales in 2010, the printing and publishing segment accounted for Ps. 1,804.0 million, taking into consideration intersegment sales. This segment derives revenues primarily from the sale of advertising, copies of newspapers and magazines and optional products.

Arte Gráfico Editorial Argentino

AGEA publishes Diario Clarín, the flagship Argentine newspaper and one of the most important in terms of circulation in the Spanish-speaking world; Olé, launched in 1996, the first and only sports newspaper of its kind in the Argentine market; and Genios, a magazine with a high penetration rate in the children's segment. It also publishes Elle, Jardín de Genios; Ñ, a cultural magazine that reflects all cultural news and trends; Revista Pymes, aimed at small and medium-sized entrepreneurs; and Diario de Arquitectura, aimed at the construction sector, architects, designers and building contractors, among other products.

Through Artes Gráficas Rioplatense S.A. ("AGR"), Grupo Clarín is also engaged in color printing, publishing and distribution activities. AGR prints Viva, Clarín's Sunday magazine, and carries out other production activities for AGEA and for third parties, including installment books, telephone directories and flyers.

AGEA leads the online classified advertising market through its vertical sites: Autos, Inmuebles, Empleos, and has a leading position in the Internet content market through its websites Clarin.com, Olé.com.ar, revistaenie.clarin.com, ieco.com, among others. Through its subsidiary and controlled company Tinta Fresca Ediciones S.A., the Company entered the textbook editorial market.

Diario Clarín

With an average of 603,000 readers from Mondays to Saturdays and over 1.5 million readers on Sundays, and its long-standing journalistic and commercial leadership consolidated throughout its 65-year track record, Clarín is the most prominent Argentine newspaper in terms of outreach, influence, 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 journalism style that enables 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 a clear and direct language, providing its readers with easy access to the different sections and issues.

During 2010, its daily circulation reached almost 316,000 copies, a volume 2.1 times higher than its closest competitor. On Sundays, over 640,000 copies are sold, which places it among the major Sunday newspapers of the world. According to the Newspaper and Magazine Circulation Verification Institute ("IVC"), in 2010, Clarín had a 44% share in the newspaper market in the City of Buenos Aires and the province of Buenos Aires and a 11% share in the provinces. On a national level, it had a 27% market share.

Given its broad circulation and reach to all social classes, Dario Clarín leads the printing media market. It is ranked first in terms of advertising revenues, sold advertising space and also leads in all advertising categories (display, special section and classified ads). In 2010, Diario Clarín's advertising sales were of Ps. 747 million, an increase of 18.9% compared to the previous year, while AGEA's advertising sales were of Ps. 788 million.

From an editorial perspective, Clarín reaffirmed its long-standing journalistic leadership. Its in-depth coverage of this year's most outstanding news revealed once again the production quality of its reports and the depth of its approaches and insights. The work of the paper's investigation team, the constant proposal of new editorial products and the launch of new publications continue to reflect the work of the greatest team of journalists in Argentina.

Also in this year, Grupo Clarín's journalists and media once again received prestigious awards and acknowledgments. In the category "Best Internet Coverage", the journalists Paula Lugones and María Arce were recognized with the most important Spanish-speaking award "Rey de España" for their work: "Ruta 66: el largo camino hacia la Casa Blanca" (Route 66: the long path towards the White House), a special production of Clarín and Clarin.com on the elections that made Barack Obama President of the United States. "Ruta 66" was produced and fully broadcast from the US during almost 40 days. The journalists travelled approximately 4,000 kilometers; visited 35 cities and interviewed almost 150 people.

Clarín's Design and Infographics team was once again one of the most awarded in the world for the excellence of its work. In the 32nd Edition of the International Awards granted by the Society for News Design (SND), the team won 6 awards for the works published in Revista Arquitectura (DNI), in Revista Ñ, in the newspaper (Bicentennial and World Cup supplements) and in Revista Viva.

In April, the Unesco granted Mónica González, correspondent of Clarín in Chile, the award "Premio Mundial a la Libertad de Prensa Guillermo Cano". In September, Eleonora Gosman, correspondent of Clarín in Brazil, was recognized with the award Comunique-se de Periodismo, the most important Brazilian award to radio, print and TV press and blogs.

In advertising, Clarín received the Effie de Plata award in the Media category for the campaign "Rizzuti - La Pareja del Mundial", the Clarín.com webseries telling the story of the soccer fan Alberto Rizzuti in his attempt to attend the World Cup South Africa 2010. Olé received the "Gran Sol de Iberoamérica 2010", the most important award granted by the Iberoamerican Advertising Festival (Festival Iberoamericano de Publicidad) in the television and motion picture category.

In 2010, Diario Clarín offered outstanding promotions that increased interaction with readers, among them, the game "El Gran DT". Among the year's milestones, in April 2010, the economic supplement iEco launched the second optional "Serie Pocket Mentor", a collectible product, jointly with the Harvard Business Review. For the purpose of understanding the value of brands for individuals, in April 2010, the iEco's Brand Ranking was launched for the third consecutive year. The ranking was published once a month in the supplement and at www.ieco.com.ar. Diario de Arquitectura continued to launch high-quality collectible products, such as, "Las Casas del Año" and "Archivo Clarín Arquitectura Siglo XXI/2010, Archivo de diseño Edición 2010". The contest Premio Nacional Arq. was launched in December to select the best Argentine architectural work of the last five years on a regional basis.

In October, the Moreno-Luján-Gral Rodriguez regional newspaper was added to the eleven existing regional newspapers, thus extending coverage within the Province of Buenos Aires. Just like Pilar's regional newspaper, this one is distributed for free on a monthly basis. In December, the company launched "Anuario 2010", a special edition featuring the most important events of the year in the regional newspapers.

As to sports, in addition to the game El Gran DT, in 2010 special supplements were published covering prominent events such as the Football World Cup South Africa 2010, the Davis Cup, the tenth year of the ATP de Buenos Aires Tournament, the Dakar Rally and the Basketball World Cup, in addition to its traditional products and special football tournament guides. During the year Diario Clarín's newsroom started to work closely with the newsroom of Clarin.com Deportes, producing multimedia content and sharing knowledge, which enriched news coverage and content.

Diario Clarín also continued to build upon the achievements attained by the cultural magazine Ñ, reaching average sales of 42,700 copies per issue. During the year, several initiatives were carried out aimed at engaging readers through the launching of collectible products, the creation and sponsorship of forums comprising different cultural issues and involvement in and sponsorship of major cultural events.

In its seventh year, Revista Pymes, continued to strengthen its growth. Two collections of books were published: "Las Mejores Ideas Pymes" and "Diseño e Innovación".

In order to continue to 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. It was an intense year in terms of collectible and optional products, consolidating Grupo Clarín as one of the major book editors of Argentina.

The highlights were: El Gran Libro del Asador; El Gran Libro del Teatro Colón; Ejercita tu mente; Libros Bilingües III; Spider Man; Desafía tu mente; Argentina 200 años; Biblioteca Esencial de Lengua Espasa; La Gran Historia de los Mundiales; Billetes y Estampillas de los 200 años; El Gran Libro Clarín de la Decoración 2010; Grandes Biografías de los 200 Años; Las grandes fotografías del periodismo argentino; Los Increíbles; Cocina Argentina de los 200 años; La Enciclopedia del Saber National Geographic; Grandes Enigmas de la Historia; Q´Estudio; Libro de Viajes de la Argentina, Clarín -ACA; Colección Museo Nacional de Bellas Artes; Almanaque de pared 2011; Cocina para las Fiestas; Robin Hood; Guía para conocerte más y mejor; El Gran Libro de Tejido 2010; - El Gran Libro del Crochet 2010; Anuario Autos.

Clarín's products continued to set trends and brand loyalty activities contributed to the consolidation of readers' strong relationship with the brand. Further efforts were channeled into strengthening the bond with advertisers, bringing together new sectors and identifying their needs.

Clarín organized the 2010 edition of its renowned Clarín Awards, honoring its strong commitment to the promotion of Argentina's best in the cultural and sports fields. To this effect, the 13th consecutive "Premio Clarín de Novela" ceremony was held, where Gustavo Nielsen was awarded for his novel "La otra playa". Clarín also awarded the best sportsmen of the year at the Premios Consagración y Revelación 2010 - La gran noche del Deporte Argentino ceremony, in which Luciana Aymar received the Sportswoman of the Year award.

Other Newspapers

La Razón, the first-ever free distribution newspaper, is distributed in all subway and train lines in the City of Buenos Aires, as well as in bars and in highway tollbooths within Buenos Aires. Building upon the concept that "La Razón is a travelling companion", as it does every summer, the newspaper sent copies throughout the season to Mar del Plata, Pinamar and Villa Gesell.

After thirteen years of existence and with an average daily circulation of 45,000 copies, Olé, the first and only Argentine sports newspaper, continues to consolidate its market positioning. It is the fourth largest newspaper in Buenos Aires in terms of circulation. Since its inception, it has revolutionized reading habits and managed to attract not only sports fans, but also a new generation of young readers, offering advertisers an opportunity to reach a specific market.

During 2010, the company did a special coverage of the main sports events, including the Football World Cup South Africa 2010 and launched special products, promotions, games and prizes.

Magazines

In 2010 the Company continued to issue the magazine Genios, which has 12 years in the Argentine market. With the children and school in mind, this magazine was created with the aim of integrating contents for children, parents, school and society, combining education with entertainment. Since it was launched in March 1998, it has led the children's magazine segment. Its editorial offering is always renewed at the beginning of each academic year, presenting new sections, updated school materials and collectible books prepared by experts. Genios sold 301,000 copies in its first annual issue at the beginning of the academic year. During 2010, Genios consolidated its efforts in the website genios.com.ar It published collectible products such as Argentina mi País and Guía Escolar Genios, as well as important promotions such as a flag of Argentina with a Bicentennial motif, Toy Story 3 album, among other things. In April and May, the magazine published the fifth and sixth editions of Genios free newspaper, which is distributed at the entrance of schools in the City of Buenos Aires, in the province of Buenos Aires and in the provinces.

Jardín de Genios, the monthly publication aimed not only at pre-school children and those attending the first years of primary school, but also at parents and teachers, achieved increased average sales of 87,300 copies during 2010. In its annual launch, it published the magazine "Edición de Oro", with more pages and a square-shaped spine, and the supplement "Guía para Padres", that came with a free book called ABC mis primeras letras. The magazine also presented the first book of the new collectible "Nuevos Clásicos de Oro Disney", which became a best-seller.

During 2010 "Tiki Tiki", a magazine aimed at children aged 8 through 14 and adolescents, continued to strengthen its position. New collectible products were launched: Tiki 3D and Tiki Mostros; Álbum Oficial de La Copa del Mundo FIFA 2010 - Sudáfrica and four editions of "Ediciones Mundial".

The magazine Elle reaffirmed its leadership in the high-end advertisers segment. In 2010, its circulation reached a monthly average of 31,000 copies. In May and October, the company also published the magazine Elle Decoración.

The bimonthly magazine Clarín Rural Revista continued to strengthen its position as a management tool for the productive sector with all the solutions and technologies aimed at agricultural businesses.

Also in 2010 the company continued to publish the monthly magazine-catalogue Shop & Co which includes discount coupons on important brands.

Tinta Fresca

Tinta Fresca Ediciones S.A. ("Tinta Fresca") is an Argentine publishing company, engaged in textbook publishing for the different stages of the Argentine education system. Tinta Fresca looks to place books as central elements of the teaching and learning processes and proposes to use books as effective and updated tools for teachers and students. Its strength is to provide access to textbooks to the largest number of students possible, at competitive prices, relying on a sales force capable of promoting its products by visiting teachers throughout the country and with points of sale nationwide.

In 2010 Tinta Fresca continued to improve its market position. Tinta Fresca strengthened its editorial offering with three books aimed at the first stage of primary school "Imaginá que… 1, 2 y 3" and for the second stage of primary school, the series "Cruz del Sur" with a total of 18 books: 3 language books, 3 math books, 6 social sciences books (at regional -aimed at the province of Buenos Aires- and national levels) and 6 of natural sciences (at regional -aimed at the province of Buenos Aires- and national levels). For secondary school, two books were published Biología ES 3 and Físico- Química ES.3, among other projects of high added value.

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 2010, AGR retained its leading position in the sector with sales of Ps. 199 million. The company continued to exploit one of its main strengths: its participation in the entire value chain of the printing industry, which enables it to offer comprehensive customer service, including drafting, prepress, variable printing, offset printing, finishing and distribution.

AGR strengthened its presence in the foreign market, where sales reached Ps. 6 million.

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

UNIR S.A. ("Unir") 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. In 2010, Unir totaled sales of Ps. 44 million, a 24% increase compared to the previous year.

CIMECO

Compañía Inversora en Medios de Comunicación S.A. ("CIMECO") was organized in 1997 with the aim of acquiring equity interests in Argentine and foreign newspapers, seeking to preserve the regional journalistic industry, blending experience, synergy and economies of scale. To date, CIMECO holds a majority interest in two of the three largest regional newspapers in Argentina: La Voz del Interior (Córdoba) and Los Andes (Mendoza).

Diario Los Andes was able to maintain its leadership in the province with special publications, events and special supplements. In 2010 the newspaper was once again present at the Vendimia National Festival; and published the fourth edition of Tintero Adventure kids. The number of members of the readers loyalty program Los Andes Pass doubled during this year.

La Voz del Interior, a 106-year old newspaper, has a strong presence in the province of Cordoba. This year, it managed to consolidate its position as distributor of other publications at newsstands, with significant increases in the sale of optional products and also in digital media advertising sales. La Voz del Interior has completely redesigned its website lavoz.com.ar and updated the content sites launched during last year with a view to becoming a digital benchmark in terms of information, entertainment and social networks.

Papel Prensa

Papel Prensa is the first producer of newsprint that is wholly owned by Argentine capital. It began its operations in 1978 and is currently the largest Argentine producer of newsprint, with an annual production capacity of approximately 170,000 tons. As of December 31, 2010, 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%).

Papel Prensa has implemented production policies based on the procurement of strategic inputs without contributing to the depletion of natural resources. To this end, the paper mill recovers raw materials from the recycling of returned newspapers, instead of using virgin fiber. In 2010, Papel Prensa sold 147,423 tons of paper for newspapers.

Ferias y Exposiciones Argentinas

One of the main activities of Ferias y Exposiciones Argentinas is the organization of Caminos y Sabores, an exhibition intended to foster Argentina's gastronomy and handicrafts and promoting the region's most important tourist destinations. In 2010, its sixth year, the exhibition received 80,000 visitors.

In 2010, in Venado Tuerto, province of Santa Fe, the company also held the seminar ADMITE, which was attended by more than 150 people, and offered courses given by renowned professors of the agricultural sector, with training in technology and machinery.

In 2007, AGEA entered into an agreement with S.A. La Nación for the organization of Expoagro, a new agro-industrial fair, improving the results that had been obtained until then by Feriagro, and achieving a record-high number of exhibitors. In 2010, the exhibition, held from March 3 through March 6 in La Flamenca - Ruta 9 Km 121, Corredor Productivo Baradero - San Pedro, was a success and received more than 100,000 visitors.

BROADCASTING AND PROGRAMMING

Grupo Clarín is also the leading company in the audiovisual broadcasting and programming segment. Through Artear, it holds the license to broadcast Canal Trece, one of the two largest broadcast television channels in Argentina, and leads the segment in terms of advertising share and prime time audience share. It also has 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, more recently, Mitre AM 810 in the province of Córdoba.

Grupo Clarín also has a strong stake in sports commercialization and broadcasting rights, mainly soccer and motor racing, directly and through joint ventures.

Out of Grupo Clarín's total sales in 2010, the broadcasting and programming segment accounted for Ps. 1,124.7 million, taking into consideration intersegment sales.

Artear

Amidst a scenario marked by industry challenges and strong competition, Artear was able to achieve its goals in 2010. Its year-on-year total sales increased by 14% and its share in the traditional advertising market of broadcast television reached 35.9%.

In 2010 Canal Trece celebrated its 50-year anniversary and was the leading channel overall in broadcast TV. Since 2006 Canal Trece had been leading only the Prime Time, which accounts for 70% of advertising revenues. It achieved such leadership with 10.1 rating points from Monday through Sunday from 12:00 PM through 12:00 AM, against 9.9 rating points achieved by its closest competitor. Its professionalism, artistic quality, innovative proposals and technological developments continue to distinguish it as the most prominent audiovisual media in the market.

As far as its programming is concerned, during 2010 Canal Trece combined fiction, information and entertainment in a varied offering which places it not only as the general audience leader, but also as leader at high and middle socioeconomic levels, allowing it to reach highly demanded targets and, therefore, to lead the advertising market.

"Malparida", "Show Match", and "Para Vestir Santos" led audience ratings. As regards news programs, "Arriba Argentinos" continued to consolidate its morning audience rating. Canal Trece's news programs -"El Noticiero de Santo", "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 signals, TN achieved the highest audience share throughout the year across all time slots. On several occasions, it outperformed broadcast stations. Several talk-shows stood out, such as "El Juego Limpio", "Palabras más, Palabras menos", "Código Político", "Desde el Llano", "Argentina para Armar", "Otro tema" and "A Dos Voces".

Artear further strengthened its TV slots seeking to offer diverse options in terms of information and entertainment. The Spanish language music signal "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 signal that preserves our memory with the highest technology. Magazine and Metro, general interest cable signals, continued to develop their programming criteria through thematic modules and standardized broadcasting. Canal Trece Satelital, the signal of Canal Trece de Buenos Aires, continued to focus on local productions and on including a significant number of in-house national productions in its programming.

During 2010, the most prominent showbusiness and general interest events were broadcast, such as the Reopening of Teatro Colón, Pepsi Music, the concerts of Paul Mc Cartney, Bon Jovi, Jonas Brothers, Beyoncé, Black Eyed Peas, Metallica, Coldplay and Alejandro Sanz and the 19th edition of the traditional campaign Un Sol para los chicos aimed at raising funds for UNICEF, held at Luna Park.

During 2010 the company continued to acquire equipment in order to complete the infrastructure required to produce High Definition content for El Trece and Todo Noticias. A digital file system was implemented in the newsroom area which allows for tapeless workflows.

Artear continued to produce fiction content for TV series and motion pictures through Pol-Ka, Ideas del Sur and Patagonik Film Group. In the case of fiction production, the flagship was "Malparida" which had the highest audience share in 2010. In this period, two world-class motion pictures were released "Carancho" and "Igualita a mí".

In addition, the Company is devoting significant efforts aimed at developing activities related to the commercialization, organization and broadcast of sports events through TyC Sports, mainly football and motor racing.

Radio Mitre

In 2010, AM Mitre 790 reaffirmed its track record and consolidated its second place in the ranking of audience share during the entire year, reaching an audience share of 20 points. In this way, Radio Mitre reduced the gap with its closest competitor.

The radio talk show "Primera Mañana", hosted by Nelson Castro with a group of prestigious columnists, stood out among Radio Mitre's programming. "Hola Chiche", hosted by Chiche Gelblung, renewed the morning slot with a proposal that combines journalism, general news coverage and enjoyable and smart humor.

In the afternoon slot, Radio Mitre continued with programs that have strong journalistic content such as "El Club de la tarde" hosted by Ernesto Tenembaum, "La Otra Pata" hosted by Marcelo Zlotogwiazda, and "Lo que queda del día", hosted by Horacio Caride.

FM 100's music programming relies on multitarget hits and anglo/latin pop, combining communication, information and entertainment slots. In 2010, the shows "El Show de la Noticia", hosted by Roberto Pettinato in his seventh season, and "Lalo por hecho", hosted by Lalo Mir, stood out once again. To further consolidate its bond with listeners, the radio station continued to organize acoustic concerts and on-location broadcasts from its mobile studio, featuring highly acclaimed national and international artists.

The site Cienradios.com was a particular initiative of La 100 in the period. It entails the development of an infinite concept of the dial and is unique in Latin America. The user 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, folklore, tango, romantic music and other rhythms.

During 2010, the presence of Mitre AM 810 was also consolidated in the province of Córdoba, as the second radio with the highest audience share. With a permanent staff in the city and its own news service, Mitre AM 810 developed a comprehensive coverage of news comprising Córdoba, Argentina and the world.

DIGITAL CONTENT AND OTHER

Revenues in this segment are derived from the sale of advertising in Internet websites 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 Contenidos de Medios Digitales ("CMD").

Out of Grupo Clarín's total sales in 2010, this segment accounted for Ps. 240.9 million, taking into consideration intersegment sales.

Digital Content

Grupo Clarín is the leading producer of digital content. Through CMD and Clarín Global, the Company developed the broadest network of portals and digital content in Argentina, covering news, entertainment, sports, classified advertisements, 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.

According to the traffic measurements carried out by Certifica.com for the Interactive Advertising Bureau (IAB), by the end of 2010, Clarín.com website received an average of 11.8 million monthly unique visits, a 5% increase, compared to 2009.

Olé received 6 million monthly unique visits, a 28% increase, compared to the previous year. In June, during the Football World Cup in South Africa, it received 7.4 billion unique visits. The same happened with Ciudad.com, which increased its unique visits by 20% to 1.8 million. These traffic levels reaffirm once again Clarín Global's Internet portal leadership and places Clarín Global portals as the number one portals in the news and sports segments, respectively. Clarin.com is also one of the most visited digital newspapers in the Spanish-speaking world.

In order to consolidate its leadership position, besides its journalistic excellence, Clarin.com continued to make progress in the redesign of its website, the upgrade of services and tools and the improvement of the websites of its supplements and related magazines.

Through CMD, Grupo Clarín continued to exploit efficiently the capabilities and potential of the Internet by devoting resources and know-how to its websites and portals such as TN.com.ar, ElTreceTV.com.ar and Cienradios.com.ar.

During 2010, the Company continued to consolidate its leadership position in specific content production for Internet and mobile phones, reflected in the growth of brands such as Ciudad, Ubbi, VXV and the tourism portals Interpatagonia.com, Welcomeargentina.com, Welcomechile.com and Welcomeuruguay.com.

In advertising, the turnover of all CDM sites rose by 19% compared to 2009, keeping its share in the Internet advertising pie. The revenues from the e-business sites Mas Oportunidades y Confronte increased by 29.8% compared to 2009.

At year-end, Mundo Gaturro, a joint venture with Winta y Dridco, became the pop-up search that experienced the highest growth in 2010, according to the Google report Zeitgeist 2010. In addition, the Argentine Association of Videogame Developers (Asociación de Desarrolladores de Videojuegos de Argentina) granted Mundo Gaturro the award to the best web/flash videogame of the industry. The site has now more than 650,000 registered users.

Concerning launches, during 2010 Clarín launched Mublet, the Tipete.com social network for connecting with friends and finding hot spots, discounts and promotions through geolocalization. Besides, the new social network has microblogging and picture, video and file management features and is integrated with Facebook and Twitter. The network may be accessed from home or by mobile through mobile phone networks since it is also available for Android, Iphone and Blackberry.

In early November 2010, Clarín launched Club Cupón, an on-line discount site which offers daily discounts on several items. A minimum base of buyers choosing the same benefits is required to activate them.

Ciudad.com and Tangocity.com sites were redesigned. The portal was created in the year 2000 as the Internet site of the Solo Tango signal. Under the commercial management of CMD and fostering the idea of converting it into an international benchmark, the portal will have translations into five languages and will feature important historical material. Through an agreement with the National Tango Association, it will digitalize approximately 30,000 scores, in addition to its sound record.

Also in this segment, Oportunidades S.A. deserves a special mention. It is engaged mainly in the exploitation of classified adds websites such as www.argenprop.com, www.buscainmuebles.com, www.deautos.com and www.demotos.com. As in previous years, during 2010, the efforts were also focused on the development of sites related to the real estate, automobile and labor markets. At year-end, subscribers to the real estate intranet reached 2,464.

Other Services

Through GCGC, Grupo Clarín renders specialized process outsourcing services to medium and large companies. The services focus on reducing costs, optimizing quality and providing innovative management tools. During 2010, total sales increased by 22.2% compared to the previous year.

The company continues to bolster the services offered, increasingly focusing on a customer-driven approach, as well as on strengthening improvement processes.

GRUPO CLARÍN AND ITS CORPORATE SOCIAL RESPONSIBILITY

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. The Company attaches special importance to the relationship with its different audiences, which acknowledge and validate its activities each day and, over time, have established multiple communication and interaction channels with Clarín's stakeholders.

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

STANDARDS AND GUIDELINES

Through its commitment to the Global Compact proposed by the United Nations, Grupo Clarín seeks to intensify and, to a greater extent, systematically embody the values and principles that guide the Company's daily work, particularly those concerning labor, sustainable development, and human rights.

Grupo Clarín also participates in several groups and spaces, which gather other Argentine, Latin-American and global media players and stakeholders to share experiences, identify best practices, and foster cooperation on the specific issues that media companies address as part of their social responsibility strategies. During 2010, the Noble Foundation renewed its presence in the "Grupo de Fundaciones y Empresas", a space to share knowledge and set standards in the field of strategic social investment.

During the period of 2009-2011, Grupo Clarín committed its participation in the multi-stakeholder development of the Media Sector Supplement for the Global Reporting Initiative. The GRI guidelines act as a reference for an extensive process, currently underway at the Company, to further consolidate, identify and report relevant information regarding the environmental and social impacts, while establishing new goals to strengthen its related initiatives and strategy.

Grupo Clarín's observance to the principles included in all those guidelines is also outlined in the Company's Code of Ethics and "Guía para la Acción", a document which proposes models for management, organization and roles, while outlining Grupo Clarín´s policies and procedures concerning labor, the environment and human rights.

Freedom of expression and transparency are values which are indispensable to the Company and its professionals. Both principles are particularly relevant in areas linked to news services. At Grupo Clarín, each company commits to the quality, rigor and transparency of its information and content. News coverage and programs aim to be impartial and fair, reflecting the journalists' efforts to inform on facts and events in a balanced and unbiased manner, while allowing opinion regarding the parties involved.

Style guides, ethics manuals, news coverage guidelines -including some for kidnapping and hostage situations- and several other self-regulations and commitments guide the different activities of news and entertainment oriented companies. This does not mean that every issue, especially regarding content and editorial view, is addressed as expected. For that reason business units are continuously designing new means to engage with its readers and audiences.

2010 proved to be a specially challenging year for freedom of expression. The Company supported numerous initiatives to create awareness on the subject and demonstrated its sustained commitment to defending and promoting it.

PEOPLE'S VOICES

The proliferation of new media, Internet based networks and the web 2.0 phenomenon, started a revolution in journalism and in terms of how people consume news. This requires a serious assessment on how to face the challenges of the digital era, adapting the Company's business models to satisfy Grupo Clarín's audiences, and at the same time sustaining the Company's leadership position.

Grupo Clarín's media companies have a long history of audiences' and readers' engagement. The ability to anticipate trends together with a profound knowledge of media consumers and the ability to interpret their needs and meet their demands, explain the Company's sustained leadership and favored place amongst consumers' preferences.

The pace of change calls for new and creative means of interaction. Clarín's newspaper segments such as "El juicio final", "Cartas al país" and daily readers' surveys, all traditional means of engaging readers, are complemented by more recent initiatives to accompany peoples' needs to participate in the news process. Over the last few years, the Company has launched a growing number of new blogs, and generated greater interaction not only with journalists, but also between our users. Interactivity opens space for informative content deriving from readers, listeners and web users. 'TN y la gente' is a web-based tool developed by the Company's news channel, where audiences send photos or video footage captured from personal and mobile cameras, as another way of introducing citizen journalism and increasing end-user participation in our media.

The Company also pays special attention to giving voice to small or underserved communities and providing for the development of local content. Cablevisión and Artear are working together to gradually renew local TV channels and newscasts in several cities in Argentina. The program takes into consideration access to local information and culture, while providing them with state-of-the-art technology and training.

Also during this period, Clarín gave voice and fostered several initiatives organized by Responde, an organization that promotes comprehensive programs of local development in order to avoid the disappearance of small towns and communities.

SOCIAL AND SUSTAINABILITY COVERAGE

To better assess the influence the media can have on different audiences, Grupo Clarín establishes goals to ensure the quality and pluralism of its content. Grupo Clarín's newspapers and television newscasts have a long and highly praised record in investigative reporting, and provide comprehensive news coverage and insightful pieces on relevant social and environmental issues. Reflecting the diversity of society through its news coverage and entertainment content lies in the core of its unique capacity to engage with audiences and readers.

Special supplements, expert and academic voices and editorials, onsite coverage and skilled journalists and infographics complete an extensive offering on topics that vary from health, consumption and development to science, education and conservation. Weekly TV Programs such as 'TN Ecología' and 'TN Ciencia', in Todo Noticias, Grupo Clarín's 24 hour news channel and the leading cable channel in Argentina, have become leaders in their fields.

During 2010, the Company´s media paid special attention to issues related to climate change and the environment. Radio Mitre, its main broadcasting radio station, combined 24 hour coverage of these issues through an environment specialized journalist and a campaign to promote people's involvement.

The Company also developed weblogs that create social awareness within Clarín.com. Some examples are "¿Estás?" in association with Red Solidaria, "Espacio Positivo", with Fundación Huésped and "El Otro, el Mismo", with Universidad Católica Argentina and social organizations engaged in fostering the inclusion of people with disabilities. Moreover, the "Calendario del Compromiso con la Comunidad" was published in Revista Viva for the fourth consecutive year.

Education is deeply rooted in the Noble Foundation's mission and history of community involvement since its origin, and is also one of the key social issues frequently addressed by Grupo Clarín's editorial coverage. During the last few years, third party, academic and the company's own monitoring processes have all registered a gradual, yet sustained increase in social topics coverage.

The company is setting the goal for the next period of introducing training for journalists in regards to coverage and integration of social issues, recognizing the importance of reflecting diversity, promoting social justice, protecting youth, encouraging minority recognition and preventing racial and gender discrimination.

PROMOTING INVOLVEMENT

Still, there is much to be done. In this regard, Grupo Clarín aims to continuously enhance its role in promoting public debate, encouraging individual involvement by better and further portraying the challenges of society under social, economic and environmental aspects with a plural view.

Grupo Clarín's different media companies also endorse several initiatives promoting people's involvement in democracy and responsible civic control of their representatives' acts and decisions.

During 2010, through Artear, the Company set out once more to promote values such as solidarity and community involvement. Thus, it created, "Abanderados de la Argentina Solidaria", an award that recognizes the otherwise silent labor of social entrepreneurs and community leaders, by divulging valuable and replicable initiatives that advance social transformation. In its first edition, the award was granted to Sigfrido Moroder, a catholic priest that transformed the lives of the aboriginal community of Quebrada del Toro, in the province of Salta.

COMMUNITY ENGAGEMENT AND SOCIAL ADVERTISING

Grupo Clarín's impact and relation with communities and individuals exceed those of its editorial coverage. Support for vulnerable communities, mentoring education projects, campaigning for disaster affected regions and different types of donations and expertise are only some examples of the many initiatives organized and fostered jointly or separately by Grupo Clarín's different media companies.

In terms of social advertising, during 2010, through the Noble Foundation and several of its media companies, Grupo Clarín contributed with advertising time and space to promote social, civic and environment related causes, through its own programs or within strategic alliances with renowned NGOs.

The impact made by specific contributions to projects and campaigns by other subsidiaries, can be added to the 2.3 million pesos budget of the Noble Foundation for the 09/10 period. Nevertheless, the total figure of donations cannot be calculated at the group level since information is not available in detail. As well as contributing with its own funding, knowhow and expertise, Grupo Clarín aims to leverage support from others by seeking matching funding and regular donations from individuals and partner organizations for supported initiatives.

In response to civil society organizations growing communication needs and demands, Grupo Clarín launched a multiple approach program that combines spreading and raising active awareness of public and social interest topics through advertising, design and communication services for NGOs and the development of web based blogs and sites.

During 2010, the Company strived to further contribute to the improvement of social advertising and communication skills in civil society organizations. One of the ways to engage this issue involved increasing the scale and impact of "Segundos para Todos", an advertising contest for NGOs organized by Cablevisión, which combined broadcasting spots with coaching sessions in Buenos Aires, Córdoba, Santa Fe, Salta and Neuquén. During 2010, the growing need of communication of social initiatives resulted in the launching of a TV program "Segundos para todos TV" that reflected their outreach to the community and focused on public interest topics. This was also addressed from the advertising supply chain perspective, though a "Social" category to the well-known "Premio Clarín Creatividad" (Clarín Creativity Awards).

An additional issue in which Grupo Clarín has a sustained and strategic commitment is in reducing the digital divide and promoting digital inclusion. This is addressed by raising awareness through news coverage and TV programs in different media outlets. Also during 2010, Cablevisión extended its cable TV and Internet access connections program to a growing number of schools, hospitals and other institutions, reaching more than 14 thousand by the end of the year. This is completed with specific programs such as the "social charges", which are special low subscription fees for low income neighborhoods.

FOSTERING EDUCATION AND CULTURE

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

Also, the company created Voz Activa, a publishing house that receantly launched the first Dictionary ever published that is entirely focused in the Spanish language spoken in Argentina. This historic contribution to culture and education was widely acknowledged by academics and society in general.

As part of its actions to promote public debate on educational issues, the achievements of the program and three year conference cycle "La Infancia en Agenda" (Childhood in the Agenda), developed together with the Arcor Foundation and CIPPEC, were consolidated in 2010. Along with a new cycle on culture and youth, it published "Radiografía de la Educación Argentina", a comprehensive view of the pending issues and challenges. The Company also provided renewed support to the traditional campaign "Un sol para los chicos", together with Artear and UNICEF. The campaign promotes private social investment -still lower in Argentina and Latinamerica compared to the US and Europe- and is one of the key sources of income for UNICEF in the country. For the ninth consecutive year, the Company successfully organized the campaign entitled "Digamos Presente", an initiative focused on education involvement and rural education, together with APAER, Red Solidaria, Cimientos Foundation, Arcor Foundation and YPF Foundation.

Among the main alliances are specific initiatives such as the public-private project entitled "Escuelas del Bicentenario" (Bicentennial Schools). This project seeks to assist public elementary schools to which children in vulnerable social circumstances attend throughout the country, and to contribute to public policy, by developing scalable, sustainable and replicable school improvement mechanisms.

Another relevant initiative is the "Premio Clarín-Zurich a la Educación" (Education Awards). The second edition recognized the best projects aimed at improving the quality of language teaching. For the next period it will select the best project in the field of natural sciences.

Likewise, Grupo Clarín plays an important role in the recognition, promotion and encouragement of literary creation, through prestigious awards such as "Premio Clarín de Novela" and "Premio Clarín de Cuentos". The Company is committed to the support and dissemination of culture. Cultural editorial products and collectibles, partnership agreements with renowned institutions and several sponsorships add to Grupo Clarín and its brands' sustained presence in important events such as the National Book Fair, the Book Fair for Kids and the Youth, Arte BA, Expo Trastiendas and Arte Clásica, among others. During 2010, Clarín partnered with the local government of the City of Buenos Aires to promote massive cultural events, such as the International Tango Festival, the BAFICI, the increasingly renowned independent film festival, the International Theater Festival, International Jazz Festival, Polo Circo, Library Night and Museum Night, among others, where the highlight of the year was the reopening of the historical Colón Theater.

Through its cable and broadcasting channels, the Company also makes significant efforts to promote the most important cultural, cinema and sports events, and makes an increasing contribution in the field of cultural diversity and local identity. Noteworthy are initiatives such as "Volver", a cable channel that preserves the most complete Argentine programming archive, or the "Word Archive" at Radio Mitre, which offers an online record of some of the country's most valuable audio heritage.

MEDIA LITERACY AND YOUNG PEOPLE

Media has an increasing role in society and especially in the lives of young people. Through several programs, the Company encourages them to develop tools to access media through critical analysis and to take advantage of opportunities presented by media to explore their identities, creatively express their thoughts and opinions, and amplify their voices.

Media Literacy is generally defined as the ability to access, analyze, critically respond and benefit from the different type of media. Grupo Clarín´s main tool for fostering media literacy is "Los medios de comunicación y la educación" ('Education and Media'), a leading and recognized program that has been in place for more than 26 years. One of the main activities of the Noble Foundation in 2010 -foundation which embodies Grupo Clarín's mission and values- was that of renewing the program, which consists of workshops and booklets for teachers and students to promote a critical approach to the media and to utilize them as complementary resources in education.

During 2010, there was an increase in the number of workshops. It responds to the progressive growth and achievement of objectives set for 2010, but the figures are significantly high in relation to 2009 when the numbers had dropped dramatically due to long periods of cancellation of classes as a result of teachers' strikes over wages and the N1H1 virus. The goal for the next period is to continue the expanding trend and outreach of the program.

"Education and the Media" Program

2010 2009 %Change*

Teachers' workshops: 169 111 34.3%

Students' workshops: 581 553 4.81%

The Foundation renewed the presence and coordination of the media section at the "Museo de los Niños" (Children's Museum), and maintained the number of visitors to its printing facilities to 14,255 (mainly students). During this period it strengthened its donations of bibliographical material, with an increase in the field of books, distance learning programs and several sponsorships, and renewed its long time support of several schools which carry the name of the Clarín's founder, Roberto Noble ('Escuelas Roberto Noble').

Noble Foundations' educational donations

2010 2009 %Change

Books 63,542 40,589 36.12%

Magazines 4,160 7,066 -41.12%

Booklets 550 837 -34.29%

Within its Cable and Internet access segment, the Company contributes with the necessary tools for parents to keep their children from accessing sensitive or age inappropriate programming. This includes parental control options in Cable TV service and equipment, in addition to guidance tips and tools for web access. Regarding children artistic participation in television and films, the Company complies with regulations and self-imposed guidelines by setting limited time schedules and engaging with parents and tutors.

EXCELLENCE IN JOURNALISM

Reaffirming its commitment to journalistic excellence, the Noble Foundation also carried out activities to consolidate the training and excellence of current and future communicators.

Among them is the support provided to the Masters Degree in Journalism, an international graduate course at 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 dictated by renowned national and international journalists and academics.

During 2010, The Company renewed its support to the Graduate Course in Scientific, Medical and Environmental Communication, a program is organized by the University Pompeu Fabra in Barcelona, together with the Leloir Institute and the cable station Todo Noticias (TN), aimed at addressing the challenges and assuming a responsible approach to scientific and medical information.

OUR PEOPLE

Grupo Clarín's success and leadership is mostly the result of the efforts, talent, professionalism and creativity of its people.

It is no coincidence that Grupo Clarín's media companies are amongst the most preferred working places by 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 Grupo Clarín's project.

Total Employees 2010 2009 %Change

16,277 15,522 4.63%

Distribution of company employees by category: 2010 2009 %Change Management 280 246 12.14%

Middle management 2,132 2,075 2.67%

Junior management, administration and commercial 3,706 3,538 4.53%

Qualified technical personnel 6,782 6,174 8.96%

Journalists and others 3,377 3,489 -3.21%

The Company possesses a special make-up in terms of age and gender diversity among its employees. When it comes to gender, the higher proportion of male employees is significantly explained by the large number of technical personnel, which in Argentina is predominantly male, working in the printing facilities and in the Cable TV and Internet access segment. The gender composition in other companies of the Group is balanced, especially regarding content related activities, such as journalism and audiovisual production, where the workforce is diverse.

Employees by sex 2010 2009 %Change Men 12,698 11,554 9.00%

Women 3,579 3,968 -9.80%

Employees by groups of age 2010 2009 %Change

31-50 9,464 9,558 -0.98%

>51 1,938 1,614 16.71%

In 2010, employee turnover was reduced 0.23% to 8%, from the 7.77% of the previous year. This figure shows the number of employees that left the Company or its subsidiaries voluntarily or due to dismissal, retirement or death.

Turnover by Sex and Age

(As a percentage of total employees)

2010 2009 %Change

Men 5.42% 5.33% 0.09%

Women 2.64% 2.44% 0.20%

31-50 3.50% 3.18% 0.32%

>51 0.88% 1.16% -0.28%

In addition to strictly abiding by the laws, the Company sets higher than standard conditions for its employees. Of Grupo Clarín's total workforce, more than 76% of employees are covered by collective agreements. For those who are not, the Company's policy is to apply the conditions established by the best existing agreement.

Taking care of the work environment and conditions, health and job safety and offering training to improve employees' professional skills and techniques are some of the actions aimed at consolidating the sense of integration and achievement of organizational goals.

One of the key ways of obtaining feedback on the Company's performance is via the global staff survey. In this respect, during 2010 Grupo Clarín made progress in the climate management process, including activities for the joint development of measurement tools, a thorough analysis of variables and improvement opportunities, and a collaborative effort to define a permanent approach and improvement stages. 90% of the personnel are already involved in the joint process concerning feedback, sharing and proposals.

Grupo Clarín has paid special attention to the multiple internal communication tools, such as the magazine Nuestro Medio, the Corporate Intranet with participation spaces and forums, the digital newsletter Nuestro Resumen, and the digital newsletters of the Corporate Training Program and the Company Climate Management Program, 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

Although most benefits are common to the whole Company, each business unit integrates additional benefits that vary in nature according to tasks. Since 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 2008.

During 2010, corporate and business units' human resources departments have continued to implement different programs to identify internal talent for career development. Also, Grupo Clarín's and Cablevision's Young Professionals Program was renewed, creating opportunities for professionals that are taking their first steps in their career paths.

In order to develop new skills and build up existing strengths, people need encouragement and support. In addition to increasing the number and variety of training options, during 2010, the Company continued efforts to extend and enhance the employee performance appraisal program in different categories. Although the program is still not extensively applied, during 2010, it reached three new subsidiaries and is growing in those in which it is already in place. For 2011 the Company is setting the goal of broadening its introduction to the rest of its main subsidiaries.

Grupo Clarín's employees and professionals can update and expand their knowledge and skills through several training programs, ranging from seminars and courses to graduate degrees and MBAs. Human Resources departments are in the process of consolidating individual training records and training hour's information

One of the main initiatives in this respect is the 'Corporate Training Program' which includes a wide variety of courses. A relevant aspect among current training options is that the Company pays special attention to training on new tools and technology developments, in order to properly prepare its workforce for the challenges the media sector is facing.

In addition, throughout the business units, there have been seminars and programs on quitting smoking, diseases, and other relevant topics, as well as special action campaigns regarding health and medical check-ups, with special focus on the preemptive measures against seasonal deceases. Also, the Group carries our several different activities designed to prevent job related accidents.

Grupo Clarín continued to explore alternatives of interaction or joint approach to common interest issues at the various levels of its value chain. Grupo Clarín focused on the implementation of systems and procedures aimed at the application of best practices for purchases, hiring, and contracting with suppliers, within a framework of supervision and transparency.

ENVIRONMENT

It is widely recognized that the media industry has a lower impact than most other industrial processes. Within the framework of an environmental management policy aimed at improving eco-efficiency, the Company and its subsidiaries primarily consume energy, wood, newsprint, cable and water and generate waste.

During 2010, the Company continued to take steps towards the measurement, planning and improvement of manufacturing processes to optimize results and address possible impacts. Progress was made in achieving the period's goals by introducing sustainable methods to obtain and use resources; implementing policies for investment in equipment and raising awareness for the adequate use of technology.

The United Nations Global Compact, signed by Grupo Clarín in 2004, also sets principles regarding environmental protection. Businesses are asked to:

(Principle 7) support a precautionary approach to environmental challenges;

(Principle 8) undertake initiatives to promote greater environmental responsibility;

(Principle 9) and encourages the development and diffusion of environmentally friendly technologies.

The present report reflects the global impact of the different subsidiaries where the Group has controlling or minority stakes, while indicating some specific effects with regards to the nature of the different business activities.

CONSUMPTION

Wood, Newsprint and Energy

A company that publishes newspapers and magazines with an integrated structure achieves a comprehensive view of product's life cycles. Through its subsidiaries and related companies, Grupo Clarín participates in the production of newsprint, which is then used as a raw material by some of its subsidiaries. Printed products can subsequently be recovered and reused via recycling processes to generate more newsprint.

The principal raw materials for the production of newsprint are fresh fiber from round wood and recovered paper.

In 2010, Papel Prensa, the paper mill in which Grupo Clarín owns a minority stake, consumed 344.178 tons of fresh fiber and 8.838 tons of recovered paper. The type of fiber source (Poplar, and Willow) depends upon the availability of materials, as well as economic considerations such as the minimization of transport distances and costs, which is a relevant economic and environmental consideration.

Nevertheless, it is important to mention that fresh fiber comes entirely from sustainable plantations.

This means that no native forests are involved or endangered. This is combined with continuing research on Salicaceae, related to their genetic improvement and also to ecologic and silvicultural aspects, done by means of agreements made with universities, research centers and experts, with the objective of increasing productivity, reducing costs and assuring the sustainability of the ecosystem.

The forestry division undertakes its activities with a sustainability strategy that involves the protection of biodiversity. Protected forestry areas and the banning of hunting activities have led to a sustained increase in bird fauna. These conditions allows for the development of several R&D programs, also in collaboration with universities, which include the introduction, protection and reproduction of certain endangered deer species for their proper and secure development.

Most of the other Company activities are undertaken in urban areas with no relation to natural areas, and complying with urban planning standards in force.

At the printing plants, paper and ink constitute the main material consumed. Most of the newsprint supply comes from Papel Prensa. The Company also follows established guidelines to ensure the provision of other materials, such as inks and other specific inputs, at quality levels compatible with international standards. At the Company's printing sites the stochastic printing style introduced in 2008 continues to be applied optimizing ink usage.

2010 2009 %Change

Paper 111,656 Tn 112,400 Tn -0.7%

Ink 2,412 Tn 2,335 Tn 3.2%

Aluminum plates 272 Tn 233 Tn 14.3%

Company qualified teams continuously strive to reduce consumption by identifying and adopting increasingly eco-efficient processes. During this period, the paper consumption decreased, which can be partially attributable to slightly lower circulation figures. The introduction of adjustments on the dimensions of newspapers made in previous years continues to shows its benefits in the use of paper and other materials.

The percentage of polybagging in the Company's newspapers and magazines continues to be of minor significance, although the use of polypropylene in some parts of the dispatching process is regularly assessed.

The primary resource used by Grupo Clarín and its subsidiaries is energy. Grupo Clarín's consumption comes from both direct and indirect sources; the indirect consumption comes from electricity taken from the grid. 

Direct and Indirect energy consumption by primary source:

2010 2009

Electricity 419.563 MWh 442,670 MWh

Natural Gas 29.898426 m3 33,688,892 m3

Gasoline 24.676 GJ 20,550 GJ

Fuel Oil 172.219 GJ 84,593 GJ

Gasoil 76.043 GJ 72,387 GJ

LP Gas 2563 GJ 2,887 GJ

Energy consumption is significant in the paper related and printing activities and, to a lesser extent, in the business units which operate with technology, such as cable television and Internet services, broadcasting, etc. In this area, some initiatives developed by Artear include the introduction of cold lighting in all new and renovated studios, in order to obtain a less than 5 times the regular consumption. During this period, the company invested in new equipment -manufactured within environmentally friendly parameters- in order to meet the needs of the generation and distribution of content in High Definition. Also, by the end of 2010, Artear has reached its goal to replace 100% of its live unit vehicles for low consumption vehicles, thus considerable reducing emissions.

Emissions and discharges

In terms of emissions, the main contributors to the Company's carbon footprint are print sites and the paper mill. Nevertheless, Grupo Clarín's indicators include other emissions such as those arising from transport and the daily use of its facilities. The Company is constantly exploring alternatives to improve processes and efficiency in these areas, and to continue to enhance the analysis and inventory of Co2 emissions generated by Grupo Clarín's activities.

2010 2009

Total CO2 direct emissions 79,954 Tn 79,866 Tn

Indirect emissions arising from electricity usage can only be calculated based on Argentina's energy matrix. The latest available information (CAMMESA, 2008/2009) shows the following breakdown:

Natural Gas 43.48%

Fuel Oil 6.45%

Gasoil 3.42%

Coal 1.76%

Hydraulic 36.20%

Nuclear 6.80%

Imports 1.80%

The primary strategies available to reduce greenhouse gas emissions is reducing the consumption or changing the energy sources. Increased use of renewable forms of fuel and bioenergy is a positive strategy. During 2009, Papel Prensa purchased a bark boiler that will allow the Company to set a goal of making additional savings in GHG emissions, while better managing waste. Thus, the decision was made to develop an emission reduction project (Clean Development Mechanism) which is in its initial phase.

Each Grupo Clarín subsidiary and related company identifies and manages waste production and disposal. In 2010, this management included the recycling of 9,096 tons of recuperated paper and cardboard, 43 tons of ink and the reuse of nearly 255 thousand cable modem units.

Contrary to the production of white paper, the newsprint manufacturing process does not involve the use of chlorine for bleaching. This results in a significantly lower chemical impact.

As part of the treatment of industrial waste from the printing process, the Company collects and separates other waste materials (ink, oils, greases and solvents), which are shipped to certified third parties for recycling and reuse. Aluminum plates used in printing can be 100% reused.

Hazardous waste is carefully handled and handed over to authorized waste management companies.

2010 2009

Urban or non-hazardous waste 53,219 Tn 54,115 Tn

Hazardous waste 622 Tn 619 Tn

Special care is also maintained regarding the handling of liquid effluents resulting from development processes, subjecting them to rigorous treatments and measurements before disposal. The main water usage, recycling and discharges are related to the paper mill. Since the beginning of its operations in 1978, Papel Prensa's investments have allowed it to reduce its water usage in more than 40%. Strict procedures are set in place to permanently asses and manage the quality of discharges. Routine testing validates compliance with nationwide regulation in terms of toxicity of the discharges.

In addition, Grupo Clarín continued to increase the contribution to the Garrahan Foundation through an office paper recycling program. This was combined with programs for reducing the use of paper in Company offices while seeking to optimise printing techniques, and renewed efforts to raise employee awareness regarding sustainability issues.

BUSINESS PROJECTIONS AND PLANNING

In the forthcoming years and as part of Argentina's challenge to achieve sustainable growth, Grupo Clarín seeks to maintain and consolidate its presence in the local market, both in the production and in the distribution of content.

Grupo Clarín's business units, along with the development of its core activities, will continue to work in order to seize opportunities, seeking to reinforce, improve and expand the range of products and services offered; increase market share; reach new audiences and promote permanent innovations.

Grupo Clarín will continue to focus on further optimizing the productivity and efficiency levels in all of its areas and companies, seeking to develop and apply the best practices related to each of these processes.

At a corporate level, it will continue to focus on the main processes that allow a sustainable, healthy and efficient growth from different perspectives: financial structure, management control, business strategy, human resources, innovation and corporate social responsibility. Grupo Clarín will continue to analyze alternative new ventures related to its mission and strategic objectives both in Argentina and abroad, as long as they add value to shareholders and are feasible and viable under the prevailing economic environment.

Grupo Clarín will continue to strengthen its consolidated commitment to traditional media, with a growing focus on the area of digital media and connectivity. To such end, the Company will leverage its strong presence in distribution networks, brand strength and, fundamentally, its broad experience in the production of content, recognized by the Spanish-speaking market for its quality, credibility and prestige.

In the hostile environment created by the current government towards the media, Grupo Clarín ratifies its determination to bring the necessary legal and administrative actions to safeguard its rights and those of its shareholders, while reinforcing once again its commitment towards its readers, audiences and the country. In its daily work, Grupo Clarín undertakes to assume with strength and responsibility the role 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, since these are pillars that extol the quality of democracy and the welfare of the Argentine society as a whole.

RISKS 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 diversification to help spread possible risks.

The Company relies on strong internal control and risk management systems. 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. 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. Although the trend was again reversed in 2010, Argentina's growth may not be sustainable in the future. Sustainable economic growth depends on a variety of factors, including international demand for Argentine commodities, stability and competitiveness of the Peso against foreign currencies, confidence of consumers and local and foreign investors and a low rate of inflation. A downturn in economic activity is likely to result in increased subscriber churn 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. The Argentine government's actions impacting the economy, including those in connection with inflation, interest rates, price control, exchange control and taxes, have affected and could continue to affect Argentine companies like ours. Presidential elections scheduled for October 23, 2011 may result in additional political and economic uncertainty and could adversely affect our financial performance.

Inflation, which stood at 10.9% for 2010 (INDEC information, although private estimates of inflation rates largely exceed those published by the INDEC) may continue to rise. A recent rise in public expenditure could further accelerate inflation, as could an adjustment of public service and utility rates. This may affect adversely the Argentine long-term credit markets as well as the Argentine economy generally. A contraction of the economy would also adversely affect our financial condition and results of operations.

The country's economy may be adversely and lengthily affected by economic developments in other markets. Furthermore, to date Argentina's ability to obtain financing from international markets remains limited.

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.

Legislation and Regulation

In October 2009, the Argentine Congress passed a new Audiovisual Communication Services Law that is intended to replace the general legal framework under which the audiovisual media industry operated in Argentina for practically three decades. The new Audiovisual Communication Services Law has been challenged by us and other parties in interest 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 discretional power to grant licenses and the application of penalties, among other controversial aspects. Since its enactment in October, 2009, several court rulings have been issued enjoining the application of the statute in its entirety in certain cases, or of certain of its provisions, in other cases. Two of these rulings have been reversed by the Supreme Court of Argentina and a court of appeals, respectively, but at least three injunctions that suspend specific sections of the law are still in effect.

If ultimately upheld by the judiciary, the application of the new legal and regulatory environment to our cable television, telecommunications and Internet and digital content operations may be disadvantageous to us, and will affect the manner in which we operate our business. Failure or delay in renewing our licenses or obtaining regulatory approvals may also influence the availability of our services to our customers.

In addition, in 2009 and 2010 the Argentine government took measures intended to rescind the authorization granted unanimously by the National Antitrust Commission in 2007 to the purchase by the Company and Fintech of shares representing Cablevision's capital stock, and Cablevision's purchase of interests in certain of our subsidiaries. The Argentine government has also taken measures to revoke the license under which Cablevision's renders internet services, and to set the price of its pay-television service according to a pricing formula, among others. Such measures, which we have challenged judicially, if upheld would materially adversely affect our business. We have obtained preliminary injunctions that have enjoined the government 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.

In Argentina, the legal system, including the Constitution, shields journalistic activities from regulation with the purpose of protecting 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.

Sector Development and Competition

The media industry is dynamic and undergoing 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 we are not able to adapt readily our operations. Also some of our activities cater to maturing markets.

While our analysis may not always be accurate, 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.

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 Audiovisual Communication Services Law we may be forced to 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. 

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. According to the Company's By-laws, the Board has ten permanent members and ten alternate members, appointed on an annual basis at the Regular Shareholders' Meeting. The By-laws also provide for the appointment of four independent directors, two permanent members and two alternate members, appointed in accordance with the requirements of National Securities Commission ("CNV").

Day-to-day decisions relating to Grupo Clarín's businesses are taken by an Executive Committee formed by three members, appointed and supervised by the Board of Directors.

Members of the Board of Directors

Héctor Horacio Magnetto Chairman

José Antonio Aranda Vice Chairman

Lucio Rafael Pagliaro Director

Alejandro Alberto Urricelqui Director

Jorge Carlos Rendo Director

Pablo César Casey Director

Muneer Satter Director

David Castelblanco Director

Mario Parrado Independent Director

Alberto César José Menzani Independent Director

Executive Committee

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 Regular Shareholders' Meeting. The Board of Directors, through an Audit Committee, is in charge of the ongoing oversight of all matters relating 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 proposed by any member of the Board of Directors and a majority of its members must meet the independence requirement set forth by the CNV.

Audit Committee

Mario Parrado Independent Director

Alberto César José Menzani Independent Director

Alejandro Alberto Urricelqui Director

Supervisory Committee

Raúl Antonio Morán Independent Permanent Member

Carlos A. P. Di Candia Independent Permanent Member

Miguel Maxwell Permanent Member

Hugo Ernesto López Independent Alternate Member

Martín Guillermo Ríos Alternate Member

Alberto López Carnabucci Alternate Member

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

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, etc. The professional experience and background of the main managers are disclosed to the general public upon their designation.

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 polices for the specific purpose of 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 safeguard of the 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.

Grupo Clarín has compensation arrangements with all of its 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 and prevailing market salaries The variable component is tied to performance during the fiscal year, of 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 13 to the parent company only Financial Statements, on January 1, 2008 Grupo Clarín began to implement a Long-term Savings Plan ("PALP") for certain executives of Grupo Clarín and its subsidiaries. Executives who adhere to such plan will contribute regularly a 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.

Stock Information and Shareholder Structure

Grupo Clarín is listed in the Buenos Aires Stock Exchange where it trades its shares, and in the London Stock Exchanges, where it trades its shares in the form of GDS.

London Stock Eschange (LSE) - Ticker: GCLA

Bolsa de Comercio de Buenos Aires (BCBA) - Ticker: GCLA

GCLA (BCBA)

Price per share, December 31st 2010

Ps. 20.20

GCLA (LSE)

Price per GDS, December 31st 2010

US$ 10.20

Total Shares 287.418.584

Total GDS 143.709.292

Shareholder Structure

70.99% Controlling Shareholders

19.90% Free float

9.11% Goldman Sachs

Annual Shareholders' Meeting

On April 22, 2010, Grupo Clarín held the third Annual Regular Shareholders' Meeting since the Initial Public Offering of its shares. On this occasion, the shareholders reviewed and approved the accounting records for fiscal year No. 11 ended on December 31, 2009 and the performance and compensation of the members of the Board of Directors, the Supervisory Committee and the Audit Committee. Among other things, they reelected the permanent members and alternate members of the Board of Directors and said committees for the year 2010. The Company did not distribute dividends.

Dividend Policy

Grupo Clarín does not have a formal dividend policy governing the amount and payment of dividends or other distributions. According to its Bylaws and the Argentine Business Associations 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 annual ordinary 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.

Code of Corporate Governance

In addition to the aforementioned and in conformity with the CNV's decisions concerning the filing of the Code of Corporate Governance report (Resolution No. 516/07), Grupo Clarín prepared the report for the year under analysis, which is attached as an exhibit to this annual report.

SETTING UP OF RESERVES

Pursuant to the Argentine Business Associations Law and CNV's 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.

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 decreased by Ps. 95.6 million, from Ps 16.2 million (positive) to Ps 79.4 million (negative). This decrease is basically evidenced in the decrease in the Company's funds (the items Cash and Banks and Other Current Investments) in the amount of Ps 49.1 million, and the increase in current liabilities, mainly generated by new borrowings. The funds available and the funds derived from such borrowings were used mainly to prepay Sellers financing, which was disclosed under Non-current liabilities.

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 item Sellers financing was significantly reduced as a result of the prepayment mentioned in the previous paragraph.

The Statement of Operations as of December 31, 2010 recorded a net income of Ps. 533.7 million. Such income is basically derived from earnings of Ps 561.8 million derived 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. Balances and transactions with subsidiaries and affiliates are detailed in Note 4 to the Parent Company Only Financial Statements.

BOARD OF DIRECTORS' PROPOSAL

Finally, with respect to net income for the year, which was of Ps. 533,714,480, the Board of Directors of Grupo Clarín S.A. proposed at the Ordinary Shareholders' Meeting that the net income for fiscal year ended December 31, 2010 be distributed as follows:

Subsequently to the end of the period, on April 28, 2011, Grupo Clarín held its General Annual Ordinary Shareholders Meeting. On that occasion, the shareholders considered and approved the 2010 Financial Statements and other related documentation and the performance and compensation of Directors, Supervisory Committee and Audit Committee. Also, they elected members of the Board of Directors and mentioned committees for fiscal year 2011, along with an external auditor. The Shareholders Meeting also approved the distribution of Ps.120 million as dividend payment.

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 US GAAP, 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

Grupo Clarín S.A.

Exhibit to the Annual Report for fiscal year ended December 31, 2010. General Resolution No. 516/07 issued by the "Comisión Nacional de Valores" ("CNV", the Argentine Securities Commission) - Code of Corporate Governance.

This exhibit to the Annual Report outlines the corporate governance practices that Grupo Clarín S.A. ("the Company") maintains or has adopted, in line with its commitment to transparency towards investors and shareholders.

In the following sections, the Board of Directors explains its views and, in some cases, the views of the Company's main shareholders on several aspects of corporate governance. It is the Board of Directors intention that the Company's corporate governance practices not only meet legal requirements, but also conform to corporate governance recommendations that seek to combine effectively the desire to achieve results with the compliance with the corporate governance guidelines set by the Board.

For ease of interpretation and analysis of this exhibit, it is recommended that the order set forth under the abovementioned Resolution be followed.

Scope of application of the Code

1) Grupo Clarín S.A. does not customarily carry out transactions with the Company's shareholders or directors. The transactions carried out with affiliates, related companies, shareholders and directors are disclosed in the quarterly and annual financial statements, in accordance with accounting standards in force.

2) The Company's Bylaws 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 Bylaws contradicts the existing recommendations on corporate governance. Regarding conflicts of interest, the Company fully conforms to the Argentine Business Associations Law and other applicable legislation.

General Information About the Board of Directors

3), 4) and 5) The Board of Directors is responsible for the Company's management and approves its overall policies and strategies. The daily decisions related to the Company's businesses, including the approval of specific policies set forth by General Resolution No. 516/07 and the verification of the implementation thereof, are the responsibility of an Executive Committee comprised by three members appointed by the Board from among its own members. The Executive Committee acts under the oversight of the Board of Directors.

The Board of Directors, through its Audit Committee, is in charge of the ongoing oversight of all matters relating to control information systems and risk management, and issues an annual report on these topics. The Executive Committee oversees the control tasks carried out by the Corporate Control Division; an area in charge of the independent control of the Company's operating management.

6) The members of the Company's Audit Committee may be proposed by any member of the Board of Directors and a majority of its members must meet the independence requirement set forth by the CNV. The members of the Audit Committee have experience in finance and operating management.

7) The Company's Bylaws provide for the election of ten permanent directors and ten alternate directors. The main shareholders have considered that this number is adequate considering the Company's size, the structure of its capital stock and the complexity inherent in its decision-making processes. According to the Bylaws, four independent directors, two permanent directors and two alternate directors shall be included in the Audit committee to guarantee compliance with applicable legislation. However, the Company's directors and main shareholders regularly review the number of independent directors and the creation of committees in addition to the Audit and the Executive Committees. To date, there is no plan in place to change the Board's structure in the short term. If the Board of Directors decides to increase the number of Board committees, the Company will take precautions to include the necessary number of independent directors.

8) In the Board of Directors' view, it is not particularly convenient for the Company to include former executives among its members, though the Company's main shareholders regularly review this alternative.

9) 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 which 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 reelected.

10) Given that the Board of Directors discloses its main activities and in view of the information made available to the shareholders on a regular basis, the Board considers that shareholders have all the elements necessary to approve or reject its performance at the meetings held on an informed basis, with no additional written self-assessment being necessary.

11) The Company's Human Resources Division, at the request of the Board, plans for and manages the training activities for the Board's members that also carry out executive functions in the Company, as well as the training activities for top tier managers. Such training includes the attendance by these officers to conferences and lectures related to the Company's businesses.

Directors' Independence

12) The Company has four independent directors, two permanent directors and two alternate directors, appointed in compliance with the CNV's rules and regulations.

At the time of appointment of such directors at the Shareholders' Meeting, the Board established compliance with the legal requirements, without the need for additional statements or representations by the proponents.

13) The overall criteria used to appoint managers are based on the background and experience in the position and the industry, the background of companies they have worked for, age, professional and moral suitability, etc. The professional experience and background of the main managers are disclosed to the general public upon their appointment.

14) According to the Bylaws, two permanent directors and two alternate directors must meet the independence requirements set forth by the CNV to guarantee that the majority of the Audit committee is comprised by independent directors. Independent directors are identified at the time of their appointment and on subsequent communications from the Company. The executive or non-executive status of directors will also be informed at the upcoming Shareholders' Meeting.

15) Independent directors may hold exclusive meetings during the exercise of their functions in the Audit committee. To date, the Board of Directors has not delegated the preparation of the agenda to an independent member.

Relationship with Shareholders

16) 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 website. The Company also communicates with its investors through its executives in charge of market relations and through regular informational meetings and conferences. The Company calls for shareholders' meetings, as set forth by the Argentine Business Associations Law.

17) 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 website.

18) The Company encourages the participation of minority 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 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 the publication in the Company's website.

19) As contemplated in the Company's Bylaws, the Company opted out of the mandatory tender offer rules set forth in Decree No. 677/01. However, the Bylaws set forth mechanisms to protect the minority shareholders' interests against certain scenarios involving the acquisition of the Company's shares. The Company also abides by current legislation in the event of a voluntary delisting or tender offer.

20) The Company has not adopted a fixed dividend policy establishing the amount and payment of dividends or other distributions. Four months after each year-end, the Company's Board of Directors submits the financial statements for approval at the Annual Shareholders' Meeting, where the allocation of the net income for the year is decided upon.

Relationship with the Community

21)  The Company has a website with sufficient and updated information, which may be easily accessed from multiple channels. The website includes contact information as well as several forms and mechanisms to gather concerns from the various users.

22)  The Company's website guarantees the confidentiality and integrity of the information contained therein. The site is hosted by the Company's own and exclusive Windows-based server, with restricted access. It has a 24-hour monitored firewall and the information integrity is secured through the safest measures available and through regular safety updates and audits. Content updates are made through a secured application with restricted access to authorized and trained personnel.

Committees

23) In the Board's view, the president of the Audit committee does not necessarily have to be an independent director to secure compliance with the goals to be achieved by such committee. According to effective legislation and the Company's Bylaws, a majority of the Audit Committee's members must be independent, even if the president of the committee is not. Therefore, the independent directors may make all relevant decisions.

24) In the Company's view, it is not necessary to have a specific policy in place concerning the rotation of the Supervisory Committee's members. As regards the rotation of the partner of the external audit firm, the Company follows the CNV's guidelines. In line with international practices, the Board of Directors does not require the rotation of the external audit firms. The Audit Committee periodically evaluates external auditors in terms of independence, know-how and performance, among other issues.

25) The members of the Company's Supervisory Committee are not involved in the external audit and do not belong to the firm rendering these services.

26) Certain members of the Board of Directors that also carry out managerial functions, along with the Company's executives, set forth the Company's compensation and benefit policies, following criteria in line with the expected results and goals, as well as conventional and legal limitations.

27) The Company's main shareholders regularly review the convenience of creating an Appointment and Corporate Governance Committee. The shareholders particularly review the extent to which the implementation of such committee would lead to a more favorable opinion on the Company's governance from the investors' standpoint, since its creation would entail a significant change in the current way of operating.

28) In line with its policies, the Company ensured that the appointment of the Board's members was free of any form of discrimination.

GRUPO CLARIN S.A.

CONSOLIDATED

FINANCIAL STATEMENTS

As of and for the years ended

December 31, 2010 and 2009

GLOSSARY OF SELECTED TERMS

CONSOLIDATED BALANCE SHEETS

(In Ps. - unless otherwise stated)

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

CONSOLIDATED STATEMENTS OF INCOME

(In Ps. - unless otherwise stated)

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Ps. - unless otherwise stated)

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Ps. - unless otherwise stated)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND

OTHER COMPREHENSIVE INCOME

(In Ps. - unless otherwise stated)

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 (in Ps. - unless otherwise stated)

Note 1. Description of the business

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 controlled companies and equity investees, it is engaged primarily in the following business segments: a) Cable television and Internet access, b) Printing and publishing, c) Broadcasting and programming and d) Digital content and others.

Note 2. Summary of Significant Accounting Policies

Basis of presentation

In preparing these consolidated financial statements, the Company has followed accounting policies that are in accordance with US GAAP.

US GAAP differs in certain respects from Argentine generally accepted accounting principles applied by the Company in its statutory consolidated financial statements prepared in accordance with Argentine GAAP and in accordance with the rules and regulations of the CNV.

The consolidated financial statements include 100% of the assets, liabilities, revenues, expenses and cash flows of Grupo Clarín and all entities in which the Company has a controlling voting interest ("subsidiaries") required to be consolidated in accordance with US GAAP. When Grupo Clarín consolidates entities, the ownership interests of any minority parties are reflected as noncontrolling interests, and investment in entities in which the Company has 20% to 50% ownership, but not a controlling interest, are accounted for under the equity method. Intercompany accounts and transactions between consolidated entities have been eliminated in consolidation. The following chart includes the most significant consolidated subsidiaries as of each closing date (percentages show direct and indirect interest held by the Company).

(1) Includes Multicanal and Teledigital, which were merged into Cablevisión effective as of October 1, 2008 (see Note 12.2.c).

(2) % in votes amounts to 99.7%.

(3) Includes Clarín Global, which was merged into CMD effective as of January 1, 2009.

As a result of the situation described in Note 12.7.a), among other things, Papel Prensa has not issued its financial statements as of December 31, 2010 as of the date of these financial statements. To calculate the equity value of its investment in Papel Prensa, the Company has relied on the financial statements as of September 30, 2010 approved by Papel Prensa's Board of Directors on December 28, 2010 and on AGEA's estimate of the October-December 2010 results. However, the Company considers that any deviation between its estimates and the financial statements as of December 31, 2010 ultimately approved by Papel Prensa's Board of Directors will not have a material effect on these financial statements.

Noncontrolling Interests in Consolidated Financial Statements

On January 1, 2009, the Company adopted a new accounting guidance for noncontrolling interests in subsidiaries as issued by the FASB. The new accounting guidance establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary, which is sometimes referred to as a minority interest, is a third-party ownership interest in the consolidated entity that should be reported as a component of equity in the consolidated financial statements. Among other requirements, the new guidance requires the consolidated statement of income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. The new guidance also requires disclosure on the face of the consolidated statement of income of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest. The Company's consolidated financial statements were updated to reflect the reporting and disclosure requirements.

Consolidated Variable Interest Entities

The Company, through one of its indirect subsidiaries, has executed agreements with other non-related companies, for the purposes of rendering on behalf of and by order of such companies subscriber selling and installation services, collections, administration of subscribers, marketing and financial technical advising, and general business advising, with respect to cable television and Internet access activities in Uruguay. In accordance with ASC 810-10, these consolidated financial statements as of December, 31, 2010 include the assets, liabilities and results of these companies, disclosing the net effect in the items "Equity attributable to non-controlling interests", and "Net income attributable to non-controlling interest".

Use of estimates

US GAAP requires management to make estimates that affect the reported amounts of assets and liabilities, and the reported amounts of revenues and expenses. The Company evaluates its estimates, including those related to tangible and intangible assets, doubtful accounts, inventories, provisions and income taxes, on an ongoing basis. The Company bases its estimates on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Cash and cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents are carried at cost, which approximates fair value.

Cash in foreign currency is converted into Ps. at the exchange rate prevailing as of each year end.

Concentration of cash and credit risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents, accounts receivable, and short-term investments. The Company maintains cash and cash equivalents and other financial investments with various high credit quality financial institutions, in order to mitigate the amount of credit exposure to any one institution. The Company has not experienced any significant losses in such accounts. The Company does not depend on any single customer.

The Company maintains reserves for potential credit losses based on impaired accounts, historical charge-off patterns and management judgment; historically such losses have not been significant and have been within management's expectations.

Allowance for doubtful accounts

The Company reviews its doubtful accounts on a monthly basis for estimated losses resulting from the inability of its customers to make required payments. The customer base in the cable television and Internet access segment is primarily residential in nature while the customer base of the publishing, printing and broadcast television operations involves a wide range of companies and, to a lesser extent, individuals.

The Company invoices most of its cable television and Internet access subscribers in advance. A majority of Argentine cable television subscribers pay their invoices in cash, and it encourages them to pay their monthly invoices by automatic credit card or bank account debits. The Company enforces a strict disconnection policy.

In determining the adequacy of allowances for doubtful accounts, the Company analyzes, among other things, historic bad debt experience, customer credit worthiness, current economic trends in Argentina and customer payment history.

Inventories

Inventories are valued at lower of cost (standards approximating the first-in, first out method) or market. Costs included in inventories are based on invoiced cost and/or production costs, as applicable. Included in production costs are material, direct labor and allocated overhead. The Company writes down inventories for the difference between the carrying value of the inventories and their estimated market value. If actual market conditions are less favorable than those projected by management, additional write-downs may be required.

Investments in unconsolidated affiliates

Investments in companies in which the Company has significant influence, but less than a controlling voting interest, are accounted for using the equity method. This is generally presumed to exist when the Company owns between 20% and 50% of the investee.

Property, plant and equipment, net

Property, plant and equipment are stated at cost. The cost of additions and substantial improvements to property, plant and equipment is capitalized. The cost of maintenance and repairs of property, plant and equipment is charged to operating expenses. Borrowing costs are capitalized as part of the cost of property, plant and equipment when the preparation of such assets for their intended use necessarily involves a substantial period of time. Other materials and equipment consisting mainly of networking infrastructure not related to additions or improvements are charged to profit or loss as consumed. Property, plant and equipment are depreciated using straight-line methods over their estimated economic lives.

Goodwill and Intangible assets, net

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a business combination. Such fair values are determined by using primarily internal valuations, including discounted cash flows, external market values and others. Goodwill is not subject to amortization, but is subject to at least an annual assessment for impairment, applying a fair-value based test.

Intangible assets resulting from the acquisitions of entities accounted for using the purchase method of accounting are estimated by management based on the fair value of assets received. Identifiable intangible assets are mainly comprised of acquired subscriber portfolio, which is amortized over its useful life determined on the basis of the churn rate of such acquired portfolio. These useful lives range from approximately 7 to 10 years.

To improve disclosure, intangible assets now include some assets that used to be disclosed under the item Property, plant and equipment. They have been valued at acquisition cost, net of the related accumulated amortization. Intangible assets are amortized on a straight line basis, taking into account their estimated useful lives.

Impairment of Long-Lived Assets and Goodwill

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the asset. If such assets are considered to be impaired on this basis, the impairment loss to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Goodwill is reviewed at least annually for impairment. Impairment of goodwill is tested at the reporting unit level by comparing the reporting unit's carrying amount, including goodwill, to the fair value of the reporting unit. The fair values of the reporting units are estimated using a combination of the income or discounted cash flows approach and the market approach, which utilizes comparable companies' data. If the carrying amount of the reporting unit exceeds its fair value, goodwill is considered impaired and a second step is performed to measure the amount of impairment loss, if any.

The book value of these assets does not exceed their estimated recoverable value. Nevertheless, as mentioned in Note 20, theses estimations could be affected by the final outcome of the circumstances described in such note.

During 2009, the Company has reviewed, based on the term of certain contracts, the carrying value of the goodwill related to CPGB, and accounted for an impairment of approximately Ps. 5 million.

Other assets

Deferred charges have been valued at the amounts actually disbursed.

The other assets included in this item have been valued at acquisition cost, except for those assets with an agreed-upon sale price fixed under a contract, which have been valued at net realizable value. Where applicable, the value of improvements has been added, net of the related accumulated depreciation calculated on a straight-line basis, considering the estimated useful life of the asset. The asset value does not exceed its estimated recoverable value.

Revenue recognition

Revenue is recognized when persuasive evidence of an arrangement exists, the fees are fixed or determinable, the product or service has been delivered and collectability is reasonably assured. The Company considers the terms of each arrangement to determine the appropriate accounting treatment.

Revenues for each of the main business segments identified by the Company are recognized when the following conditions are met.

·; Cable television and Internet access

Subscriber fees and internet services are recognized as revenue in the period that the service is provided. Advertising revenues for cable television are recognized when the advertisement is aired and online advertising revenues are recognized over the period in which the advertisements are displayed.

·; Printing and Publishing

Advertising sales are determined by the prices achieved per single column centimeter (the advertising yield) and the number of advertising centimeters sold (advertising lineage) in the relevant period. Circulation sales include the price received from the sale of newspapers, magazines and other publications. Printing services sales consists mainly of fees received from the printing of magazines, books, supermarket leaflets and related products.

Advertising sales from newspapers and magazines is recognized when the advertisements are published. Revenues from the sale of newspaper and magazines are recognized upon passing control to the buyer. The Company records the estimated impact of residual returns as a deduction from revenues. In determining the estimate of the sales to be returned as of the end of each fiscal year, the Company uses historical return trends to calculate the amount. Revenues from printing services are recognized upon completion of the services and delivery of the related product and customer acceptance.

·; Broadcasting and Programming

Advertising revenues for television and radio stations are recognized when the advertisement is aired. Revenues from programming and distribution of television content for broadcast channels are recognized when the programming service is provided.

Barter transactions

The Company enters into transactions that either exchange advertising for advertising ("Advertising Barter") or advertising for other products and services ("Non-advertising Barter"). Advertising Barter transactions are recorded at the estimated fair value of the advertising given. Revenue from barter transactions is recognized when advertising is provided, and services received are charged to expense when used. Revenues for Non-advertising Barter transactions are recognized at the estimated fair value when the product is available for telecast and the advertising spots received under such contracts are either used or sold to third parties. Revenue from barter transactions is not material to the Company's consolidated statement of income for any of the fiscal years presented herein.

Advertising cost

Advertising costs are expensed as incurred. Advertising expenses in 2010 and 2009 totaled approximately Ps. 198.8 and Ps. 122.8 million, respectively.

Other Comprehensive Income

Other Comprehensive Income is reported on the accompanying consolidated statement of shareholders' equity and other comprehensive income and consists of income and other gains and losses affecting shareholders' equity that, under US GAAP, are excluded from net income. For the Company, such item includes the cumulative translation adjustment relating to the translation of the financial statements of the Company's foreign subsidiaries.

Fair value of financial instruments

The carrying amounts of cash, accounts receivable and short-term obligations approximate their fair values, because of the short-term maturities of these instruments.

The fair value of non-current long-term debt and sellers financing was estimated based on the current rates available to the Company for the debt of similar remaining maturities. Fair value of derivative financial instruments represents the estimated amount that would have been required to terminate the contracts. The estimated fair values of financial instruments (amounts stated in millions of Ps.) are as follows, except for those financial instruments noted above for which the carrying values approximate their fair values:

Foreign currency translation

Management has determined that for all of the Company's foreign operations the local currency is their functional currency. Accordingly, these foreign subsidiaries translate assets and liabilities from their local currencies to Ps. using year end exchange rates while income and expense accounts are translated at the average rates in effect during the year. The resulting translation adjustment is recorded as part of Other Comprehensive Income, a component of shareholders' equity. Gains and losses resulting from transactions denominated in non-functional currencies are recognized in earnings. Net foreign currency transaction (losses) gains are included in the consolidated statements of income under the caption "Financial results, net" and amounted to Ps. (126.9) and Ps. (272.7) million for the years ended December 31, 2010 and 2009, respectively.

Derivative financial instruments

The Company enters into derivative contracts for the sole purpose of securing the future cash flows of its fixed-rate and/or USD-denominated debt. Grupo Clarín does not enter into derivative contracts for speculative purposes. Refer to Note 16 for additional information.

Receivables and liabilities generated by derivatives have been valued at their estimated fair value. Changes in fair value have been recognized as result for the year.

Fair value measurements

The following table shows the Company's financial assets measured at fair value on a recurring basis as of December 31, 2010, based on their fair value hierarchy:

Financial assets are valued using quoted prices in active markets, for money market funds (Level 1), and readily-available pricing sources for comparable instruments, for interest rate swaps (Level 2). As of December 31, 2010, the Company did not have any assets or liabilities without observable market values that would require a high level of judgment to determine fair value (Level 3 assets).

Derivative financial instruments are valued using pricing models. Pricing models take into account the contract terms as well as multiple inputs where applicable, such as equity prices, interest rate yield curve, option volatility and currency rates.

As of December 31, 2010, the carrying value of the Company's cash and cash equivalents other than money market funds, which was held primarily in bank deposits, approximated their fair value. There were no financial liabilities measured at fair value. The Company held no direct investments in auction rate securities, collateralized debt obligations, structured investment vehicles or mortgage-backed securities.

Income tax and tax on assets

The Company accounts for income tax following the liability method of accounting which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred tax assets are also recognized for tax loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets or liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded when, based on the available evidence, it is more likely than not that all or a portion of the Company's deferred tax assets will not be realized. The Company's income tax expense consists of taxes currently payable, if any, plus the change during the period in the Company's deferred tax assets and liabilities.

Tax on assets is supplementary to income tax. While income tax is levied on the taxable income for the year, tax on assets is imposed on the potential income from certain productive assets at the rate of 1%. Therefore, the Company's tax liability shall be equal to the higher of both taxes. However, if tax on assets exceeds income tax in any given fiscal year, the excess may be creditable against any excess of income tax over tax on assets in any of the following ten years.

Tax on assets balance has been capitalized under the caption Other non-current receivables, since the Company has estimated, based on its current business plans, that the outstanding balance will be recoverable within the statute of limitations.

Uncertainty in Income Taxes

As of December 31, 2010, income tax filings corresponding to fiscal years 2005 through 2009 could be subject to examination by the AFIP. The Company classifies interest and penalties in the consolidated statements of income in Other financial results.

Troubled debt restructurings

The Company accounts for debt restructurings in accordance with provisions related to troubled debt restructurings. US GAAP requires that a debtor should (a) recognize a gain or loss by reducing the carrying amount of the debt by the fair value of the assets or equity interest transferred, and (b) account for the remainder of the restructuring as a modification of debt terms. When the terms of a debt are adjusted in a troubled-debt restructuring, the total amount of the future cash payments should be determined. If the carrying amount of debt is less than the aggregate future cash payments required by the new debt term, the debtor should amortize the difference over the life of the new debt as interest expense using the effective interest method. No gain or loss is recognized in the period of extinguishments. If the carrying amount of debt is greater than the aggregate future cash payments required by the new debt term, the debtor should reduce the carrying value of debt to an amount equal to the total future cash payments and recognize the reduction an extraordinary gain. No interest expense should be recorded.

Recent Accounting Pronouncements

No recently issued accounting pronouncements are applicable to the Company.

Note 3. earnings per share

Basic net income per share for the Company's common shares is computed by dividing Grupo Clarin's net income available to common shareholders attributable to common shares for the year by the weighted average number of common shares outstanding during the year.

Net income per common share for the years ended December 31, 2010 and 2009 is as follows:

For the years ended December 31, 2010 and 2009 there were no outstanding instruments that through conversion or exercise could result in an increase of common shares with either dilutive or anti-dilutive effect.

Note 4. Breakdown of certain balance sheet accounts